The Effect of Operational Strategy on Organizational Performance of Commercial Banks in Meru County, Kenya

Abstract

Achieving optimal organizational performance is a concern for businesses, and it largely hinges on how well they adapt to the dynamic business landscape. Currently, this landscape is marked by significant turbulence in organizational performance, particularly posing challenges for managers in the banking sector. Furthermore, there has been a noticeable decline in the growth rate of most commercial banks in Meru City County, Kenya, leading to diminishing profit margins. Consequently, the implementation of functional level strategies has become crucial for banks aiming to achieve objectives such as customer retention, profit growth, increased sales, operational efficiency, and expanded market share. This research study primarily aimed to investigate how operational strategy impact the organizational performance of commercial banks in Meru County, Kenya. To conduct this research, a theoretical framework, resource-based view was used. The study utilized a descriptive research design, and a census approach was employed, targeting 19 branch managers, 19 operational managers, 19 marketing managers, 19 chief accounting officers, and 19 human resource managers in Meru County. A total of 95 respondents were selected for the sample, and data were collected using questionnaires with close-ended questions. Content validity was established through consultations and discussions with experts, academicians, and the supervisor. Reliability was assessed using the Cronbach Alpha method, and data analysis was conducted through the utilization of both descriptive and inferential statistical techniques, facilitated by the Statistical Package for Social Sciences software. The presentation of data took the form of frequency distribution tables and graphical charts. The consensus among respondents was that operational strategies exerted an influence on the organizational performance of commercial banks. Based on these findings, the study recommends enhancing operational strategies as they have a positive impact on the organizational performance of commercial banks in Meru County, Kenya.