Strategic Choice and Organizational Performance of Kenya Revenue Authority
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Date
2023-11
Authors
Kahenda, Vita Michelle
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Organizational performance is vital for conceptual and empirical research in strategic management. Strategic choice serves as the link between the organization and the operational environment. In the unpredictable and competitive business environment, it is paramount for organizations to enforce strategic choices that will direct them to cope with changes in the environment and attain a competitive advantage. Kenya Revenue Authority, a government-owned organization mandated to collect, assess and account for all revenues, has faced sincere challenges in its operations and management. The organization’s performance has been a factor that needs to be examined since for instance, two decades ago in the financial year 1998/1999 revenue collection targets fell short. On the same note, the dismal performance trend persisted in 2003/2004 financial year, where it failed to surpass its targets in revenue collection. In the financial year 2017/2018, the organization collected Ksh.1.435 trillion against the set target of 1.5 trillion. In the financial year 2019/2020, Kenya Revenue Authority missed its revenue collection target by Ksh.88.3 billion. This study assessed if adopting strategic choice would affect the performance of Kenya Revenue Authority. Specifically, the study examined the effect of technology adoption, tax base expansion, taxpayers' education, customer service and strategy communication variables of strategic choice on the performance of Kenya Revenue Authority. The guiding theories were the resource-based view theory, the balanced scorecard and the dynamic capabilities theory. A descriptive survey research design was adopted, targeting 90 top and middle-level departmental employees. Proportionate stratified and random sampling was used as the sampling techniques. The data collection instrument was a pilot-tested questionnaire for true measurement examination. Validity and reliability tests were ascertained on the data collection tool before the actual exercise. Data was analyzed using descriptive statistics such as mean and standard deviation and inferential statistics, including regression and correlation analysis. Regression analysis was used to analyze whether the strategic choice variables significantly impacted the organization's performance, while correlation analysis was used to analyze the study's variables relationships. Results from correlation analysis inferred that all independent variables, including technology adoption, tax base expansion, taxpayers' education, customer service and strategy communication, strongly influenced organizational performance. The study concluded that technology adoption strongly influenced organizational performance, with the majority of responses agreeing that service quality and cost reduction had a high reputation through technology in the firm. Tax base expansion also positively and significantly impacted the performance of Kenya Revenue Authority identified through tax administration and the establishment of tax collection systems for the new taxable markets. Taxpayers' education influenced the performance of Kenya Revenue Authority through effective training programs, media avenues and other adverts. It was also concluded that customer service led to improved performance of Kenya Revenue Authority as effective customer service through the use of the rights tools and empowering staff helped the organization to provide service responsiveness and quality services to taxpayers. The research study also concluded that strategy communication influenced the performance of Kenya Revenue Authority through clear communication channels, which are supportive and open to the employees and ensure they are well-sensitized on their roles in the organization. This study implied that strategic choice significantly influenced Kenya Revenue Authority performance. In this regard, the study recommends that directors and managers employ strategic choices in their operations to increase organizational performance. The study also recommends that other government-owned companies, corporations or agencies that seek to improve performance should incorporate strategic choice in their operations
Description
Organizational performance is vital for conceptual and empirical research in strategic management. Strategic choice serves as the link between the organization and the operational environment. In the unpredictable and competitive business environment, it is paramount for organizations to enforce strategic choices that will direct them to cope with changes in the environment and attain a competitive advantage. Kenya Revenue Authority, a government-owned organization mandated to collect, assess and account for all revenues, has faced sincere challenges in its operations and management. The organization’s performance has been a factor that needs to be examined since for instance, two decades ago in the financial year 1998/1999 revenue collection targets fell short. On the same note, the dismal performance trend persisted in 2003/2004 financial year, where it failed to surpass its targets in revenue collection. In the financial year 2017/2018, the organization collected Ksh.1.435 trillion against the set target of 1.5 trillion. In the financial year 2019/2020, Kenya Revenue Authority missed its revenue collection target by Ksh.88.3 billion. This study assessed if adopting strategic choice would affect the performance of Kenya Revenue Authority. Specifically, the study examined the effect of technology adoption, tax base expansion, taxpayers' education, customer service and strategy communication variables of strategic choice on the performance of Kenya Revenue Authority. The guiding theories were the resource-based view theory, the balanced scorecard and the dynamic capabilities theory. A descriptive survey research design was adopted, targeting 90 top and middle-level departmental employees. Proportionate stratified and random sampling was used as the sampling techniques. The data collection instrument was a pilot-tested questionnaire for true measurement examination. Validity and reliability tests were ascertained on the data collection tool before the actual exercise. Data was analyzed using descriptive statistics such as mean and standard deviation and inferential statistics, including regression and correlation analysis. Regression analysis was used to analyze whether the strategic choice variables significantly impacted the organization's performance, while correlation analysis was used to analyze the study's variables relationships. Results from correlation analysis inferred that all independent variables, including technology adoption, tax base expansion, taxpayers' education, customer service and strategy communication, strongly influenced organizational performance. The study concluded that technology adoption strongly influenced organizational performance, with the majority of responses agreeing that service quality and cost reduction had a high reputation through technology in the firm. Tax base expansion also positively and significantly impacted the performance of Kenya Revenue Authority identified through tax administration and the establishment of tax collection systems for the new taxable markets. Taxpayers' education influenced the performance of Kenya Revenue Authority through effective training programs, media avenues and other adverts. It was also concluded that customer service led to improved performance of Kenya Revenue Authority as effective customer service through the use of the rights tools and empowering staff helped the organization to provide service responsiveness and quality services to taxpayers. The research study also concluded that strategy communication influenced the performance of Kenya Revenue Authority through clear communication channels, which are supportive and open to the employees and ensure they are well-sensitized on their roles in the organization. This study implied that strategic choice significantly influenced Kenya Revenue Authority performance. In this regard, the study recommends that directors and managers employ strategic choices in their operations to increase organizational performance. The study also recommends that other government-owned companies, corporations or agencies that seek to improve performance should incorporate strategic choice in their operations
Keywords
Strategic Choice, Organizational, Performance, Kenya Revenue Authority