99678502 a-case-study-of-strategic-response-effectiveness-to-challenges-of-globalization-nbk-chp one

A CASE STUDY OF STRATEGIC RESPONSES EFFECTIVENESS BY THE
NATIONAL BANK OF KENYA LIMITED TO CHALLENGES OF
GLOBALIZATION
PRESENTED
BY
INGWE JOHN KENNEDY
REG. No. E6
SUPERVISOR: DR. JOHN YABS
A MANAGEMENT RESEARCH PROPOSAL SUBMITED IN PARTIAL
FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF A
DEGREE IN MASTER OF BUSINESS ADMINISTRATION (MBA),
SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI
FEBRUARY, 2012

DECLARATION
This research project is my original work and has not been submitted for any award in any other
university.
Signed: ……………………………… Date: ………………………………..
John Kennedy Ingwe
Reg. No.
Declaration by Supervisor
This project has been submitted with my approval as University Supervisor.
Signed: ……………………………… Date: ……………………………….
Dr. Jon Yabs
School of Business
University of Nairobi
iii

TABLE OF CONTENTS
DECLARATION.............................................................................................................................................iii
LIST OF ABBREVIATIONS..............................................................................................................................vi
CHAPTER ONE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................................1
1.1 Background of the Study....................................................................................................................1
1.1.1Strategic Responses.....................................................................................................................2
1.1.2Globalization................................................................................................................................4
1.1.3The Baking Industry in Kenya.......................................................................................................4
1.1.4 The National Bank of Kenya Limited...........................................................................................6
1.2 Statement of the Problem.................................................................................................................6
1.3 Objectives of the Study......................................................................................................................8
1.4 Significance of the Study....................................................................................................................8
REFERENCES...............................................................................................................................................10
CHAPTER TWO...........................................................................................................................................12
LITERATURE REVIEW..................................................................................................................................12
2.1 Introduction.....................................................................................................................................12
2.2 The Concept of Globalization...........................................................................................................12
2.2.1 Globalization and Strategic Alliances........................................................................................14
2.2.2 Globalization and New Product Creation..................................................................................15
2.2.3 Globalization and New Market Creation ..................................................................................17
2.2.4 Globalization and Technology...................................................................................................18
2.3 Factors Driving Globalization and its Challenges..............................................................................20
2.4 Strategy and Strategic Response......................................................................................................22
iv

2.5 Empirical Review..............................................................................................................................22
CHAPTER THREE.........................................................................................................................................25
RESEARCH METHODOLOGY......................................................................................................................25
3.1 Introduction.....................................................................................................................................25
3.2 Research Design...............................................................................................................................25
3.3 Data Collection.................................................................................................................................25
3.4 Data Analysis....................................................................................................................................26
REFERENCES...............................................................................................................................................27
APPENDICES...............................................................................................................................................37
APPENDIX I: LETTER OF INTRODUCTION....................................................................................................37
APPENDIX II: INTERVIEW GUIDE................................................................................................................38
v

LIST OF ABBREVIATIONS
HRM Human Resources Management
SHRM Strategic Human Resources Management
CIPD Chartered Institute of Personnel and Development
NSSF National Social Security Fund
SME Small and Medium Enterprises
vi

CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Globalization is the growing interdependence of national economies involving consumers, producers,
suppliers, and governments in different countries (Dunning, 1993). Globalization allows companies and
firms to sell their products and services to consumers beyond the borders of their country of origin.
Globalization is literally removing the boundaries to potential customers in a worldwide market. Knight
(2000) states globalization reflects the trend of firms selling and distributing products and brands in
many countries around the world. In the past two decades, the world has gone through the process of
globalization, one that causes increasing economic, financial, social, cultural, political, market, and
environmental interdependence among nations.
According to Chanda (2007), globalization has worked silently for millennia without being given a
name. Indeed, globalization processes are continuously evolving, driven by the economic aspirations of
millions around the globe— the more people involved, the faster the globalization is. The notion that the
world has become a global village is shared by almost every person on earth. Events, discoveries,
technologies, and crises that make headlines in one part of the world are swiftly brought to the notice of
many people all over the world. Globalization also refers to the strategy of approaching worldwide
markets with standardized products (Thompson and Strickland, 1993) and as such, has made it easy for
the task of pursuing international business strategies as trade among nations has been liberalized with a
tremendous reduction in trade barriers. Consequently, fewer trade barriers have also led to the spread of
improved technologies, communication systems, transportation systems and logistics, which all facilitate
the exchange relationships between an organization and its buyers, suppliers and other actors across the
globe. However, the impact of globalization remains very controversial (Abdel-Bar, 2006).
The banking sector is one of the most important economic sectors and the most influential and
responsive to changes due to globalization, whether international or domestic (Thompson and
Strickland, 1993). The most important of those changes include technological developments, the
internationality of money markets, and freedom from the constraints that hinder all banking activities,
the removal of barriers that prevent some financial institutions from working in certain sectors, and the
1

trend to develop and manage the risks of lending in light of the increase in international competition in
this sector while seeking to attract foreign capital with the emergence of giant banking entities. The
Kenyan banking system is one of the most important channels for mobilizing savings in the form of
credit or investment and working to direct them to more effective and more profitable productive sectors
and activities. Added to this is the role which the banking system plays in activating and enhancing
privatization and attracting investments to get the financial resources required for developmental needs.
Hence the concept of globalization has been associated with the concept of abundance and availability
of the services provided by banks. The accurate view to provide banking services, whether related to
deposits, loans, or bonds (as traditional services), or to the contracts of complex derivatives or other
innovative advanced services, leads banks to exist effectively in all fields of economic activity (El-
Dabie, 1999).
1.1.1 Strategic Responses
A strategy is a set of decision-making for guidance of organization or firm behaviors. Strategy and
objectives are used to filter projects hence they appear similar but they are distinct. Objectives represent
the ends which the firm is seeking to attain while strategy is the means to these ends (Ansoff &
McDonnell, 1990). According to Hax & Majiluf, (1996) there are various dimensions in the concept of
strategy. Strategy can be seen as a multidimensional concept that embraces all of the critical activities of
the firm, providing it with a source of unity, direction, and purpose as well as facilitating the necessary
changes induced by its environment.
The role of strategy is not viewed as just passively responding to the opportunities and threats presented
by the external environment but as continuously and actively adapting the organization to meet the
demands of a changing environment including globalization. Johnson and Scholes (2002) note that
strategy is the long term direction and scope of an organization that facilitates the achievement of an
advantage, for the organization, through the mode of arrangement of resources within a changing
environment. This would enable the organization to meet the needs of markets and to fulfill stakeholder
expectations. Thus strategy is viewed as the matching of the activities of an organization to the ever-
changing environment in which it operates. According to Ohmae, (1993), the purpose of strategic
response is to empower an organization to efficiently gain a sustainable competitive edge over its
competitors. Hill and Jones (2004) conclude that the strategies an organization pursues have a major
impact on its performance relative to its peers and hence it’s sustainable competitive advantage.
2

Johnson and Scholes (2002) identify political, economic, social, technological and ecological factors as
comprising the external environment that presents the organization with opportunities, threats and
constraints. Leaders in organizations have to constantly monitor developments in the environment and
take action to maintain an appropriate relationship between their organization and external environment.
Burnes (2000) notes that, due to political, economic, social and technological changes, history of
organizations has been that of change and upheaval since the industrial age. Because of the pace of
change and uncertainty, such change vary from organization to organization however, no matter what
level of turbulence is, what matters is the ability of the organization to cope with the environmental
constraints, challenges and threats.
According to Tregoe (2001), effective strategic response can be achieved in five phases. Phase one
entails strategic intelligence gathering and analysis. It ensures that the depth and breadth of information
on which strategic decisions are based is up-to-date, accurate, and relevant. Phase two consist of strategy
formulation which gives results in the creation of a strategic vision or profile. Phase three is referred to
as strategic master project planning. During this stage, the plan for strategy implementation is developed
in order to align the organization structure with the strategy. Phase four involves strategy
implementation whereby the planned actions are taken, implementation is monitored, and the Strategic
Master Project Plan is modified as and when required; and phase five - strategy monitoring, review, and
updating - helps to determine whether there’s success in the overall strategic response.
Strategic surveillance is designed to monitor a broad range of events that are likely to affect the strategy
of the company. Strategic surveillance can be done through a broad-based, general monitoring, on the
basis of selected information sources to uncover events that are likely to affect the course of the strategy
of an organization (Hill & Jones, 2004). External monitoring does not only allow assessment of strategic
progress relative to pre-established goals or competitors but also allows organizations to determine
whether environmental circumstances has changed enough to make current strategic plans and control
strategies obsolete (Preble, 1992). Methods available for monitoring external performance include
competitive benchmarking of products and process relative to competitors or other industry players,
strategic audits of company position in respect to key competitive threats, and measurement of customer
satisfaction with and competitor responses to strategic moves. Potential actions during the feedback
process include revising organizational strategies, reassessing planning premises and action plans, or
recasting managerial objectives.
3

