Moderating Effect of Strategic Fit on the Relationship between Contingency Factors and Performance of Commercial Banks in Kenya

Abstract

The purpose of the study was to investigate the moderation effect of strategic fit on the relationship between contingency factors and the performance of commercial banks in Kenya. The study adopted a descriptive research design where a census of 39 commercial banks regulated by CBK was carried out. The study targeted 7 respondents from each of the 39 commercial banks. Primary data were collected through a questionnaire from the selected managers and were analyzed using SPSS version 26. Correlation and multivariate regression analysis were used to test the research hypothesis. The regression analysis results showed that strategic fit moderated the relationship between strategic contingency factors and the performance of commercial banks in Kenya (p-value < 0.05). It was recommended that organizations should endeavor towards matching their resources and capabilities with the opportunities in the external environment. The matching takes place through strategy and it is therefore vital that the company have the actual resources and capabilities to execute and support the strategy