i

COMPETITIVE STRATEGY IMPLEMENTATION FOR SELF-

SUSTAINABILITY: A CASE OF THE REGIONAL CENTRE FOR MAPPING OF

RESOURCES FOR DEVELOPMENT

BY

HAJI, RASHID MCHATTA

A Project Report Submitted to School of Business in Partial Fulfillment of the

Requirement for Degree of Masters of Business Administration (MBA)

UNITED STATE INTERNATIONAL UNIVERSITY

FALL 2013

ii

STUDENT’S DECLARATION

I, undersigned, declare that this is my original work and has not been submitted to any

other college, or university other than the United States International University in Nairobi

for academic credit.

Signed: _______________________________ Date: ____________________________

Mchatta, Haji Rashid ID No: 623197

This project has been presented for examination with my approval as the appointed

supervisor

Signed: _________________________________ Date: ____________________

Dr. Mosoti Zachary

Signed: _________________________________ Date: _____________________

Dean, Chandaria School of Business

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COPYRIGHT

All rights reserved. No part of this proposal may be reproduced, stored in a retrieval

system, or transmitted in any form or by any means, electronic, mechanical, photocopy,

recording or otherwise without the prior permission of the author.

iv

ACKNOWLEDGEMENT

I take this opportunity to thank my project supervisor, Dr. Mosoti Zachary for his academic

support that was immeasurable. Thank for giving me your time, guidance and academic

insight. Secondly my sincere appreciation goes to the Human Resource officer of RCMRD

Mr. M. Galafa for allowing me the chance to do my research at this wonderful

organization. I would like to thank all respondents who took their time to fill the

questionnaires and who actively participated in the study. I am also grateful to my family

for allowing me the time to undertake my study. Above all, I thank Almighty God for His

Grace that enabled me to undertake this degree program which in one way or another

happen to be an eye opener to my daughters, son and some of my colleagues.

v

DEDICATION

I hereby dedicate this research project to my wife Kamaria, my daughters Huzla and Hindu

without forgetting my son Kharim. May Allah (God) bless you all.

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ABBREVIATIONS

CM Conference of Ministers

ECA Economic Commission for Africa

GC Governing Council

IGO Inter-Governmental Organization

LCDs Least Development Countries

RCSSM&RS Regional Centre for Services in Surveying Mapping and Remote

Sensing

RDMRD Regional Centre for Mapping of Resources for Development.

R & D Research and Development

SPSS Statistical Package for Social Science

SWOT Strengths, Weaknesses, Opportunities and Threats

TC Technical Committee

UN United Nations

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ABSTRACT

The purpose of this study was to determine the competitive strategy implementation for

self-sustainability in inter-governmental organizations with RCMRD being the case study.

RCMRD is one of inter-governmental organizations which depend on contributions from

member states to run its daily activities. In the year 2000 RCMRD was almost taken to

receivership because member states were not able to honor their obligation of contributing

their yearly subscription due to several reasons including economic hardship. As a result

RCMRD was not able to run its activities. In the year 2001 it went through restructuring

process to overcome the problem and new management mandated RCMRD to generate its

income with an intention of becoming self-sustainable. However up to date RCMRD still

depends on member states contributions.

There were three research questions that were used to guide this research. The first research

question was “what factors determine the choice of strategies for the organizations?” The

second research question was “what is the role of managers in successful strategy

implementation?” And finally the third research question was “what is the relationship

between strategy planning and organizational performance?”

This study used census research design. The reason of using census is that the population of

employees at RCMRD is sixty five only. According to Kathari (2006) there is no need to

obtain the sample from a population if the size of a population is not big enough. Use of

census ensures fair representation of findings from different department and sections of the

organization. Well-structured questionnaire were used in data collection. A pilot

questionnaire was distributed to five randomly selected employees to aide in criticizing the

questionnaire prior to the actual survey. The collected data was classified and coded by

using a Statistical Package for Social Science (SPSS) tool.

The findings regarding the first research question on the factors determine the choice of

strategies for the organization, indicated that RCMRD has corporate strategy which is

compatible with the organizational activities and functional level strategy which is

consistence with corporate level strategy. Moreover the findings indicated that the

organization has enough resources required to implement the strategy. However, majority

of respondents disagreed if the organization is conducting SWOT analysis. On the second

research question which sought to find out the role of managers in successful strategy

implementation, indicated that the managers of RCMRD have right knowledge to

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implement the present strategies and they have ability to empower others. Moreover, the

working environment is very conducive while about few of respondents agreed that the

communication channel is very effective. However, management is not focusing to

employees and the staff remuneration is very poor. Nevertheless, staff turnover is very

high. Regarding the third research question on the relationship between strategic planning

and organization performance the finding indicated that majority of respondents agreed that

the organization embraces strategic planning while only average of respondents agreed that

the organization realized its performance.

The study concluded that the organization has corporate level strategy as well as functional

level strategy. Corporate level covers all parts of organization which need to be looked at

during the choice of strategy exercise which includes product lines, operating decisions and

business interest. However the organization is not conducting SWOT analysis which is

necessary during choice of strategy exercise. On the role of managers in successful strategy

implementation the study concluded the managers need to focus to employees and improve

staff remuneration in order to reduce staff turnover. And finally regarding the relationship

between strategic planning and organization performance it was concluded that since

majority of respondents were uncertain then the organization is not realizing its financial

and non-financial performance.

The study recommended that the organization should conduct SWOT analysis since

external and internal environment of an organization need to be understood very well

before choosing the right strategy for an organization. With regards to the managers the

study recommends that the manager should focus to the employees and improve

employees’ remuneration in order to reduce staff turnover and finally with regards to the

relationship between strategic planning and organizational performance the study

recommended for further study in order to have clear cut since majority of the respondents

did not take side.

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TABLE OF CONTENTS

STUDENT’S DECLARATION .......................................................................................... ii

COPYRIGHT ...................................................................................................................... iii

ACKNOWLEDGEMENT .................................................................................................. iv

DEDICATION...................................................................................................................... v

ABBREVIATIONS ............................................................................................................. vi

ABSTRACT ........................................................................................................................ vii

LIST OF TABLES ............................................................................................................. xii

CHAPTER ONE .................................................................................................................. 1

1.0 INTRODUCTION.......................................................................................................... 1

1.1 Background of the Problem.......................................................................................... 1

1.2 Statement of the Problem ............................................................................................. 4

1.3 Purpose of the Study .................................................................................................... 4

1.4 Research Questions ...................................................................................................... 4

1.5 Importance of the Study ............................................................................................... 5

1.6 Scope of the Study........................................................................................................ 5

1.7 Definition of Terms ...................................................................................................... 6

1.8 Chapter Summary ......................................................................................................... 7

CHAPTER TWO ................................................................................................................. 8

2.0 LITERATURE REVIEW ............................................................................................. 8

2.1 Introduction .................................................................................................................. 8

2.2 Factors Determining Choice of Strategy for Organization .......................................... 8

2.3 Competitive Strategies Implementation ..................................................................... 12

2.4 Strategy Planning and Performance ........................................................................... 17

2.5 Chapter Summary ....................................................................................................... 23

CHAPTER THREE ........................................................................................................... 24

3.0 RESEARCH METHODOLOGY ............................................................................... 24

3.1 Introduction ................................................................................................................ 24

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3.2 Research Design ......................................................................................................... 24

3.3 Population and Sampling Design ............................................................................... 24

3.3.1 Population................................................................................................................ 24

3.4 Data Collection Methods ............................................................................................ 26

3.5 Research Procedures .................................................................................................. 27

3.6 Data Analysis Methods .............................................................................................. 27

3.7 Chapter Summary ....................................................................................................... 28

4.0 RESULTS AND FINDINGS ....................................................................................... 29

4.1 Introduction ................................................................................................................ 29

4.2 General Information ................................................................................................... 29

4.3 Factors to Consider in Choice of Strategies for an Organization ............................... 32

4.4 The Role of Managers in Successful Strategy Implementation. ................................ 38

4.5 Relationship between Strategic Planning and Organization Performance ................. 43

4.6 Chapter Summary ....................................................................................................... 47

CHAPTER FIVE ............................................................................................................... 48

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS .......................... 48

5.1 Introduction ................................................................................................................ 48

5.2 Summary .................................................................................................................... 48

5.3 Discussion .................................................................................................................. 49

5.4 Conclusions ................................................................................................................ 54

5.5 Recommendations ...................................................................................................... 55

REFERENCES ................................................................................................................... 57

APPENDICES .................................................................................................................... 64

Appendix I: Cover Letter ................................................................................................. 64

Appendix II: Questionnaire .............................................................................................. 65

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LIST OF FIGURES

Figure 4.1: Gender Representation……………………………………………...…………28

Figure 4.2: Respondents Age Group………………………………………………...……. 29

Figure 4.3: Respondents Working Period……………………………………………….... 30

Figure: 4.4: Respondents Level in the Organization………………………………...…….31

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LIST OF TABLES

Table 3.1: Employees Distribution ……………………………………………………..26

Table 4.1: Corporate Level Strategy …………………………………………………...32

Table 4.2: Compatibility of Corporate Strategy to Activities of Organization……….. 32

Table 4.3: Business Level Strategy …………………………………………………… 33

Table 4.4: Business Level Strategy Consistent with Corporate Strategy ……………...34

Table 4.5: Functional Level Strategy …………………………………………………..34

Table 4.6: Functional Level Strategy Consistent with other Strategies ………………..35

Table 4.7: Enough Resources to Implement Strategy …………………………………35

Table 4.8: Organization Conducts SWOT Analysis ……………………………………36

Table 4.9: Results of SWOT Analysis are Used in Formation of Strategy……………..36

Table 4.10: React to Threat and Opportunities in ad-hoc Fashion ……………………..37

Table 4.11: Employees Have the Right Knowledge to Implement Strategy …………..38

Table 4.12: Managers Have the Right Ability to Empower Others…………………… 38

Table 4.13: Management Focus on Employees ………………………………………...39

Table 4.14: Staff Remuneration is Very Attractive ………………………………….…39

Table 4.15: Employees are not Resistance to Change …………………………….……40

Table 4.16: Communication Channel is very Effective ………………………….…….40

Table 4.17: Employees are Involved in Decision Making ……………………….……41

Table 4.18: Rate of Staff Turn-over is Low …………………………………….………41

Table 4.19: Conducive Working Environment …………………………………………42

Table 4.20: Management Embrace Strategic Management……………………………..43

Table 4.21: Realizing Organization Performance …………………………………….. 43

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Table 4.22: Efficiency in Allocation of Resources ………………………….………….44

Table 4.23: Setting out Priorities and Implementing them Accordingly …………….... 44

Table 4.24: Measure Performance based on Objectives..…………………………….... 45

Table 4.25: Realizing Financial Performance (Profit) ………………………………… 45

Table 4.26: Realizing Non-Financial Performance (Quality and Satisfactory)………... 46

1

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Problem

Many of organizations that were established in 1960s either for profit making or non-profit

making do not exist today. This is because becoming self-sustainable is very difficult to

achieve without the ability to implement effective strategies in this dynamic business

environment (Hitt, Ireland and Hoskisson, 2005). The purpose of establishment of these

organizations was very imperative for the development of Least Developed Countries

(LDCs). Most of these organizations were addressing the important issues that face the

world today including eight millennium development goals. If those organizations were

still existing and implementing what they were established for, most of the issues that were

targeted by millennium goals could be addressed if not fully but at a big percentage. The

question was why most of these important organizations had to perish? Companies do not

find difficult in formulation of strategy, the difficult part was implementing. The study that

was undertaken showed that only 30% of strategies are properly implemented by the

companies so this needs improvement (Sterling, 2003).

