Influence of Organizational Capabilities on Electronic Commerce Strategy as Adopted by Commercial Banks in Kenya

Abstract

The ease of doing business in Kenya remains weak, and the rapid development of information technology has shaken the foundation of banking industry. The competition is cut throat, and the commercial banks have generally adopted the use of electronic commerce products and services in their delivery of services to customers. The main objective of this study was to analyze the influence of organizational capabilities on electronic commerce strategy as adopted by commercial banks in Kenya. The general objective was operationalized by in-depth study of the following constructs; business process re-engineering, organizational re-structuring, capacity for change, and leadership. The findings of this study acts as a guide to management of commercial banks in their steps to developing sustainable competitive advantage and commitment to organization’s strategy. The findings of the study can assist academicians and business researchers to borrow from the findings of this research to support literary citations as well as develop themes for further research on the relationship between organizational capabilities and electronic commerce strategy adoption. The study employed a descriptive survey research design. The questionnaires were distributed to management, supervisors, clerical and secretariat, and support staff randomly selected from the commercial banks that are sample respondent. The research was carried out at the banks headquarters in Nairobi. Quantitative data gathered was analyzed by the use of statistical package for social scientists (SPSS), version 20. Tables were used to present the analyze results. Inferential statistics were used to analyze quantitative data. Qualitative data was analyzed by content analysis. The study conducted a census of all the 43 commercial banks in the country licensed by the Central Bank of Kenya. However, the accessible population constituted 40 banks following two banks being placed under receivership and one under statutory management. A total of 36,212 respondents were targeted, and a sample size of 384 was drawn, giving a response rate of 63.54%. Study limitations included some respondents taking too long to fill the questionnaire and some considering the information confidential. The study findings among others revealed that Business Process Reengineering had no statistical significant influence on electronic commerce strategy as adopted by commercial banks in Kenya. The study concluded that banks embracing organizational re-structuring, capacity for change, and leadership have a higher level of electronic commerce strategy adoption. It is recommended that the commercial banks should change their strategic approach to BPR, so that a positive impact on electronic commerce strategy adoption could be achieved. The study recommended improved single point of contact for customers, minimized control and checks, and minimized non-value adding works, improved connection with what is going on inside and outside the organization, improved middle level management effectiveness, empowering of newer managers and pushing authority lower in the organization, strongly shared service-off shoring and outsourcing, and leadership support for role of center, liberization of market. Future studies should consider among others exploring this study in non-commercial banks so as to support the generalization of the findings.