The Influence Of Strategic Management Processon Organizational Performance Of Listed Companies At The Nairobi Securities Exchange

This study was carried out with the aim of investigating the influence of strategic management process on organizational performance of companies listed at the Nairobi Securities Exchange (NSE). Specifically, the study sought to analyse the effect of strategy formulation, strategy implementation, and strategy evaluation on organizational performance of companies listed at NSE. Further, the study examined the moderating effect of regulation on the relationship between strategic management process and organizational performance of companies listed at NSE. 

The study was based on positivism research philosophy and explanatory research design. The target population was 325 senior managers of companies listed at NSE. The study utilized stratified sampling technique with real estate investment trust, telecommunication and technology, manufacturing and allied, investment services, investment, insurance, energy and petroleum, construction and allied, commercial and services, banking, automobiles and accessories, and agricultural sectorsforming the strata. The study followedYamane’s (1967) formula to come up with a sample size of 179 senior managers. Data was gathered from senior managers by means of a structured questionnaire. 

Before the main data collection, the study conducted a pilot study to assess thereliability and validity of the questionnaire. Pilot study results showed an overall Chronbach alpha of 0.7 that indicated that the questionnaire was reliable. Validity tests corroborated the reliability results. Out of a sample of 179, the study collected data from 147 respondents representing 82.12% response rate. Afterthedata collection, the study conducted descriptive and inferential analysis, where descriptive analysis entailed, means, standard deviations and frequencies. Inferential analysis includedcorrelation analysis, One-way Analysis of Variance (ANOVA),factor analysis and regression analysis. Before running the regressions, diagnostic tests wereconducted. 

The study found that organizational performance was positively and significantly correlatedwith strategy formulation. Using regulation as the moderator, strategy formulation was found to have no significant effect on organizational performance but had significant effect on organizational performance when regulation was not a moderator. 

Organizational performance was positively and significantly correlated with strategy implementation. The results for multiple linear regression model with and without regulationas a moderator showed that strategy implementation had a negative but insignificant effect on organizational performance. Organizational performance had positive and significant correlationwith strategy evaluation. With regulation as a moderator and without a moderatorthe study found that strategy evaluation had a positive but insignificant effect on organizational performance.

Correlation analysis results showed that organizational performance had positive and significant correlation withregulation. Results for multiple linear regression model showed that regulationdid not moderate the relationship between strategic management process andorganizational performance of companies listed at NSE.The study concluded that strategic management process, especially strategy formulation positively and substantially influenced organizational performance of companies listed at the NSE. The study recommended that in order to achieve the organizational vision and consequently enhance the performanceof companies listed at the NSE and other securities exchanges should put appropriate measures that ensure effective strategy formulation.