Effect of Horizontal Integration Strategy on Performance OF Commercial Banks in Kenya A Case of Stanbic Holdings PLC

Abstract

purpose of the study was to assess the relationship between horizontal integration strategies on performance of commercial banks in Kenya, with a specific focus on Stanbic Holdings Plc. The study objectives were to identify the horizontal integration strategies adopted, establish the measures of organizational performance used and to assess the relationship between horizontal integration strategy and organizational performance. Resource dependency theory, theory of efficiency, and performance theory led the research. The study used descriptive research and the target population consisted of 142 employees at Stanbic Holdings Plc's Nairobi headquarters. Primary data for this study was collected through a questionnaire using a census survey. The Statistical Package for Social Sciences (SPSS) version 22 was used to analyze data into descriptive and inferential statistics. Descriptive statistics helped in presenting results in the form of frequencies and percentages, while inferential statistics in the form of Pearson correlation was applied assess the relationship between horizontal integration strategies and performance. Findings indicated that Stanbic Holdings Plc used horizontal integration techniques including mergers, acquisitions, and hostile takeovers. The study also found that customer satisfaction, market share, and revenue growth were used as measures of performance. It was also found that there was a positive significant relationship between horizontal integration strategies and performance. It was recommended that financial institutions need to continually adopt horizontal integration strategies and establish strong measures of benchmarking that evaluate effectiveness of horizontal integration strategies adopted on performance. The study concluded that adoption of horizontal integration strategies enhanced performance in terms of customer satisfaction, revenue creation and increased market share.