Influence of Strategic Planning on Corporate Performance: A Case of National Hospital Insurance Fund, Kenya

Abstract

The major role of the ministry of health in Kenya is to promote the health status of Kenyans through access to effective and affordable services. To address citizens' major health sector challenges, the Kenya government, in 1966, set up NHIF to provide medical insurance coverage. Unfortunately, key stakeholders have raised dissatisfaction with service provision, sighting that the corporation has lost sight of its cardinal goals leading to the loss of funds ventured in by principals. In recent cases, regular system failure during the online self-service, including payment, and laxity in addressing client-related cases have been reported failure to timely remit funds to offset facilities bills like the case of Kenyatta hospital costing 311 million in 2017 suggests a lack of strategic plans. Whereas previous studies largely focused on funding, they never considered strategic planning in NHIF and more so in Busia, Western Kenya.

Moreover, no known studies have focused on a mission, objective, and vision that ensures improvement and, thus, better performance. The purpose of this study was to analyze the influence of strategic planning on corporate performance. It was guided by three objectives:

• To establish the influence of the mission statement on corporate performance,
• To establish the influence of an organization's objectives on corporate performance and
• To determine the influence of an organization's policies on corporate performance

The study covered scholars' work on empirical studies on strategic planning and performance and was guided by resource-based theory. The study employed a correlational research design targeting 49 NHIF staff as a population, of whom 4 were used for the pilot study and 45 for the actual study. The Census sampling approach was opted for as the target population was a manageable number. The research instrument was a questionnaire and questionnaire schedules. Instrument reliability was ascertained using Cronbach's Alpha coefficient, where all the variables met the threshold of 0.701, implying internal consistency.

In contrast, validity was ascertained by expert judgment from the school of business and economics. Data were analyzed using descriptive statistics (percentage), and inferential statistics were used to generate quantitative reports. In contrast, content analysis was used to analyze quantitative data, and it was presented in tables. Findings revealed that:

• The use of a mission statement in strategic decision-making was a statistically insignificant predictor of corporate performance β₁= .038 (p = .269),
• Organization's objectives were positive significant predictors of corporate performance (β₂ = .429 (p = .000) and
• Organization's policies were positive significant predictors of corporate performance (β₃ = .432 (p = .000)

These values of the organization's objectives and the organization's policies are statistically significant since the p-values are less than 0.05, meaning that a unit change in the use of an entity's objective and policies intensify results in an increase in performance of 0.429 and 0.432 respectively, all things being fixed. The study, therefore, concludes that a mission statement should not be embraced in an attempt to increase corporate performance. Using the organization's objectives and adopting policies in strategic planning should be embraced as they lead to increased corporate performance. The study recommends that the NHIF Busia branch should continue embracing objectives and policies in strategic decision-making as this was found to improve the corporate performance of funds. The importance of the study is that it presents an overview of the influence of strategic planning on corporate performance. This is intended to offer insights and additional sources of reference to researchers and NHIF policy-makers.