Moderating Effects of Macro Environment on Strategy Implementation and Performance in Energy Sector Institutions in Kenya
Abstract
The business environment is characterized by turbulence, unpredictability, and ever-changing circumstances. This compels organisations to revisit their strategic planning in order to adjust to the dynamic and complex environment that is ever changing. The influence of strategy implementation on performance is subject to soft, hard and mixed factors. Soft factors consist of human capital factors like commitment, communication, and consensus. The hard factors consist of hierarchy of positions in the organizational and administrative systems. Strategy implementation is a highly complex and interactive process and the success in strategy implementation depends crucially on the human or people side of project management, and less on organization and systems related factors. Most organizations do not report good performance outcomes because the organizations and their managers forget the vital role of strategy implementation. Strategy implementation is a connecting loop between formulation and control. Implementing strategies require the identification of the gap in skills and figure out how to bring those skills into the organization. The concept and practice of implementing strategies has been embraced worldwide and across various sectors because of its perceived contribution to organizational effectiveness and improvement in performance by organizations. This paper was anchored on the expectancy theory and buttressed by the open systems theory and resource-based view theory. This paper adopted positivism view with the aim of predicting and generalizing about the relationship between strategy implementation and performance of Energy sector institutions as moderated by macro environment. The target population was the 68 institutions under the energy sector. The pilot test was carried out on twenty managers from different departments of the selected firms. The Quantitative data was analysed using Statistical Package for Social Sciences (SPSS version 22). The study results showed a statistically significant relationship between strategy implementation and performance. The study findings also indicated a positive and a statistically significant relationship between macro environment and performance. The paper recommends continued scanning and analysis of macro environment attributes as they are important to firms in coining strategies.
Keywords: Strategy implementation, Macro Environment, Organizational performance
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