According to Porter (1980), for an organization to continue its operations in an industry it

has to poses sustainable competitive advantage in the industry the organization is

operating. This can be done by determining the organization’s relative position within its

industry whether organization profitability is above or below the industry average. The

fundamental basis of above average in the long run is sustainable competitive advantage.

That can only be achieved by having on board strategic manager who are able to strive in

the present turbulence business environment.

It has been argued that the ultimate purpose of any organization is to create value for its

stakeholders (Porter, 2008). The objective of strategy therefore is to transform multiple

inputs and options to achieve an organizations strategic goals and objectives (Grant, 2008).

Moreover, any improvement in results is unlikely to be retained without a robust strategy to

provide the organization with an inspirational vision and direction (Kaplan and Norton,

2008). The success development and deployment of an effective strategy is therefore of

paramount importance to all organizations (Grant, 2008).

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According to Chathoth and Oslen (2007), one of the major goals of business managers is to

achieve superior performance. Prior researches have shown strategy formulation and

implementation to be key factors in accomplishing the organizational goal. Many

organizations develop competitive strategies that aim to secure a strong market position

and achieve profitability outcomes. In line with Barney’s (1991) method, such competitive

strategies are usually formulated by assessing the internal resources of the firm (e.g.

Tangible and intangible assets and organizational capabilities). Enz (2008) argued that a

single resource cannot create competitive advantage. Relatively, it is the mixture of

competitive resources – branding, human resources, information technology innovations,

computer reservation systems, niche marketing and advertising, and pricing tactics – that

can increase organizational capabilities and improve performance.

Louw and Venter (2006) argued that to resist stagnant in the organization’s growth, it also

refers as organizational inertial, proactive organizations have focused on product or service

innovation; re-examining their purpose; re-inventing themselves; re-engineering their

processes and procedures. Moreover it places emphasis on the development of the

organization’s human capital.

According to Meyer (2004), researchers recognize that employee commitment and

leadership styles are of major factors to the organizational success or failure. Also Meyer

(2004) suggests that the continuer interest is a result of the belief that if properly managed

employee performance, reduced turnover and absenteeism. This pursue to exploit the

potential organizational benefits has resulted in the large number or studies that focus on

the nature of employee commitment.

The United Nations (UN) is an international organization designed to make the

enforcement of international law, economic development, security, social progress, and

human right easier for countries around the world. In 1958 United Nations established

Economic commission for Africa (ECA) in order to spearhead the development of African

continent. ECA established Regional Centre for Mapping of Resources for Development

(RCMRD) in 1975 together with other six organizations. However, among seven

organizations that was found by ECA only two are existing (ECA report, 1975).

The head quarter of RCMRD is in Nairobi Kenya and it is governed by eighteen

contractual member states which includes Botswana, Burundi, Namibia, Comoros,

Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Rwanda, Seychelles, Somalia, South Africa,

3

Swaziland, Tanzania, Sudan, Uganda, Zambia, and seven non-contractual member States

which includes Angola, Zimbabwe, Madagascar, Mozambique, Djibouti, Eritrea and Zaire.

The employees of The Centre are the nations of member states. Whenever there is a job

opportunity at the Centre the post is advertised to all member states to give equal

opportunity to qualified candidates to apply (RCMRD News, 2012).

The vision of RCMRD is to become a premier Centre of excellence in the provision of

Geo-Information and Information Technology applications in Africa and beyond, while its

mission is to provide quality Geo-Information and allied ICT products and services in

environmental and resource management for sustainable development in our member

countries and beyond (RCMRD News, 2012).

The highest level of management of the Centre is the Conference of Ministers (CM) which

is the overall policy and political organ of the Centre. Its mandate is to approve the

implementation of the Centre’s Business plan and promote the Centre’s activities at

national and regional level. They meet after every two years. It is followed by the

Governing Council (GC) which is composed of the Permanent Secretaries of all member

States. The Governing Council meets every end of the calendar year in order to assess the

progress for that particular year and approve the programs for the following year as well.

Followed by the Technical Committee (TC) meeting which comprises of Directors of

Survey Department of each member States and it meets at every end of the calendar year.

The Director General is the Chief Executive and is responsible for the general management

of the Centre. Moreover, the chairmanship of RCMRD is on rotational bases among

member countries and the chairperson is elected during every Conference of Ministers

(Earth Resource Mapping in Africa, 1995).

Since it was established the main income of RCMRD is contributions from contracting

member States. It is an obligation of each Member State to subscribe to RCMRD yearly.

However, sometimes member states undergo economic hardship to the extent that they

cannot honor their contributions. In this situation it becomes impossible for Centre to

implement its activities. In the year 2000 the Centre was almost went to receivership due to

lack of funds. This is because most of member states couldn’t manage to remit their

contributions in time (Earth Resource Mapping in Africa, 1995).

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1.2 Statement of the Problem

Organizations are facing turbulence business environment that leads to aggressive

competition for survival which resulting in some organization to fall and others to succeed.

In such situations, it is important to have on board organizational manager who are able to

choose the right generic strategies for the organization, which are able to implement chosen

strategies while considering the financial aspect during implementation. According to

(Gluck et al, 1980, Weiss and Birnbaum, 1989, Kazanjian and Drazin, 1987, Alexander,

1985) organizations have comparatively not been short of strategies but have fallen short of

strategy implementation. Moreover, they estimate that seventy percent of Chief Executive

Officers fail due to bad execution of strategies. Based on that, strategy selection and

implementation is cited as the main factor that determines success or failure of

organizations.

Previous research has focused on either the effect of competitive strategy to its

implementation or the effect of implementation to performance of the organization (Dess

and Daviss, 1984). However, there is an apparent inadequacy of research that links the

aspects of choice of competitive strategy, its effects on implementation and the general

performance of the organization. Moreover, based on the researchers knowledge most

research in this area has been conducted in private sector and few, if any have been

conducted to address issues in Inter-Governmental organizations (Alexander, 1985).

Implementation of strategic plan at RCMRD had never made the organization realize its

goal of becoming self-sustainable. Furthermore, focused examination of competitive

strategy implementation had never been carried out. This research performed this task and

documented it. In addressing the task emphasis was been placed on examining how the

firm has implemented competitive strategies, an exercise that is known to ensure the

survival of firms (Porter, 1985).

1.3 Purpose of the Study

The purpose of this study was to determine competitive strategy implementation for

serf-sustainability of inter-governmental organizations.

1.4 Research Questions

The study was steered by the following research questions:

1.4.1 What factors determine the choice of strategies for the organizations?

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1.4.2 What is the role of managers in successful strategy implementation?

1.4.3 What is the relationship between strategy planning and organizational performance?

1.5 Importance of the Study

The study was of significant value to the following parties or fulfilling the following roles:

1.5.1 RCMRD

The management of RCMRD may base their decisions regarding the importance and

priority of projects undertaking. They will be able to select the right strategy for their

organization, implement it competitively in the industry, and evaluate their performance

with an intention of taking the necessary corrective measure essential for fulfillment of the

goal of the organization if the need arise in order to fulfill the organizational goal of

becoming self-sustainable. According to Raps (2004) an efficient strategy implementation

has an enormous impact on a company’s success.

1.5.2 Researchers and Scholars

Researches and scholars may benefit from the outcome of this study in two ways. First they

may use this report for reference and source of secondary data for future research that are

related to implementation of competitive strategies by other organizations in a developing

country that are facing similar problems. Secondly, researcher may use this study as a

learning base for conducting future business research assignments and also to provide and

insight into competitive strategy implementation.

1.5.2 Economic Commission for Africa (ECA)

Economic Commission for Africa with its mandate given by United Nation to promote

economic development of African continent can use the outcome if this research to

emanate with the structure that will assist established inter-governmental organizations to

become self-sustainable. It’s long over-due for member state to start benefiting from relief

of subscription to intergovernmental organization and continue to enjoy the services (ECA

report, 1975).

1.6 Scope of the Study

The study was limited to RCMRD which is in Kasarani area – Nairobi, Kenya. Since the

population of the study was small (sixty five employee) the sample size was the population

of entire organization. Moreover the study was covered the period between September and

November 2013.

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1.7 Definition of Terms

1.7.1 Organization

According to Gray (2007), an Organization is a systematic arrangement of people to

accomplish some explicit purpose. There are three components that are composed in every

organization i.e. people, system and goals. Each organization has different purpose. This

purpose is articulated as goals generally. Every organization has a systematic structure that

defines the limit of each member.

1.7.2 Organization Structure

According to Chandler (1962), the organization structure determines the hierarchy within

an organization. In thus refers to the formal framework by which job tasks are divided or

coordinated within an organization.

1.7.3 Organization Culture

The organization culture can be defined as a set of common understandings around which

action is organized and which finds expression in language whose nuances peculiar to the

group. According to Becker and Geer (1960), culture is thus a combination of systems,

values, symbols, and rituals that evolve over time,

1.7.4 Inter-Governmental Organization

Intergovernmental organization (IGO) refers to an entity formed by treaty, concerning two

or more countries, to work in good faith, on issues of mutual interest. Without presence of

a treaty, an IGO does not exist in the legal intellect. For example, the G8 is a collection of

eight nations that have annual economic and political conferences. IGOs that are made by

treaties are more advantageous than a mere grouping of nations because they are subject to

international law and have the ability to enter into enforceable agreements among

themselves or with states (Walker, 2004).

1.7.5 Employees

Employees are simply paid workers. According to Freeman and Walker (2004), the word

“employee” means a person employed in any industry, it doesn’t matter if he/she is on

salary or wages or piece- work rates.

1.7.6 Objectives and Goals

Objectives and goals describes what the program/project is determining to achieve.

According to Hill and Jones (2013), goal depicts the general programmatic outcomes,

7

while objectives specify outcomes. It is common to have several objectives for each

program/project goal.

1.7.7 Strategist Manager

A strategist manager is a manager in an organization who is skilled in planning the best

way to gain an advantage or to achieve success in an organization (Hitt, Hoskisson, and

Ireland, 2013)

1.8 Chapter Summary

This chapter presents the background of the study and discusses the problem that was

addressed. The purpose of the study was discussed and the questions used in the study are

stated here. The chapter further highlighted the importance of the study and the scope

covered by the study and finally the definition of the terms used in the research.

The relative review in chapter two seeks to address relevant theories, priorities, studies and

their outcome relating areas while chapter three focuses on the methodology that were used

in research designing. Population, sampling design and data collection method were

identified in this chapter. Chapter four discusses the results and findings of the study while

chapter five draws critical discussions, conclusions and recommendations for the study.

.

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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter presents a review of relevant literature concerning the research questions in

this study. First the study intended to examine intensively the discipline of strategic

management and the factors to be considered during the choice of the best strategies for an

organization. Secondly it looked at the role of managers if the organization needed to

implement its strategy successfully. Third, the relationship between strategy and

organization performance was revealed. And finally it provided summary of theories and

concept covered in the review.

2.2 Factors Determining Choice of Strategy for Organization

In order to facilitate an exhaustive discussion on choice of strategy some definition of

strategy of various authors were reviewed. There after the levels of the strategy were

defined and explained before describing how to formulate the strategy. Finally the

formulated strategies can be analyzed in order to choose the best strategy that fits an

organization (Pettinger, 1996).

