Top Management Team Characteristics and Performance of Independent Regulatory Agencies in Kenya
Oketch, Joseph Odongo
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There has been great variation in organizational performance of independent regulatory agencies in Kenya, with some exhibiting exceptional outcomes in delivering on their mandates, while others are performing dismally. Previous researches have demonstrated that top management team characteristics affect organizational performance. This study purposed to investigate the effect of strategy execution and legal environment on the relationship between top management team characteristics and performance of the independent regulatory agencies in Kenya. The specific objectives of the study were; to determine the effect of top management team demographic characteristics, to examine the effect of top management team psychological characteristics and to assess the effect of top management team cognitive characteristics on the performance of the independent regulatory agencies in Kenya. The study also aimed to establish the mediating effect of strategy execution on the relationship between top management team characteristics and performance, and lastly to evaluate the moderating effect of legal environment on the relationship between top management team characteristics and performance of the independent regulatory agencies in Kenya. The study was anchored on upper echelons theory, resource based view theory, the contingency theory, open systems theory and stakeholder theory. To achieve these objectives, the study adopted descriptive cross-sectional research design. The target population of the study was the twenty-three independent regulatory agencies currently existing in Kenya. The study adopted a census survey of the top management team members in the twenty three independent regulatory agencies in order to capture the required information. Primary data was gathered using structured questionnaire administered through drop and pick later method. Descriptive statistics were then used to summarize the survey data into percentages, frequencies, means and standard deviations. Inferential statistics employed regression analysis to test hypotheses and draw conclusions. Baron and Kenny, and Whisman and McClelland models were used to test for mediating and moderating effects respectively. The results of the study showed that there is no significant effect of top management team demographic characteristics on performance of the independent regulatory agencies. The results further showed that top management team psychological characteristics significantly affect performance of the independent regulatory agencies. Further, it was established that top management team cognitive characteristics significantly affect performance, strategy execution partially mediates the relationship between TMT characteristics and performance and lastly, that legal environment moderates the effect of TMT characteristics on performance of the independent regulatory agencies in Kenya. The study recommends that the recruitment process of TMTs should include psychological and cognitive characteristics as requirements apart from the demographic characteristics requirements mostly in use. The study further recommends that independent regulatory agencies need to develop a reward system for their TMTs who excel in executing their organizational strategies so that they can be motivated and to provide an opportunity for the managers to compete amongst themselves in order to achieve superior organizational performance. The study also recommends that the judicial system should recognize and support the work of the independent regulatory agency in enforcing regulations for their sectors or subsectors. Lastly the study recommends that the independent regulatory agencies should have stable funding mechanism to enable them to execute their mandates and to be operationally autonomous.