THE EFFECT OF ORGANIZATIONAL SYSTEMS ON PERFORMANCE OF COMMERCIAL BANKS IN NAKURU AND KISII COUNTIES, KENYA

Abstract

The purpose of this study was to determine the effect of organizational systems on performance of banking institutions in
Kenya in selected commercial banks in Nakuru and Kisii Counties, Kenya. Specifically, the study sought to determine the
effect of organizational systems on organizational performance of the banking institutions. The study design employed was
a cross-sectional using a sample of 257 employees from a population of 776 employees. A questionnaire was used to collect
data from the selected respondents. Descriptive statistics and inferential statistics were used to analyse the data. The R value
was 0.656 indicating that there is a positive relationship between organization systems and organizational performance. The
coefficient of determination (R2) value of 0.430 shows 43% of organizational performance is explained by organizational
systems, the remaining 57% is explained by other dimensions enhancing organizational performance of the banking sector
in Kenya. The study recommends that effective systems should be put in place as stipulated in the strategic management of
the banking institutions and the sustainability of the competitive damage relies on the ability of the institutions to demand for
the same. Therefore, it is very important for these organizations to implement competitive strategy despite the challenges that
they can encounter such as increased number of competitors and they should adopt market penetration using various ways
such advertising and promoting their products/services. The institutions should also ensure product improvement, product
replacement, product range extension and introduction which will ensure the organizations remain competitive in the market.
The study further recommends that the organizations should adapt the new technology which enhances flow of information.
This means that there should be adequate financial resources and required infrastructure to ensure efficient adoption of
technology innovation strategies