Strategic Planning, External Environment And Performance Of Large Manufacturing Firms In Nairobi City County

Abstract

The aim of the study was to establish the influence of strategic planning on performance of manufacturing firms in Nairobi County. The research was conducted using cross sectional survey design. The population of interest in this study was all manufacturing firms in Kenya. The target population was 560 manufacturing firms. The sample size was 56 firms. The required information was gathered by the use of questionnaire. The questionnaire was filled by the CEOs/MDs, head of human resources, marketing, operations or finance. The data from the field was thoroughly checked to ensure completeness, consistency and accuracy. The data was then coded and tabulated to facilitate data analysis. The researcher further analyzed the data and presented the results in form of percentages, frequencies, graphs and tables. In addition, the study utilized inferential statistics. Inferential statistics refers to the statistics measures which use a random sample of data taken from a population to describe and make inferences about the population. For this study multiple regression was utilized to find out the relationship between strategic planning, external environment, and organization performance. The study found that that firms develop long-term strategic plans and that the strategic plans were between 5-10 years. The study also found that to a great extent that the firm has done cost reduction through employee reduction or lay-offs in the last five years. The study established that to a great extent strategy evaluation, monitoring strategy implementation, evaluation and adoption of corrective measures is carried out in the firm. The study further found that the firms carry out external environmental analysis. The study found that to a great extent that social-cultural dynamics affect the operations of the firm. The study concluded that the overall performance for the five years was average and the firms were heading in the right direction. The study also concluded that at 5% level of significance and 95% level of confidence, strategic planning and external environment were all significant on performance of large manufacturing firms in Nairobi County. From the findings and conclusion, the study recommends that that the strategic process should be inclusive of all the employees, all the departments should develop and apply their strategic plans, organization and departments should review those plans to ensure the success of the implementation, there should be frequent horizontal meetings to enhance cohesion and congruence between departments, management should increase the budgetary allocation to be in line with the strategic plan for the successful implementation of strategies.