Institutionalization Of Strategy And Performance Of Cement Manufacturers In Kenya

Abstract

The research was commissioned to examine the link between institutionalization of strategy and the performance of the Kenya’s cement processing establishments. The dependent variable was the organizational performance while the independent variable included the constructs of the strategy institutionalization such as culture, policies, leadership and organizational structure. Data was gathered using structured questionnaire. The response rate was 84.72%, a total of 61 respondents out of the estimated 72 respondents participated in the survey. Data was collected from top management teams in charge of commercial divisions, business development, finance and administration. The research was pegged on three theories; theory of Resource Based , Institutional Theory and McKinsey 7-S Framework. To accomplish the research objectives, the research utilized descriptive analysis, Pearson correlation and regression analysis. Preliminary diagnostics shows that the data set is within a normal distribution. The Durbin Watson test of serial correlation also shows the absence of a serial correlation in the data set. The model summary through the R square statistic shows that 31.1% of the changes in the independent variable is illustrated by the selected dependent variables; organizational culture, policies, structures and leadership. The ANOVA statistic concluded that model as set out is statistically significant in explaining the changes in the organizational performance at 95% confidence level. The ordinary least square regression methodology indicates presence of a positive link between organizational performance and Leadership and culture. Organizational policies were found not to have any relationship with the performance. The organizational structure was established to possess a negative link with performance. These relationships were tested for statistical significance at 95% confidence level. Therefore, the research concluded that institutionalization of strategy has a positive influence on organizational performance. These findings confirm the assertions of the theory of resource based and the framework of McKinsey 7-S. Hence the study recommends that chief executive officers should support strategy institutionalization by investing in the structure, leadership, culture and policies which promote institutionalization. Top management are also advised to promote strategic cultural practices since they are linked to positive performance. The study suggest that similar studies be conducted in SMEs to ascertain the presence statistically significant disparity in the way SMEs execute their strategies as compared to corporates.