Strategic Responses to Changes in the External Environment by Pension Administrator Companies in Kenya

Abstract

The organizations today are faced with the ever changing external environment that affects their operations. Organizations must therefore anticipate and respond strategically to the changes in the external environment to remain competitive and viable in the industry they operate in. The objective of this study was to establish the extent of influence of the external environmental factors and determining the strategic responses that the pension administrator companies have employed in response to the external environmental changes. The study targeted 30 pension administrator companies which have been registered and licensed. The study used a census because of the relatively low population size of the pension administrator companies. Out of the 30 respondents, 26 respondents completed and returned the questionnaires, translating to 86.67% response rate. A semi-structured questionnaire was used as an instrument for data collection. Descriptive statistics were used to analyze the data. Descriptive statistics such as frequencies, means, percentages and standard deviations were used. The analyzed data was presented in form of frequency tables and pie charts. The study found out that external environmental factors affect the operations of the pension administrator companies. The strategic responses used by the pension administrators companies included retrenchment, mergers and acquisitions, low pricing, downsizing, new product development and expansion of the market boundaries. The impact of the strategic responses were observed to lead to customers growth, improved market share, adoption of new technologies, increase in profitability, new product development and enhancing the competitiveness of the organization. The study further found out that through these strategic responses, the firms have been able to attain sustainability and competitiveness in the industry and increase their customer satisfaction levels. The study recommends that the pension administrator companies should regularly and thoroughly evaluate their performance in order to determine the impact of the factors in the external environment. It was recommended that another study should be done to incorporate other variables and separate the large organizations from the small organizations in order to determine how these firms respond differently and separately on the external environmental factors