Effect of Structural Alignment on Performance of Selected Micro Finance Institutions in Meru County, Kenya

Linet Gatwiri, Robert Obuba

Abstract


One of the most significant challenges affecting the financial sector pertains to issues such as loan non-repayment, a weak legal framework, and ineffective strategies for lender recourse and bad debt recovery. This has particularly impacted microfinance institutions, leading to Non-Performing Loans (NPLs) that diminish profits through credit losses and direct write-offs for loans turning into bad debts, ultimately reducing the funds available for lending. These challenges have posed a serious threat to the stability and survival of some Microfinance institutions in Kenya. Recognizing this gap, the research delved into exploring the effect of structural alignment on the performance of selected microfinance institutions in Meru County Kenya. Employing a descriptive research design, the study targeted 530 individuals comprising of Senior Managers, Tellers/Field Officers, and Customers of the ten selected Microfinance institutions within Meru County. Using Cochran (1977) formula as adopted by Chaokromthong and Sintao (2021) the study came up with a sample size of 223 respondents who were selected randomly to participate in the survey. Primary data was collected using questionnaires, and the semi-structured instrument was pilot-tested by 20 staff from Key Microfinance. The questionnaires were delivered to the respondents' workplaces and subsequently collected for analysis, which involved both descriptive and inferential statistical methods. The study's findings were presented through tables, figures, and qualitative discussions for analysis.

Keywords


Structural, Alignment, Dynamic Capabilities, Performance, Microfinance

Full Text:

PDF

References


, K., & Sintao, N. (2021). Cohen's statistical power analysis via G* Power and comparisons, as well as Yamane, Cochran, Krejcie, Morgan, and green formulae, were used to estimate sample size. Apheit International Journal, 10(2), 76-86.

Abdullah, H. H., & Siam, M. (2014). The influence of organizational structure and organization culture on the organizational performance of higher educational institutions: The moderating role of strategy communication. Asian social science, 10(13), 142-154.

Agaba, A. M., Bosco, T. J., & David, K. J. (2023). In the Kabale District of Uganda, Lyamujungu Sacco serves as an example of strategic management and organizational performance. International Journal of Islamic Business and Management Review, 3(1), 50-60.

Alagaraja, M., & Shuck, B. (2015). Exploring organizational alignment-employee engagement linkages and impact on individual performance: A conceptual model. Human Resource Development Review, 14(1), 17-37.

Alshurideh, M., Hamadneh, S., & Ahmad, A. (2022). Moderating the impact of supply chain partners' integrations on organizational performance was trust. Uncertain Supply Chain Management, 10(4), 1191-1202.

Amanah, A. A., Hussein, S. A., & Fadhil, A. H. (2022). Analytical study on the potential function of strategic thinking in moderating the link between strategic alignment and strategic response at the Karkh Health Directorate in Baghdad, Iraq. International Journal of eBusiness and eGovernment Studies, 14(2), 388-410.

Ambarkhane, D., Singh, A. S., & Venkataramani, B. (2019). Use the Malmquist productivity index to calculate the change in total factor productivity of microfinance organizations in India. Indian Growth and Development Review, 12(1), 105-130.

Blanchard, P. N., & Thacker, J. W. (2023). Effective training: Systems, strategies, and practices. SAGE Publications.

CHIGOZIE, M. P., & CHIJIOKE, E. THE RELATIONSHIP BETWEEN ORGANISATIONAL PAY AND EMPLOYEE RETENTION IN MANUFACTURING FIRMS IN SOUTH EAST, NIGERIA _.

Gupta, N., & Mirchandani, A. (2020). Recent worldwide data on the relationship between corporate governance and microfinance institution performance. Journal of Management and Governance, 24(2), 307-326.

Hermes, N., & Hudon, M. (2019). A rigorous examination of the factors that affect microfinance organizations' success. Contemporary Topics in Finance: A Collection of Literature Surveys, 297-330.

Hermes, N., & Hudon, M. (2019). Determinants of the performance of microfinance institutions: A systematic review. Contemporary Topics in Finance: A Collection of Literature Surveys, 297-330.