In the present day competitive business environment, evaluation and control process is crucial to ensure
sustainable competitive advantage by the firm. The environment is dynamic, changing and
unpredictable. The rate and intensity of change facing every organization is increasing daily. These
changes are driven by new technologies, regulatory changes, globalization, increasing customer
expectations and so on. Moreover, there is increasing cost of doing business owing to a number of
factors such as expensive power, expensive fuel and labour unrest due to rising cost of goods and poor
remuneration (Charles and Gareth, 1998).
1.1.2 Globalization
Globalization is the integration of economies throughout the world by means of trade, financial and
technological flows, the exchange of technology and information and the movement of people, goods
and services (Abdel-Bar, 2006). It is multi-faceted phenomenon comprising of economic, political-legal,
social-cultural and environmental dimensions. Globalization is not a purely contemporary phenomenon.
The various factors that drive the rising globalization can be grouped under four broad categories:
macro-economic factors; political factors; technological factors; and
organizational factors (Harvey and Novicevic, 2002).
Macro-economic factors include, for example, an acceleration of technology transfer among countries
and a rapid increase in populations in emerging economies (Harvey et al., 2002). Political factors refer
to privatization, deregulation and trade liberalization of many nations in favor of free flows of trade and
investments (Eden et al., 2001; Hafsi, 2002). Organizations such as multinational enterprises are another
major agent of this process (Eden et al., 2001; Harvey et al., 2002). Shifting organizational strategic
attention towards a more global mindset is an example of organizational forces of globalization.
Consequently, these forces have inevitably caused changes in the global marketplace. Such changes can
be viewed as effects of globalization, which ultimately have an effect on the performance of firms.
1.1.3 The Baking Industry in Kenya
Commercial banks are defined as profit making financial institutions which play an important role in the
financial system. Commercial banks provide a broad array of corporate financial services that address
the specific needs of private enterprise including deposit, loan, and trading facilities but will not service
investment activities in financial markets (Magutu et al., 2009). The term commercial bank is used to
differentiate these banks from investment banks which are primarily engaged in the financial markets. In
4

Kenya, commercial banks play a number of roles in the financial stability and cash flow of the country’s
private sector including: processing payments; issuing bank cheques and drafts; accepting money on
term deposits; and acting as moneylenders, by way of installment loans and overdrafts.
The commercial banks in Kenya provide a number of import financial and trading documents. These
include; letters of credit (LCs), performance bonds, standby letters of credit, security underwriting
commitments and various other types of balance sheet guarantees. Moreover, commercial banks in
Kenya take responsibility for safeguarding important documents and other valuables by providing safe
custody and deposit boxes. The relevant departments in larger commercial banks do provide currency
exchange functions and the provision of unit trusts and commercial insurance (Omondi et al., 2010). In
today’s competitive banking environment, they are ceaselessly restructuring their operations in order to
develop more cost effective and efficient operations (Magutu et al., 2009).
The Companies Act, the Banking Act, the Central Bank of Kenya Act and the various prudential
guidelines issued by the Central Bank of Kenya (CBK), governs the Banking industry in Kenya. The
banking sector was liberalised in 1995 and exchange controls lifted. The CBK, which falls under the
Minister for Finance’s docket, is responsible for formulating and implementing monetary policy and
fostering the liquidity, solvency and proper functioning of the financial system. The CBK publishes
information on Kenya’s commercial banks and non-banking financial institutions, interest rates and
other publications and guidelines. The banks have come together under the Kenya Bankers Association
(KBA), which serves as a lobby for the banks’ interests and addresses issues affecting its members
(Kenya Bankers Association Annual Report, 2010).
There are forty-six banks in Kenya and the industry is dominated by a few large banks most of which are
foreign-owned, though some are partially locally owned. Six of the major banks are listed on the Nairobi
Stock Exchange. These banks are Equity, KCB, Barclays, National, NIC and Standard Chartered bank.
The commercial banks offer corporate and retail banking services but a small number; mainly
comprising the larger banks, offer other services including investment banking (Okutoyi, 2003). All of
the policies and regulations that administer the entire banking industry centers in lifting the controls
towards the management and equitable services. Banking industry is expected to remain strong even in
the midst of adversities and challenges. In every nation, the banking institutions are different and unique
among the other type of business.
5

1.1.4 The National Bank of Kenya Limited
National Bank of Kenya Limited (NBK) was incorporated on 19th June 1968 as a 100% government-
owned financial institution and officially opened on Thursday November 14th 1968.The objective for
which it was formed was to help Kenyans to get access to credit and control their economy after
independence. In 1994, the Government reduced its shareholding by 32% (40 Million Shares) to
members of the public. Again in May 1996, it further reduced its Shareholding by 40 million Shares to
the public. The current shareholding now stands at: National Social Security Fund (NSSF) 48.06%,
General Public 29.44%, Kenya Government 22.5%.During the 34th AGM held on 25th April 2003 the
bank increased its Share Capital by Kshs. 6 Billion i.e. from Kshs. 3 Billion to Kshs. 9 billion through
the creation of 1,200,000,000 non-cumulative preference Shares of Kshs. 5 each.
NBK is a large financial services provider in Kenya, serving individuals, small-to-medium companies
and businesses (SMEs) and large corporations. Headquartered in Nairobi, the bank owns one subsidiary
company: NatBank Trustee and Investment Services Limited. As of December 2010, National Bank of
Kenya's asset base was valued at over US$750 million (KES: 60 billion), with shareholder's equity in
excess of US$110 million. The stock of National Bank of Kenya is listed on the Nairobi Stock
Exchange, where it trades under the symbol: NABK. The current branch network of National Bank of
Kenya is made up of 44 branches and agencies.
1.2 Statement of the Problem
The challenges of globalization are felt by virtually all the industries and sectors and the banking
industry is no exception. Economists believe that the onset of the global integrationism means the
globalization of financial services. Banks, according to Berger et al (2002), have inherent nationality and
reach. Other elements that could contribute to the globalization of the banking industry are the
emergence of new business models, the emergence of global challenges to banking, the changing
attitude and perspectives of the workforce, the emergence of new competitors and the emergence of
strategic off-shoring. Further, globalization is much more than the worldwide production and
consumption of products. It is not just an economic or cultural trend but a movement of ideas, lifestyles,
and developments that could affect our families, our employment, and the future of the world. It is the
process of increasing social and cultural inter-connectedness, political interdependence, and economic,
financial and market integrations (Eden and Lenway, 2001; Giddens, 1990; Molle, 2002; Orozco, 2002).
Dramatic changes in the business environment that cause shifts in business conduct and marketing
6

activities of firms around the world include, for example, the emergence of global markets for goods and
services, labor, and financial capital, advances in technologies, and a reduction in traditional barriers to
trade and investment (Deardorff and Stern, 2002). Recent years have seen a drastic reduction in global
barriers to competition in the financial services industry. Deregulation around the world has permitted
consolidation across more distant and different types of financial institutions. Improvements in
information processing, telecommunications, and financial technologies have facilitated greater
geographic reach by allowing institutions to manage larger information flows from more locations and
to evaluate and manage risks at lower cost without being geographically close to the customer.
Moreover, growth in cross-border activities of nonfinancial companies has spurred greater demands for
institutions that can provide financial services across borders.
Pearce and Robinson (1997) observed that for firms to be effective and successful, they should respond
appropriately to changes that occur in their respective environments. Commercial banks worldwide as a
result of globalization are becoming increasingly interrelated. Globalization is creating numerous
opportunities for sharing knowledge, technology, social values, and behavioural norms and promoting
development at different levels including individuals, organizations, communities, and societies across
different countries and cultures (Brown and Lauder, 1996; Waters, 1995). Globalization comes with
enormous challenges such as liberalization of markets, intense competition, decline of domestic job
opportunities and revenues, economic volatility of the integrated markets, cyclical crises, and non-tariff
barriers to trade, spread of pandemics, and new security issues. Many actors not have the capabilities to
handle challenges (Spiegel, 2007; Human Development Report, 2002) which globalization brings with
it. In Kenya, globalization has brought with it challenges that have commercial banks to adopt various
strategic responses with the aim of staying competitive not only in the global market but also in the local
market. Local firms have been forced to diversify their product portfolio to cope with competition,
maintain market share, enter into new markets and seal off any unexplored market segments that foreign
competitors may come to exploit.
The banking sector is one of the most important economic sectors and the most influential and
responsive to changes, whether international or domestic. The most important of those changes include
technological developments, the internationality of money markets, and freedom from the constraints
that hinder all banking activities, the removal of barriers that prevent some financial institutions from
working in certain sectors, and the trend to develop and manage the risks of lending in light of the
7