2.2.1 Strategy

Different scholars have provided different definitions to the concept of strategy. Strategy is

an outcome of a continuous process of strategic management. According to literature, the

concept of strategy was borrowed from the military and adapted for use in business. A term

Strategy comes from the Greek word “strategia”, meaning "general-ship." In the military,

strategy repeatedly refers to guiding troops into position before the enemy is actually

engaged (Andrews, 1999). Strategy, then, has no existence apart from the ends required. It

is a over-all context that delivers guidance for actions to be taken, and at the same time, is

molded by the actions taken (Thompson et al, 2007).

On the same note, O‟Regan and Ghobadian (2004), suggested that strategy articulates the

means by which an organization endeavors to convert its intentions into organizational

capability. Strategy represents the organization's chosen mode for interacting with its task

environment (Gupta, 1987). It is a learning process, much like the scientific process of

hypothesis testing (Beatty and Quinn, 2007). This means that the necessary precondition

for formulating strategy is a clear and widespread understanding of the ends to be obtained.

9

According to Mintzberg and Quinn (1996), strategy is a pattern of plan that integrates an

organization’s major goals, policies and action sequences into a unified whole. They

argued that a well-formulated strategy helps to marshal and allocate an organization’s

resources. Strategies are means to ends and these ends concern the purpose and objectives

of the organization. They are the things that organizations do, the decisions they take and

the path they follow in order to reach certain levels of success.

Strategy is a plan for integrating with the competitive environment so as to achieve the

organizational goals. Organizations set specific goals that it seeks to be achieved within a

specific period of time. To ensure the organization realizes its goals the strategic manager

must plan, direct, organize and control the strategic related decisions and actions of an

organization (Strickland and Thompson, 1997).

McMillan (1992) argued that a strategy is an organizational game plan, although that plan

does not precisely detail all future deployment (as people, finances and materials). Strategy

provides a framework for managerial decisions. It is the determination of the basic term

goals and objectives of an organization, and the acceptance of course of action and the

allocation of resources necessary for carrying out those goals (Chandler, 1962).

The definitions of strategy are not limited to the categories outlined above. These

definitions were introduced in order to illustrate that no matter what definition is given, the

commonality between them is that they aim at maximizing the performance of an

organization by improving its position in relation to other organizations operating in the

same competitive environment (Thompson et al., 2007).

2.2.2 Levels of Strategy

In an organization a strategy exist in four major levels which include operational level

strategy, functional level strategy, business level strategy and corporate level strategy. All

these levels are supposed to be oriented towards the goal of organization (Pettinger, 1996).

2.2.2.1 Corporate Level Strategy

According to Pearce and Robinson (2000), corporate level strategies are also called grand

strategies. They include mergers, turn around, acquisitions, forwards and backwards

integration. Corporate strategy adopts a macro-view of organization. It covers all parts of

organizations product lines, operating decisions and business interests. It shows the scope

10

of activities that organization plans to be involved in and how the available resources will

be allocated among these activities (Pettinger, 1996). According to Louw and Venter

(2006) corporate level strategy is concerned with the overall purpose and scope of an

organization.

2.2.2.2 Business Level Strategy

Business level strategy is more specific than a corporate strategy. It must be consistent with

the corporate strategy in the manner that it shows how a firm intends to compete in a

particular industry, market segment or product line. Moreover it gives more details on how

firm’s resources will be allocated to various business lines in order to compete effectively.

Depending on the nature and size of a firm business strategy and the corporate strategy

may be one and the same (Porter, 1999).

According to Louw and Venter (2006) business level strategy is concern with how the

organization competes and attains a competitive advantage in each area of business either

as low cost producer, differentiator or focus.

2.2.2.3 Functional Level Strategy

Pearce and Robinson (2000) argued that functional level strategies are more specific and

detailed. This is because in most cases they show how the key function areas of the

business should be managed to maximize effectiveness and efficiency in the firm.

According to Louw and Ventre (2006) functional level strategy is concerned with

implementing business strategies through functional areas such as marketing, human

relations, production, information systems and finance.

2.2.2.4 Operational Level Strategy

Operational level strategies are the most detailed of all strategies. They are the strategic

guidelines that operation level managers develop and use in managing their areas of

responsibility. They must be consistent with all the preceding strategies. They have the

shortest time span and can be changed without much consultation. They involve the day-to-

day actions that the department intends to take to complete effectively (Baseman and

Phatak, 1989).

2.2.3 Strategy Formulation

Grant (1991) proposed a resource-based framework for strategy formulation that comprises

analysis of the firm’s appraisal of its capabilities, resource base, strategy selection and the

11

extension, and upgrading of the firms pool of resources and skills. The fundamental to the

resource-based methodology to strategy formulation understands the relationships among

capabilities, resources, competitive advantage and profitability. It is predominantly vital to

know the mechanisms by which competitive advantage can be sustained over time by

utilizing internal firm resources. Barney (1991) defined resources as all assets,

organizational processes, capabilities, information, firm aspects, knowledge etc., controlled

by the organizations that enable to conceive and implement strategies.

A competitive strategy in an organization is a strategy whereby a firm’s portfolio of

products and services is designed to bring together its unique resources and capabilities to

gain advantage in the marketplace (Oslen et al., 2008). Hence, strategic business

implementation choices are selected on the bases of each organizations competitive

resource. Different resources influence firms’ performance in different ways, even when

the firms are in similar locations or subject to similar environmental changes.

According to Kaplan and Norton (2008), strategy formulation process starts with a vision,

mission and values. Secondly, a SWOT-analysis is performed. Opportunities and threats

are external business environment related factors, while strengths and weaknesses are

company internal factors. Then, Porter’s (2004) five competitive forces are diagnosed.

Finally, one can draw a resource and capability based view of a strategy (Kaplan and

Norton 2008). There are two commonly used models for formulating strategies. These are

Porter model or competitive strategies model and Miles and Snow’s strategy typology

mode.

2.2.3.1 Porter’s Competitive Strategies Model.

Porter (1999) has developed three types of competitive strategies which are: Low-cost

leadership strategy on which a firm tries to increase market share by emphasizing low cost

compared to competitors, differentiation strategy on which a firm attempts to distinguish its

products or services from others in the industry, and last Focus strategy on which a firm

concentrates on a specific buyer or group or regional market.

2.2.3.2 Miles and Snow’s Strategy Typology

According to Miles, Snow, Meyers and Coleman (1978) manager seek to formulate

objectives that are contingent with the external environment. Organizations need to find a

fit between the internal capability of the firm, strategy and the external environment. They

state that organizations can follow four main strategies which are Prospector: The firms

12

that follow this are proactive. It innovates and actively seeks new opportunities by

maintaining among other things a strategic window; Defender: The firms that follow this

seek to maintain current market; Analyzer: The firms that follow this should lie midway

between the prospector and defender. While maintain the same products in a stable market.

A firm innovates in areas where there is potential for growth; and finally Reactor: The

firms that react to threats and opportunities in an ad-hoc fashion.

2.2.4 Strategy Analysis and Choice

Generally, a company strategy defines how an added value is planned to be produced to

customers and shareholders. Continuous, specific capability improvements and alignments

with customer needs are crucial (Kaplan and Norton, 2004). When the competition and

business environment are dynamic, existing organizational capabilities form a stable

foundation for a strategy (Grant, 1996). Mintzberg, Ahlstrand and Lampel (2005)

emphasize that a strategy is an engagement between external opportunities and internal

strengths, including resources and capabilities. Kaplan and Norton (2008) put stress on a

strategic long-term direction. Many firms prefer to concentrate on increasing operational

excellence and making operative adjustments in a reactive manner (Porter, 2004).

Operational excellence may decrease costs, improve quality and shorten lead times, but

only a strategy can lead to sustainable success (Kaplan and Norton, 2008). By focusing on

operational excellence, risks to ignore the business environment and competitors increase.

All companies, even pure R & D firms that compete, should have a competition-adjusted

strategy (Porter, 2004). R & D specific strategies contain capability improvements,

organizational changes and cultural programs, in addition to development activities. An

R&D strategy, with technological capabilities and new business opportunities, is an

essential input to a business strategy of a corporation (Larsson, 2004).

Strategy analysis and choice seek to determine an alternative course of action that could

best enable the firm to achieve its mission and objectives. According to David (1998) the

firm’s present objectives, strategies, and mission, coupled with the external and internal

assessment report, provide a basis for creating and evaluating feasible alternative strategies.

2.3 Competitive Strategies Implementation

According to Louw and Venter’s (2006) successful strategy implementation is dependent

on strategic leadership as the key driver of implementation and a sound organizational

architecture. Top management in an organization needs to ensure that its employees have

the required knowledge base to facilitate strategy formulation and implementation. It is

13

easier to implement strategies through empowered team members and since knowledge

management is systems driven, it can add value to the process of strategy implementation.

Organizations are challenged to improve technical expertise and knowledge of high-end

technology so as to find opportunities in the competitive environment which has also

become global in nature. This theory of Louw and Venter (2006) is similar to the theory by

Ehlers and Lazenby (2004) which acknowledges that the various strategy implementation

drivers are leadership, organizational culture, reward systems, organizational structure and

resource allocation. The dynamic approach to strategy formulation and implementation

requires the leaders of an organization to include plans for the implementation of a strategy

during the strategy planning stages already thus requiring a more systematic and integrative

approach.

The integration required in the strategic direction of an organization is encapsulated by the

5 Ps model of strategy implementation which depicts a connection between strategy

(purpose), structure (principles as internal structures), the influence of structure on

employee behaviour (people), and corresponding results (performance). Should an

organization not plan for the method of implementation whilst the strategy is being

formulated then it will be doomed to fail. Organizational leaders are called upon to

recognize that, strategy drives structure, structure drives behaviour and behaviour drives

results (Pryor et al., 2007).

According to Raps (2004) argued that properly aligned human assets are the key to

successful strategy implementation and unfortunately the link to human resource

component is often feeble or missing in many organizational execution endeavors. The

people in the entire organization, the role of middle managers and communication will be

discussed below to illustrate how they affect strategy implementation.

2.3.1 People

People are the process owners who perform work that is consistent with the principles and

processes of an organization to achieve its purpose. Therefore, people must be a substantial

section of any depiction of a comprehensive and integrated implementation process.

Organizational leaders are advised to recognize that the people in the organization should

be well remunerated and relatively happy at work so that they can deliver to the level of

quality expected and this can be done through enforcing measurement and feedback

14

systems. If this advice is heeded then an organization can achieve long - term survival and

profitability (Pryor et al., 2007).

According to Nel et al. (2004) an organization needs to observe the requirements of a

legally integrated human resource management system. They illustrate that the workplace

has to manage the employee, group and organizational empowerment through human

resource interventions in order to successfully implement its strategy. These human

resource interventions include concepts like job and organizational design, national level

skills development issues, training and development of employees and career management

at organizational level, performance management and organizational renewal and change

management

The focus on people was also emphasized by Charan and Bossidy (2008) who postulated

that execution of strategy involves understanding how to link strategy, operation and

people.

With the right people in the right jobs there’s a leadership gene pool that conceives and

selects strategies that can be executed. Once the right people and strategy are in place, they

are linked to an operating process that results in implementation. Speculand (2006) goes

further and categorizes the people in an organization in terms of the saboteurs who resist

change, the groupies who neither support the implementation nor oppose it and the

mavericks who are the drivers of change. Strong organizational leaders know what

leadership style to apply for each category of the people so as to ensure implementation of

the strategy required.

However Okumus (2003) has found that there is no tangible empirical testing of the

approach of dynamic strategy formulation and implementation. One is led to believe that

organizations should exercise effective people management and effective communication

in order to succeed in strategy implementation.

