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

Abstract

Kenyan Commercial banks play a vital role in the economic resource. However, the ease of doing business in Kenya remains
weak, and the rapid development of information and technology is shaking the foundation of banking industry. The
competition is cut throat, and the commercial banks have generally adopted the use of e-commerce products and services in
their delivery of services to customers. The main objective of this study was to analyze the influence of organizational
capabilities on e-commerce strategy as adopted by commercial banks in Kenya. The general objective was operationalised by
in-depth study of the following constructs; business process re-engineering, structural design, capacity for change, and
leadership. The study employed a descriptive survey research design. Self-administered questionnaire was distributed to
management, supervisors, clerical and secretariat, and support staff randomly selected from the commercial banks that are
sample respondent. The target population was 36,923, and the sample size of 384. The scope of the study targets was 43
commercial banks in Kenya. The quantitative data was analyzed by the use of statistical package for social scientists (SPSS).
Result from the research findings indicates that different organizational capabilities influences electronic commerce strategy
adoption by commercial banks in Kenya in different directions and magnitude: Business process reengineering by 0.055,
structural design by 0.177, capacity for change by 0.203, and leadership by 0.143. Banks that embrace Structural Design,
capacity for change, Leadership has a higher level of Electronic Commerce strategy adoption. However, BPR has not a very
strong impact on electronic commerce adoption strategy, and we cannot say that banks that embrace BPR have a higher
level of Electronic Commerce strategy adoption. The recommends of the study include the introduction of advanced
technologies that can be upgraded to achieve next generation capabilities and providing a basis for further productivity
gains, improved evaluation of activities in the banking processes, effective management of interdepartmental
communication, a single point of contact is provided for the customer, control and checks and other non-value-added work be
minimized, and works should be performed where it makes more sense. The study recommends stronger management
support for best fit of organization structure, just in time and total quality management, among other recommendations.
Future researchers to explore the influence of organizational capabilities on electronic commerce strategy as adopted by
non-commercial banks, so as to support the generalization of the findings; and also, they can focus on the influence of other
organizational capabilities.