Technical Efficiency for Strategic Change and Global Competitiveness

• Date: 01 January 2017
• Author: Isaiah Onsarigo Miencha,M. Selvam,Justin Paul
• DOI: http://doi.org/10.1002/jsc.2109
• Published date: 01 January 2017

RESEARCH ARTICLE

Strategic Change 26: 53–67 (2017)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2109

Copyright © 2017 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2109

Technical Efciency for Strategic

Change and Global Competitiveness1

Isaiah Onsarigo Miencha

All Nations University, Ghana

Justin Paul

University of Puerto Rico, Puerto Rico, USA

M. Selvam

Bharathidasan University, India

Technical efciency helps the banks in developing countries to be competitive in

this era of globalization.

It is known that nancial institutions, particularly commercial banks, play a

crucial role in the economy of all developing nations (King and Levine, 1993;

Levine and Renelt, 1992). Globalization has resulted in integration of the economy

and markets with the rest of the world (Paul, 2015). e banking sector has

undergone drastic structural changes in the form of privatization and globalization

in recent years in most developing countries, with the intention of increasing

eciency levels and competitiveness, despite the diverse views on its implications

(Suresh and Paul, 2010). Mere transfer of ownership from public to private hands

is unlikely to improve performance. Signicant organizational changes in systems,

structures, and cultures are essential for realizing desirable performance outcomes

following privatization (Ramaswamy and Von Glinow, 2000).

Service quality is important for the survival of any bank in an era of cut‐throat

competition, as consumers value eciency and quality in retail banking (Paul

et al., 2015). Commercial banks have undergone tremendous technological and

managerial changes (including computerization) to catch up with the pace of

globalization and new business environments across the globe. ey have to

achieve international benchmarks with best practices. As one of the fast‐growing,

developing economies in the African region, Kenya has captured the attention of

the rest of the world in recent years. e banking sector in Kenya has been facing

serious problems during the past few decades. ough the nancial system in

Kenya has the advantage of operating in a closed and regulated environment, it

1 JEL classication codes: G21, G28, O3.

Banks need to improve their

technical efciency to succeed in

the long run.

Private banks show a general

increase in scale efciency.

Technical efciency varies from

bank to bank.