CHAPTER THREE: RESEARCH METHODOLOGY

3.1. Introduction

This section introduces the research methodology, outlining the chosen design, methods, and
procedures that contribute to addressing the central questions surrounding the effects of downsizing on
financial performance in KCB Banks, Kenya. The careful selection of the research design, target
population, sampling procedures, and data collection methods is crucial for the study's validity and
reliability.

The methodology adopted for this research aims to provide a comprehensive understanding of
downsizing practices and their implications on financial performance. The following subsections will
detail each component of the research methodology, emphasizing the rationale behind the choices
made.

3.2. Research Design

The research design is a crucial component of this study as it outlines the overall plan and structure
guiding the investigation into the effects of downsizing on financial performance within KCB Banks in
Kenya. A research design acts as a blueprint, providing a systematic framework for collecting, analyzing,
and interpreting data to address the central research questions (Orodho, 2003).

For this study, a descriptive, cross-sectional research design was chosen due to its appropriateness for
capturing a snapshot of downsizing practices at a specific moment in time (Chandran, 2004). This design
allows for a comprehensive examination of downsizing strategies and their impact on financial
performance across various banks. The cross-sectional nature ensures efficiency in data collection and
facilitates the exploration of multiple dimensions within a defined timeframe.

The choice of a descriptive design is driven by the need to depict an accurate representation of
downsizing practices in KCB Banks. It enables the collection of both quantitative and qualitative data,
offering a holistic understanding of the subject matter. By adopting a cross-sectional approach, the study
aims to capture a diverse range of downsizing practices and their implications on financial metrics.
The inclusion of qualitative elements in the research design is essential for gaining insights into the
intricacies of downsizing strategies, employee experiences, and organizational outcomes. Qualitative
data, gathered through open-ended questions in the questionnaire, will provide a deeper understanding
of the underlying factors influencing financial performance during and after downsizing initiatives.

Furthermore, the cross-sectional design allows for the simultaneous examination of multiple variables,
such as the methods of downsizing employed, organizational responses, and financial indicators. This
integrative approach enhances the study's ability to draw meaningful correlations between downsizing
practices and financial outcomes.

In summary, the chosen research design aligns with the study's objectives, combining the strengths of
both descriptive and cross-sectional approaches. It provides a robust framework for investigating the
effects of downsizing on financial performance within the specific context of KCB Banks, offering a
nuanced understanding of the dynamics at play in the banking industry.

3.3 Target Population

The target population for this study consists of Human Resource (HR) managers in the selected
commercial banks in Nairobi, Kenya. The definition of the target population is crucial as it establishes the
group from which the sample will be drawn, ensuring the study's relevance and applicability (Kombo &
Tromp, 2006).

According to the Central Bank of Kenya (CBK) in 2012, there were 43 licensed commercial banks in
Kenya (see Appendix 3). Given the focus on downsizing practices within the banking sector, HR
managers serve as key informants due to their roles in overseeing human resource management,
organizational restructuring, and workforce-related decisions.

The rationale for selecting HR managers is rooted in their central role in implementing downsizing
initiatives and managing the human capital implications of such strategies. They possess valuable
insights into the decision-making processes, communication strategies, and overall organizational
response during downsizing. Including HR managers as the target population ensures that the study
captures perspectives from individuals directly involved in managing workforce changes.
The geographical focus on commercial banks in Nairobi is justified by Nairobi's status as the financial
hub of Kenya, hosting the headquarters of numerous commercial banks. This concentration allows for a
targeted investigation into downsizing practices within a specific urban context, considering potential
variations in organizational strategies based on location.

3.4 Sampling Design and Procedure

The sampling design for this study involves employing a simple random sampling technique. This
method ensures that each HR manager in the target population has an equal and independent chance of
being included in the sample (Chandran, 2004). Simple random sampling is preferred for its fairness in
representation and its potential to yield a sample that reflects the diversity within the population.

The sampling frame comprises the 43 HR managers of commercial banks in Nairobi, Kenya, as identified
by the CBK. The sample size was determined using Yamane's formula (1967), taking into account a 95%
confidence level and a 5% margin of error. The resulting sample size was calculated as 39 organizations,
ensuring a representative subset for the study.

A pilot study was conducted with five experienced HR professionals from the financial sector and two
strategic management lecturers. This step aimed to validate the data collection instrument, refine
ambiguous questions, and ensure the clarity and relevance of the questionnaire. After adjustments,
permission was sought from the banks' management to proceed with the main study.

3.5. Data Collection

The process of collecting data for this study involved a comprehensive approach to ensure the
acquisition of relevant and reliable information from the identified target population, HR managers in
commercial banks in Nairobi, Kenya.

