Title:
Evaluating the Effect of Reconfiguring Capability on the Performance of Commercial Banks in Kenya

Authors:
Robert Moger, Susan Ngure, Kenya

Abstract:

The performance of the financial services sector, particularly that of commercial banks, is crucial for the economic vitality of any country. The performance of commercial banks in Kenya appears erratic while the banks continue to face turbulent operating environments. This study evaluated the effect of reconfiguring capability on the performance of commercial banks in Kenya.  The study used a cross-sectional descriptive research design and targeting 228 managers from 38 licensed commercial banks in Kenya. Primary data was collected using a structured self-administered questionnaire. The questionnaire was evaluated for internal consistency using Cronbach alpha coefficient and for construct validity using Kaiser-Meyer Olkin Coefficient from the Confirmatory Factor Analysis. The weighted data from 38 commercial banks was tested for multivariate Gaussian distribution, collinearity, pairwise linearity, outliers and autocorrelation. Ordinary Least Squares was used for testing the hypotheses. The study found that 33.8% of the variations in commercial banks performance was accounted by reconfiguring capability practices and that there was a statistically significant effect of these practices on the performance of commercial banks in Kenya.  The study recommends innovativeness approaches to institutional flexibility, resources mapping and reallocations as well as business network management for sustained performance of the commercial banks in the lagging strategic performance metrics.

DOI: https://doi.org/10.51505/IJEBMR.2026.10620