Hiebl, M. R. (2019). From theoretical framing to empirical testing in risk governance research: Moving the field forward. Management Research Review, 42(11), 1217-1223.

Kaplan, R. S., & Norton, D. P. (2008). The execution premium: Linking strategy to operations for competitive advantage. Harvard business press.

Kihara, A., Karanja, P., & Kennedy, O. (2016). Influence of organizational Structure on performance of Large Manufacturing firms in Kenya. European Journal of Business Management. Vol 2 (11). 15, 29.

Mbai, W., Kinyua, G., & Muhoho, J. (2018). The Machakos Water and Sewerage Company in Kenya showcases its corporate leadership and performance. The Strategic Journal of Business & Change Management, 5(3), 631-639.

Mbugua, J. W., & Kinyua, G. M. (2020). An empirical analysis of deposit-taking SACCOs in Nairobi City County, Kenya, revealed a relationship between service differentiation and organizational performance. Journal of Business and Economic Development, 5(2), 64-72.

Mongale, A. M. (2023). Developing a Framework for Business Information Technology Alignment in South African Development Banks (Doctoral dissertation, North-West University (South Africa)).

Mugenda, O. M., & Mugenda, A. G. (2003). Research methods: Quantitative & qualitative apporaches (Vol. 2, No. 2). Nairobi: Acts press.

Muthoni, D. M., & Kinyua, G. M. (2020). Corporate reputation and firm performance: An empirical analysis of motor vehicle assemblers in Nairobi city county, Kenya. Journal of Business and Economic Development, 5(2), 73-81.

Muriu, D. (2019). The influence of organizational structure on M-commerce performance in Kenya’s commercial banks. European Journal of Business and Strategic Management, 4(2), 24-38.

Muzny, A. M., & Simba, F. (2019). Turnaround techniques' effects on organizational performance: the Coast Development Authority in Kenya as a case study. The Strategic Journal of Business & Change Management, 6(2), 225-243.

Navin, N., & Sinha, P. (2021). MFIs' financial and social performance: mutually exclusive or compatible? Vilakshan-XIMB Journal of Management, 18(1), 42-61.

Ogaga, B., & Awino, B. Z. (2019). Corporate Strategy, Organizational Structure and Organizational Performance of Listed Companies in Emerging Markets: Kenyan Perspective. International Journal of Economics, Business and Management Research, 3(2), 125-143.

Ogbo, A. I., Chibueze, N. F., Christopher, O. C., & Anthony, I. A. (2015). Impact of structure on organizational performance of selected technical and service firms in Nigeria. Corporate Ownership & Control, 13(1), 1278-1284.

Otiso, K. N. (2018). Influence of Organizational Structure on the Quality Service of Commercial Banks in Nandi County, Kenya. IJAMEE.

Owino, T. A. (2016). Effects of financial innovations on operational efficiency of commercial banks in Kenya (Doctoral dissertation, University of Nairobi).

Soltani, E., & Wilkinson, A. (2020). TQM and performance appraisal: complementary or incompatible? European Management Review, 17(1), 57-82.

Teece, D. J. (2014). The foundations of enterprise performance: Dynamic and ordinary capabilities in an (economic) theory of firms. Academy of management perspectives, 28(4), 328-352.

Venkatraman, N., & Ramanujam, V. (1987). Measurement of business economic performance: An examination of method convergence. Journal of management, 13(1), 109-122.

Volk, S. C., & Zerfass, A. (2020). Defining alignment as a fundamental idea in strategic communication. Future directions of strategic communication, 105-123.

Zhang, Y., & Li, L. (2009). Study on balanced scorecard of commercial bank in performance management system. In Proceedings. The 2009 International Symposium on Web Information Systems and Applications (WISA 2009) (p. 206). Academy Publisher.




DOI: https://doi.org/10.46336/ijbesd.v5i3.659

Refbacks

  • There are currently no refbacks.


Add comment

Copyright (c) 2024 International Journal of Business, Economics, and Social Development

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Published By: 

IJBESD: Jalan Riung Ampuh No. 3, Riung Bandung, Kota Bandung 40295, Jawa Barat, Indonesia


IJBESD Indexed By:

width=width=width= width= width= width= 

 

Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 International License.