THE IMPACT OF CHANGE MANAGEMENT ON PROFITABILITY: CASE OF NATIONAL BANK OF KENYA

Change management is undertaken to achieve desired results within a specified time frame. However how do we confirm that it is change management that leads to a certain result being achieved? Some institutions have been known to meddle through there operations and still pull through. Other organizations rely on environmental trends and therefore one can argue that for example, with an improved economy institutions will automatically perform well and the opposite will happen in recess. This study therefore sought to determine the impact of the change management on the profitability of NBK between the year 2002 and 2006.

The study used a case study design since the unit of analysis is one organisation. The researcher collected primary and secondary data. Secondary data was collected from the bank’s annual reports, inter-rim financial reports, strategic plans, board papers and the Central Bank of Kenya’s banking reports. Primary data was collected using questionnaire administered on a drop and pick bases. The questionnaires were administered to the managers of NBK as they are deemed to be well versed with change management within the bank as well as appropriate indicators on the influence of such practices on the banks profitability. Quantitative data was analysed using descriptive statistics such as mean scores, percentages and frequencies. Frequency tables were used to present the data. SPSS computer package aided in data analysis.

From the findings, the study concludes that that change management had a great impact on profitability of NBK between the year 2002 and 2006. This is because from the study, restructuring of the bank, culture change, recapitalization and ICT were found to have a great impact on the profitability of the bank and the National bank’s turn around to profitability was directly related to change program. The study therefore recommends that change should be guided in a planned direction, in a cost effective manner and also it should be completed within the targeted time frame with desired results to ensure profitability in the bank

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