Effect of Strategic Direction Practices on Organizational Performance of Energy Companies in Kenya
Abstract
Purpose: This study examined the effect of strategic direction practices on organizational performance among selected energy companies in Kenya. Methodology: The study was anchored on the Upper Echelons Theory, which posits that organizational outcomes are largely influenced by the strategic decisions and characteristics of top management. An explanatory cross-sectional survey design was adopted. The target population comprised 189 management staff drawn from seven selected energy companies in Kenya, from which a sample of 128 respondents was determined using the Yamane sampling formula. Data were collected using structured questionnaires, whose reliability was confirmed using Cronbach's alpha coefficient (α = 0.713). Descriptive statistics were used to summarize the data, while simple linear regression analysis was employed to examine the effect of strategic direction practices on organizational performance. Findings: With response rate of 80.4%, the findings revealed that strategic direction practices had a positive and statistically significant effect on organizational performance (β = 0.452, p = .001). The study further established that although the energy companies had clearly articulated organizational visions and missions, they exhibited weaknesses in regular review of strategic objectives, formal strategic planning processes, evidence-based strategic decision-making, and employee involvement in strategic direction. Unique Contribution to Theory Practice and Policy: For sustainability in dynamic, uncertain and competitive business environment, energy companies in Kenya should prioritize strategic choices and practices aimed at positive outcomes and aligned to company visions. The study therefore, recommends that energy companies strengthen strategic planning processes, institutionalize periodic review of strategic objectives, promote evidence-based strategic choices to enhance their performance and competitiveness.