increase in international competition in this sector while seeking to attract foreign capital with the
emergence of giant banking entities. Locally, various studies (Gichira, 2007; Hannah, 2007) on
globalization have not addressed the strategic response adopted to handle the challenges of globalization
by the commercial banks in Kenya, in particular, by the National Bank of Kenya Limited. The foregoing
makes it imperative to conduct a case study on strategic response effectiveness by the National Bank of
Kenya to challenges of globalization. This study therefore seeks to fill the existing gap in knowledge by
establishing various strategic responses by the National Bank of Kenya Limited as well as their
effectiveness to challenges of globalization.
1.3 Objectives of the Study
The broad objective for this study is to establish the strategic responses effectiveness by commercial
banks in Kenya to challenges of globalization. The study will be guide by the following specific
objectives;
i) To establish challenges of globalization at the National Bank of Kenya Limited.
ii) To establish strategic responses by the National Bank of Kenya to challenges of globalization.
iii) To evaluate the effectiveness of the strategic responses by National Bank of Kenya to challenges
of globalization.
1.4 Significance of the Study
This study is important in informing stakeholders in the commercial banks as well as other institutions
on the strategic response by commercial banks to challenges of globalization. The study will offer
valuable contributions from both a theoretical and practical standpoint. From a theoretical standpoint, it
contributes to the general understanding of how banks respond to challenges of globalization through
their ability to create new markets, new products, affect the technology employed as well as strategic
alliance. This study will help to sensitize the Central Bank as a regulator, and the Government of Kenya
on the strategic responses to the challenges that come about as a result globalization by commercial
banks. The government may find this study useful in identifying the various challenges.
Policy makers may benefit from the issues and insights raised in the study that are important in
developing the frameworks where formation of such organizations might be enhanced to keep them in
8

sustainable competition. The study will add to the existing body of knowledge on the concepts of
strategic responses to challenges of globalization by firms to benefit academicians and aid further
research on the concept. It will form a fundamental base upon which further researches into the field will
be based as it will act as both reading and secondary source material in such cases.
9

REFERENCES
Pearce, J. and Robinson, R. (1997) Strategic Management: Formulation, Implementation, and Control.
Boston: Irwin/McGraw-Hill.
Human Development Report (2002) Deepening Democracy in a Fragmented World, Oxford University
Press, New York, NY.
Spiegel (2007), Geschichte – Afrika, das umka¨mpfte Paradies, Nr. 2/22-05-2007, Spiegel Special.
Brown, J.S. (1997) Seeing Differently, Insights on Innovation, Harvard Business School Press, Boston,
MA.
Deardorff, A. V. and Stern, R. M. (2002) What You Should Know about Globalization and the World
Trade Organization, Review of International Economics, 10 (3): 404-23.
Orozco, M. (2002) Globalization and Migration: The Impact of family Remittances in Latin America,
Latin American Politics and Society, 44 (2): 41-66.
Molle, W. (2002) Globalization, Regionalism, and Labor Markets: Should We Recast the Foundations
of the EU Regime in Matters of Regional (Rural and Urban) Development? Regional studies,
3(2), 161-172.
Giddens, A. (1990) The Consequences of Modernity. Stanford, CA: Stanford University Press.
Eden, L. and Lenway, S. (2001) Introduction to the Symposium Multinational: The Face of Globaliza
tion, Journal of International Business Studies, 32 (3): 383-400.
Okutoyi, P. (2003) The Relationship between the Use of Strategic Marketing and Bank Performance in
Kenya. Unpublished MBA product. University of Nairobi, Nairobi, Kenya.
Kenya Bankers Association Annual Report, (2010).
Hafsi, T. (2002) Global Competition and the Peripheral Player: A Promising Future. Washington DC:
The International Bank of Reconstruction and De velopment.
Eden, L., and Lenway, S. (2001) Introduction to the Symposium Multinational: The Face of Globaliza
tion, Journal of International Business Studies, 32 (3): 383-400.
Harvey, M. & Novicevic, M. M. (2002) The Hypercompetitive Global Marketplace: The Importance of
Intuition and Creativity in Expatriate Managers. Journal of World Business, 37, 127-138.
El-Dabie, A. (1999) Privatization of Banks and Development in Egypt. El-Ahram Economic, Egypt.
10

Thompson, A. and A. Strickland (1993) Strategic Management: Concepts and Cases, 7th Ed, Boston:
Irwin.
Abdel-Bar, S. (2006) Restructuring the Banking System and How to Increase its Competitiveness: A
Study Based on International Experiences. Contemporary Egypt Magazine, Egyptian Associa
tion of Political Economics, Statistics and Legislation, No. 483, Cairo.
Magutu O. P., Richard O. N, and Haron, M (2009) Modeling the Effects of E-Commerce Adoption on
Business Process Management: Case Study of Commercial Banks in Kenya. Communications of
the IBIMA, Vol 8, 2009 ISSN: 1943-7765 pg 175.
Omondi, G. O., Magutu, P. O., Onsongo, C. O., and Abong’o, L. A. (2010) The Adoption of
Strategic Human Resource Management Practices in Commercial Banks: The Process and
Challenges in Kenya. Journal of Human Resources Management Research, Vol. 2011 (2011),
Article ID 598896.
Dunning, J. (1993) The Globalization of Business. London: Routledge.
Knight, G. (2000) Entrepreneurship and Marketing Strategy: The SME under Globalization. Journal of
International Marketing. Chicago: 2000.Vol.8, Issue. 2; pg. 12-21.
11

CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter provides theoretical and empirical information from publications on topics related to the
research problem. It examines what various scholars and authors have written about strategic response
and globalization.
2.2 The Concept of Globalization
Globalization has made it easy for the task of pursuing international business strategies; trade
among nations has been liberalized with a tremendous reduction in trade
barriers. Consequently, fewer trade barriers have also led to the spread of
improved technologies, communication systems, transportation systems and
logistics, which all facilitate the exchange relationships between a firm and its
buyers, suppliers and other actors across the globe (Carasco and Singh, 2009;
Harford, 2007; Andersson and Wictor, 2003). The phenomenon of globalization
has become one of phenomena that are most associated with economic activity.
Globalization is also linked to banking activity as part of economic
globalization. Globalization has taken banking dimensions and contents of a
new, made the banks tend to the fields and activities unprecedented, and led to
the transition from the attitudes and perceptions of activities and extended
range, in order to maximize the opportunities and increased gains, and look to
the future (Abdel-Bar,S.,2006).
Globalization is an interesting phenomenon since it is obvious that the world has been going through this
process of change towards increasing economic, financial, social, cultural, political, market, and
environmental interdependence among nations. Virtually, everyone is affected by this process. Given
these changes, globalization brings about a borderless world (Eden and Lenway, 2001; Ohmae, 1989a).
Globalization drives people to change their ways of living, prompts firms to change their ways of
12

conducting business, and, spurs nations to establish new national policies. Events transpiring in different
parts of the world now have dramatic consequences to other parts of the world at a faster pace than
anyone could imagine in the past.
On the positive side, globalization enables firms to outsource and find customers around the world, e.g.,
the auto and electronics industries. The globalization of production and operations benefits firms
through the realization of economies of scales and scope (Corswant, 2002; Reyes, Raisinghani, and
Singh, 2002). Hence, no one can deny that globalization has changed the way we conduct business. As
the banks and banks manufactured identity and personality through
orientation, which charted throughout its history, since its inception, the bank
has made globalization futuristic vision of a new dimension to enter the new
world of cosmic, a world of enormous economic opportunity. In light of
globalization and the restructuring of the banking services industry trend
banks and commercial banks in particular, the shift towards universal banks.
Are those banking entities that seek always behind the diversification of sources
of funding and employment, and mobilization of the greatest possible savings
from all sectors, and employ their resources in more than one activity in several
diverse areas. It opens and gives credit to all sectors. As well as working to
provide all the miscellaneous services and renewable which may not based on
the balance of knowledge.
In light of globalization banks innovate and create distinct clients, and provide
them with future richer and richer more at the level of banking service (El-
Dabie, 1999). The future of this innovative technology is owned and used by
banks, which are only common denominator in all the work of trying to
progress and to the growth and prosperity. Hence the concept of globalization
has been associated with the concept of abundance and availability of the
services provided by banks. The accurate view to provide banking services,
13

whether related to deposits, loans, or bonds (as traditional services), or to the
contracts of complex derivatives or other innovative advanced services, leads
banks to exist effectively in all fields of economic activity.
2.2.1 Globalization and Strategic Alliances
A strategic alliance is a contractual agreement among firms to cooperate in reaching an objective
without regard to the legal or organizational form the alliance takes. Strategic alliances cover all
relationships within the marketplace. Alliances are constructed as effective means to acquire access to
new markets and special expertise or compete with others on the market. There might be a problem with
finding resources to pursue a certain strategic direction and, therefore, a partner would be called in to
help. Typically, such alliances may occur when a particular company has an interesting technological
opportunity but lacks the funds to take it further or the needs to penetrate other countries (Johnson and
Scholes, 2002).
Today, enterprises of all sizes will have to depend more heavily on worldwide networks of
communications and transportation and establish virtual organizations to remain responsive and flexible.
To adopt agile manufacturing practices, they have to organize them into new teams as new opportunities
arise. Speed-to-market practices require companies to adopt concurrent engineering in which all aspects
of a product's development are planned simultaneously rather than waiting for research and development
phases to end before testing them with customers and developing marketing and service strategies.
Cross-functional teams representing engineering and design, marketing, purchasing, distribution and
service departments and customer representatives - some of whom are scattered widely in different cities
or countries - is becoming part of the product development process (Deutsch, 2005).
Globally competitive firms will have to enter into international strategic alliances more aggressively in
the future and in this light the Airtel Kenya has adopted various types of strategic alliances to cope with
the challenges of globalization. Marketing can furnish a deep understanding of customer needs and
demands. An operation has the knowledge and experience to cost effectively produce and deliver the
product to the market (Smith, 2003). Just as the customer provides revenue to the firm, suppliers may
represent the bulk of the costs. Because the company's product and processes depend on healthy
suppliers, management must look backward when planning production and research strategies.
14

