ISSN: 2222-6990
Open access
The purpose of the study was to establish the effect of organizational strategy on performance of companies listed in NSE in Kenya. The theoretical framework that was anchored on the study includes chaos and complexity theory and industrial organizational economic theory. The study objective was to determine how organizational strategy affects performance of companies listed in NSE. The study tested the null hypothesis that organizational strategy does not significantly affect performance of companies listed in Nairobi Securities Exchange. The study used a cross sectional survey design on 64 companies listed in the NSE in Kenya with a sample of 38 companies covering five years (2013-2017) as at 30th June, 2017. Purposive sampling technique was used on 4 senior managers namely, Chief Executive Officers, heads of divisions in Human Resource, Finance and Marketing from the listed companies in NSE giving a sample size of 152 managers. Pre-testing was conducted on 15 respondents and reliability coefficient(r) was above the recommended threshold of 0.7.The study used five point Likert Scale to measure organizational culture and performance. Secondary data was obtained from published sources and primary data was obtained from the semi-structured questionnaire. The analysis comprised descriptive statistics, Pearson’s correlation, and hypothesis testing and regression analysis using ANOVA. The study determined that organizational strategy had a significant positive effect on performance of companies listed in Nairobi Securities Exchange. The study concluded that organization strategy needs to be adopted by companies as this helps in coming up with strategic plans either short term or long term that propels the company to better performance in the changing business environment. The study recommended that management should adopt organizational strategy that develops competitive market strategy that builds long-term objectives and annual corporate goals which defines key performance indicators for the companies listed in NSE. Further studies may also consider inclusion of either moderating variables or mediating variables which may affect the relationship between organizational strategy and performance of companies listed in NSE in Kenya.
Best, R. J. (2009). Market-Based Management: Strategies for Growing Customer Value and Profitability (5th Ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Carmines, E. G., & Zeller, R. A. (1987). Reliability and Validity Assessment. Newbury Park, CA: Sage Publications.
Chaimankong, M., & Prasertsakul, D. (2012).Impact of Strategy Implementation on Performance of Generic Strategy: Evidence from Thailand. The South East Asian Journal of Management 6 (1).
CMA. (2002). The Capital Markets (Licensing Requirements) (General) Regulations Published by Capital Markets Authority. Companies Act (1948). Nairobi: Kenya Government Printer.
Cvetek, S. (2008). Applying Chaos Theory to Lesson Planning and Delivery. European Journal of Teacher Education, 31 (3), 247–256.
Drury, C. (2007). Management and Cost Accounting (7th Ed). London: Cengage.
Fauzi, H., Svensson, G., & Rahman, A.A. (2010). Triple Bottom Line as Sustainable Corporate Performance: A Preposition for the Future. Sustainability, 2, 1345-1360.
Fisher, F. (1989). Games Economists play: A Non Cooperative View. RAND Journal of Economics, 19,113-124.
Ghosh, S., & Mukhertjee, S. (2006). Measurement of Corporate Performance through Balance Scorecard. Overview Vidyasagar University Journal of Commerce, 11.
Hubbard, G. (2000). Strategic Management: Thinking, Analysis and Action. N.S.W: Prentice Hall, French’s forest.
Kaplan, R. S., & Norton, D. P. (1992). The Balance Scorecard: Measures that Drive Performance. Harvard Business Review, 71-80.
Kothari, C. R. (2009). Research Methodology: Methods and Techniques. New Delhi: New Age International.
Levy, D. (1994). Chaos Theory and Strategy Theory. Application and Managerial Implications. Strategic Management Journal, 15, 167-178.
Lorenz, E. N. (1993). Deterministic Non Periodic Flow. Journal of the Atmospheric Sciences, 20, 130-141.
McBride, N. (2005). Chaos Theory as a Model for Interpreting Information Systems in Organizations. Info Systems Journal, 15, 233–254
Mintzberg, H. (2009) Managing, Berrett-Koehler Publishers.
Monroe, S. A. (2006). How Corporate Strategy Contributes to Firm Performance: A Cross- Sectional Study of Resource Governance Decision Making in US Firms. Unpublished Thesis. Palmerston North, Massey University.
Moutinho, L., & Southern, G. (2010). Strategic Marketing Management. Andover: Cengage.
Mugenda, O. M., & Mugenda, A. G. (2003). Research Methods, Quantitative and Qualitative Approaches. Nairobi: African Centre for Technology Studies (ACTS) Press.
Njagi, L., & Kombo, H. (2014). Effect of Strategy Implementation on Performance of Commercial Banks in Kenya. European Journal of Business and Management, 6 (13).
NSE Hand Book. (2015). Corporate Information and Financial Review of Listed Equity Companies. Nairobi: NSE.
NSE Hand Book. (2016). Corporate Information and Financial Review of Listed Equity Companies. Nairobi: NSE.
Porter, M. E. (1981). The Contributions of Industrial Organization to Strategic Management. Academy of Management Review, 6 (4), 609-620.
Ross, S. A., Westerfield, R. W., & Jaffe, J. (2005). Corporate Finance (7th eds). U.S.A: McGraw Hill,
Salimian, H., Khalili, S., Nazemi, J., & Alborzi, M. (2012). Alignment in the Organization’s Strategy Window (Concentration on Business Strategy and Operations Strategy). African Journal of Business Management, 6 (51), 12016-12022.
Santos, J. B., & Brito, L. A. (2012).Toward a Subjective Measurement Model for Firm Performance. BAR Rio de Janeiro, 9 (6), 95-117.
Shapiro, C. (1989). The Theory of Business Strategy. RAND Journal of Economics, 20(1).
Simons, R. (2000). Performance Measurement and Control System for implementing Strategy, Text and Cases. New York: Prentice Hall, Old Tappan.
Tulsian, M. (2014). Profitability Analysis: A comparative Study of SAIL & TATA Steel. Journal of Economics and Finance, 3(2), 19-22.
In-Text Citation: (Ng’ong’a, Oloko, Rambo, & Orwa, 2018)
To Cite this Article: Ng’ong’a, A. E., Oloko, M., Rambo, C. M., & Orwa, G. (2018). Effect of Organizational Strategy on Performance of Companies Listed in Nairobi Securities Exchange in Kenya. International Journal of Academic Research in Business and Social Sciences, 8(5), 505–523.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode