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Organization Behavior, Challenges and Opportunities

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 University of Nairobi

Organization Behavior, Challenges and Opportunities

A Kenya Commercial Bank Case Study

YONI AYIEKOH

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Organization Behavior, Challenges and Opportunities

Background

Business in today’s world is a hectic and dynamic undertaking. The environment in

which organizations operate is ever changing, thereby changing the needs of the
organization and internal operations. As needs change, the leadership and internal
dynamics must be reviewed. The concept of organization behavior is important as it
provides insights into organizations’ challenges and opportunities. Although organization
behavior varies from one organization to another, its usefulness is universal.

Introduction

Organizational behavior is the analysis of human dynamics in an organization. It helps

human resources professionals and business leaders understand the relationships
between themselves and their employees. Additionally, it reveals a great deal about how
employees on the same level interact with each other. Although organizational behavior
varies from one organization to another, the nature of the behavior carries significant
implications.

Organizational behavior is about people at work in all kinds of organizations and how
they may be motivated to work together in more effective ways. By studying these
behaviors organizations become more aware of their business ethics and are able to
positively find ways to transfer their employee's attitudes and behaviors into more
positive experiences personally and for the company. Most organizations realize that
being ethical is good business practice and pays in the long run. To be ethical requires
treating others -- customers and employees -- properly and fairly. A company that is
interested in growth and profits must establish relationships with customers.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Organizational Behavior Organizations have been described as groups of people who
work interdependently toward some purpose. This definition clearly indicates that
organizations are not buildings or pieces of machinery. Organizations are, indeed,
people who interact to accomplish shared objectives. The study of organizational
behavior (OB) and its affiliated subjects helps us understand what people think, feel and
do in organizational settings. For managers and, realistically, all employees, this
knowledge helps predict, understand and control organizational events. There are three
determinants of behavior in order to make an organization more effective: individual,
groups, and structure. The people within the organization and their behaviors affect the
performance of the organization.

Explanation of the definitions

 A manager can know the behavior of an employee through interacting with him/
her and by observation
 Predicting behavior tells whether the employee with be productive for the
organization or will create problems for the organization in the future
 Although everybody has different behavior, an organization needs to have a
uniformed behavior of all employees

There are a number of behavioral disciplines that contribute to OB: psychology,

sociology, social psychology, anthropology, and political science.

Psychology

Psychology is the science that seeks to measure, explain and sometimes change
behavior of human beings and other animals. Basically psychology is the study of mind
and behavior, if a manager is good in psychology, it will help in understanding the
behavior of employees.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Sociology

This is the study of people in relation to other human beings. Sociology is the study of
group behavior. Because an organization is a social unit where different individuals work
together in groups, the organization can use this to improve work relations.

Social psychology

This is an area of psychology that blends with sociology and focuses on the influence of
people on one another. Psychology studies individual behavior while sociology is
concerned with group behavior. Social psychology studies how group behavior
influences individual behavior.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Anthropoloy

The study of societies to learn about beings and their activities. It helps us understand
different fundamental attitudes and values between people in different countries. In
organizations we find people from multiple cultures, religions, education, custom and
values.

Political science

This is the study of individuals in a political environment and the allocation power to a
single individual to rule over them.

Organizational behavior offers both challenges and opportunities for managers. It

recognizes differences and helps managers to see the value of workforce diversity and
practices that may need to be changed when managing in different countries. It can help
improve quality and employee productivity by showing managers how to empower their
people as well as how to design and implement change programs. It offers specific

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

insights to improve a manager’s people skills. In times of rapid and ongoing change,
faced by most managers today, OB can help managers cope in a world of
“temporariness” and learn ways to stimulate innovation. Finally, OB can offer managers
guidance in creating an ethically healthy work climate.

There are lots of challenges and opportunities today for managers. The importance of
organization behavior in organizations cannot be over emphasized. Some of the main
aspects that bring about the vitality of organization behavior include the following:

 Interpersonal relationships
 Managerial effectiveness
 Improving quality and productivity
 Improving employer-employee relationship
 Dealing with globalization

Challenges

Organizational behavior is founded on the company's aspirations, ethics and goals. It

fuels the very nature of the organization and the direction it takes. More importantly, it is
a significant predictor of the business' potential success. Ineffective or misguided
organizational behavior can effectively cripple a company's competitiveness. A major
challenge in organizational behavior is reform. If a business is plagued with ineffective
leadership, poor work ethic or low employee morale, changing this is a significant
undertaking. Another significant challenge when studying organizational behavior is
determining where problems lie and how to fix them. Issues can vary in scope and
severity, so the approach's success is contingent on its strategy.

Opportunities

Organizational behavior is a medium that provides significant opportunities for change.

Once a company's organizational behavior is identified and analyzed, problem areas can
be addressed. Additionally, there may be undiscovered opportunities to improve aspects

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

that are already strong. For example, an organization with successful sales output can
introduce new reward packages or incentives for its salespeople to further boost
production. Alternately, if that same company's sales performance is poor, management
can evaluate its leadership or introduce new coaching programs to address each
employee's weak points, then follow through with incentives once performance
increases.

Knowledge of strengths, vulnerabilities, opportunities and threats in the industry is

absolutely necessary for identifying organizational challenges for any company. For this
SWOT analysis is used.

SWOT Analysis

The acronym SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
SWOT analysis (alternately SLOT analysis) is a strategic planning method used to
evaluate the strengths, Weaknesses/Limitations, Opportunities, and Threats involved in
a project or in a business venture. It involves specifying the objective of the business
venture or project and identifying the internal and external factors that are favorable and
unfavorable to achieve that objective.

This is an effective way for organizations to develop their business strategies and
continuously align themselves to changes in the business environment.

Internal factors are under the control of the organization. This factors include the types of
employees hired, size of the firm and business strategies outlined by management.

External factors include the political, technological, environmental and social-cultural

aspects.

Organization has certain internal factors which serve as their strengths. This includes
dedicated employees, location. Organizations should align their strengths to capitalize
on the opportunities in the market.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Weaknesses are internal factors that can prevent the organization from reaching its
objectives. These include poorly trained employees, poor strategies, and managerial
ineffectiveness. Weaknesses should be minimized and eventually extinct by
organizations if they are to remain competitive.

Opportunities are external to the organization. These opportunities are factors, which
once capitalized on can enable the organization to achieve its objectives. These include
but not limited to the following:

 Low competition in markets

 Poor strategies by competitors
 Government incentives and projects
 Multinational corporations mergers

Threats are also external factors which may prevent the organization for achieving its
objectives if not addressed adequately threats in the business environment include
political unrest, technological advances that can render the organization’s modus
operandi obsolete, legal issues, environmental factors. Organizations should find ways
of turning threats into opportunities.

In view of these, alls organizations - banks, insurance companies, airlines,

manufacturing companies all face various challenges and opportunities. Kenya’s
economy is driven by various industries and companies. Kenya Commercial Bank is one
of the many banks in Kenya.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

History of Kenya Commercial Bank (KCB)

The history of KCB dates back to 1896 when its predecessor, the National Bank of India
opened an outlet in Mombasa. Eight years later in 1904 the bank extended its operations
in Nairobi, which had become the headquarters of the expanding railway line to Uganda.

The next major change in the bank’s history came in 1958. Grindlays Bank merged with
the National Bank of India to form the National Grindlays Bank.

Upon independence the Government of Kenya acquired a 60% share holding in National
&Grindlays Bank in an effort to bring banking to majority of Kenyans. In 1970 the
Government acquired a 100% stake to take full control of the largest commercial bank in
the country at that time. National &Grindlays Bank was renamed Kenya Commercial
Bank.

In 1972, Savings and Loans (K) was acquired to specialize in mortgage finance.

In 1997 another subsidiary, Kenya Commercial Bank (Tanzania) limited was

incorporated in Dar-es-Salam, Tanzania to provide banking services and promote cross
border trading. Since then the bank has 11 branches.

In pursuit of his vision: in May 2006 KCB extended its operations into Southern Sudan to
provide conventional banking services. The subsidiary has 11 branches.

The latest addition to the KCB family came in November 2007 with the opening of KCB
Uganda which has 14 branches. In December 2008 KCB bank Rwanda began its
operations with one branch in Kigali. There are now 9 branches.

The Government has over the years reduced its share holding to 35% and more recently
to 26.2 % following the rights issue in 2004 which raised Ksh 2.4 billion in additional
capital to the bank.