Establishing suppliers as partners is generally a win-win situation. Alliances geared towards reducing
supplier costs or improving the quality supplied can greatly affect the productivity and attractiveness of
the firm's own products and services to its customers (Mahmood and Mitchell, 2004).
Complementary alliances exist when two firms possess similar technology but different product lines. In
this case a single technology may be implemented differently by firms with different products on various
markets (Kotler, 2001). A coalition of their energies and resources may yield much greater advancement
of the overall technology than the sum of their individual efforts. This kind of technology coalition may
be classified as a vertical alliance. In either case, combining complementary strengths enhances each
firm's competitive position: productivity and financial performance above what individual paths could
have provided (Afuah, 1998). Globally, competitive enterprises will not only have to manage their own
internal operations effectively, but coordinate the entire value chain of suppliers and distributors on
which they depend. Virtual organizations are not constrained by requirements of geographic space or
locations in cities in the same way as those that are engaged in mass production, they have to be able to
have a global presence in order to attain economies of scope, connect components of a production
distribution system in many locations that have the physical and geographical characteristics most
appropriate for the component's efficient operation (Alderfer, 2003).
2.2.2 Globalization and New Product Creation
It is not enough to avidly engage in new product creation for its own sake - what some managers refer to
as innoflation (Brown, 1997). It is important to delineate just what product features are to be improved
or radically changed. For this purpose, analysts have differentiated between “core” product features and
help provided in evaluating, buying and using the core product. The amount of help or support provided
will depend on the needs of particular customers. An appropriate premium price can normally be
charged for support. Support provides a potentially profitable lever for gaining competitive advantage. It
enables a supplier to sell the same core product to different customer groups as different offerings
(Brown, 1997).
New product creation provides the most obvious means for generating revenues. Process innovation, on
the other hand, provides the means for safeguarding and improving quality and also for saving costs.
Improved and radically changed products are regarded as particularly important for long-term business
growth (Burnes, 2000). The power of product innovation in helping companies retain and grow
15

competitive position is indisputable. Products have to be updated and completely renewed for retaining
strong market presence. Different terminologies have been used to categorize and describe product
development. Cooper et al (2002), for example, embraces two distinct activities: old product
development, which involves updating and improving existing products, and new product development,
which involves a greater degree of innovational challenge. Canals (1993) similarly categorized product
development into primary and secondary innovations. Primary innovations were broadly concerned with
the development of new markets and relate to instances where there is a high degree of technical
originality and a commensurate change in consumer behavior. Secondary innovations, on the other hand,
are basically business or company focused and typically involve improvements to an existing market.
Product portfolio decisions are the manifestation of a firm’s innovation and marketing strategies. The
common approach to managing new product development is to develop and manage a portfolio of
specific projects (Choueke and Armstrong, 1998). Practically speaking, choosing the product portfolio
determines the firm’s strategy for the medium term future and is senior management responsibility
Christensen and Bower (1996). Operationally, portfolio decisions involve two strategic components: a
development strategy regarding the number and rate of new product introductions (introduction
intensity), and a market entry strategy regarding the relative speed to market (pioneering intensity). Past
research suggests that better-managed firms structure their portfolios by striking a balance in the product
innovation portfolio across these strategic components (Wheelwright and Clark, 1992). However, past
research has not systematically decomposed the components of portfolio strategy to examine how the
components work together in relation to financial performance (Matsuno et al, 2002).
A product can be differentiated in various ways. Unusual features, responsive customer service, rapid
product innovations and technological leadership, perceived prestige and status, different tastes, and
engineering design and performance are examples of approaches to differentiation (Porter, 1980). Rather
than cost reduction, a firm using the differentiation needs to concentrate on investing in and developing
such things that are distinguishable and customers will perceive. Overall, the essential success factor of
differentiation in terms of strategy implementation is to develop and maintain innovativeness,
creativeness, and organizational learning within a firm (Clerk et al, 2000).
Successful differentiation is based on a study of buyers’ needs and behavior in order to learn what they
consider important and valuable. The desired features are then incorporated into the product to
16

encourage buyer preference for the product. The basis for competitive advantage is a product whose
attributes differ significantly from rivals’ products. Competitive advantage results when buyers become
strongly attached to these incorporated attributes and this allows the firm to: charge a premium price for
its product, benefit from more sales as more buyers choosing the product and more buyers become
attached to the differentiating features resulting in greater loyalty to its brand. Efforts to differentiate
often result in higher costs. Profitable differentiation is achieved by either keeping the cost of
differentiation below the price premium that the differentiating features command, or by offsetting the
lower profit margins through more sales volumes (Cooper et al, 2002). Kotler (2001) insists that
anything that a firm can do to create buyer value represents a potential basis for differentiation. Once it
finds a good source of buyer value, it must build the value, creating attributes into its products at an
acceptable cost. These attributes may raise the product’s performance or make it more economical to
use. Differentiation possibilities can grow out of possibilities performed anywhere in the activity cost
chain.
2.2.3 Globalization and New Market Creation
Market creation is concerned with improving the mix of target markets and how chosen markets are best
served (Cumming, 1998). Its purpose is to identify better (new) potential markets; and better (new) ways
to serve target markets. Market segmentation, which involves dividing a total potential market into
smaller more manageable parts, is critically important if the aim is to develop the profitability of a
business to the full. Incomplete market segmentation will result in a less than optimal mix of target
markets, meaning that revenues, which might have been earned, are misread (Cumming, 1998).
Market orientation as a business culture leads to business performance improvement, as proved by
numerous studies (Davila et al 2006). It is precisely product innovation that is considered as a moderator
of the link between market orientation and successful business operation (Dodgson, 2001). New market
creation has a positive impact on business performance by leading to a market share increase and/or cost
reduction and, in turn, a profit rise. Market oriented enterprises deliver superior quality products to their
customers while complying with ecological, health and safety standards as well as with legal norms.
Accordingly, market orientation is expected to produce a significant positive impact on all analyzed
effects of innovative activities. Sales has been proposed as the most important measure of business
performance on which managers should focus and is a measure of firm performance that is often closely
associated with the marketing function. Similarly, gross profit (sales revenue minus cost of selling) is an
17

indicator of the firm’s value chain, specifically measuring a firm’s ability to convert inputs into valuable
outputs (Doyle, 2004).
The market in which an enterprise offers its products can be a predictor of the effects of innovative
activities. Strengths and weaknesses of competitors, demands raised by consumers, legal regulations, as
well as ecological, health and other standards, motivate enterprises to develop products taking into
account the situation in a particular market. Enterprises often find themselves having to modify their
products sold on the international market, not only to achieve outstanding business performance and
competitive advantage, but also to enter the market in the first place and to remain in it. Accordingly, the
market range can have an impact on the effects of innovative activities. It is to be expected that the more
present an enterprise is in the international market, the more oriented its innovation activities are
towards improving product quality, ecological and health aspects, as well as towards complying with
legal standards and various regulations (Everitt, 2002).
2.2.4 Globalization and Technology
For many banking firms in Kenya, information and communication technology is viewed as potentially
capable of helping achieve innovative strategy. The high rate at which organizations are buying mobile
phones, computer hardware and software as well as using the Internet for information and
communication is evidence of the increasing awareness of information and communication technology
in the Kenyan market. The business benefits of using information and communication technology
include efficiency and attainment of increased returns. The vast opportunities brought by the Internet to
the banking industry have therefore attracted much attention from researchers whose efforts apparently
group on certain areas of interest (Fitzgerald et al, 2000).
Porter (1980) emphasized the use of technology to empower the firm’s capabilities. He argued that
technology would enable the firm to excel in the competition. Banks are regarded as a vanguard in the
use of information and communication technology (ICT) (Im and Workman 2004). In the context of
banks, the advancement in technology presents a new opportunity to improve service quality in response
to volatile economic environment and changing competitive conditions. Rosenberg (1996)At the firm
level, apart from adopting technology to integrate delivery channels to develop a close relationship with
customers, Banks also adopt technology to enable the analysis of information about customer
segmentation, demographics, product usage, transaction behavior that thereby help them to improve the
18

