Influence of Strategy Implementation on Performance of Kenya Owned State Corporations

Abstract

Strategic management research has demonstrated that strategic planning coupled with implementation is instrumental for superior performance. However, strategy formulation on its own may not achieve any results against the turbulent and dynamic nature of the environment, unless backed by a clear and well aligned implementation process. The impact of strategy implementation on organizational achievement could be dependent on other variables such as available resources and operating environment. The main focus of this study was to assess the influence of strategy implementation, organizational resources and operating environment on performance of Kenya owned State Corporations. The study was rooted in the Institutional Theory and supported by Resource Based View (RBV), Dynamic Capabilities Theory (DCT), and the New Public Management (NPM) Theory. The population of this study comprised all the 249 Kenya owned State Corporationss. Out of these, 181 managed to respond, representing a 72.7 per cent response rate. Data, collected through a structured questionnaire, was processed for reporting of descriptive and inferential statistics both of which were tied to the specific objectives of the inquiry. The study established that State Corporations formulate strategies and implement them effectively. The regression analysis results revealed that strategy implementation had a positive and significant effect on organizational performance. This finding was well grounded in the DCT, Institutional Theory, NPM theory and was corroborated by numerous other studies. Both organizational resources and operating environment were found to have no moderating effect on the relationship between strategy implementation and performance. However, the complexity dimension of operating environment was found to significantly influence the relationship between strategy implementation and organizational performance. The results also showed that the joint effect of strategy implementation, organizational resources and operating environment was less than the sum effect of the independent variables in isolation. The study has made important contributions to policy design and management of Kenya owned SCs. Managers need to ensure reconfiguration of the structure and culture of the organization in a manner that promotes successful outcomes. They also ought to have a grasp of organizational changes so as to design the necessary structural changes for supporting the strategy implementation process. This may advice on the need for policy thrust to shift more to strategy implementation over and above strategic planning by putting in place measures to monitor and evaluate implementation. The study has also contributed to the existing body of knowledge by interlinking the NPM Theory, DCT Theory, Institutional Theory and the RBV. The study has several limitations, among them the fact that the variables applied only accounted for 51.7 per cent variation in organizational performance. The rest of the performance could be explained by other factors outside this study. The study also focused solely on public organizations which may face different challenges from those faced by State Corporations. The study recommends that future researchers could consider exploring the influence of other factors on organizational performance in addition to replicating the study in organizations within the private sector.