Thesis:

Value discpline strategies on organization competitiveness in tier three category of commercial banks in Kenya

The Banking sector has for eons formed one of the economic pillars for countries to realize their prosperity agenda. This is achievable through improved competitiveness across all commercial banks regardless of size. Small banks categorized as tier 3 commercial banks in Kenya face considerable challenges including financial distress, poor performance, and intense competition both externally with tier 1 and tier 2 banks and internally among themselves. This has led to financial losses, decreased market share, and even bank closures, impacting stakeholders such as shareholders, depositors, and businesses reliant on bank loans. The study aims to explore how value discipline strategies can improve competitiveness within this sector, considering the moderating effect of the external environment. The current study sought to investigate the effect of Value discipline approaches in competitiveness of organizations specifically the Tier III category of Commercial Banks in Kenya and assessed customer intimacy, product leadership and operational excellence strategies, with the external environment as the moderator. The study deployed Resource Capabilities Theory, Value Disciplines Theory and Dynamic Capabilities Theory; and used descriptive and cross- sectional research design. The study targeted 1,027 middle and senior managers of all Tier III commercial banks in Kenya. A sample of 288 respondents was identified using proportionate stratified random sampling. Content validity and reliability of the data collection instruments were examined using Content Validity Index and Cronbach Alpha coefficient respectively. Data was collected using combined interview guides and semi-structured questionnaires. The researcher used simple linear regression analysis, to analyze the predictive influence of each Value discipline and using multiple linear regression, analyzed the combined effect of Value discipline approaches on the organizations’ competitiveness. Hypothesis testing of the coefficients was conducted at a significance level of 5%. The findings indicate substantial effects of each independent variable on Organizations’ Competitiveness. Operational Excellence demonstrated a highly significant impact, as evidenced by a t-statistic of 14.493 with a p-value of < .001. Similarly, the Customer Intimacy Strategy exhibited a highly significant effect, with a t-statistic of 22.239 and a p-value of < .001. The Product Leadership Strategy also demonstrated a highly significant effect, supported by a t-statistic of 24.014 and a p-value of < .001. The analysis showed evidence of a significant effect of combined value discipline strategies on the organizations’ competitiveness, R 2 of 0.839, an F-statistics of 618.033 and P-values of 0.000, hence supporting rejection of the null hypothesis. Furthermore, the study revealed that incorporating the interaction term in the model, significantly enhances the model's ability to explain the variance in Organizations’ Competitiveness beyond the main effects. The R-square change of .003, an F-statistic of 4.606, and a p-value of 0.033 support the rejection of the null hypothesis, suggesting the meaningful contribution of the interaction term in the model. The study concludes that there is a positive correlation between the various models within Value Discipline Strategies and Organization’s Competitiveness, amidst the moderating influence of external environment. The study recommends a longitudinal study assessing the long-term impact of sustained application of individual Value Discipline strategies on organizations’ competitiveness.