A survey of risk factors in the strategic planning Process of selected parastatals in Kenya
Strategic planning has its roots m war situations, where survival is key to success. Modem business organizations have embraced this concept, and now most leading organizations engage strategic planning managers to ensure survival and growth. The concept of strategic planning has also taken root in public sector organizations, whose objectives may not necessarily be profit oriented. In Kenya, parastatals are important organizations used by the Government as conduits for service delivery to the populace. Their goals are usually of a wider scale concerning both the organization and the country as a whole, and their operations call for accountability to varied stakeholders. In order that they achieve their objectives, or increase their chances of doing so, it is important that strategic planning be done bearing in mind all the risks involved. This research project set out to document the state of strategic planning, with particular reference to risk measurement and management, in Kenyan parastatals. The key objectives of this study were the identification of the risk assessment factors in strategic planning and the establishment of the factors influencing the risk measurement practices. A comprehensive review of available literature, both local and international was done. Strategic planning, as presented by various authors, was analyzed with emphasis on its application in public sector organizations. Various weaknesses of strategic planning, and how to counter the same, were highlighted. Notably, it was established that strategic planning can only succeed when contextual factors are adequately considered and organizations take deliberate steps towards -identifying and managing all likely consequences of making certain strategic choices. The research findings on strategic planning in public sector organizations were for the most part consistent with the findings of other studies on similar organizations and topics. The findings further presented new insights on strategic planning risk factors. Strategic planning risks were categorized according to organization-based factors, environmental factors and planning factors. For analysis purposes, the parastatals were categorized according to the nature of operations; being regulatory and sector support parastatals, production and marketing parastatals, and finance, training, research & development and allied services parastatals. The three groupings were compared for differences in strategic planning practices. Significant differences were noted in choice of strategies, with regulatory and sector support parastatals being significantly involved in various strategies. The differences among the categories, in terms of the strategic planning risk factors considered, were found to be statistically insignificant. However, slight differences were noted when the mean scores were plotted on a likert type profile. From the study, it was found that although strategic planning was widely practiced, there was a further need to consider the risks that were involved. Recommendations were made for enhanced risk-based strategic planning mechanisms and practices in public sector organizations, as well as the identification of areas for further research.