Cost Leadership Strategy and Organisational Performance: A Case of Insurance Companies in Nyeri County, Kenya.
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Date
2020
Authors
Njuguna, Samuel Ngugi
Waithaka, Paul
Journal Title
Journal ISSN
Volume Title
Publisher
International Academic Journals
Abstract
This study sought to determine the effect of
cost leadership strategy on the performance
of insurance firms in Nyeri County, Kenya.
It was anchored on Porter’s Five Forces
Model and the Dynamic Capabilities
Theory. A census study approach was used
to subject all the twenty (25) insurance
companies operating in the county to study.
Purposive sampling was used to identify the
respondents who included branch managers,
finance officers, marketing managers, claims
managers and actuaries of all the insurance
firms being studied. This procedure led to a
total of 125 respondents. The study assessed
non-financial performance of the insurance
companies for 5 financial years 2014-2018.
Primary data was collected through
questionnaires while secondary data was
gathered using a document review guide to
review financial statements, management
reports and other key publications in the
company. Both descriptive and inferential
statistics were used in the analysis. The
Pearson correlation analysis results
established that cost leadership (r=0.791, p=
0.01) has a very strong and positive
correlation with organisational performance.
Similarly, the results of the multiple linear
regression analysis showed that cost
leadership (β=880, p=0.004) has a positive
effect on organisational performance. Thus,
a conclusion was made that pursuit of cost
leadership strategies delivers positive results
to the organisation. The study recommends
that insurance companies work on
improvement of the adoption of proprietary
technology and innovative distribution
channels for products which were found to
be only moderately entrenched. This could
be limiting their efficiency in effectively
controlling the operating and distribution
costs.
Description
A research article published in International Academic Journal of Human Resource and Business Administration
Keywords
cost leadership strategy, competitive strategies, organisational performance, insurance firms
Citation
Njuguna, S. N. & Waithaka, P. (2020). Cost leadership strategy and organisational performance: A case of insurance companies in Nyeri County, Kenya. International Academic Journal of Human Resource and Business Administration, 3(9), 256-267