Effects of Strategic Factors on Organizational Performance; A Case Study of the Kenya Geothermal Development Sector (Kengen)
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Background information indicates that firms which fail to analyze their strategy ultimately underperform or perish. Numerous strategic performance management theories and a conceptualized model support this empirical research. This study analyzes strategic factors affecting organizational performance to ensure the pursued strategy is unique, inimitable and competitive. Despite the establishment of KenGen Geothermal sector as a discrete strategic business unit (SBU), it’s not clear if strategic factors affect organizational performance indicated by increase in profit, revenue and growth; that may be the cause of the problems of frequent power blackouts and rationing. These problems of frequent power blackouts and rationing in the recent past by KenGen require assessing the effects of strategic factors on organizational performance; first based on a single SBU of the firm. The objectives of the study are; assess if the firm’s SBU has strategic or culture fit and analyze if strategy decay affect performance. Random or probability sampling is used to collect data from respondents. Standard normal distribution at 95% confidence interval is used to test the proposed hypotheses. In all cases of these tests, the null hypotheses have been rejected. Pearson correlation coefficients have been used to test linear dependence of the variables of interest. The study output verifies strong positive linear dependence ranging from 0.574 to 0.993. The research recommends further studies to include all other SBUs in the firm and other diverse organizations in order to verify the universality of this research. The study benefits the firm as it is a cost effective method of assessing effects of strategic factors on organizational performance.
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