Strategic Leadership Practices and Performance of Banking Sector in Kenya: A Case Study of Equity Bank Limited, Head Office

  • Mukhwana Teresa Wanyama Management University of Africa
  • Juster Nyaga Management University of Africa

Abstract

Like other financial institutions, Equity bank Limited is constantly affected by changes in the external environment that include government regulations, trading blocks, increasing cost of inputs, increased competition and improved customer awareness. The main objective of this study was to establish strategic leadership practices and performance of Banking Sector in Kenya, with reference to Equity Bank Limited. Specifically, the study sought to; examine the influence of corporate strategic direction; corporate resource allocation; balanced organizational controls and ethical practices on performance of Equity Bank Limited. The study is anchored on leadership trait, institutional and goal setting theory. The study used descriptive research design. The target populations were 175 employees at Equity Bank head office that were selected using random stratified sampling procedure. Structured questionnaires were used for data collection. Data was analyzed using SPSS software. Descriptive statistics including mean, percentages, standard deviation and correlation analyses were used. The study established that corporate strategic direction affects organization performance to a large extent and therefore it concludes that corporate strategic direction is significant determinant in the performance of organizations. It also established that corporate resource allocation influences the performance of Equity bank and the study concludes that corporate resource allocation affects organization performance to a great extent, which denotes a strong positive correlation between corporate resource allocation and organization performance. It was also established that balanced organizational controls affects organization performance to a great extent and the study concludes that balanced organizational controls is a significant determinant of organization performance and finally the it was established that ethical practices affects organization performance to a great extent and the conclusion is that ethical practices significantly to organization performance. Recommendations for improvement includes: formulation of guidelines, governing structure and strategic plans for effective implementation of organization goals and objectives; investment in human capital. Board of directors and management of Equity Bank ought to understand that organizational controls facilitate making reactive and proactive corrective adjustments to strategies as they are implemented and to create and ensure a strong ethical ethos in the organization. Basing on the findings of this study, the conclusion and subsequent recommendation, there is need for a further study on strategic leadership practices and organizational performance in the telecommunication sector in Kenya whereby the study should seek to provide more insights on the current study findings and validate these findings.

Keywords: Corporate Strategic Direction, Corporate Resource Allocation, Balanced Organizational Controls, Ethical Practice, Organization Performance, Strategic Leadership Practices, Performance of Banking Sector and Equity Bank Limited

Author Biographies

Mukhwana Teresa Wanyama, Management University of Africa

Post Graduate Student, Management University of Africa

Juster Nyaga, Management University of Africa

Lecturer, Management University of Africa

 

References

Andreeva, L. Y., Epifanova, T. V., Andreeva, O. V., & Orobinsky, A. (2018). Competency-Based Management in a System of Sustainable Development of Banks, Financial and Technology Companies. Contemporary Studies in Economic and Financial Analysis, Volume 100, 49 - 59.

Bjorck, F. (2014). Institutional Theory : A New perspective for research into IS/IT security organizations. HICSS.

Bloodgood, J. M., Hornsby, J. S., & Hayton, J. C. (2014). Organizational Resourcefulness: The Role of Purposeful Resource Focus Vacillation in Implementing Corporate Entrepreneurship in banking sector. Advances in Entrepreneurship, Firm Emergence and Growth, Volume 15, 125 - 147.

Braton, T., & Ahlstrom, S. (2015). Institutitional Theory examination. Geneva: Free Press.

Cascio, P. (2014). Cultural change: opportunity, silent killer or metamorphosis. San Francisco: Jossey Bass.

Cooper, D., & Schindler, P. S. (2016). Business research methods. New Delhi: McGraw Hill.

Ferris, W. (2007). Enriching Goal Setting Theory with time : An integrated approach. . Academy of Management Review vol 29 issue 3, 404- 422.

Gitonga, R. K. (2014). Balanced Scorecard and Performance of Considilated Bank of Kenya . Nairobi : Un Published MBA Thesis UoN.

Green, C., & Heywood, J. (2007). Does performance pay increase job satisfaction? . Economica.

Jooste, C. & Fourie, B. (2010). The role of strategic leadership in effective strategy implementation: perceptions of South African strategic leaders. South African Business Review, 13(3), 51–68.

Kirimi, B. A., & Minja, D. (2010). Transformational corporate leadership. Wake Forest, NC: IPI Publishers.

Kombo, D. K., & Tromp, D. L. (2009). Project and Thesis Writing: An introduction . Nairobi: Pauline Publications Africa.

Kumar, H. (2014). The Importance of Strategic Management Process in the Knowledge-Based Economy. Review of International Comparative Management. Vol 10 issue 1, 125 -133.

Locke, E. (2011). The Motivation Sequence, the Motivation Hub and the Motivation Core. Organisational Behaviour and Human Decision Processes vol. 50 , 288-299.

Northouse, P. G. (2015). Leadership Theory and practice. Thousand Oaks: Sage.

Pearce, J. A., & Robinson, R. B. (2011). Strategic Management: Formulation, Implementation and Control . New York: McGraw Hill.

Resnik, D. B. (2015). What is Ethics in Research & Why is it Important? New Delhi : NIEHS.

Scott, W. R. (2013). Institutions and Organizations: Ideas, Interests, and Identities. London : SAGE Publications.

Tiwari, R., & Vidyarthi, H. (2018). Intellectual capital and corporate performance: a case of Indian banks. Journal of Accounting in Emerging Economies, Vol. 8 Issue 1, 84-105.

Yeo, R. K., & Youssef, M. A. (2010). Communicating corporate image into existence: the case of the Saudi banking industry. Corporate Communications: An International Journal Vol. 15 Issue 3, 263-280.
Published
2019-11-05
How to Cite
Wanyama, M., & Nyaga, J. (2019). Strategic Leadership Practices and Performance of Banking Sector in Kenya: A Case Study of Equity Bank Limited, Head Office. Journal of Human Resource & Leadership, 3(3), 63-78. Retrieved from https://stratfordjournals.org/journals/index.php/journal-of-human-resource/article/view/372
Section
Articles