profitability and increase market share (Margerison, 1991). With the use of information technology (IT),
the banks can use the cross-selling strategies to sell new banking innovations to their existing customer
base. It can be seen that bank’s adoption of technology changes from improving efficiency of back office
banking functions towards improving the service quality in servicing the customers. Such changing
strategy demonstrates the situation where banks compete to own the potential customers (Fulmer, 1992).
The strengths of the integrated systems approaches relate to their taking learning, relations, dynamic and
systemic aspects of innovation into account. Griffin (1997) argued that innovation requires a process of
co-evolution between technology and cultural perspectives. Technology exerts a significant influence on
the ability to innovate and is viewed both as a major source of competitive advantage and of new
product innovation. Often, organizations experience problems in this area, which are caused by lack of
capital expenditure on technology and insufficient expertise to use the technology to its maximum
effectiveness (Alstrup, 2000).
Hamel (2000) stresses that organizations should obliterate rather than automate believing that
technology is often introduced for technology's sake without contributing to the overall effectiveness of
the operation. However, organizations traditional lack of resources usually results in a compromise
situation. It is important to link technology to innovation in sustaining competitiveness (Schon, 1998).
Organizations that can combine customer value innovation Hammer, (1990) with technology innovation
have an increased chance of enjoying sustainable growth and profit. If management skills and activities
are conceptualized to be situation specific and embedded in the organizations in which they are practiced
then the question arises about what is the best way to prepare managers for the “complexity, uncertainty,
uniqueness and value conflicts” which postulates characterize organizational environments (Manogran,
2001).
While the area of information technology is very wide, the most applicable and highly used is the mobile
phone, which is used by majority of Kenyans, both individuals and corporations. A large number of
people now use mobile phones for communication purposes this implies that banks can reach a large
number of persons through their mobile phones, which are always with them. The adoption of short
messages services banking both from clients will, if effectively implemented, lead to substantial cost
savings by insurers in the areas of telephone calls and personnel time (Lewis and Lytton, 1997).
Technological developments particularly in the area of Telecommunications and Information
19

Technology are revolutionizing the way business is done. Electronic commerce (e-commerce) is the
activity in which consumers get information and purchase products using Internet technology (Hart,
(1996). This revolution in the market place has set in motion a revolution in the insurance sector for the
provision of a payment system that is compatible with the demands of the electronic marketplace.
Consequently, the potential benefits of e-commerce have been widely touted (Leonard, 1995). While
technology is often a key ingredient in cost-reduction efforts, insurers also are looking to ensure they
restrain unnecessary IT expenses. One driver is the cost of maintaining interfaces among multiple legacy
systems, which are often the result of a series of acquisitions that have not been fully integrated (Carrie,
2008).
One promising strategy is virtualization or grid computing, where software and data are centralized,
moving from PCs to central servers. Zurich North America Commercial for example initially went
through a phase of virtualization to consolidate servers and boost utilization. Zurich used virtualization
to homogenize hardware and software environment (Carrie, 2008). The Schaumburg, Ill.-based
Company then used virtualization in non-production and, subsequently, production environments. It
currently uses virtualized and non-virtualized environments for production; in addition, the company
used virtualization to improve application efficiencies by running an application family within a virtual
environment (Higgins, 1995).
New analytics tools such as synthetic data and unstructured text applications add to the already powerful
analytics repertoire and create opportunities for both profitability and efficiencies in claims
administration, marketing and distribution (Carrie, 2008). Banks have to capture and analyze multiple
sources of data internally from diverse product databases and claims systems and externally from a
range of public domain data sources to develop insights that enable better and more informed decisions
(Carrie, 2008).
2.3 Factors Driving Globalization and its Challenges
Technological forces such as advance development in communication and transportation technologies,
which promote growth in international business transactions, are also key drivers of rapid globalization
(Graham, 1996; Knight, 2000). Thus, globalization is made possible by the development of cost
effective, yet very powerful technologies, including the Intra- and Internet, enterprise resource planning
system, data warehouse, data mart, and data analytics. Friedman (2005) defined globalization a whole
20

set of technologies and political events converging—including the fall of the Berlin Wall, the rise of the
Internet, the diffusion of the Windows operating system, the creation of a global fiber-optic network, and
the creation of interoperable software applications, which made it very easy for people all over the world
to work together—that leveled the playing field. It created a global platform that allowed more people to
plug and play, collaborate and compete, share knowledge and share work, on a scale never seen before.
Cloud computing and new advances in remote access and support technologies also seem to fuel
globalization. Many service jobs, such as call centers, animation, transcription, and software
development can be carried out remotely. It is estimated that 160 million jobs, or about 11 per cent of the
projected 1.46 billion service jobs worldwide in 2008, could be carried out remotely, barring any
constraints on supply (McKinley Global Institute, 2005).
Globalization is a force that has brought about increased interdependencies among many actors the
world over, which has never been witnessed before. (Czinkota and Ronkainen, 2007; Peters and Pierre,
2006). Therefore, the world is both becoming more homogenous and that the distinctions between
national markets, for some products/services, are fading away. Essentially, there abound numerous
opportunities such as large markets, access to modern technology, access to modern and superior
goods/services, fewer barriers to trade and capital flows for interdependent actors in our globalized
world. Consequently, integrated and/or interdependent markets should be virtually free from all forms of
trade barriers. Trade liberalization, therefore, assumes importance (Peng et al., 2008; Czinkota and
Ronkainen, 2007; Human Development Report, 2004; World Development Report, 1994).
As markets are liberalized, with almost all trade barriers like physical, fiscal,
monetary, and technical removed, many firms can enter and operate in almost
any market of their choice. However, some nations may not have the ability to
deal with the challenges which globalization and its concomitant result of trade
liberalization bring with them.
Removal or even decreasing of tariff and non-tariff barriers in the globalized world is becoming
imperative for all markets. Firms and even private individuals have over the years been agitating for
trade liberalization because of the benefits that come with that venture (Czinkota and Ronkanen, 2007;
Human Development Report, 2004). An important premise for trade liberalization is that all markets will
benefit from deregulation or removal of all forms of trade barriers, which summarily limit, for example,
firms’ and private individuals’ exchange relationships in an economy (Human Development Report,
21

2004; World Development Report, 1994; Todaro, 1994). However, the forces of globalization and trade
liberalization have also led to intense competition among firms in all countries (Peng et al., 2008;
Czinkota and Ronkainen, 2007; Beamish and Lu, 2004). Trade liberalization comes with challenges and
firms are compelled to develop ways to have the ability to deal with intense competition. Since many
firms in may not be well equipped to face the emerged competition from trade liberalization, their
competitiveness vis-à-vis other competitors that can enter their markets from anywhere in the globalized
world becomes eroded (Spiegel, 2007; Human Development Report, 2004, pp. 85-6). But, the presence
of trade liberalization will call for the role of institutional arrangements in any economy to help various
actors exploit opportunities or manage challenges emanating from trade liberalization (Peng et al., 2008;
Beamishand Lu, 2004; Human Development Report, 2004).
2.4 Strategy and Strategic Response
2.5 Empirical Review
According to a study on commercial banks in Egypt, Ezzat (2009) found that with increasing
globalization, banking work became exposed to risks whether external or internal factors and banks had
to be causation about risks using several means, the most significant of which is strengthening capital.
Merging leads to the achievement of economies of scale and increases the volume of activity and
savings and reduce the costs of the activity and mergers and acquisition leads to a change in bank
management and the selection of leaders to pursue more efficient and modern management methods
which leads to lower costs and increase profits. The study recommended: development of skills of the
personnel in charge of credit and selection of the best of them from among those who are efficient, well-
reputed and highly experienced in the banking field; taking into consideration on-going training of bank
staff to get acquainted with the latest development in the banking sector; and also knowing the nature of
competition facing banks.
Thoumrungroje and Tansuhaj (2009) carried out a study on the effects of globalization on firm
performance. The results of their study show that as uncertainty increases, firms engage more in
networking activities, which finally enhances firm performance. This implies that uncertainty alone can
be harmful for firm performance unless certain strategies, such as networking activities and alliance
participation, are implemented to mitigate its negative impact. Further, globalization not only benefits
firms in terms of increasing opportunities, but also hurts business performance due to higher competitive
22

threats (Contractor and Lorange, 1999, D’Aveni, 1994, Jones, 2002). The study also found that
globalization has several implications for managers in the global marketplace. This study elaborated on
the different effects that globalization has on business. The results indicated that such effects are not
significantly different across cultures. This study also confirmed that globalization is a universal
phenomenon and that firms are inevitably affected. Globalization can affect firm performance positively
and negatively. While global market opportunities are likely to enhance firm performance, global
competitive threats tend to worsen it. Therefore, managers must be aware of such double-edged effects,
and try to capitalize on opportunities while converting threats into opportunities.
In their study on the globalization of commercial banking, Bexley et al. (2007) concluded that, to
accomplish total globalization, a common currency must be established which will ease the entry of
foreign banks into domestic markets that can contribute to more efficiency through increased
competition. On the other hand, a currency crisis in an emerging market would exaggerate this situation.
Domestic borrowers, including banks, that obtain funds from abroad, usually borrow in a foreign
currency such as the dollar to give foreign currency such as the dollar to give foreign investors some
reassurance about the value of their investments. The effect of financial globalization, therefore, on
domestic financial fragility is not simple. Foreign direct investment both lowers the incidence of
banking crises and shortens its duration. To face international competition, commercial banks must work
to know all details about the market needs, but ensure that they do not conflict with the goals of their
bank. They must also know the nature of their competition. Banks need to reinforce their financial
resources through increasing capital and merging with small and weak banks to form more effective
units in order to achieve the required reduction in costs. Banks need to develop human resources through
rehabilitation and training in such a way as to fit with the developmental process and the requirements of
modern banking technology. They need to implement the modern banking technology and introduce
modern services and products to the customers in the local market.
Gachunga (2009) concluded that globalization has its positive side as well as its negative side. It affects
the economic dimensions; that is trade, finance, aid, migration and ideas. Increases in these dimensions
of globalization, if managed in a way that supports development in all countries, can help alleviate
global poverty under certain conditions. Further, globalization has led to a situation where the business
processes that are outsourced are at the lowest level in the hierarchy in terms of skills requirement. The
other effect of globalization on human resources in Kenya has to do with the migration patterns. Ratha
23

