Corporate Governance-Strategic Decision Making Co-Alignment, External Environment And Performance Of Mission Hospitals In Kenya

Abstract

This study was set to test the viability of the co-alignment model using theories that support corporate governance practices and strategic decision-making dimensions and their effect on performance. It interrogated the relationship between corporate governance-strategic decision making co-alignment, external environment and performance of Mission Hospitals in Kenya. Drawing from the agency, stakeholder, resource-based view and open system theories, the researcher conceptualised the potential effect of corporate governance-strategic decision making co-alignment on performance. It was prompted by the need for more grounding since there are limited empirical studies on co-alignment model and study context. Arising from the broad objective, seven specific objectives were formulated and each of these objectives had a corresponding hypothesis. A descriptive cross-sectional survey research design was used, anchored on positivism philosophy. The target population consisted of 88 Mission Hospitals in Kenya and data were collected from 74 hospitals (84.09 percent response rate). A single data collection method through structured questionnaires was used. The collected data was analysed and interpreted based on descriptive statistics, correlation and multivariate regression analysis as well as canonical correlations analysis. The findings revealed that corporate governance, strategic decision-making, corporate governancestrategic decision making co-alignment and external environment had a significant joint effect on the performance of Mission Hospitals in Kenya. The results further indicate that there was significant moderating influence of the external environment on the relationship between the independent variables and performance (the dependent variable). Correlation and regression analysis indicated that there exist strong relationships among the variables in the model. Indeed, results suggested that the joint effect of the independent variables on dependent variables were statistically significant. This study has made contributions to theory, policy, managerial practices and methodology. It has given rise to several new research avenues and practical implications such as the need to replicate this study in different contexts in order for researchers to draw patterns. However, one of the limitations of this study was the single data collection method through self-administered tool which could be biased and subjective in nature. The reliance on primary data has potential danger associated with sources of systematic measurement error. Future studies could focus on using secondary data to measure, for example, both financial and non-financial performance. The researcher also employed a cross sectional approach whereas a longitudinal approach would provide for a longer time of study to observe relationships among study variables and to underscore the importance of co-alignment in explaining superior organisational performance.