Strategic organizational architecture, environmental dynamism and competitive financial performance of deposit taking Saccos in Kenya.

Abstract

Organizational architecture refers to the entire organization, including its structure and culture, control systems and incentives, processes, and people, while Strategic Organizational Architecture describes the context within an organization through which a strategic and entrepreneurial vision can be translated into specific entrepreneurial behaviours, processes and outcomes. The objective of this study was to establish the influence of Strategic Organizational Architecture on the competitive financial performance of Deposit Taking Saccos (DTS) in Kenya. The study also sought to determine how environmental dynamism moderates this relationship. Anchored on the ambidexterity theory of leadership for innovation the study was a pragmatic study of 715 Senior Head Office staff and 159 branch managers from 62 DTS from which a sample of 278 participants was derived. A semi-structured questionnaire having both closed and open-ended questions was used to collect primary data from the respondents, while secondary data was obtained from the Sacco Societies Regulatory Authority (SASRA’s) Annual Sacco Supervision Reports for the years 2017-2021. Data was analyzed using binary logistic regression which revealed that Strategic Organizational Architecture was a positive and significant predictor of the probability of competitive financial performance in DTS. Further, the study established that the moderating effect of Environmental Dynamism in this relationship was not significant. The study recommends that for DTS to remain competitive, they ought to emphasize on building agile and adaptive organizational structures, creating an organizational culture favourable for risk seeking; ensuring that resources are adequate and well prioritized, and establishing competitive performance measuring systems and controls. On the flipside, the study recommends that although DTS ought to pay attention to customer tastes and preferences, changes in technology as well as competitor strategies, they should be careful not to deviate from their traditional business model