2.3.2 Communication

Strategies have to be demonstrated to the people through regular and effective

communication channels. It is true that if a person does not understand what has to be done,

then one cannot own the process and will thus not be able to deliver since no one can apply

what they do not properly understand (Sterling, 2003). Klein (1996) suggests that

organizations can formulate their communication strategies around the Kurt Lewinian

15

model incorporating the unfreezing stage, changing stage and the refreezing stage. The

primary objective of the unfreezing stage is to prepare organizational participants for

change by giving them information on what is going to happen and why. At this stage the

content of the communication is characterized by explanations, rationales and reassurances.

Klein (1996) outlines three primary objectives during the changing stage. The first one is to

provide those who initially are not directly involved with the change with detailed and

accurate information of what is happening. The second one is for those not currently

involved should be aware of how they will become engaged in the future, how the change

will affect them, their new roles and responsibilities. And lastly to challenge whatever

miss-information is circulating about the change.

During the refreezing stage Klein (1996) outlines three primary objectives. The first one is

building understanding through building structures and processes that support new ways.

The second one is to understand personal implications of the change. And finally making it

a way of life.

It has been found that the people who work for an organization normally need effective

communication for two reasons. First in order to achieve responsiveness of supervision to

employee complaints about work standards and secondly the degree to which employees

felt that they had influence over how they did their job and at what pace (Klein and Ritti,

1985).

Implementation of a strategy can also be monitored and controlled if the specifics have

been effectively communicated however this should take place before the monitoring and

controlling process is affected. In this respect, therefore, performance management is an

essential process for strategy implementation. The desired results can never be achieved if

they are not effectively monitored for performance and the personnel directly involved with

implementation must be held accountable (Sterling, 2003).

2.3.3 The Role of Middle Managers

The role of middle managers is therefore significant for effective people management and

effective communication towards effective strategy implementation (Aaltonen and

Ikavalko, 2002). Middle managers are crucial as they are the subordinates to carry out the

instructions on strategy from top management and they are superiors to the employees to

ensure implementation of the strategies by the employees. However, Nienaber (2007) has

16

found that most parts of Africa are faced with the challenge of unavailability of competent

senior managers to nurture both the employees and the customers in a constructive manner

to gain competitive advantage for their organizations. African management is perceived as

being focused on profit making, rather than creating value and wealth (Nienaber, 2007).

Human capital is not employed with care as the employees’ individual contributions are not

unleashed to the maximum benefit of the organization but employees are immobilized in

one way or the other. There are a number of variables that contribute to this

immobilization of employees like; minimum involvement of employees, extremely unequal

remuneration between executives and employees, lack of motivation to employees and an

environment conducive to effective performance (Charan and Bossidy, 2008).

Nienaber (2007) proposes solution to organizations to intensify its focus on economic

policy that aims at addressing structural problems that impede economic growth and wealth

creation and by business to rectify the shortcomings of current management through

acquainting them with sound theory underpinning management. The competency required

of middle management therefore is the practical ability to juggle planned strategies with

realized strategies (Aaltonen and Ikavalko, 2002). According to Noble (1999), these

strategies have to be communicated, interpreted, adopted and enacted and these

components cannot be detached from one another. There is no doubt that two-way

communication within organizations is seen as fundamental to the effective implementation

of strategy, with emphasis on facilitating useful feedback and reacting to bottom-up

messages (Alexander,1985; Aaltonen and Ikavalko, 2002).

Atkinson (2006) noted that theorists may have an emerging consensus about the important

implementation issues to be addressed like importance of communication, problems in

identifying relevant performance indicators, significant part played by middle-level

managers, and the roles of strategic control systems.

According to Reed and Buckley (1988) observations, literature has focused on different

aspects of strategy implementation and offers partial problem-solving solutions as a result

general rules are elusive. This is indeed a very valid observation of the fragmentation and it

therefore requires leaders of organizations to know their organizations thoroughly and

know what implementation factors to address during different times of change. Certainly it

is very difficult to give a cut and dried solution in terms of a specific model or framework.

The test for the achievement of dynamic formulation and implementation appears to be the

17

ability of business leaders and management to apply various strategies as required and

maintain stability in times of change. Thus the organization needs to be clear about what it

is trying to achieve.

Atkinson (2006) recognized four problems associated with strategy implementation which

includes the need for a clear fit between strategy and structure no matter which comes first

as long as there is congruence in the operating environment, the need for management style

to be appropriate to the strategy being implemented, problematic goal setting and controls

with need for heightened control as uncertainty and change provide a volatile environment

and the difficulty of identifying co-ordinated targets at various levels in the organization.

Atkinson (2006) suggests that the balance scorecard can be used in facilitating effective

strategy implementation and it could address the key implementation problems.

2.4 Strategy Planning and Performance

According to the International Journal of Humanities and Social Science (2012) firms that

have effectively embraced strategic planning, archives better performance as compared to

those that have not. Hofer and Schendel (1978), Greenley (1986), Miller and Cardinal

(1994) and David (1997) argue that firms record improved performance once they

effectively embrace strategic planning. Conducting various steps in the strategic planning

process is expected to facilitate the realization of organizational effectiveness. By

describing a company’s goals and purpose, strategic planning provides direction to the

organization and enhances coordination and control of organization activities.

McCarthy and Minichiello (1996), note that a company’s strategy provides a central

purpose and direction to the activities of the organization and to the people who work in it.

Kotter (1996) argue that the primary goal of strategic planning is to guide the organization

in setting out its strategic intent and priorities and refocus itself towards realizing the same.

Porter (1980), Greenley (1986), Miller and Cardinal (1994), Hax and Majluf (1996) and

Grant (1998) argue that an objective analysis of external and internal environment

facilitates the establishment of the firm-environment fit, and improved decision-making are

the main contributors of the firm performance. Adding to this view, Porter (1980), Quinn

(1980), Ohmae (1983) and Kotter (1996) noted that the identification of strategy analysis

and selection, and strategic issues facilitates the success of efficient allocation of resources,

improved innovation, and sustainable competitive advantage. It is also perceived that the

18

development of implementation program, evaluation and control systems facilitates smooth

execution and implementation of the planned tasks.

Bryson (1989), Stoner (1994) and Viljoen (1995) argue that strategic planning assists in

providing direction so organization members know where the organization is heading and

where to expend their major efforts. It guides in defining the business the organization is

in, the ends it aimed and the resources it will use to accomplish those ends. McCarthy and

Minichiello (1996) noted that a company’s strategy provides a central purpose and

direction to the activities of the organization and to the people who work in it. Adding to

this argument, Kotter (1996) contends that the primary goal of strategic planning is to

guide the organization in setting out its strategic intent and priorities and refocus itself

towards realizing the same.

David (1997) argues that strategic planning allows an organization to be more proactive

than reactive in shaping its own future, initiate and influence (rather than just respond to)

events, and thus to employ control over its fortune. It helps in highlighting areas

demanding attention or innovation. The process of strategic planning shapes a company’s

choice of strategy. It discloses and clarifies forthcoming opportunities and threats and

provides a framework for decision making throughout a company. It helps organizations to

make better strategies through the use of logical, more systematic, and rational approach to

strategic choice.

Steiner (1979) noted that strategic planning stimulates the future on paper and it

encourages and permits a manager to see, evaluate and accept or discard a far greater

number of alternative courses of action than he might otherwise consider. Stoner (1994)

and Viljoen (1995) argue that strategic planning tends to make an organization more

systematic in terms of its development and this can lead to a greater proportion of the

organization’s efforts being directed towards the attainment of those goals established at

the planning stage, that is, the organization become more focused.

Strategic planning applies a system approach by looking at a company as a system

composed of subsystems. It permits managers to look at the organization as a whole and

the interrelationships of parts, rather than deal with each separate part alone without

reference to others. Therefore, it provides framework for improved coordination and

control of an organization’s undertakings. Strategic planning offers a basis for other

management functions.

19

Steiner (1979) observes that strategic planning is inextricably interwoven into the entire

fabric of management. It provides a framework for decision-making throughout the

company and forces the setting of objectives, which provides a basis for determining

performance. Leaders are able to spend resources, efforts, and time in activities that pays.

On the other hand setting of goals and targets facilitate evaluation of organization

performance. Individuals in an organization will strive to achieve clear objectives that are

set. It is argued that strategic planning results in a viable match between the firm and its

external environment. Strategy concerns on analysis of the environment of firms, leading to

what the firm should achieve when given the environment required. Environmental

scanning and analysis allows the firm to be connected to its environment and guarantees

the alignment between the firm and its environment. Environmental analysis discloses the

market dynamics, challenges and business opportunities, technological advancements,

customer expectations, and the firm’s internal capacities and this provides the basis for

strategy selection.

Kotter (1996) argues that the strategic planning process can be used as a means of

repositioning and transforming the organization. Thompson, Strickland and Gamble (2007)

postulate that the essence of good strategy making is to build a market position strong

enough and an organization capable enough to produce successful performance despite

unanticipated events, internal difficulties and potent competition.

Quinn (1980) explains that well-formulated strategies helps marshal and allocate an

organization’s resources into a unique and viable posture based upon its relative internal

competencies and deficiencies, foreseen changes in the environment, and conditional

moves by intelligent rivals. Ohmae (1983) contends that strategic planning enables a

company to gain as effectively as possible a sustainable edge over its opponents. Bryson

(1989), Stoner (1994) and Viljoen (1995) share Ohmae’s argument, mentioned that

strategic planning helps organizations to develop a comparative advantage or an edge over

competitors and creates sustainable competitive advantage.

2.4.1 Relationship between Strategic Planning and Organization Performance

Greenley (1986) points out that a range of potential benefits to intrinsic values accrues to

both the company and external stakeholders from the use of strategic planning. Various

empirical studies have been done to establish the relationship between strategic planning

and firm performance with diverse conclusions. The early studies include that conducted

20

by Thune and House (1970). Thune and House (1970) studied 36 companies employing the

approach of examining the performance of each company both before and after formal

strategic planning were initiated. This covered both formal and informal planners. The

comparison showed that formal planners outperformed the informal planners on all the

performance measures that were used.

Herold (1972) in an attempt to cross-validate Thune and House (1970) study, surveyed 10

companies, comparing performance of formal and informal planes over a 7-year period.

Based on the survey results, he concluded that formal planners outperform informal

planners and hence, supporting the results of Thune and House.

Gershefski (1970) in his survey compared the growth of sales in companies over a 5-year

period before strategic planning was familiarized, and over a period of 5 years after

strategic planning was familiarized. The results of the comparison led Gershefski to

conclude that companies with formal strategic planning outperformed companies with little

planning.

Ansoff (1970) studied 93 firms using various variables of financial performance. The

findings revealed that companies, which embracing strategic planning, realize better

performance than other companies. Karger and Malik (1975), taking a similar approach to

that taken by Ansoff, compared the values of a range of variables of planners to those of

the non-planners and based on the results concluded that the planners outperformed the

non-planners.

Greenley (1986) examining empirical data from nine surveys (8 in USA and 1 UK within

the manufacturing business) on the relationship between strategic planning and company

overall performance noted mixed conclusions with five studies concluding the existence of

the relationship while the rest conclude that higher levels of performance did not

necessarily relate to the utilization of strategic planning

Miller and Cardinal (1994) employed a meta-analytic approach using data from 26

previously published studies and concluded that strategic planning positively influences

firm performance. Caeldries and VanDierdonck (1988) surveyed 82 Belgian Business firms

and reported a link between strategy and performance. They noted that strategy enables a

firm to strengthen its competitive position, and facilitates coordination and integration of

members’ behavior.

21

Fubara (1986) did a survey in Nigeria and observed that companies that engage in formal

planning experienced growth in profits. It has been argued that although there is a general

perception and belief that strategic planning improves organization effectiveness, if

wrongly implemented the anticipated value may not be tapped.

