Determinants Of Strategic Innovation Implementation In The Banking Sector, A Survey Of Commercial Banks In North Rift Region

Abstract

Innovation strategy enables organizations to remain relevant in a highly competitive arena by focusing the organization‟s efforts on doing things differently. The purpose of this study was to analyze the determinants of strategic innovation implementation in the banking sector, a survey of Commercial Banks in North Rift Region. It was guided by the following objectives: to assess the effects of organizational culture, organizational leadership, strategy formulation process and organizational structure on the implementation of strategic innovation. The study was guided by the Higgin‟s eight S model and the theory of transformation; it adopted a survey research design. The study targeted 229 respondents, who included regional managers, branch managers, and departmental heads of best performing commercial banks in the north rift region ranked by CYTONN‟S Investment as at 10th December, 2017. Therefore the study included all the respondents in the study. Questionnaires were used as data collection instruments. Research experts were used to determine the validity and their suggestions and comments were used as a basis to modify the research items. The research instruments were pre-tested to ensure reliability, further split half method was adopted to calculate the cronbach alpha coefficient. A value of above 0.7 confirmed the reliability of the research instruments. The data was analyzed using descriptive and inferential statistics and presented in tables. The study findings indicated that organizational culture (β = 0.103; ρ =0.023), organizational leadership (β = 0.574; ρ = 0.00), strategy formulation (β = 0.177; ρ =0.00) and organizational structure (β = 0.148; ρ =0.011) influence the implementation of strategic innovation by Commercial Banks in Kenya North Rift Region. Therefore it is recommended that commercial banks should ensure existence of norms and values that ensure collaboration, flexibility as well as innovativeness among employees to ensure effective implementation of strategic innovations. When considering organizational leadership, Commercial banks need to oscillate between the four major leadership styles at the various levels of strategic innovation implementation. Effective value assessment will ensure that commercial banks allocate adequate resources in terms of finances, human resource, equipments and infrastructure so as to ensure effective strategic innovation implementation and commercial banks may need to appreciate that different strategic innovations may require different types of structures to be in operation at the same time in order for effective implementation to materialize.