Influence of operational excellence strategy on organisations’ competitiveness among tier III category of Commercial Banks in Kenya

Abstract

Tier 3 Kenyan commercial banks face significant challenges, including intense competition, financial distress, and declining profits despite  consistent loan growth. This study investigates the impact of operational excellence strategies on the competitiveness of these  banks using a pragmatic research approach that combines qualitative and quantitative methods. The study is grounded in the dynamic  capabilities theory and collected data from 288 respondents across various management roles within the banks through semi-structured  questionnaires. The data were analyzed using thematic analysis for qualitative data and SPSS for quantitative data, including descriptive  statistics, regression analysis, and ANOVA. The regression model revealed a moderate positive relationship between operational  excellence and organizational competitiveness, with a correlation coefficient (R) of 0.685. The coefficient of determination (R Square) was  0.469, indicating that operational excellence accounts for 46.9% of the variability in competitiveness. The coefficient for Operational Excellence is 1.260 (standard error = 0.087, beta = 0.685), with a tvalue of 14.493 and a significance level of 0.000. The constant coefficient  is -1.565 (standard error = 0.353, t-value = -4.437). This study underscores the importance of strategic investments in operational  excellence practices to enhance organizational efficiency and sustainable competitive advantages. However, the study's scope is limited  to tier III commercial banks in Kenya, and future research should explore additional factors influencing competitiveness and include a  broader sample for improved generalizability.