INFLUENCE OF RESOURCE ALLOCATION ON THE PERFORMANCE OF COMMERCIAL BANKS IN KENYA

Janet Chepngetich Sitonik, Jane Munga, James Mbebe

Abstract


Optimal resource allocation is essential for all organizations to achieve high performance, as it ensures that financial, technological, and human resources are effectively utilized to support strategic goals. However, current challenges in resource distribution may be hindering the banks' ability to fully capitalize on market opportunities and meet performance targets. Addressing these inefficiencies is crucial for enhancing competitiveness and sustaining long-term financial growth. This paper sought to determine the influence of resource allocation on the performance of Commercial Banks in Kenya. The study applied a descriptive research design on 38 Commercial Banks in Kenya as the unit of analysis in the study. The target respondents were 190 middle-level managers of commercial banks in Kenya as the unit of observation. A stratified random sampling technique was applied in addition to Taro Yamane’s formula to sample 129 participants in the study. The study gathered data through questionnaires which were administered both physically and online. Data collected was analyzed through both descriptive and inferential analyses. Results revealed a ? of 0.637 and a p-value of 0.001, between resource allocation and performance of commercial banks in Kenya. The study concluded that resource allocation had a positive and significant influence on the performance of commercial banks in Kenya. The study recommends that Kenyan commercial banks invest in targeted training programs to enhance employee skills in change management. Additionally, the study recommends that Commercial banks in Kenya should refine budgeting processes through precise forecasting models to optimize financial resource allocation. Further, the study recommends upgrading technological infrastructure and strengthening knowledge management systems essential for sustaining effective change management and improving decision-making. Finally, the study recommends that commercial banks in Kenya should promote a culture of continuous improvement by encouraging employee contributions and rewarding innovative strategies to better align resource allocation and change management with the bank’s overall goals.

Key Words: Resource Allocation, Performance, Commercial Banks


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References


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