and Xhu (2008) indicate that the remittances provided by the people who have migrated provide a
lifeline to the poor and to their dependants and are an essential source of foreign exchange and a
stabilizing force for the economy in turbulent times. However for many sub-Saharan African countries,
the remittance figures are also an indicator of the high levels of brain drain that have deprived these
countries of some of the finest brains (Ratha and Xhu, 2008). This level of brain drain hampers Africa’s
and specifically Kenya’s growth. The fact that the jobs created require low skills and the skilled people
are going away is a bad mix for Kenya’s growth.
Gachunga (2009) further concluded that globalization has led to cut throat competition which means that
organizations have had to manage their performance very strictly in order to survive. It is from this
backdrop that organizations in Kenya including the civil service have embarked on measures of
improving performance. From the human resource management perspective, the performance targets
should be clearly measurable so that individuals can gauge their performance. The targets come from the
organizational targets. This form of management thinking has led to improvement in organizational
performance and especially service delivery has improved extensively especially in the public service.
Most of these organizations are competing with global organizations so they have had to put in extra
effort to survive. So with globalization organizations can no longer remain complacent.
24

CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter sets out various stages and phases that will be followed in completing the study. It involves
a blueprint for the collection, measurement and analysis of data. This section is an overall scheme, plan
or structure conceived to aid the study in answering the raised research question. Therefore in this
section the research identifies the procedures and techniques that will be used in the collection,
processing and analysis of data. It is comprises of the following; research design, data collection, and
data analysis.
3.2 Research Design
Research design refers to the arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy in the procedure (Kothari, 2006).
Research design constitutes the blue print for the collection, measurement and analysis of data (Kothari,
2006). The function of research design is to provide for the collection of relevant evidence with minimal
expenditure of effort, time and money.
The research design for this study will be a case study and will focus on the National Bank of Kenya
Limited. This study aims at collecting information from respondents on the strategic responses by
National Bank of Kenya Limited on the challenges of globalization. The design is deemed appropriate in
this study because it’s focusing on only one of the commercial banks in Kenya- the National Bank of
Kenya Limited. Kiptoo (2008) asserted that a case study research design is appropriate where a detailed
analysis of a single unit is desired as they provide a focused and variable insight into a phenomenon.
3.3 Data Collection
The source of data will be both primary and secondary. The instruments to be used in primary data
collection will be in-depth personal interviews guided by open ended questions in an interview guide
(appendix II). The questions will be geared to acquire the opinion of the respondent on the strategic
responses by the National Bank of Kenya Limited on the challenges of globalization. The study will
consider twelve (12) respondents for an interview: one chief manager, one regional manager; one deputy
regional manager; two functional heads; one branch business head; one sectional head; and two field
25

staff. The respondents are expected to give an insight into the strategic responses by the National Bank
of Kenya Limited on the challenges of globalization in their respective positions. Secondary data will be
obtained from existing bank records.
Open-ended questions will be applied to avoid subjectivity that could result from limiting the
respondents’ answer to the questions. Cooper and Schindler (2008) points out that open ended questions
help measure sensitivity or disapproval of behavior and encourage natural modes of expression. Open-
ended questions also allow the respondents to include more information, including feeling, attitudes, and
understanding of the issues (Bryman & Bell, 2007).
3.4 Data Analysis
Data will be analyzed and evaluated using content analysis. The data collected will be summarized
according to the study objectives being: to establish challenges of globalization at the National Bank of
Kenya Limited; to establish strategic responses by the National Bank of Kenya to challenges of
globalization; and to evaluate the effectiveness of the strategic responses by National Bank of Kenya to
challenges of globalization. Cooper and Schindler (2008) point out that content analysis measures the
semantic content or the ‘what’ aspect of the message. Its breadth makes it a flexible and wide ranging
tool that may be used as a methodology or as a problem specific technique. He further points out that
content analysis guides against selective perception of content and provides for rigorous application of
reliability and validity criteria. Content analysis is a technique for making inferences by systematically
and objectively identifying specific characteristics of messages and the relating themes (Ichangi, 2006).
This is an appropriate tool for quantifying and analyzing presence, meaning, and relationships of words
and concepts within texts.
26

REFERENCES
Abdel-Bar, S., (2006): Restructuring the Banking System and How to Increase its Competitiveness: A
Study Based on International Experiences. Contemporary Egypt Magazine, Egyptian Associa
tion of Political Economics, Statistics and Legislation, No. 483, Cairo.
Afuah, A. (1998), Innovation Management: Strategies, Implementation and Profits, Oxford University
Press, New York, NY,
Alderfer, (2003). Strategic Assets and Organizational Rent. Strategic Management Journal, Vol. 14
No.1, pp.33-46.
Alstrup, L. (2000). Coaching Continuous Improvement in Small Enterprises, Integrated Manufacturing
Systems, Vol. 11 No.3, pp.165-70.
Andersen L. and Segars B., (2001). Seeing Differently, Insights on Innovation, Harvard Business School
Press, Boston, MA.
Andersson, S. and Wictor, I. (2003), “Innovative internationalisation in new firms – born globals the
Swedish case”, Journal of International Entrepreneurship, Vol. 1 No. 3, pp.
249-76.
Ansoff, H. I. & McDonnell, E. (1990). Implanting Strategic Management. New York: Prentice
Athanasoglou P. P., Brissimis S. N. and Delis M., (2005). Bank-Specific, Industry-Specific and
Macroeconomic Determinants of Bank Profitability, Bank of Greece Working Paper, No. 25
Berry, D. B., (2000). Competitive Viability in Banking: Scale, Scope and Product Mix Economies,
Journal of Monetary Economics Vol. 20 (4) pp. 19-28.
Bessant, J., and Francis, D. (1999), Developing Strategic Continuous Improvement Capability,
International Journal of Operations & Production Management, Vol. 19 No.11, pp.1106-19.
Bexley, J. B., Bond, P., Maniam, B. (2007). The Globalization of Commercial Banking, Sam Houston
State University. Research in Business and Economics Journal, October, 2007.
Bobáková, I.V. (2003). Raising the Profitability of Network Providers, BIATEC, Volume XI,
27

Bogdan N. and Biklen L. (2003). Making the Numbers Count: Virtualization or Grid Computing,
Portland: Productivity Press: 17.31.
Bradley, T. C., Bross, U.S., Carrie, A.S., McDevitt, L.G. (1993). Integrated Performance Measurement
Systems: A Development Guide, International Journal of Operations & Production Management,
Vol. 17 No.6, pp.522-35.
Brown, J.S. (1997). Seeing Differently, Insights on Innovation, Harvard Business School Press, Boston,
MA.
Bryman, A. and Bell, E. (2007). Business Research Methods, 2nd edition, Oxford: Oxford University
Press.
Burnes, B. (2000). Managing Change - Instructor's Manual (3rd Edition). Financial Times: Prentice
Hall
Burnes, T. (2000). Competitive Viability in Banking: Scale, Scope and Product Mix Economies, Journal
of Monetary Economics Vol. 20 (4) pp. 19-28.
Canals E. (1993). New Product Development, Dryden Press, London.
Carasco, E.F. and Singh, J.B. (2009), “The evolution of global business ethics conventions”, in
Andersson, S. and Svensson, G. (Eds), Glocal Marketing: Think Globally and
Act Locally, Studentlitteratur, Lund.
Carrie, C. (2008). Small Firms Under the Microscope: International Differences in
Production/Operations Management Practices And Performance, Integrated Manufacturing
Systems, Vol. 12 No.7, pp.469-82.
Chanda (2007)………………………..
Charles, H. and Gareth, J. (1998). Strategic Management Theory: An Integrated Approach. Boston, MA:
Houghton Mifflin.
Choueke, R., and Armstrong, R. (1998). The Learning Organization in Small and Medium-sized
Enterprises, International Journal of Entrepreneurial Behaviour & Research, Vol. 4 No.2, pp.129-
40.
Christensen, C.M., Bower, J.L. (1996). Customer Power, Strategic Investment and the Failure of
28

