Strategy Implementation Challenges in State Corporations: the Case of Agricultural Finance Corporation Kenya

Abstract

Strategy implementation is tougher and more time consuming than strategy formulation. The process requires action-oriented and operations-driven people and systems management activities of leading, motivating, organizing, engineering business processes, and creating strong fits between strategy and how the organization does things. The process of strategy implementation faces many challenges leading to most organizations failing to successfully implement their strategies. The objective of this study therefore was to establish the challenges faced by Agricultural Finance Corporation in the implementation of strategy. Some researchers note that organizations fail to implement up to 70% of their strategic plans. The research adopted a case study research design. The study employed a face to face interview with selected management staff from both top and middle levels as a primary data collection method. An interview guide was employed as the sole research instrument. The collected data was then analyzed by content analysis. The study established that inadequate financial resources posed the major challenge given that AFC is a Financial Institution and liquidity is crucial. The organizational structure was found to be appropriate, however, the many decision making levels and different loan approval limits hindered successful strategy implementation by making loan processing periods unnecessarily long. The study found that the culture of AFC needed to change to remove the perceived difference between the branch network and head office as this resulted in lack of trust. Another challenge faced by AFC was poor communication of strategic plans with some respondents not aware of the contents of the strategic plan. The corporation must adopt a better communication plan and involve all staff in the formulation stage of the plan in order to enhance ownership. It was evident from the study that AFC staffs were de-motivated. Most respondents cited lack of fit between performance and reward policy as the de-motivating factor. There were uncontrolled external factors identified by the study which included lack of political goodwill, negative client attitude, government policies, and agricultural finance related risks. Organizations operate in turbulent ever-changing environments and must therefore align themselves to the environment for survival.