2.4.2 Findings of Performed Studies

Pealtie (1993) observed that the main reason for the introduction of formalized strategic

planning is to improve company performance through the development and implementation

of better strategies. He noted that managing a large business without a plan is like trying to

organize a car rally without a map, not impossible, but difficult.

Published research from Africa also indicates that strategic planning is an effective tool in

improving firm performance. Imoisili (1978), studying indigenous and multinational

companies in Nigeria, concluded that the more effective companies are found among

organizations which maintain consistency between environmental perception and

administration practices, performs long-term planning, flexible control systems and have

smaller spans of control.

Steiner (1979) points out that a wrong strategy or a wrongly formulated strategy may not

translate into the anticipated value for the organization. Johnson, Scholes and Whittington

(2005), note that strategic drift occurs when the organization’s strategy gradually moves

away from relevance to the forces at work in its environment.

Tourangeau (1987) shares these sentiments but cautions that strategic business planning

cannot be expected to cure all that ails an organization i.e. address other shortcoming of the

organizational process, but can best be appreciated as a partial solution to management

problems. Strategic planning, or any other management technique is of limited value by

itself, only a partnership with all parts of the management particularly execution, controls

and rewards can result in synergy and lead to substantial advancement.

In their survey to see how successful companies translates their strategies into

performance, Mankins and Steele (2005) observed that companies typically realize only

about 60 percent of their strategies potential value because of defects and breakdowns in

planning and execution. Hofer and Schendel (1978) argue that strategy is important and

therefore its formulation should be managed and not left to chance. Therefore, each of the

stages in the strategic planning process cannot be taken for granted.

22

2.4.3 Financial and Non-financial Performance Measuring

According to Crook et al. (2003) after implementing a management strategy, manager must

gauge its organizational effectiveness by measuring firm performance data. Performance

may vary depending on whether it is assessed from the customer or stakeholder perspective

or according to the time period used for such assessment (Tse, 1991). According to

Venkartaman and Ramanujam (1986), business performance can be measured using

financial indicators, operational indicators (non-financial), or both. Sainaghi (2010)

summarized the performance indicators used in the hospitality industry over the past 20

years and place them into three categories: operational (e.g. occupancy, customer

satisfaction, and service quality orientation), operational and financial (e.g. , profit and

service quality , profit and volume, volume, profit, and customer satisfaction), and financial

performance (e.g. financial ratios, financial margins and stock prices). Many researchers

have emphasized the measurement of operational performance, particularly terms of

occupancy and price and revenue per available room.

Non-financial performance measures are appropriate for situations in which performance

results are difficult to measure, and well as those in which there is a clear causal connection

between activities and results (Botten and McManus, 1999). For example Donavan et al

(2004) argued that the motivational well-being of service workers (e.g. satisfaction and

commitment) is important and is demonstrated through these workers willingness to

commit to the employment, their satisfaction with their work, and improved business

performance. Bridoux (1997) viewed financial performance as profit in excess of the cost

of investment, which depends on the firm’s competitive advantage and attractiveness of the

industry in which the firm operated (industry-effect on performance). Botten and McManus

(1999) argued that financial performance indicators such as return on investment, total

sales, net profit, profit before tax and total assets have been widely used to evaluate

business performance and compere firms with others in the industry.

2.4.4 Defender and Prosper Organizations

According to Maltz et al. (2003) argues that relationship between competitive strategy and

performance measures in various dimensions. Each strategy is unique and requires different

types of performance measures. Defender and prospers organizations are competitive

strategies classified by Miles and Snow (1978). Defender is a survivor whose main aim is

to protect its current business and focus on manufacturing existing designs more efficiently

through competitive pricing. A prospector firm continuously explores and exploits new

23

products of market opportunities to achieve high growth. Prospector firms tend to take a

differentiation strategy and cost leadership seems more likely to be taken by defender

firms. Thus a firm with a differentiation strategy may prefer to use nonfinancial measures

and a cost leadership firm tend to use financial measures (Gosselin, 2005).

In testing different types of strategy and firm performance, Simons (1978) find that

defender firs tend to rely more on financial measures such as short-term budgets to

compensate their managers. Olson and Slater (2002) find that the high-performing and low-

cost defenders place greater emphasis on financial perspective and less emphasis on

customers, innovation and growth perspectives. However, they find that prospectus, high-

performing analyzers, and high performing differentiated defenders place greater emphasis

on non-financial perspectives. Similarly, Gosselin (2005) find that defenders seem to use

non-financial measures less frequently.

2.5 Chapter Summary

The chapter has presented a review of literature reviewed with regard to competitive

strategy implementation for self- sustainability. The presentation was guided by the three

study questions: determination of important factors to be considered during the choice of

strategies for the organizations, the role of managers in successful strategy implementation

and the relationship between strategy planning and organizational performance.

The next chapter will present the methodology of the study which includes research design,

the population and sample size that will be drawn from RCMRD employees. Furthermore

the data collection method and data analysis tool will be defined.

24

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

Research Methodology is a way to systematically solve a research problem by logically

adopting various steps (Scridhar, 2008). In this chapter therefore, we will look at the

research methodology as used in the study, organized by the research questions. This study

present the following; research design, the population of the study, the sample and

sampling techniques, instruments of data collection and method, data analysis and

presentation methods and research procedures..

3.2 Research Design

This study employed descriptive research designs. According to Sekaran (2003) a

descriptive study is undertaken to ascertain and be able to describe the characteristics of the

variables of interest in a situation. Robson (2002) argued that the objective of descriptive

research is to portray an accurate profile of persons, events or situations. Descriptive study

is therefore, critical in drawing conclusions and describing characteristics associated with

the subject population from which the sample was drawn. It discovers and measures cause

and effect relationships among variables (Cooper and Schindler, 2001).

This study employed the use of survey to collect data from the respondents. Surveys are

methods of data collection in which information is gathered through oral or written

questioning. Questionnaires are stable, consistent and uniform offering a considerable and

objective view of issue, since respondents can consult their files (Sarantakos, 2005). For

this study, written questionnaires were used.

3.3 Population and Sampling Design

3.3.1 Population

Population is the total collection of elements whereby references have to be made (Cooper

and Schindler. 2003). The target population of interest in this study was the employees at

Regional Centre for Mapping of Resources for Development (RCMRD). RCMRD which is

based in Nairobi Kenya has only 65 employees. All employees had been employed on

contract bases, most of them two years contracts.

25

3.3.2 Sampling Design

3.3.2.1 Sampling Frame

Cooper and Schindler (2003) have defined a sampling frame as a list of elements from

which sample is actually drawn and is closely related to the population. Kothari (2006) also

defines sampling frame as a list of names of all items of a population. He emphasized that a

sampling frame should be complete and correct list of population members only.

For this study the sample frame was a census of RCMRD. Since the organization contains

small number of employees there was no need to obtain a sample from population (Kothari,

2006). Based on that, all members of the organization were full participants in this

exercise.

3.2.2 Sampling Technique.

This research used a census and therefore it did not need any form of sampling. According

to Kothari (2006) use of census ensure fair representation of findings from different

department and sections of the organization. The decision to use a census was birthed by

the fact that the organization is very small.

3.3.2.3 Sample Size

Kothari (2006) defines sample size as the number of items to be selected from the

population. The size of the sample should neither be excessively large nor too small. It

ought to be ideal. An ideal sample is one which fulfills the requirement of efficiency

representativeness, flexibility and reliability.

The sample size for this study was a census because the population of the employees in the

organization is only sixty five. The employees’ distribution is shown on Table 3.1.

26

Table 3.1: Sample Size Distribution

RCMRD POPULATION MALE FEMALE

Director

1

1

0

Head of departments

2

2

0

Head of Sections

8

7

1

Technical staff

13

10

3

Support Staff

16

11

5

Sub ordinate staff

15

10

5

Project oriented staff

10

8

2

Total

65

49

16

3.4 Data Collection Methods

According to Kothari (2006) a data collection method refers to the means the researcher

will use to gather data. The collection of data is a crucial operation in the execution of good

research design hence quality of the research rests on the quality of data. Stake (1995) and

Yin (2009) identifies six sources of evidence in case studies. The works of these

researchers reflect a number of data collection methods available to a researcher namely:

archival records, interviews, documents, participants’ observation, direct observation, and

physical artifacts. Data collection methods and techniques include such procedures as the

construction and use of questionnaires, personal interviews, focus groups, observation and

review of documents among others.

In this study primary data collection methods was used. Research objectives were used to

design a questionnaire that was administered to the selected sample.

27

The questionnaire had four parts, the first part had questions on the general information

about the respondents in relation to their organization. The second part has questions on the

factors to consider in choice of strategies for an organization. The third part had questions

on competitive strategy implementation and the fourth part had questions on relationship

between strategic planning and organizational performance.

The questionnaire was mainly structured and the respondent was guided by the interviewer

through the illustrated answers to ensure that the respondent understood them and therefore

respond suitably. Structured questions were used because they offered an increased

response rate and were easily coded and analyzed. The questionnaire used closed ended

question utilized a five-point Likert-type scale ranking from 1 (Strongly agree) to 5

(Strongly disagree). The questionnaire did not request for any personal information such as

respondent name.

3.5 Research Procedures

The questionnaire developed by the researcher in line with the research questions was pre-

tested to ascertain in the suitability of the tool before the actual administration. Pre-testing

was done by administering the questionnaire to five randomly selected respondents from

the sample size of 65 respondents. This was to enable the researcher to fine tune the

questionnaire for objectivity and efficiency of the process. To improve response rate and

also comply with some of the organizations internal policies, a cover letter explaining the

reasons for the research, the importance of the research and a guarantee of the respondent’s

confidentiality was provided. The refined questionnaire was then distributed to the

population during the official working hours. It took three working days to administer the

questionnaires.

3.6 Data Analysis Methods

Cooper and Schindler (2000) describe data analysis as the process of editing and reducing

accumulated data to a manageable size, developing summaries, seeking for patterns and

using statistical methods. In this study quantitative analysis technique was used.

Questionnaire was collected, and then coded according to each of the variables of the study

to minimize errors and assure accuracy during the process of analysis. The data gathered

was edited and cleaned in order to detect errors and omissions that could interfere with the

accuracy of the data. The data was then coded to transform it into quantitative from which

made it easier for analysis before it was entered into a computer statistical software known

as Statistical Package for Social Science ( SPSS). The quantitative analysis was applied

28

using descriptive statistic. Data analysis method adopted by this study includes frequency

distribution and percentage while SPSS was very useful in measuring the relationship

between variables and to what extent the variable affects each other. The analyzed data was

presented in a table form and figures which include pie and bar charts.

3.7 Chapter Summary

Chapter three discussed the research methodology used in the study. The population and

sample size are equal because of the small size of the employees of RCMRD. The sampling

frame of the study was the census of RCMRD. It also discussed about sampling techniques

used. Data collection method used in this study is questionnaire on which the pilot

questionnaire to five randomly selected employees was distributed prior to real survey.

Finally the data analysis was done by using SPSS software.

Chapter four presents the results and findings of the data collection through administration

of the questionnaire. Furthermore the brief description of each research question will be

presented based on key percentage.

29

CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

This chapter presents the results and findings of the study. The purpose of the study was to

scrutinize how competitive strategy implementation can help intergovernmental

organizations to become self-sustainable. Data was collected from 75 employees out of 65

employees of Regional Centre for Mapping of Resources for Development. This represents

a response rate of 89 percent. The results were represented in form of pie chart, histogram,

bar charts and tables.