Leading Firms, Strategic Management Journal, Vol. 17 pp.197-218
Clarke, R., Davies, S. and Waterson, M. (2000). The Profitability-Concentration Relation: Market
Power or Efficiency, Journal of Industrial Economics, 32 (4).
Contractor, F. J. & P. Lorange (1988). Why Should Firms Cooperate? The Strategy and Economics Ba
sis for Cooperative Ventures. In F. J. Contractor & P. Lorange (Eds.), Cooperative Strategies in
International Business (pp. 1-29). Lexington, Massachusetts: Lexington Books.
Cooper, D.R & Schindler, P.S (2003). Business Research Methods. New York: Mc McGraw-Hill Irwin.
Cooper, D.R. and Schindler, P.S. (2008). Business Research Methods (10th ed.). New York: McGraw-
Hill Irwin.
Cooper, R.G., Scott, J.E., Kleinschmidt, E.J. (2002a), “Optimizing the stage-gate process: what best-
practice companies do I”, product innovation Management, Washington, DC, Vol. 45 No.5,
pp.21-7
Corswant, Fredrik von, Fredriksson, Peter (2002) ‘Sourcing Trends in the Car Industry: A Survey of Car
Manufacturers’ and Suppliers’ Strategies and Relations’, International Journal of Operations &
Production Management, 22 (7): 741-58.
Creswell, J.W. (1994). Research Design: Qualitative and Quantitative Approaches. Thousand Oaks: CA
Sage.
Cumming, B.S. (1998), “Innovation overview and future challenges”, European Journal of Innovation
Management, Vol. 1 No.1, pp.21-9.
D’Aveni, R. A. (1994). Hypercompetition. New York: Harper Business.
Damanpour, F. (1996), “Organizational complexity and innovation: developing and testing multiple
contingency models”, Management Science, Vol. 42 No.5, pp.693-716
Davila, Tony; Marc J. Epstein and Robert Shelton (2006). Making Innovation Work: How to Manage It,
Measure It, and Profit from It. Upper Saddle River: Wharton School Publishing. ISBN 0-13-
149786-3.
Deardorff, A. V. and Stern, R. M. (2002) ‘What You Should Know about Globalization and the World
Trade Organization’, Review of International Economics, 10 (3): 404-23.
29

Deutsch, Y. (2005). The impact of board composition on firms’ critical decisions: A meta-analytic
review. Journal of Management, 31(3): 424.
Dodgson, J M (2001). Innovation: A Guide to the Literature, in Fagerberg, Jan, David C. Mowery and
Richard R. Nelson: The Oxford Handbook of Innovations. Oxford University Press, 1-26. ISBN
0-19-926455-4.
Doyle W N (2004). Open Innovation: The New Imperative for Creating and Profiting from Technology.
Boston, MA: Harvard Business School Press.. ISBN 1-57851-837-7.
Eden, L., and Lenway, S. (2001) ‘Introduction to the Symposium Multinational: The Face of Globaliza
tion’, Journal of International Business Studies, 32 (3): 383-400.
El-Dabie, A., 1999. Privatization of Banks and Development in Egypt. El-Ahram Economic
Everitt, G. (2002), The organisational culture of idea management: a creative climate for the
management of ideas, in Henry, J., Walker, D. (Eds), Managing Innovation, Sage, London.
Ezzat, M. K., (2009).Globalization and its Effects on the Banking System performance in Egypt. Ozean
Journal of Applied Sciences 2(1).
Fitzgerald, L., Johnston, R., Brignall, S., Silvestro, R., Voss, C. (2000), Technology Measurement in
Service Businesses, CIMA Publishing, London, .
Fram, E. H. & R. Ajami (1994). Globalization of Markets and Shopping Stress: Cross-Country Compar
isons. Business Horizons, 37(1), 17-23.
Frenkel, S. J. & D. Peetz (1998). Globalization and Industrial Relations in East Asia: A Three-Country
Comparison. Industrial Relations, 37(3), 282-310.
Friedman, T. L. (2004). The World is Flat New York: Farrar, Straus and Giroux.
Fulmer, R.A. (1992), “Implementing strategy: developing a partnership for change”, Technology
Planning Review, Vol. 21 No.5, pp.33-6.
Gachunga, H. G. (2009). Impact of Globalization on The Human Resource Management Function in
Developing Countries: A Case Study of Kenya Public Corporations. , [Online] Available at:
Giddens, A. (1990). The Consequences of Modernity. Stanford, CA: Stanford University Press.
Gitonga Timothy (2003) Innovation Processes And The Perceived Role Of The Ceo In The Banking
30

Industry, Unpublished MBA project. University of Nairobi.
Graham, P. G. (1996). Small Business Participation in the Global Economy. European Journal of Mar
keting, 33(1/2), 88-102.
Griffin, A. (1997), “PDMA research on new product development practices: updating trends and
benchmarking best practices”, Journal of Product Innovation Management, Vol. 14 pp.429-58.
Hafsi, T. (2002). Global Competition and the Peripheral Player: A Promising Future. In S. Fawzy (Ed.),
Globalization and Firm Competitiveness. Washington DC: The International Bank of Recon
struction and Development.
Hamel, T. (2000), Defining and Shaping the Future of Cost Management,” Journal of technolgy
Management 14, no. 5: 32.
Hammer, M. (1990), “Re-engineering work: don't automate, obliterate”, Harvard Business Review, July-
August, Vol. 68 No.4, pp.104-12.
Hansen, R. (2002). Globalization, Embedded Realism, and Path Dependence. Comparative Political
Studies, 35(3), 259- 283.
Harford, T. (2007), The Under Cover Economist, Abacus, London.
Hart, S. (1996), New technolgy Development, Dryden Press, London., .
Harvey, M. & M. M. Novicevic (2002). The Hypercompetitive Global Marketplace: The Importance of
Intuition and Creativity in Expatriate Managers. Journal of World Business, 37, 127-138.
Hax, A. C. & Majiluf, N. S. (1996). The Strategy Concept and Process, A Pragmatic Approach. Upper
Saddle River, NJ: Prentice Hall.
Henderson, P. (1993), “Improving productivity and quality in small and medium enterprises: cases and
analysis”, International Small Business Journal, Vol. 15 No.1, pp.59-72.
Higgins, J.M. (1995), “How effective companies operate: lessons from Japanese strategy”, Creativity
and Innovation Management, Vol. 4 No.2, pp.110-9.
Hill, C. W. & Jones, G. R. (2004). Strategic Management Theory: An Integrated Approach. Boston:
Houghton Mifflin Company.
31

Hitt, M. A., B. W.Keats & S. M. DeMarie (1998). Navigating in the New Competitive Landscape:
Building Strategic Flexibility and Competitive Advantage in the 21st Century. Academy of
Management Executive, 12(4), 22-42.
http://ajol.info/index.php/kjbm/article/viewFile/43822/27340.
Human Development Report (2002), Deepening Democracy in a Fragmented World, Oxford University
Press, New York, NY.
Ichangi, M.M. (2006). Managing Resistance to Change in Strategy Implementation in Public
Universities in Nairobi: A Case Study of University of Nairobi. Unpublished MBA Research
Project, School of Business, University of Nairobi.
Im, S., Workman, J.P. (2004), “Market orientation, creativity and new product performance in high-
technology firms”, Journal of Marketing, Vol. 68 pp.114-32
Johne, A., and Storey, C. (1998), “New service development: a review of the literature and annotated
bibliography”, European Journal of Marketing, Vol. 32 No.3/4, pp.184-251.
Johnson, G and Scholes, K (2002). Exploring Corporate Strategy (6th edn). London: Prentice Hall.
Jones, M. T. (2002), Globalization and Organizational Restructuring: A Strategic Perspective. Thunder
bird International Business Review, 44(3), 325-351.
Kenya Bankers Association annual Report, (2010).
Kim, W.C., and Mauborgne, R. (1999), “Strategy, value innovation, and the knowledge economy”,
Sloan Management Review, Spring, Vol. 40 No.3, pp.41-54.
Kiptoo, I.K. (2008). Strategic Change Management at the University of Nairobi, Unpublished MBA
Research Project, School of Business, University of Nairobi.
Knight, G. (2000). Entrepreneurship and Marketing Strategy: The SME under Globalization. Journal of I
nternational Marketing, 8(2), 12-32.
Koros, G. (1993). An Evaluation Of The Financial Performance Of Non Banking Institutions That
Converted Into Commercial Banks In Kenya. Unpublished MBA product. University of Nairobi.
Kothari, C.R. (2006). Research methodology: Methods & techniques. India: New Age International
Publishers.
Kotler J. (2001) marketing, 6th ed. Englewood Cliffs, NJ: Prentice-Hall College Division, 528–529.
32

