Strategic Planning and Performance of Savings and Credit Cooperative Societies in Nairobi City County, Kenya
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Date
2023
Authors
Karuoya, Wairimu Elizabeth
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
SACCOs play a crucial role in granting access to sustainable fiscal assistance and are identified as
most effective models in enhancing productivity with over 80% of the population in Kenya,
deriving their livelihood directly or indirectly from the cooperative sector. However, SACCOs are
facing challenges in performance as a result of stiff competition from other financial institutions,
modern technology, problems in financial management, poor leadership and governance issues.
This review narrows the gap by evaluating the impact of strategic planning on SACCO
performance in Nairobi City County, Kenya. The general objective of this research was to
determine the effects of strategic planning practices on SACCO performance in Nairobi City
County. The specific objectives of this research were to examine the influence of environment
analysis on SACCO performance, establish the effect of strategy formulation on SACCO
performance and to ratify in what way strategy selection affects performance of SACCOs. This
study was guided by the Balance Scorecard Model, Michael Porter’s Five Forces Model, ResourceBased View Theory and Dynamic Capabilities Theory. A descriptive survey research design was
utilized. The research targeted 47 licensed SACCOs in Nairobi City County using a census
sampling method. The respondents of the study included staff from the accounting department,
human resource department and operations department, summing up to a summation of 141
informants of which, a total of 115 questionnaires were fully filled and successfully returned. This
represented a response rate of 82% that was considered adequate for data analysis.. Questionnaires
were used in collection of primary data and administered by adopting the drop and pick method.
This study involved a pilot test to pretest the data collection instrument as well as check on
reliability and validity of the questionnaire in collecting necessary data intended for this research.
The Cronbach Alpha coefficient for 14 items was found to be 0.763. This exhibited a high internal
consistency. To enable the researcher to get percentiles and cumulative frequencies, a computer
software known as Statistical Package for Social Sciences (SPSS) was used in inputting plus
analyzing data using a simple descriptive analysis. In data analysis, descriptive and inferential
statistics were utilized. Results for Pearson correlation analysis revealed that all independent
variables comprise environment analysis, strategy formulation and strategy selection, were
significant and had a positive relationship with SACCO performance. R square depicted that the
independent variables explain 90.5% of the changes in SACCOs performance. Therefore, it was
concluded that strategy planning delivers positive results in a firm, with strategy selection
contributing most to the performance of SACCOs, followed by strategy formulation and then
environmental analysis. The study recommends that SACCOs should review its strategic plan
every quarter of the year for continuous improvement of performance.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of the Degree of Master of Business Administration (Strategic Management) of Kenyatta University, April 2023.
Keywords
Strategic Planning, Savings and Credit Cooperative Societies, Nairobi City County, Kenya