Strategic Planning and Organizational Performance of Savings and Credit Cooperative Societies in Nairobi City County, Kenya
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Date
2023-10
Authors
Karuoya, Wairimu Elizabeth
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Savings and credit cooperative societies are facing challenges in performance as a result of not conducting comprehensive environmental analysis, improper formulation of long-term/short-term strategies and lack of selection criteria for considering strategies that enhance decision effectiveness. This review narrows the gap by evaluating the impact of strategic planning on SACCO performance in Nairobi City County, Kenya. However, 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. The general objective of this research was to determine the effects of strategic planning on SACCO performance in Nairobi City County. The specific objectives of this research were to examine the influence of environmental analysis, establish the effect of strategy formulation and to ratify in what way strategy selection affects performance of savings and credit cooperative societies in Nairobi City County, Kenya. This study was guided by the balance scorecard model, Michael Porter’s five forces model, resource-based view theory and dynamic capabilities theory. A descriptive survey research design was utilized. This study is significant to top executives, Nairobi City County and scholars in identifying gaps that may promote organizations, give guidance to understanding strategy planning and as a resource to future scholars, respectively. The research targeted 47 licensed SACCOs in Nairobi City County using census. 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 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 environmental analysis, strategy formulation and strategy selection, were significant and had a positive relationship with organizational performance. R square depicted that the independent variables explain 90.5% of the changes in organizational 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 through conducting an environmental analysis, formulating relevant strategies and carefully considering strategies that enhance decision effectiveness, 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, October 2023
Keywords
Strategic Planning, Organizational Performance, Savings and Credit Cooperative Societies, Nairobi City County, Kenya