STRATEGY IMPLEMENTATION ON PERFORMANCE OF M-COMMERCE IN KENYA S COMMERCIAL BANKS

Transcription

1 STRATEGY IMPLEMENTATION ON PERFORMANCE OF M-COMMERCE IN KENYA S COMMERCIAL BANKS Presented at the EAMARC CONFERENCE TH NOVEMBER, 2016 BY DOREEN MURIU & JOSEPH KAMAU

2 1.0. BACKGROUND In Sub-Sahara Africa (SSA) financial systems are underdeveloped with inefficient banking sectors (EIB, 2015). Only 34 percent of adults in SSA were banked in 2014, making financial access in SSA among the lowest in the world (World Bank 2015). While it is estimated that only 2 percent of adults worldwide have a mobile money account, in SSA 12 percent of the population have a mobile account (EIB, 2015). Kenya s banking industry has one of the most successful mobile banking models M-Pesa (KPMG, 2015). M-Pesa had a subscription of 19 Million while the leading bank s M- commerce provider Equity (Equitel) had 1.4 million users (CAK, 2015). 2

3 1.0. BACKGROUND Top level management rely on cooperation of middle and lower managers. Well-conceived policies and procedures aid strategy execution (Hough and Thomson, 2011). Firms are not just economic entities, but social entities, in which conscious deliberations by individuals and teams can achieve extraordinary results (Koch, 2011). Hough et al. (2011) argued that while successful strategy making depends on business vision, successful strategy implementation depends on working with and through others. 3

4 2.0. PROBLEM STATEMENT Strategy implementation is a key element of strategic management process. According to Miller 2002, organizations fail to implement 70 percent of panned strategic initiatives. Speculand, 2009, organizations accomplish less than 50% of intended plans and about 90 percent of their strategies fail successful implementation. Kenya s Commercial banks deploy huge technology investments and staff training to manage the new technologies and this study investigates efficiency. 4

5 3.0. PURPOSE OF THE STUDY The study investigated strategy implementation as a tool that promotes competitive advantage through increased performance of M-commerce in Kenya s Commercial Banks. 5

6 4.0. SPECIFIC OBJECTIVE To examine the influence of strategy communication on performance of m-commerce in Kenya s commercial banks. 6

7 6.0. JUSTIFICATION OF THE STUDY Because of the high failure rate of strategy implementation, there is need to examine factors that impede strategy implementation. This study, therefore seeks to fill the gap in knowledge by identifying obstacles of strategy implementation. The study will be important to the following constituents: Commercial Bank Strategy Leaders Central Bank of Kenya (CBK) Scholarly Literature Gap on Strategy Implementation The Kenyan Government Policy Stakeholders Social Change 7

8 7.0. EMPIRICAL REVIEW Bapat and Mazumdar (2014) in India, focused on competition, cost, innovation and customer need. Alter 2012, investigated M-Commerce service system implementation in banks in Jordan. Gardachew (2010), on Ethiopian banks, focused on the slow adaption of technological innovations. Ngumi (2013), researched on impact of innovation on financial performance in Kenya s banks. Other scholars (Amin, Baba and Mohammed 2005; Mwaura 2009; Aker and Mbiti 2010; Aduda and Kingoo, 2012), carried out research in the banking sector but none has focused on the relationship between strategy implementation and performance of M-Commerce in Kenya s commercial banks which is the focus of this study. 8

9 8.0. CONCEPTUAL FRAMEWORK Independent Variable Dependent Variable M-Commerce implementation M-Commerce Performance Leadership Structure Information Systems Human Resources Strategy Communication H 1 H 2 H 3 H 4 H 5 Growth of New Applications Growth of M- Commerce Users Growth of Bank Accounts Growth of Savings H 6 Technological Turbulence Market Turbulence 9

10 9.0. METHODOLOGY Research Design: Explanatory Target Population 40 Commercial banks and 5 Senior managers from each bank Sampling Frame List of Licensed Commercial Banks from CBK Sampling Technique Probability sampling: A sample of 133 senior managers from a population of 200 managers of the 40 commercial banks to identify the managers to be interviewed based on the formula by Yamane (2001) n = [ ] =

11 RESULTS Reliability Tests for Constructs was done using cronbach s alpha, to determine the internal consistency reliability as suggested by (Gregory, 2004). The results were shown in Table below: NO construct No of items originally Cronbach's Alpha No of items retained 1 Human resource Information system M-commerce performance Structure leadership strategic communication Market turbulence All the constructs indicate consistency as they were all above 0.7, hence were reliable. 11

12 RESULTS - EXPLANATORY POWER R-Squared for dependent latent variable (M-Commerce Performance was used. The R-Squared for the endogenous variable M-Commerce Performance was 0.487, an indication that M-Commerce performance was well predicted by the model. 12

13 RESULTS - HYPOTHESIS TESTING Path Path coefficient Standard Error T Value P Value Result Human resource -> M-commerce performance Information system -> M-commerce performance Supported rejected Structure -> M-commerce performance rejected leadership -> M-commerce performance rejected strategic communication -> M-commerce performance rejected The path coefficient between strategic communication and M-commerce was found to be positive and significant at the 0.05 level of significance (β=0.287, t= 3.307, p<

14 CONCLUSION AND RECOMMENDATION The study found out that strategy communication has a significant positive relationship with M-Commerce performance of Commercial Banks in Kenya. The relationship strategy communication leads to the closing of knowledge gap thereby enabling banks to not only focus on strategy development and implementation, but the development of communication strategy. Well documented strategy communication, lessens the banks strategy failures, thus with successful strategy implementation, there will be increased M-Commerce performance, leading to competitive advantage for the banks. There is need for further research on M-Commerce Strategy Implementation in Commercial Banks in Kenya and globally. 14