Strategic Drift and Its Effect on the Performance of Insurance Companies in Nairobi City County, Kenya
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Date
2018-11
Authors
Lee, Estone Gachanja
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Organizations functions in an external setting which is continually altering and mostly
characterized by instability linked to globalization, changes in customers and investors demands,
increased competition and markets deregulation. This study determined strategic drift and its
effect on the performance of insurance companies in Nairobi, County. The study’s specific
objectives were to establish how organizational culture, leadership, strategic planning and finally
innovation affect the performance of insurance companies in Kenya. The study embraced both
descriptive survey and explanatory research designs and census was used to get the 49 registered
insurance companies carrying out business in Nairobi County. A sample size of 49 respondents
was purposively sampled where only general managers in the insurance companies were
interviewed. Data was collected using questionnaires. This study used construct, face and content
validity and a Cronbach’s Alpha of 0.7 was satisfactory for the assessment of the questionnaire’s
reliability. Data was analyzed using excel and SPSS software where both descriptive and
inferential statistics were conducted. Results indicated that the mission of the insurance company
has been communicated to the employees clearly had the highest mean with having a centralized
decision making in all matters concerning the company key in the leadership of insurance
companies. Results further indicated that innovative products have the ability of attract diverse
consumers with varied needs obtained a high mean followed by innovative insurance products
have high success chances regardless of the insurance firm that launches the product.
Additionally, during formulation of strategic plans in the company, views of all staff are
considered had the highest mean among the strategic planning indicators evaluated. Findings
also showed a statistically significant negative relationship between organization culture and
organization performance, a statistically insignificant negative relationship between leadership
and organization performance. Additionally, there was an insignificant positive relationship
between both innovation and strategic planning and organization performance. ANOVA results
which assessed the overall significance of the regression model indicated that it was significant.
The study concluded that organizational culture is a key strategic drift indicator that affects
performance of insurance companies as it was found to significantly affect organization
performance. The management of insurance companies should therefore consider organizational
culture for their companies to improve customer satisfaction and profitability and increase their
market share.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment of the Requirements for the Award of the Degree of Masters in Business Administration (Strategic Management Option), Kenyatta University