Effect of Strategy Implementation Drivers on Organizational Performance of Cement Manufacturing Firms in Kenya

Abstract

Strategic implementation involves a critical look at the firm’s human and non-human resources to achieve its objectives. A firm’s organizational performance is measured by a prescribed yardstick which is based on evaluating both the financial and non-financial metrics. The non-financial metrics include such issues as corporate governance, sustainability, and compliance with the regulation. Kenyan’s cement manufacturing has experienced a decline in performance in the last few years; the main reason for this trend is the entrance into the industry by new firms, innovative technology for efficiency improvement, utility and changeability of various working teams, and adopting strategies in management that focus on fundamental standards of strategic management. The broad objective is to evaluate the impacts of strategic implementation on cement companies in Kenya. Specifically, the research evaluated the impact of leadership style on organizational performance; the paper also examined the influence of organizational structure on performance; evaluated the influence of resource allocation, and determined the influence of rewards and incentives on cement firm’s performance. Theories applied in the study included: the resource-based view theory and the contingency theories. A descriptive research study design was applied to describe and distinguish the phenomenon being studied. 209 senior managers in large cement firms in Kenya were targeted as the study participants. A sample size of 137 managers was obtained by the use of a simple random sampling design. Self-administered questionnaires were used in the study design whereas inferential and descriptive statistics were used in the study methodology. Data was presented using frequency tables and bar diagrams. The study disclosed that all four strategic implementation drivers have a great effect on firms’ organizational performance. With R2= 64.5% it is clear that the specific strategic implementation drivers high influenced organizational performance. Following the findings, leadership style affects organizational performance significantly (β1 = 0.714, p = 0.03), organization structure has a positive influence on organizational performance (β2 = 0.655, p = 0.03), resource allocation had a significant effect on organizational performance (β3 = 0.706, p = 0.02), and rewards and other motivational factors affect the organization’s performances positively (β4 = 0.624, p = 0.04). The study concluded that leadership style, organization structure, resource allocation, and rewards and incentives significantly affect the organizational performance of cement manufacturing companies. This paper acclaims that good leadership styles should be adopted in all organizations to motivate employees to perform well, enhance the adoption of changing environment, and improve customer relations. Organizations should come up with a strategy through which favorable organizational structures are implemented in all organizations to improve their performance. The study also recommended enough resource allocation through, management ensuring the existence of enough resources both human and financial for any organization to perform well. Finally, cement manufacturing organizations should put in place institutional regulations that favor rewards and incentives for best-performing employees. This paper recommends further research in other private and government firms to evaluate the relationship between strategy implementation and performance.