4.2 General Information

The demographic variables sought in the study include the respondents gender, age,

number of years worked at RCMRD and levels of an employees in organization structure.

The findings have been presented as follows:

4.2.1 Gender Representation

As shown in the figure 4.1, 74.1% of the respondents were male whereas 25.9% were

female

Figure 4.1: Gender Representation

74.1%

25.9%

30

4.2.2 Age of Respondents

As shown in the figure 4.2 the respondents aged between 20 – 30 years a counts to 28

which is 48.3%, from 30-40 years counts to 20 which is 34.5% and finally those whose

aged between 40-50 years counts to 10 which is 17.2%. The total number or respondents

was 58.

Figure 4.2: Respondents Age Group

31

4.2.3 Number of Years the Respondents has Worked for RCMRD.

As shown in the figure 4.3 employees who worked for RCMRD less than a year are 13

which is 22.4%, those who worked between 2 -5 years are 25 which is 43%, those who

worked between 5 – 10 years are 13which is 22.42%, while those who worked for more

than 10 years are 7 which is 12.1%.

Figure 4.3: Respondents Working Period

32

4.2.4 Respondents Levels in Organization Structure

As revealed in Figure 4.4, 8.6% of the respondents are in the senior manager level as well

as those on middle level managers. It followed by lower level manager at 13.8% and finally

normal employees takes a bigger part of the structure at 69.0%.

Figure: 4.4: Respondents Level in the Organization

4.3 Factors to Consider in Choice of Strategies for an Organization

This section sought to find out the personal opinion on the factors need to be considered on

choice of an organizational strategies.

4.3.1 Corporate Level Strategy

On this aspect the study needs to find out employees understanding if the organization has

corporate strategy. From table 4.1, 22.4 % of the respondents strongly agreed that the

organization has corporate strategy, 34.5 agreed, 34.5 % are uncertain while 6.9 %

disagreed. However, one participant didn’t answer this question. However one respondent

didn’t answer this question.

33

Table 4.1: Corporate Level Strategy

Frequency Percent

Disagree 4 6.9

Uncertain 20 34.5

Agree 20 34.5

Strongly agree 13 22.4

No response 1 1.7

Total 58 100.0

4.3.2 Compatibility of corporate strategy

On this aspect the study sought to establish the compatibility of the organizational strategy

and the activities of the organization. From table 4.2, 17.2% strongly agreed that the

present strategy is compatible to the organization activities, 36.2% agreed, 32.8% are

uncertain while 12.1% disagreed. However, one participant didn’t reply to this question

Table 4.2: Compatibility of Corporate Strategy to Activities of Organization

Frequency Percent

Disagree 7 12.1

Uncertain 19 32.8

Agree 21 36.2

Strongly agree 10 17.2

No response 1 1.7

Total 58 100.0

34

4.3.3 Business Level Strategy

On this aspect the study needs to find out employees understanding if the organization has

business strategy. 6.9% of respondents strongly agreed that the organization has business

strategy, 22.4% agreed and another 22.4% are uncertain. 29.3 % disagreed, 13.8 are

strongly disagree. However 5.2% of respondents did not answer this question.

Table 4.3: Business Level Strategy

Frequency Percent

Strongly disagree 8 13.8

Disagree 17 29.3

Uncertain 13 22.4

Agree 13 22.4

Strongly agree 4 6.9

No response 3 5.2

Total 58 100.0

4.3.4 Consistence of Business Level Strategy

On this aspect the study needs to find out if the present business strategy is consistent to the

corporate strategy of the organization. The finding was 6.9% strongly agreed that the

present business strategy is consistence with corporate strategy. 17.2% agreed, 16% are

uncertain while 13.8 strongly disagreed. However 5.2 of respondents did not answer this

question.

35

Table 4.4: Business Level Strategy Consistent with Corporate Strategy

Frequency Percent

Strongly disagree 8 13.8

Disagree 17 29.3

Uncertain 16 27.6

Agree 10 17.2

Strongly agree 4 6.9

No response 3 5.2

Total 58 100.0

4.3.5 Functional Strategy

On this aspect the study needs to find out employees understanding if the organization has

functional level strategy. Among the respondent’s 19% strongly agreed that the

organization has functional level strategy, 48.3% agreed and 29.3 are uncertain. However

3.4 have no idea if the organization has or doesn’t have functional level strategy.

Table 4.5: Functional Level Strategy

Frequency Percent

Uncertain 17 29.3

Agree 28 48.3

Strongly agree 11 19.0

No response 2 3.4

Total 58 100.0

36

4.3.6 Consistence of Functional Level Strategy

On this aspect the study sought to establish if the existing business level strategy is

consistent with other strategies. Based on table 4.6, 12.1% strongly agreed that the present

functional level strategy is in consistent to other strategies, 41.4% agreed and 43.1 are

uncertain. However, 3.4 of respondents didn’t attend this question.

Table 4.6: Functional Level Strategy Consistent with other Strategies

Frequency Percent

Uncertain 25 43.1

Agree 24 41.4

Strongly agree 7 12.1

No response 2 3.4

Total 58 100.0

4.3.7 Resources

On this aspect the study sought to establish either the organization has enough resources to

implement the strategy or not. Among the participant’s 25.9% strongly agreed that the

organization has enough resources to implement strategies, 23% agreed. 22.4% are

uncertain 10.3% disagreed while 1.7 strongly disagreed.

Table 4.7: Enough Resources to Implement Strategy

Frequency Percent

Strongly disagree 1 1.7

Disagree 6 10.3

Uncertain 13 22.4

Agree 23 39.7

Strongly agree 15 25.9

Total 58 100.0

37

4.3.8 SWOT Analysis

On this aspect the study sought to establish is the organization conducts SWOT analysis.

Only 6.9% strongly agreed that the organization conducts SWOT analysis while 1.7

agreed.41.4% disagreed and 13.8 strongly disagreed if the organization conducts.

Table 4.8: Organization Conducts SWOT Analysis

Frequency Percent

Strongly disagree 8 13.8

Disagree 24 41.4

Uncertain 18 31.0

Agree 1 1.7

Strongly agree 4 6.9

No response 3 5.2

Total 58 100.0

4.3.9 Results of SWOT analysis

On this aspect the study sought to establish if the results of SWOT analysis are considered

in formulation of strategies of the organization. Only 1.7% agreed, 34.5% are uncertain.

37.9% disagreed and 20.7% are strongly disagreed. However 5.2 % did not answer this

question.

Table 4.9: Results of SWOT Analysis are Used in Formation of Strategy

Frequency Percent

Strongly disagree 12 20.7

Disagree 22 37.9

Uncertain 20 34.5

Agree 1 1.7

No response 3 5.2

Total 58 100.0

38

4.3.10 Reacts to Threats and Opportunities

On this aspect the study sought to establish how the organization reacts to threat and

opportunity. 12.1% or the respondents strongly agreed that the organization reacts to threat

and opportunity on the ad-hoc fashion while 39.7 agrees, 36.2 are uncertain, 10.3 disagreed

and 1.7 strongly disagreed.

Table 4.10: React to Threat and Opportunities in ad-hoc Fashion

Frequency Percent

Strongly disagree 1 1.7

Disagree 6 10.3

Uncertain 21 36.2

Agree 23 39.7

Strongly agree 7 12.1

Total 58 100.0

4.4 The Role of Managers in Successful Strategy Implementation.

This section sought to find out how the organization emphasizes the elements of

competitive strategy implementation.

4.4.1 Knowledge to Implement Strategy

On this aspect the study sought to establish if the employees have the right knowledge to

implement the present strategies of the organization. Among participants 31% strongly

agreed that the employees have the tight knowledge to implement the strategies of the

organization, 60.3% agreed and 8.6% are uncertain.

39

Table 4.11: Employees Have the Right Knowledge to Implement Strategy

Frequency Percent

Uncertain 5 8.6

Agree 35 60.3

Strongly agree 18 31.0

Total 58 100.0

4.4.2 Managers Ability to Empower Others

On this section the study sought to establish if the managers have ability to empower

others. 15.5% strongly agreed that the mangers have ability to empower others while 43.1

agreed. 29.3% are uncertain while 12.1% disagreed.

Table 4.12: Managers Have the Right Ability to Empower Others

Frequency Percent

Disagree 7 12.1

Uncertain 17 29.3

Agree 25 43.1

Strongly agree 9 15.5

Total 58 100.0

40

4.4.3 Management Focuses on Employees

On this section the study sought to establish how management focuses on employees.

Among the participants 3.4% strongly agreed that the management focuses on employees,

8.6% agreed while 41.4 are uncertain. Moreover, 29.3% disagreed while 15.5 are strongly

disagreed.

Table 4.13: Management Focus on Employees

Frequency Percent

Strongly disagree 9 15.5

Disagree 17 29.3

Uncertain 24 41.4

Agree 5 8.6

Strongly agree 2 3.4

No response 1 1.7

Total 58 100.0

4.4.4 Staff Remuneration

In this section the study sought to establish if the staff remuneration is very attractive for

the organization to maintain its personnel. Among the participants only 9% were uncertain,

39.7% disagreed and 44.8% were strongly disagreed.

Table 4.14: Staff Remuneration is Very Attractive

Frequency Percent

Strongly disagree 26 44.8

Disagree 23 39.7

Uncertain 9 15.5

Total 58 100.0

41

4.4.5 Resistance to Change

This section sought to establish the degree of resistance to change of employees. Among

respondents13.8% strongly agreed that the employees are not resistance to change, 24.1%

Agreed, 43.1% were uncertain, 8.6% Disagreed and 10.3 were strongly disagreed.

Table 4.15: Employees are not Resistance to Change

Frequency Percent

Strongly disagree 6 10.3

Disagree 5 8.6

Uncertain 25 43.1

Agree 14 24.1

Strongly agree 8 13.8

Total 58 100.0

4.4.6 Communication Channel

This section sought to establish how effective the communication channel is in the

organization. Among the respondent’s only 3.4% strongly agreed that the organizational

communication channel is very effective while 36.2% agreed. 50% were uncertain while

only 8.6% disagreed and only 1.7% strongly disagreed.

Table 4.16: Communication Channel is very Effective

Frequency Percent

Strongly disagree 1 1.7

Disagree 5 8.6

Uncertain 29 50.0

Agree 21 36.2

Strongly agree 2 3.4

Total 58 100.0

42

4.4.7 Decision Making

This section sought to establish if the employees are involved in decision making in the

organization. Among the respondents only 3.4% strongly agreed that the employees are

involved in decision making while 20.7% agreed, 37.9 were uncertain. Moreover 24.1 were

disagreed and 13.8 were strongly disagreed.

Table 4.17: Employees are Involved in Decision Making

Frequency Percent

Strongly disagree 8 13.8

Disagree 14 24.1

Uncertain 22 37.9

Agree 12 20.7

Strongly agree 2 3.4

Total 58 100.0

4.4.8 Turnover

This section sought to establish the rate of staff turnover in the organization. Among the

respondents only 5.2% agreed that the staff turnover is low while 13.8 are uncertain. 31%

disagreed while 48.3% were strongly disagreed that the staff turnover in the organization is

low.

Table 4.18: Rate of Staff Turn-over is Low

Frequency Percent

Strongly disagree 28 48.3

Disagree 18 31.0

Uncertain 8 13.8

Agree 3 5.2

No response 1 1.7

Total 58 100.0

43

4.4.9 Working environment

This section sought to establish if the working environment in the organization is

conducive. Only 8.6% of respondent’s strongly disagreed that the working environment in

an organization is conducive while 60.3% agreed. 22.4% are uncertain, 5.2% disagreed

and 3.4% strongly disagreed.

