Influence of Strategic Direction on Organizational Performance of Commercial-Based Parastatals in Kenya

Abstract

To investigate the influence of strategic direction on the organizational performance of commercial-based parastatals in Kenya. The study used a descriptive research design to collect data on a target population of six (6) commercial-based parastatals. The respondents were 45 departmental managers and 151 administrative staff. Data was analyzed using descriptive and inferential statistics. Of the questionnaire respondents who were 56(52%) agreed and 51(48%) strongly agreed on a mean of 4.48 (SD of 0.50), that there was adequate involvement in decision-making among the departmental heads. This was closely followed by 60(56%) respondents agreeing and 19(18%) strongly agreeing on a mean score of 3.70 (SD of 1.01), that innovation and customer satisfaction were supported by their parastatal. However, 39(36%) respondents strongly disagreed while another 42(39%) disagreed on a mean score of 2.55 (SD of 1.33), that the organization's budget was aligned to the strategic goals with the strategic goals. Additionally, 48 (45%) strongly disagreed and 50 (47%) disagreed on a mean score of 2.18 (SD of 1.22), that the management managed the organizations' resources effectively. The Pearson correlation coefficient was r=0.706** at α < 0.000 and 99% significance level indicating a positive correlation between strategic direction and performance. The management diverted the organization's resources to unscheduled things hence ending up misusing the resources and causing ineffectiveness in the operations. It was rather sad that the strategic goals were not being achieved because some members of the management thought it wise to divert the resources meant for that purpose to either other areas or their projects amounting to embezzlement of funds. Additionally, the findings revealed that some organizations were unwilling to change when strategies demanded change but stick to old methods to serve their interests. Therefore, there should be implementation of tough regulations by the government agencies like EACC of various legal punishments to any staff irrespective of their job group found guilty of embezzlement of funds must face. Further, ow cadre staff should be involved in the strategic direction exercise which can be done by seeking the views and opinions of the staff on the strategies to develop to improve organizational direction to foster implementation and make the staff to be part of the progress of the organization. There is a need to build the competency of the leaders to assume a strategic approach while directing other activities.