Kulmala, H. I., J. Paranko & E. Uusi-Rauva (2002). The Role of Cost Management in Network Rela
tionships. International Journal of Production Economics, 79, 33-43.
Lees, S. (1992)), “Ten faces of management development”, Journal of Management Mumford, A.
(1993), Management Development: Strategies for Action,, IPD,, London., .
Leonard-Barton (1995) “Ten faces of management development”, Journal of Management Mumford, A.
(1993), Management Development: Strategies for Action,, IPD,, London., .
Levitt, T. (1983). The Globalization of Markets. Harvard Business Review, 61(3), 92-102.
Lewis and Lytton, (1997), Dictionary for Accountants, 6th ed. Englewood Cliffs, NJ: Prentice-Hall
College Division, 528–529.
Magutu O. P., Richard O. N, and Haron M, (2009). Modeling the Effects of E-Commerce Adoption on
Business Process Management: Case Study of Commercial Banks in Kenya: Communications of
the IBIMA. Vol 8, 2009 ISSN: 1943-7765 pg 175.
Mahmood, I. P., & Mitchell, W. (2004). Two faces: Effects of business groups on innovation in emerging
economies. Management Science: 1348-1365
Maithulia, M. (1989) Portfolio Diversification: An Empirical Investigation Of Commercial
Manogran, J. (2001), “Organizational complexity and innovation: developing and testing multiple
contingency models”, Management Science, Vol. 42 No.5, pp.693-716
Margerison, C.C. (1991), “A dynamic view of strategy”, Sloan Management Review, Vol. 40 No.3,
pp.55-63
Matsuno, K., Mentzer, J.T., Ozsomer, A. (2002), “The effects of entrepreneurial proclivity and market
orientation on business performance”, Journal of Marketing, Vol. 66 pp.18-32
McKinley Global Institute, (2005). The Emerging Global Labor Market: Part I - The
Demand for Offshore Talent in Services, (2005)
Miller, D.C. (1991). Handbook of Research Design and Social Measurement. New Park: CA. Sage.
Molle, W. (2002). Globalization, Regionalism, and Labor Markets: Should We Recast the Foundations
of the EU Regime in Matters of Regional (Rural and Urban) Development? Regional studies,
3(2), 161-172.
33

Mugenda, O. M and Mugenda, A. G (1999). Research Methods: Quantitative and Qualitative
approaches. Nairobi, Acts Press.
Mugenda, O. M., & Mugenda, A. G. (2003). Research Methods: Quantitative and Qualitative
Approaches. Nairobi: Acts Press.
Mwasho G. Changa (2007) A Study of the Strategic Responses to Globalization by Foreign Commercial
Banks in Kenya. A Case of Barclays Bank of Kenya.
Nachamias, C.F and Nachamias, D (1996). Research methods in the social sciences,
Nelson C. and Winter T. (1982), Psychometric theory (2nd
ed.). New York: McGraw-Hill.
Ngechu M., (2004), Understandng the Research Process and Methods: An Introduction to Research
Methods Nairobi, Acts Press.
Nolan, P. & J. Zhang (2003). Globalization Challenge for Large Firms from Developing Countries: Chi
na’s Oil and Aerospace Industries. European Management Journal, 21(3), 285-299.
Odhiambo Gordon Omollo (2008) Innovation Strategies at the Standard Chartered Bank; An
Unpublished MBA project. University of Nairobi.
Ohmae, K. (1989a) ‘Managing in a Borderless World’, Harvard Business Review, 67 (3): 152-61.
Ohmae, K. (1993). The mind of the strategist. Penguin Books, Harmondsworth.
Okutoyi, P. (2003) The relationship between the use of strategic marketing and bank performance in
kenya. Unpublished MBA product. University of Nairobi.
Omondi, G. O., Magutu, P. O., Onsongo, C. O., and Abong’o, L. A. (2010). The Adoption of
Strategic Human Resource Management Practices in Commercial Banks: The Process and
Challenges in Kenya. Journal of Human Resources Management Research, Vol. 2011 (2011),
Article ID 598896.
Orozco, M. (2002) ‘Globalization and Migration: The Impact of family Remittances in Latin America’,
Latin American Politics and Society, 44 (2): 41-66.
Porter, M.E. (1990), The Competitive Advantage of Nations, Free Press, New York, NY, .
Preble, J.F. (1992). Toward a comprehensive system of strategic control. Journal of Management
Studies, Vol. 29. pp. 391-409.
34

Randolph, W. A. & G. G. Dess (1984). The Congruence Perspective of Organizational Design: A Con
ceptual Model and Multivariate Research Approach. Academy of Management Review, 9(1),
114-127.
Ratha, D. and Zhimei, X. (2008). Migration and Remittances Handbook. World Bank report.
Raynor A. and Christensen P. (2008) “Alignment between product innovation and competitive
priorities", International Journal of Business Performance Management, Vol. 6 No.3/4,
pp.287-97.
Reyes, Pedro, Mahesh S. Raisinghani, and Manoj Singh (2002) ‘Global Supply Chain Management in
the Telecommunications Industry: The Role of Information Technology in Integration of Supply
Chain Entities’, Journal of Global Information Technology Management, 5 (2): 48-61.
Robinson, S. (2002). Research Methodology. Washington D.C.: National Academies Press.
Rosenberg, N. (1996), Uncertainty and technological change, in Fuhrer, J.C., Sneddon Little, J.
(Eds),Technology and Growth: Conference Series No. 40, Federal Reserve Bank of Boston, s
Boston, MA,
Sanchez, R. (1997). Preparing for an Uncertain Future. International Studies of Management & Organi
zation, 27(2), 71- 94.
Schon N M (1998) "The innovative attitude of small and medium-sized enterprises", Journal of Small
Business Management, Vol. 28 No.1, pp.68-80.
Schreyogg, G. & Steinmann, H. (1987). Strategic control: A new perspective. Academy of Management
Review. Vol. 12, pp. 91-103.
Spiegel (2007), Geschichte – Afrika, das umka¨mpfte Paradies, Nr. 2/22-05-2007, Spiegel Special.
Thompson, A. and A. Strickland (1993), Strategic Management: Concepts and Cases, 7th Ed,, Boston,
Irwin.
Thoumrungroje, A. and Tansuhaj, P., (2009). Globalization Effects on firm Performance, Journal of In
ternational Business Research, Vol.6, Issue: 2, P: 43–58
Tregoe, K. (2001). Strategic Response: Creating Strategic Excellence. Worldwide Strategy Practice of
Kenper Tregoe,Vo. 02,# 01.
Wheelwright, S.C., and Clark, K.B. (1992), Revolutionizing Product Development – Quantum Leaps in
35

Speed, Efficiency, and Quality, The Free Press, New York, NY, .
36

APPENDICES
APPENDIX I: LETTER OF INTRODUCTION
The Respondent,
Dear Sir/Madam,
Re: Request for Research Data
I am a Postgraduate student at the University of Nairobi pursuing a Master of Business Administration
(MBA) program. My research project topic is “A Case Study of Strategic Response Effectiveness by the
National Bank of Kenya to Challenges of Globalization”.
In order to carry out the research, you have been selected to form part of those to provide the necessary
data. The data will be gathered through personal interview with the undersigned. You are therefore
kindly requested to assist by granting an opportunity for the interview at your convenient when
contacted for an appointment.
The information you provide will be treated in strict confidence and is purely for academic purpose. In
no way will your name appear in the final research report.
A copy of sample question to assist in preparation is attached. Your assistance and cooperation will be
highly appreciated.
Yours sincerely,
Student Supervisor
37

APPENDIX II: INTERVIEW GUIDE
Section I: Demographic Information
1. Name of your bank
i) Equity bank Ltd ( )
ii) Kenya Commercial Bank ( )
iii) Barclays Bank of Kenya ( )
2. What level are you in management?
i) Lower level management ( )
ii) Middle level management ( )
iii) Top level management ( )
3. How long have you worked in this position?
i) Less than 5 years ( )
ii) More than 5 years ( )
Section II: Profit
4. How has your bank been performing in the last 5 years?
i) Increase in profits ( )
ii) Decrease in profits ( )
iii) Neither increase nor decrease in profits ( )
5. What was your bank’s annual profit before tax for the last 5 years?
Year 2007 2008 2009 2010 2011
Annual pre-tax profit in billions (Kshs.)
38

6. Kindly indicate the extent to which the following elements have affected on the performance of your
bank in the last five years.
Element Not all Least
extent
Moderate
extent
Great
extent
Very great
extent
Technology
Competition
Politics
Cultural values and institutions
New markets
New products creation
Ecological constraints
Defined rules, duties and regulations
Strategic Alliance
Section III: Loans and Advances
7. What was your bank’s loan portfolio for the last 5 years?
Year 2007 2008 2009 2010 2011
Loan Portfolio
8. To what extent has globalization affected the levels of loan portfolio in you bank for the last 5 years?
i) Not at all ( )
ii) Little extent ( )
iii) Moderate extent ( )
iv) Great extent ( )
v) Very great extent ( )
9.
10.
39

Year 2007 2008 2009 2010 2011
Annual pre-tax profit in billions (Kshs.)
40

APPENDIX III: INTERVIEW GUIDE
Homework Help
https://www.homeworkping.com/
Math homework help
Research Paper help
Algebra Help
Calculus Help
Accounting help
Paper Help
Writing Help
Online Tutor
Online Tutoring
41

99678502 a-case-study-of-strategic-response-effectiveness-to-challenges-of-globalization-nbk-chp one

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (16)

Semelhante a 99678502 a-case-study-of-strategic-response-effectiveness-to-challenges-of-globalization-nbk-chp one

Semelhante a 99678502 a-case-study-of-strategic-response-effectiveness-to-challenges-of-globalization-nbk-chp one (20)

Mais de homeworkping7

Mais de homeworkping7 (20)

Último

Último (20)

99678502 a-case-study-of-strategic-response-effectiveness-to-challenges-of-globalization-nbk-chp one