In the second rights issue exercise in the year 2008, the Government further reduced its
shareholding to 23.1 % after raising additional capital for Ksh 5.5 billion.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

The bank conducted a third rights issue exercise in 2010 in which Government further
reduced its shareholding to 17.74 %. In the same year S& L was merged with KCB
providing access to mortgages throughout the bank’s network of 222 branches.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Challenges and opportunities related to Kenya Commercial Bank

Globalization

Kenya Commercial Bank has its operations beyond Kenya’s borders. The bank has
branches in Kigali Rwanda, Tanzania, South Sudan and Uganda. All these locations
have different employees with different attitudes, cultures, temperaments and
experiences.

By expanding to these locations, the bank has positioned itself towards achieving growth
and profitability. Further success in global competition requires the Bank to respond to
ethnic, religious, and gender diversity and to personal integrity in the workforce, in
addition to responding positively to the competition in the international market place.

It’s a challenge to better understand the needs, preferences, attitudes and values of
other cultures in order to better satisfy them and provide them with better services.

Workforce diversity

Kenya Commercial Bank is one of the biggest banks in East Africa. Today its workforce
is becoming more and more diverse as the bank continues to expand. This diverse
workforce includes different age groups, gender, races. These different people make up
the mixed blended workforce that come with different ideas and strategies which have
greatly impacted the way the Bank conducts its business.

Managing the workforce is becoming a global concern. For example, the issue of women
in the workplace concerns workforce diversity. Gender roles and expectations are often
defined differently in various cultures. Certain nonverbal cues may be understood
differently by different people. For example a polite tap on the shoulder may be offensive
to some people, but not others. A handshake, which may be used to ‘break ice’ before
and after a meeting may not be taken so lightly especially if it is between a man and a
Muslim woman and vice versa.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Quality improvement and Productivity

Companies are rapidly starting their operations in other parts of the world, thus resulting
in increased competition. In order to gain their share the companies have to provide god
quality. For the purpose of this the Bank has quality management and process
reengineering.

Quality management is the constant attainment of customer satisfaction through

continuous improvement of all organization processes.

Process engineering tasks managers to consider how work would be done and how their
organizations would be structured if they were starting their business today.

Coping with Change

Change creates opportunities and risks. Global competition is a leading force driving
change at work. Competition in the banking industry has increased significantly during
the past few years. Corporates competition creates pressures, which have a ripple effect
on people and their behavior at work. Competition may lead to downsizing and
restructuring, but it provides opportunities for revitalization.

Kenya Commercial Bank has enhanced its managerial talent and service quality to meet
the challenges of growth and competition.

Managerial effectiveness

Managers are tasked with the responsibility of coordinating other individuals’ effort to
achieve organization’s goals. The behavioral challenges managers at Kenya
Commercial Bank face today are exacerbated by the increasing complexity of the work
environment and the fast pace of demographic and technological changes.

The work force is becoming increasingly diverse. Most of the growth in the work force is
being driven by women and various racial or ethnic minorities. Increasing
internationalization is also bringing people from a variety of cultural backgrounds

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

together in the workplace. Being able to manage diversity well is more important than
ever because decisions are increasingly made in cross-functional teams and task forces.
But most corporations still have a long way to go to create a work environment in which
diversity is embraced. Likewise, managers need to understand that people who
traditionally have been discriminated against (e.g., people with disabilities) represent
valuable pools of employee talent.
As workplace demands continue to increase, they may spill over into family life.
Exacerbating the issue is the fact that family structures have shifted over the years
toward more dual-career couples and single parents. Managers who can recognize
these work-family issues and craft flexible solutions will be rewarded with greater
employee loyalty and performance.

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

Conclusion
Understanding organization challenges is at the heart of successful strategic plans.
There are challenges everywhere both within and outside the organizational boundaries.
Clarity of challenges enables an organization to assess probability of achieving goals,
and formulating plans to remove the road blocks on the way, identifying latent
opportunities in the challenges – challenges are a pack of hidden opportunities.
Organization challenges when addressed proactively provide a company with
opportunity for creating future or else can spell a disaster. Strategic plans are the means
of addressing these organizational challenges and making the most of the opportunities
that accompany the challenges. Complacency can un-sight the challenges around the
corner and in turn may deprive a company of great opportunity

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

 References

1. Allan R et al, (2004) Diversity Practices; Learning Responses for Modern

Organizations, Development and Learning in Organizations: An International
Journal
2. Cascio, WF (1998). Managing human resources –Productivity, Quality of work
life, profits, McGraw –Hill and Boston, MA.
3. Kenya Commercial Bank, Interim Report, 2008

Yoni Ayiekoh, Organizational Behavior, Challenges and Opportunities

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