Strategic Alliance Practices and Organization Performance of Selected Companies in the Energy Sector in Kenya
Medforth, Kamau John
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Stiff competition in the energy sector in Kenya has made it crucial for organizations to seek ways of improving their organization performance. Due to changes in both external and internal environmental factors, organizations have been compelled to adjust to new procedures so as to endure and prosper in the global market place that has seen an increase in innovation and technology use. This had led organizations to focus on relentless improvement of its goods and services and to seek out strategic partnerships with other companies. As more companies strive to improve the quality of their goods and services others also need to keep up so as to maintain a competitive advantage and remain profitable. The study sought to investigate the effects of the strategic alliance practices on organization performance of selected energy companies in Kenya. The specific objectives were to: to assess the effect of knowledge transfer on the performance of selected companies in the energy sector in Kenya, to examine the effect of market development on the performance of selected companies in the energy sector in Kenya, to investigate the effect of efficiency on the performance of selected companies in the energy sector in Kenya and to evaluate the effect of technological advancement on the performance of selected companies in the energy sector in Kenya. The study adopted the balance score card (BSC) model, resource-based theory, knowledge and social exchange theory and transaction theory. The study used descriptive research design and conducted a cross sectional survey of employees in selected energy companies in Kenya. The target population of the study was 22 energy companies in which 88 respondents were selected through a sample. There were four groups of respondents picked namely; Finance manager, Marketing manager, Customer experience manager and Production manager. the respondents’ views were presented using measures of central tendency. The study adopted regression analysis to observe the relationship between the independent and dependent variables. The study was based on primary data, which was collected with the help of questionnaires that were administered by the researcher. The validity of the content was tested using expert opinions. The results of the study were presented with the help of charts, tables and bar graphs. The results highlight that there was a positive relationship between the independent variables (knowledge transfer, mmarket development, ooperational efficiency, ttechnological advancement) and the dependent variable (organization performance). This is shown by values of p = 0.002, p = 0.001, p = 0.003) and p = 0.002 respectively. Additionally, R square test results show r square as 0.742 which indicates an existing variation of 74.2% on organization performance as a result in a change in the independent variables namely knowledge transfer, market development, operational efficiency and technological advancement. The study established that strategic alliance practices have an influence on the overall organization performance of selected energy companies in Kenya. It recommends that energy companies should have a careful assessment and selection of partners before entering into an alliance in order to ensure that the relationship is mutually beneficial for all the parties involved. The findings also recommend that energy companies should make an effort of entering into various strategic alliance, this ensures diversity and expansion of their products and services as long as they ensure that their financial leverage is kept low.