EFFECT OF DOWNSIZING STRATEGY ON ORGANIZATIONAL PERFORMANCE OF COMMERCIAL BANKS LISTED IN NAIROBI STOCK EXCHANGE, KENYA

The purpose of the study was to examine effect of downsizing on organizational performance of Commercial Banks Listed in Nairobi Stock Exchange. The study adopted descriptive survey design and targeted; risk managers, corporate affairs managers, human resource managers, finance managers, Accounts managers, audit managers and strategic managers from each of the 12 commercial banks listed on NSE in Kenya. Therefore, the target population was 96 respondents where a census method was used to select all respondents to participate in the study. Self-administered structured questionnaires were utilized to collect primary data from the respondents. Pilot test was conducted to ensure content validity, while Cronbach alpha was used to test instrument reliability. All collected data were coded, cleaned, tabulated and analyzed using descriptive and inferential statistics with the aid of specialized Statistical Package for Social Sciences, version 24. Descriptive analysis such as frequencies, means, and standard deviation were utilized; analyzed data was presented in tables and graphs. Inferential statistics assessed nature and the strength of the relationships. The relationship between variables was achieved through the use of correlation analysis. Regression analysis results indicated downsizing strategy had positive and significant effect on organizational performance. The study concluded that downsizing strategies significantly influence organizational performance of listed commercial banks in Kenya. The study recommends that most companies should be very cautious when applying downsizing strategy in order to avoid downsize without figuring out how to reduce the workload