Influence of Balanced Scorecard on Organizational Performance of Kenya Electricity Generating Company Limited: a Case of Central Office in Nairobi City County

Abstract

Balanced Scorecard (BSC) is an integrated strategic planning and management system that is used to align business activities to the vision and strategy of an organization by considering both financial and non-financial aspects in a balanced manner. BSC therefore provides a shift from the traditional financial performance focus only to a balanced view of the organization through four perspectives (financial, customer, internal processes, learning and growth). The BSC learning and growth perspective being broad, was narrowed down to staff training in this study. The purpose of the study was to investigate the influence of BSC on organizational performance of KenGen using a case of it’s central office in Nairobi City County in Kenya with objectives to; examine the influence of staff training on organizational performance, investigate the influence of internal business processes on organizational performance, examine the influence of customer satisfaction on organizational performance and investigate the influence of financial performance on organizational performance. Descriptive survey research design was adopted including both qualitative and quantitative research methodologies. Proportional stratified random (probability) sampling was used to select a total sample of 243 management staff comprising (159 in lower management, 56 in middle management and 28 in top management) from a heterogeneous target population of 360 (267 lower in management, 63 in middle management and 30 in top management) in KenGen’s central office in Kenya’s capital city of Nairobi using Krejcie and Morgan Table. The data collection instrument was a structured e-questionnaire to enable the researcher to collect primary quantitative data from the closed-ended questions and primary qualitative data from the open-ended questions. In some sections of the questionnaire, a likert scale was used to weigh the rank of response in terms of strength or weakness on a scale ranging from one to five. Frequencies, percentages, averages and tables were used for data analysis using Statistical Package for Social Sciences (SPSS). Qualitative data was used to compliment, enrich and reinforce the quantitative data. Validity of the questionnaire was enforced by pilot testing and using unambiguous questions to enhance standardization of the questionnaire. The reliability of the questionnaire was achieved by using split-half method. Respect, anonymity, privacy and fairness to the respondents were exercised through self-administered e-questionnaire in the research process to fulfill the ethical requirements as per the rules of natural justice and as per the bill of rights in the (Kenyan Constitution, 2010) in order to avoid unnecessary risks. The e-questionnaire was sent to 243 respondents by e-mail, out of which only 146 questionnaires were returned, accounting for 60% return rate. From the research findings based on research objectives, the respondents agreed that improvement on staff training, customer satisfaction, internal business processes, financial performance in a balanced manner as anchored in BSC also improved organization performance. It was recommended that the research findings in the central office be disseminated to the branches of KenGen to create awareness to all the staff as stakeholders of the common vision and strategy. It was further recommended that the research could be conducted in other organizations with KenGen as a benchmark to encourage them to embrace BSC in order to shift the traditional financial aspect only to all the BSC perspectives in a balanced manner. The Balanced Scorecard in this research was based on a profit making organization such as KenGen so there is need for another study based on a non-profit making organization such as KenGen Foundation