Table 4.19: Conducive Working Environment

Frequency Percent

Strongly disagree 2 3.4

Disagree 3 5.2

Uncertain 13 22.4

Agree 35 60.3

Strongly disagree 5 8.6

Total 58 100.0

4.5 Relationship between Strategic Planning and Organization Performance

This section sought to establish relationship between strategic planning of an organization

and the performance of an organization.

4.5.1 Embrace Strategic Planning

The section sought to establish if the management of an organization embraces the strategic

planning for the better performance of the whole organization. Among the respondent’s

only 5.2% strongly agreed that the management of an organization embraces strategic

planning while 65.5% agreed. 27.6% were uncertain and only 1.7% disagreed.

44

Table 4.20: Management Embrace Strategic Management

Frequency Percent

Disagree 1 1.7

Uncertain 16 27.6

Agree 38 65.5

Strongly agree 3 5.2

Total 58 100.0

4.5.2 Organization performance

This section sought to establish if the organization realize its performance as stipulated.

Among the respondent’s 46.6% agreed that the organization realizes its performance while

51.7% were uncertain. 1.7% of respondents disagree that the organization realizes its

performance.

Table 4.21: Realizing Organization Performance

Frequency Percent

Disagree 1 1.7

Uncertain 30 51.7

Agree 27 46.6

Total 58 100.0

4.5.3 Allocation of Resources

This section sought to establish the efficiency of resources allocation in an organization.

10.3% strongly agreed that the resources the organizations are allocated efficiently while

15.5% agreed. 25.9% were uncertain, 41.4% disagreed while 6.9 only strongly disagreed.

45

Table 4.22: Efficiency in Allocation of Resources

Frequency Percent

Strongly disagree 4 6.9

Disagree 24 41.4

Uncertain 15 25.9

Agree 9 15.5

Strongly agree 6 10.3

Total 58 100.0

4.5.4 Priorities

This section sought to establish if the organization sets out priorities and implement them

accordingly or not. Among respondent’s only 6.9% strongly agreed that the organization

sets out priorities and implement them according to the strategic plan. 24.1% agreed,

37.9% were uncertain while 31% disagreed

Table 4.23: Setting out Priorities and Implementing them Accordingly

Frequency Percent

Disagree 18 31.0

Uncertain 22 37.9

Agree 14 24.1

Strongly agree 4 6.9

Total 58 100.0

4.5.5 Performance Measurement

This section sought to establish whether the management of organization measures

performance based on objectives. 20.7% agreed that the organization measurers its

performance based on its targeted objectives while 46.6% were uncertain. 32% disagreed

while 1.7% strongly disagreed.

46

Table 4.24: Measure Performance based on Objectives

Frequency Percent

Strongly disagree 1 1.7

Disagree 18 31.0

Uncertain 27 46.6

Agree 12 20.7

Total 58 100.0

4.5.6. Financial Performance (Profit)

This section sought to establish if the organization realize yearly financial performance

(profit). Among the respondent’s 17.2 agreed that the organization realizes its financial

performance, 58.6% were uncertain, and 24.1% disagreed

Table 4.25: Realizing Financial Performance (Profit)

Frequency Percent

Disagree 14 24.1

Uncertain 34 58.6

Agree 10 17.2

Total 58 100.0

4.5.7 Non-financial Performance

This section sought to establish if the organization realize nonfinancial performance

(quality and satisfactory services). 5.2 of respondent’s strongly agreed that the organization

realizes its non-financial performance which includes quality service offered and

satisfactory services to the customers. Among the respondent’s only 5.2% strongly agreed

that the organization realizes its non-financial performances. 8.6% agreed, 77.6 uncertain

while 8.6 disagree

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Table 4.26: Realizing Non-Financial Performance (Quality and Satisfaction)

Frequency Percent

Disagree 5 8.6

Uncertain 45 77.6

Agree 5 8.6

Strongly agree 3 5.2

Total 58 100.0

4.6 Chapter Summary

This chapter presents the findings and interpretations of the study. These are based on the

three research questions of this study which are what factors determine the choice of

strategies for the organization?, what is the role of managers in successful strategy

implementation?, and what is the relationship between strategy planning and organizational

performance? The next chapter provides the summary, discussions and conclusions as well

as the recommendations based on the findings.

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CHAPTER FIVE

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter reviews the results and the findings of the study in the preceding chapter. It

commenced with a summary of the purpose of the study based on the research questions.

The chapter presents the type of sampling that was employed, how data was analyzed and a

summary of the results. Moreover the results and findings are interpreted through extensive

discussion and finally the conclusion was drown from the research findings and presented.

5.2 Summary

The primary purpose of this study was to determine how competitive strategy

implementation can promote self-sustainability in intergovernmental organizations. They

study was guided by the following research questions: First, what factors determine the

choice of strategies for the organizations? Second, what is the role of managers in

successful strategy implementation? And third, what is the relationship between strategy

planning and organizational performance?

Descriptive research design was adopted for the study. The population of this study was all

65 employees of RCMRD. The list of staff was obtained from the Human Resource

department. Stratified sampling method was used to arrive at the final sample. Since the

population was small, the sample size for the study was 65 in total equivalent to the

population size. Data was collected using questionnaire that was designed and drawn from

the research questions. Data analysis was aided by the Statistical Program for Social

Sciences (SPSS). The data was presented in the form of frequency table and figures and

percentages were used to interpret the findings.

The findings regarding the first research question was on the factors determine the choice

of strategies for the organizations. This research study found that the organization

formulated corporate level strategy and it is in line to the activities of the organization.

However, there is no business and functional level strategies. Moreover the organization

reacts to threats and opportunities in ad-hoc fashion at the same time it is not conducting

SWOT analysis.

Next, the findings regarding the second research question was on the role of managers in

successful strategy implementation. The research found that the employees have the right

49

knowledge to implement formulated strategies and managers have ability to empower

others. However managers do not focus to employees as assert of the organization and the

staff remuneration is very poor which cause staff turnover to be on the higher side.

Finally the findings regarding the third research question was on the relationship between

strategic planning and organizational performance. The research found that 70% of

respondents agreed that the organization embraces strategic planning while only 46% or

respondents agreed that the organization realized its performance. However, 51% or

respondents took are uncertain concerning organizational performance. Moreover the study

found that the respondents did not concur with some of performance factors which includes

efficiency of allocation of resources which only 15% of respondents agreed, setting out and

implementing them accordingly only 31% of respondents agreed, measurement of

performance based on objectives only 20% agreed, financial performance only 17% of

respondents agreed, and non-financial performance only 13% agreed.

5.3 Discussion

This section interprets the results and findings of the study with respect to the factors

determine the choice of strategies for an organizations, the role of managers in the

successful strategy implementation and the relationship between strategic planning and

organizational performance.

5.3.1The Factors Determines the Choice of Strategies for an Organization.

The study revealed that majority of the respondents agreed that the organization has

corporate level strategy. This majority being only 57% is marginal, meaning almost an

equivalent percentage did not fully agreed if the organization has corporate level strategy.

According to Pettinger (1996), corporate level strategy adopts a macro-view of

organization. It covers all parts of organizations product lines, operating decisions and

business interests. It shows the scope of activities that organization plans to be involved in

and how the available resources will be allocated among these activities.

According to Louw and Venter (2006), corporate level strategy is concerned with the

overall purpose and scope of an organization. It concurs to the findings of the study that the

formulated corporate strategy is in-line to the activities of an organization. However, since

its only 56% once again it is also marginal, meaning it is almost an equivalent percentage

of respondents who did not fully agree if the formulated corporate level strategy is in-line

to the activities of an organization.

50

The study also revealed that majority of the respondents does not agree that the

organization has business level strategy. It is known that business level strategy is more

specific than a corporate level strategy. Business level strategy shows how a firm intends to

compete in a particular industry, market segment or product line. It gives more details on

how the firms’ resources will be allocated to various business lines in order to compete

effectively. Business level strategy must be in line with the corporate level strategy.

However, depending on the nature and size of a firm business strategy can be combined

with corporate strategy and become one. Since the majority of the respondents disagreed

that the organization do not have business plan, it means the organization decided to have

corporate level strategy that accommodate business level activities.

Moreover the study also revealed that the organization has put in place functional level

strategy in which according to Pearce and Robinson (2000) they are more specific and

detailed. Functional level strategy shows how the key function areas of the business should

be managed in order to maximize not only effectiveness but also efficiency in the

organization. It is concern with implementing business strategies through functional areas

such as marketing, production, information systems, finance etc. It is important to make

sure that functional level strategy is established inline to the business and corporate level

strategies.

Further findings revealed that the organization has enough resources to perform its chosen

strategy. About 65.6% of respondents agreed that the organization has adequate resources.

Resource is one of the most important factors to be considered during the choice of

strategy. Different strategy require different amount of resources to realize the targeted

goals. According to Barney (1991) resources can be defined as all assets, organizational

processes, knowledge, firm attributes, information, capabilities etc., controlled by the

organization that enable the organization to conceive and implement strategies. In

implementation of organizational strategy in all levels resources is key and with absence of

required amount of resources and organization cannot realize its performance. Moreover

proper allocation of available resources is also a very important aspect.

In subsequent analysis of findings it was established that the organization is not conducting

SWOT analysis before formulation and chosen organizational strategy. Among respondents

only 8.6% agreed that the organization conduct SWOT analysis before the exercise of

formulation and choosing the organizational strategies. Since the firms do not operating in

isolation there is a need for SWOT analysis to be conducted before formulating and

51

choosing strategy in order to know your strength and weaknesses within the organization

and opportunities and threats outside there in the industry the firm is operating. Without

conducting SWOT analysis most likely the firm will choose to follow the strategy that will

not make the firm to realize its performance as targeted. According to Kaplan and Norton

(2008), strategy formulation process starts with a vision, mission and values. Secondly, a

SWOT-analysis is performed. In the study it also revealed that 58.6% disagreed that the

results of SWOT analysis are used in the exercise of formulation and choice of strategy

which must affect organizational performance.

Further finding revealed that about 51.8% of respondents agreed that the organization react

to threat and opportunities in ad hoc condition. This is only possible when the organization

is not conducting SWOT that will avail important information from the industry which the

firm is operating including strength and weaknesses of the organization. By having the real

situation in the industry the organization will be able to come up with the strategic plan to

react to threats and opportunities at the tight time.

5.3.2 The Role of Managers in Successful Strategy Implementation

According to the study findings, majority of the respondents agreed that the employees

have the right knowledge to implement the present strategies of the organization. This

supports the claims of Louw and Venter (2006) that successful strategy implementation is

dependent on strategic leadership as the key driver of implementation and a sound

organizational architecture. Top management in an organization needs to ensure that its

employees have the required knowledge base to facilitate strategy formulation and

implementation. It is easier to implement strategies through empowered team members and

since knowledge management is systems driven, it can add value to the process of strategy

implementation.

The study also revealed that the managers of the organization have ability to empower

others. This has been supported by 58% of respondents while 29% were uncertain and

remaining disagreed. That means the percentage that agreed is marginal, meaning almost

an equivalent percentage did not fully agreed that the managers have ability to empower

others. According to Nel et al (2004) an organization needs to observe the requirements of

a legally integrated human resource management system. They illustrate that the workplace

has to manage the employee, group and organizational empowerment through human

resource interventions in order to successfully implement its strategy. These human

resource interventions include concepts like job and organizational design, national level

52

skills development issues, training and development of employees and career management

at organizational level, performance management and organizational renewal and change

management.

