Influence of Strategy Formulation, Public Sector Policies on Performance of State Corporations in Kenya

Abstract

Purpose: The purpose of the study was to investigate the influence of strategy formulation on the performance of state corporations in Kenya and also to assess the moderating role of public sector policies in the relationship between strategic management practices and the performance of state corporations. Methodology: The study employed a descriptive cross-sectional census survey design. The target population was the 187 state corporations in Kenya, and data were collected from 160 respondents (staff). Content analysis of qualitative data while descriptive and inferential statistics were used in the analysis of quantitative data through multiple regression analysis. The assumptions tests of multicollinearity, normality and homoscedasticity were performed before regressions analysis.  Findings: It was found that both strategy formulation and public sector policies have statistically significant relationships with state corporation performance with p values less than 0.05. The multiple regression of strategy formulation and public policies and their influence on organizational performance gave an R of 0.727. This explained about 72.7% of the variation in organizational performance. Meanwhile, adjusted R squared was 0.720, meaning 72.0% of variations in the performance of state corporations were caused by change in study variables. This demonstrates the relevance of strategy formulation and public sector policies towards performance enhancement. Unique Contribution to Theory, Policy and Practice: The study will contribute to strategic management literature by highlighting strategic management concept in explaining the performance of Kenyan State Corporation and also the relevance of strategic practices and external policy environment influence to performance. Contributions to Practice Policy makers should grant state corporations autonomy to allocate financial, human and asset resources and also engage in operational and investment planning while ensuring accountability. State Corporation Managers have an obligation to link their well formulated strategies into their operational programmes so as to enhance efficiency, service delivery, account for actions and improve overall performance of their corporations.