The Strategy Implementation and Organizational Performance of Companies at Nairobi Securities Exchange

Abstract

Companies listed at security exchanges in developing countries are facing numerous challenges among them poor financial performance. Organizational performance could be influenced by various factors among them strategy implementation. The need for developing a strategy has increased due to globalization, technology advancement, deregulation, emerging of new markets and industries, and economic restructuring. This paper sought to investigate the role of strategy implementation on organizational performance of companies listed at Nairobi Stock Exchange (NSE). Positivism research philosophy and explanatory research design were utilized and a target population of 325 senior managers of companies listed at NSE were identified. Using sample size formula, a sample of 179 senior managers were estimated. Stratified sampling technique was employed and a structured questionnaire was design to aid in data collection. The questionnaire was pretested and found to be reliable since the overall Cronbach alpha was 0.7. The paper collected data from 147 respondents representing 82.12% response rate. Inferential statistics utilized comprised of correlation analysis, One-way Analysis of Variance (ANOVA), factor analysis and regression analysis.

The findings revealed that organizational performance was positively and significantly correlated with strategy implementation while the one-way ANOVA showed that the mean difference between organizational performance and strategy implementation was significant. The results of simple linear regression showed that strategy implementation had a negative but insignificant effect on organizational performance. These findings suggested that strategy implementation does not significantly influence organizational performance of companies listed at NSE. The study recommends that the companies listed at the NSE should not focus all their resources on the method in which the company develops, uses and integrates organizational structure, Policy, control systems, and organizational culture but should ensure that the right implementation processes are followed.