Further findings revealed that the management of the organization is not focusing to the

employee since only 12% of respondents agreed that the management focuses on

employees. This was against the emphasis of Charan and Bossidy (2008) who postulated

that that execution of strategy involves understanding how to link people, their strategy and

operation.

In additional the study also revealed that the organization has poor staff remuneration. This

was clearly indicated by 84% or respondents who disagreed that staff remuneration is very

attractive. The study also reveals that the staff turnover is very high in the organization.

About 79% of respondents disagreed that the staff turnover in the organization is very low.

This opposes the views of Pryor et al. (2007) who argued that people are the process

owners who perform work that is consistent with the principles and processes of an

organization to achieve its purpose. Therefore, people must be a substantial section of any

depiction of a comprehensive and integrated implementation process. Organizational

leaders are advised to recognize that the people in the organization should be well

remunerated and relatively happy at work so that they can deliver to the level of quality

expected and this can be done through enforcing measurement and feedback systems. If

this advice is heeded then an organization can achieve long - term survival and

profitability.

Of the importance is the fact that the study also revealed that only 39% of respondents

agreed that the organizational communication system is very effective while 50% of

respondents were uncertain. Since majority of respondents are uncertain regarding the

communication system then it means that organizational communication system is

marginal. According to Sterling (2003), strategies have to be demonstrated to the people

through regular and effective communication channels. It is true that if a person does not

understand what has to be done, then one cannot own the process and will thus not be able

to deliver since no one can apply what they do not properly understand. According to

Klein and Ritti (1985), people who work for an organization normally need effective

communication for two reasons. First in order to achieve responsiveness of supervision to

employee complaints about work standards and secondly the degree to which employees

felt that they had influence over how they did their job and at what pace.

53

In regard to the flexibility of employees to adopt change the study established that among

the respondents 38% agreed that employees are not resistance to change while 43% are

uncertain. Since the majorities are uncertain on this aspect it means the organizational

position regarding employees’ ability to adopt change is marginal. Klein (1996) suggests

that organizations can formulate their communication strategies around the Kurt Lewinian

model incorporating the unfreezing stage, changing stage and the refreezing stage.

5.3.3 Relationship between Strategic Planning and Organization Performance

The study revealed that the management of the organization embraces the strategic

planning for better performance. About 70% of respondents agreed that the organization

embraces the strategic management. This supports the views of Hofer and Schendel (1978),

Greenley (1986), Miller and Cardinal (1994) and David (1997) who argue that firms record

improved performance once they effectively embrace strategic planning. Embracing

various steps in the strategic planning process is expected to facilitate the realization of

organizational effectiveness. By defining an organizational goals and purpose, strategic

planning gives direction to the organization and enhances coordination and control of

organization activities. It is also reiterated by Arisa and K’Obonyo (2012) that firms that

have effectively embraced strategic planning, archives better performance as compared to

those that have not.

The study also revealed that majority of the respondents did not take side on the issue if the

organization realizing its performance or not. On this 52% were uncertain while 47%

agreed. This situation is not giving a clear indication of whether the organization is

realizing its performance or not so it is marginal. Pealtie (1993) observed that the main

reason for the introduction of formalized strategic planning is to improve company

performance through the development and implementation of better strategies. He noted

that managing a large business without a plan is like trying to organize a car rally without a

map, not impossible, but difficult. This implies that having a strategic planning is one thing

and implementation in order to make an organization realize its performance is another

thing.

Further findings revealed that the majority of respondents disagreed that the organization

allocates its resources efficiently. According to Quinn (1980) explains that well-formulated

strategies helps marshal to allocate an organization’s resources into a unique and viable

54

posture based upon its relative internal competencies and shortcomings, contingent moves

by intelligent opponents and anticipated changes in the environment.

In additional, the study revealed that the majority of respondents did not take side in both if

the organization realized financial performance and non-financial performance. After

implementing a management strategy, manager must gauge its organizational effectiveness

by measuring firm performance data (Crook et al, 2003). According to Venkartaman and

Ramanujam (1986), business performance can be measured using financial indicators,

operational indicators (non-financial), or both. Sainaghi (2010) summarized the

performance indicators used in the hospitality industry over the past 20 years and place

them into three categories: operational (e.g. occupancy, customer satisfaction, and service

quality orientation), operational and financial (e.g. profit and volume, volume, profit and

service quality, customer satisfaction and profit), and financial performance (e.g. financial

ratios, financial margins and stock prices). Many researchers have emphasized the

measurement of operational performance, particularly terms of occupancy and price and

revenue per available room.

5.4 Conclusions

5.4.1 The Factors Determines the Choice of Strategies for an Organization.

RCMRD has corporate level strategy as well as functional level strategy which is in line to

the corporate levels strategy. Corporate level covers all parts of organizational which needs

to be looked at during the choice of strategy exercise which includes product lines,

operating decisions and business interests. It shows the scope of activities that organization

plans to be involved in. Functional level strategy shows how the key function areas of the

business should be managed in order to maximize not only effectiveness but also efficiency

of the organization. Moreover the organization has enough resources to implement chosen

strategy. However it is revealed that RCMRD is not conducting SWOT analysis before

formation and choosing strategies and as consequences the organization react to threat and

opportunities in ad hoc condition.

5.4.2 The Role of Managers in Successful Strategy Implementation.

The employees of RCMRD have the right knowledge to implement the present strategies of

an organization and they are not resistance to change. The managers of the organization

have ability to empower their employees and it is revealed that the organization

communication system is very effective. Nevertheless the management of the organization

55

is not focusing to the employee while successful execution of strategy involves

understanding how to link people, strategy and operation. Moreover the organization has

poor staff remuneration.

5.4.3 Relationship between Strategic Planning and Organization Performance

The management of RCMRD embraces the strategic planning for better performance and in

general firms’ record improved performance once they effectively embrace strategic

planning. However the organization is not allocating its resources efficiently and it is not

clear if the organization is realizing its financial and non-financial performance since

majority of respondents were uncertain.

5.5 Recommendations

In view of the forgoing conclusions, the following recommendations have been made.

5.5.1 Recommendation for Improvement

5.5.1.1 The Factors Determines the Choice of Strategies for an Organization

The management of the RCMRD should make sure that SWOT analysis is conducted

before formulating and choosing strategy in order to understand the strength and

weaknesses of the organization and opportunities and threats outside the organization ( in

the industry). Without conducting SWOT analysis the firm will choose to follow the

strategy that will give a lot of challenges for the firm to realize its targeted performance.

5.5.1.2 The role of Managers in Successful Strategy Implementation.

The management of RCMRD should put their focus to the employees. This is because for

an organization to realize successful execution of strategy their managers must be able link

people, strategy and operation. Moreover, the managers of RCMRD should recognize that

the people in the organization should be well remunerated and relatively happy at work so

that they can deliver to the level of quality expected. If this advice is implemented then

RCMRD can achieve its long term survival and profitability.

5.5.1.3 Relationship between Strategic Planning and Organization Performance

In order to realize its performance the management of RCMRD should allocate an

organization’s resources into a unique and viable posture based upon its relative internal

competencies and deficiencies, expected changes in the environment, and contingent

actions by smart opponents.

56

5.5.2 Recommendation for Further Research.

This study has revealed that despite of having all relevant strategies required for an

organization to realize its performance RCMRD did not realize its performance either

financial or non-financial. Therefore there is a need to conduct further research on the

implementation of chosen strategies of an organization

57

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APPENDICES

Appendix I: Cover Letter

Mchatta Haji Rashid

United States International University

P. O. Box 556 – 00200

Nairobi

Dear Respondent,

I am carrying our research on competitive strategy implementation for self-sustainability in

inter-governmental organizations. This is in partial fulfillment of the requirements of the

Masters of Business Administration (MBA) degree program at the United States

International University.

The study uses Regional Centre for Mapping of Resources for Development as the case

study from which you have been selected as one of the respondents. The result of this study

will provide the management with the necessary information on what factor they need to

put in place to ensure that an organization become self-sustainable.

This is academic research and confidentiality is strictly emphasized, your name will not

appear anywhere in the report. Kindly spare sometime to complete the questionnaire

attached.

Thank you in advance,

Yours sincerely

Mchatta H.R.

65

Appendix II: Questionnaire

To the best of my knowledge the purpose of this study is to investigate why

intergovernmental organizations continue to depend on Governments contribution since its

conception and how competitive strategy implementation can assist these organizations to

become self-sustainable. I further understand that any information that is collected during

this study will be anonymously processed. Participants in this questionnaire will be asked

not to provide a name with the survey forms. In case there is any association of surveys to a

particular participant will be held in the strictest of confidence

Part A. General Information

1. What is your gender? Male Female

2. What is your age group?

Bellow 30 years

30 – 39 years

40 years and aver

3. How long have you worked for this organization?

Less than 1 year

2 – 5 years

5 – 10 years

Over 10 year

4 . Level in organizational structure

Senior Manager

Middle Manager

Lower Manager

Normal employee

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Part B: Please indicate the degree of agreement or disagreement with the given statements.

Factors to consider in choice of strategies for an

organization

5 RCMRD have corporate level strategy

6 The corporate strategy is compatible with the activities

of the organization

7 RCMRD have Business level strategy (BLS)

8 The BLS above is consistent with corporate strategy

9 RCMRD have Functional Level Strategy (FLS)

10 The FLS above is consistent with other strategies

11 RCMRD have Operational level Strategy (OLS)

12 The OLS above is consistent with other strategies

13 Enough resources to implement formulated strategy

14 Capability in implementing formulated strategy

15 RCMRD sustains its competitive advantage

16 RCMRD realize profits out of its activities

17 RCMRD conducts SWOT analysis

18 Results of SWOT analysis are used in formulation of

strategy

19 RCMRD use Low- cost leadership strategy in order to

increase its market share.

20 RCMRD uses differentiation strategy in order to

distinguish its product or service from others

21 RCMRD uses focus strategy on which a firm

concentrates to specific customers.

22 Innovative and actively seeks new opportunities

23 RCMRD seek to maintain current market

24 Midway between 22 and 23 above.

25 Reacts to threats and opportunities in ad-hoc fashion

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Part C: Please indicate the degree of agreement or disagreement with the given statements

Competitive strategy implementation

26 Employees have the right knowledge to implement

strategy

27 Managers have ability to empower others

28 Managers have ability to accommodate and integrate

both internal and external business environment

29 Management focuses on employees

30 Management emphasis on employees skills, training

and development

31 Staff remuneration is very attractive

32 The gap in remuneration between employees and

executives is reasonable

33 Employees are not resistance to change

34 Right people in the right job

35 Communication channel is very effective

36 Management interprets strategy to employees

37 Employees are getting feedback from management in

time

38 Management acknowledge performed employees

39 Employees are involved in decision making

40 Rate of staff turnover is low

41 Conducive working environment

42 Clear fit between strategy and structure

43 Management style is appropriate

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Part D: Please indicate the degree of agreement or disagreement with the given statements

Relationship between strategic planning and organizational

performance

44 Management embraces strategic planning

45 Realized organization performance

46 Efficiency in allocation of resources

47 Maintaining consistency between the organizations

objectives and resources

48 Setting out priorities and implement them accordingly

49 Proactive-ness and initiative-ness in shaping the future

50 Measures performance based on objectives

51 The organization realized targeted market position

52

The organization practices long term planning

53 Uses more flexible control system

54 The organization realize financial performance ( profit)

55 The organization realize Non-Financial performance

( quality and satisfactory services)

56 Implement policies and strategies to achieve objectives

of the organization

58 The organization seek a better match between a firms

products/ technology and its increasingly turbulent

market

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