Strategic Management Practices and Financial Performance of Deposit Taking Sacco’s in Nairobi City County, Kenya
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Date
2025-11
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Kenyatta University
Abstract
Deposit Taking Savings and Credit Cooperative Societies (SACCOs) as key actors within a country's economic setup, mainly through their supply of savings and credit facilities. Yet, their recent financial performance of SACCOs in Kenya has been on a slide as reflected by their Return on Assets through time. ROA stood at 14.32 percent in 2016 and declined to 11.19 percent in 2020.This trend highlights a typical problem, the unclear extent to which strategic management practices influence the financial performance of DT SACCOSs. Therefore, the study evaluated strategic management practices (control, formulation, environmental scanning, and implementation) effect on deposit-taking SACCO performance in Nairobi City County. MacKinsey 7S Model, Resource-Based View, and Open Systems Theory were applied. A descriptive research design was preferred. The study population included all the 47 deposit-taking SACCOs found in Nairobi City County. A census was then done owing to the number of that target population. Both primary and secondary data collection methods were employed to collect data on the study variables. The research instrument underwent pilot testing to ascertain validity and reliability. Validity was tested through expert review and factor loading meeting the ≥ 0.5 threshold while reliability was verified using the Cronbach’s alpha coefficient above the acceptable 0.7 benchmark .Panel data regression was utilized for the study, and descriptive and inferential statistics were used to analyze the variables, which were then presented in table formats. All ethical standards for conducting research were adhered to accordingly. The findings demonstrated that environmental scanning had a major and positive impact on financial performance. The outputs showed that strategy formulation significantly and positively affects financial performance. The outcome called strategy implementation positively and significantly impacts financial performance. The other result unveiled that strategy control has an insignificant positive effect on these DT-SACCOs financial performance. The investigation advocates that the management of DT-SACCOs should focus on enhancing the practical application of environmental scanning rather than merely conducting it as a routine exercise. This can be achieved by establishing clear mechanisms for translating the insights gained from environmental analysis into actionable strategies. For instance, SACCOs could implement regular workshops or strategy sessions where findings from environmental scans are discussed and directly linked to strategic planning initiatives.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of Degree of Masters in Business Administration (Strategic Management) of Kenyatta University. November, 2025
Supervisor
Lucy Kavindah