3.5.1. Questionnaire
A self-administered questionnaire served as the primary instrument for data collection. The
questionnaire design included structured, close-ended questions with ordered responses, aligning with
the Likert-scale format (1 = strongly agree to 5 = strongly disagree) as recommended by Clinton and
Calantone (1997). This format allows for efficient data collection, analysis, and interpretation.

The structured questionnaire was developed based on measures adopted from previous research and
adapted to the specific context of downsizing practices in the banking sector. Careful consideration was
given to crafting questions capable of providing nuanced insights into the research questions. The
questionnaire focused on aspects such as downsizing strategies, workforce changes, and organizational
responses.

3.5.2. Piloting

Before the main data collection, a pilot study was conducted with five experienced HR professionals
from the financial sector and two strategic management lecturers. The pilot study aimed to assess the
validity of the questionnaire, identify and rectify any ambiguities, and ensure clarity in respondents'
understanding. Questions found to be unclear or irrelevant were modified or excluded to enhance the
questionnaire's effectiveness.

Following the adjustments from the pilot study, permission was sought from the management of the
selected commercial banks to conduct the main study. Ethical considerations, including the guarantee of
respondent confidentiality, were communicated in the introduction letter sent to the banks'
management.

3.5.3. Data Collection Procedures

Upon obtaining consent from the banks' management, the self-administered questionnaires were
distributed to all identified HR managers in the selected commercial banks. The drop-and-pick method
was employed, allowing respondents to complete the questionnaires at their convenience. This method
enhances response rates by providing flexibility and maintaining respondents' anonymity.
To address potential challenges or queries during the questionnaire completion, a research assistant
was available to assist respondents. Follow-up procedures were established to retrieve completed
questionnaires, ensuring a comprehensive dataset for analysis.

3.6. Data Analysis and Presentation

The collected data underwent a rigorous analysis process using descriptive statistics. The Statistical
Package for Social Sciences (SPSS) software Version 19 facilitated the organization and presentation of
data. Descriptive statistics, including frequencies and measures of central tendencies such as mean,
mode, and median, were employed to offer a clear understanding of the downsizing practices within the
sampled commercial banks.

3.6. Data Analysis and Presentation

The analysis of the collected data involved a meticulous process aimed at uncovering patterns and
insights into downsizing practices within the sampled commercial banks. The Statistical Package for
Social Sciences (SPSS) software Version 19 served as the analytical tool, enabling a comprehensive
exploration of the dataset.

Descriptive statistics played a crucial role in summarizing and presenting key features of the dataset.
Frequencies were used to depict the distribution of responses, providing a quantitative overview of
various aspects related to downsizing strategies, workforce changes, and organizational responses.
Additionally, measures of central tendencies, including mean, mode, and median, were employed to
capture the central values within the dataset.

The presentation of findings utilized a combination of tables, graphs, and figures to enhance clarity and
facilitate a nuanced understanding of the results. Each subsection within this chapter will feature a brief
introduction, followed by the presentation of results, and conclude with a concise interpretation. This
structured approach ensures a seamless flow of information, allowing readers to grasp the significance
of the findings in relation to the research objectives and questions.

3.7. Ethical Issues

Ethical considerations are paramount in conducting research to maintain the integrity, confidentiality,
and respect for participants' rights. This section addresses the ethical framework that guided the
research process, ensuring that the study adheres to ethical standards and principles.

Informed Consent: Before commencing the data collection process, explicit and informed consent was
sought from the participants. A detailed introduction letter was provided to the management of each
commercial bank, explaining the purpose of the survey, the significance of the respondents'
participation, the responsible party for the survey, and a commitment to confidentiality. This
transparent communication aimed to obtain voluntary and knowledgeable consent from all involved
parties.

Confidentiality: The researcher guaranteed confidentiality to participants, assuring them that their
responses would remain anonymous. This commitment is in line with ethical guidelines to protect
participants' privacy and prevent any potential harm resulting from the disclosure of sensitive
information. The data collected was stored securely, and any identifiable information was anonymized
during the analysis and reporting stages.

Pilot Study: A pilot study was conducted involving experienced human resource professionals and
strategic management lecturers. This step was crucial in ensuring the validity of the data collection
instrument. Feedback from the pilot study facilitated necessary adjustments to questions, eliminating
ambiguity and ensuring the clarity and relevance of the questionnaire.

Data Accuracy and Transparency: The researcher committed to interpreting the data accurately to
reflect the participants' opinions. Biased research was mitigated by conducting the research process
properly, ensuring correct findings. Transparency in presenting research results was emphasized to
avoid misleading interpretations or incomplete reporting.