MODERATING EFFECT OF STRATEGIC PLAN IMPLEMENTATION ON THE RELATIONSHIP BETWEEN CORPORATE STRATEGIES AND PERFORMANCE OF COMMERCIAL STATE CORPORATIONS IN KENYA

Abstract

According the Government of Kenya, Commercial State Corporations have been associated with various challenges, including a lack of profitability and substandard goods and services. Such dismal performance may be occasioned by weak corporate strategies and poor strategic plan implementation. This study investigated the challenges faced by Commercial State Corporations in Kenya, particularly their profitability and quality of goods and services, which may stem from ineffective corporate strategies. The primary objective was to analyze how the implementation of strategic plans influences the relationship between corporate strategies and the performance of these corporations. Specifically, the research evaluated the effects of concentric, horizontal integration, vertical integration, and collaboration strategies on performance metrics. Additionally, it examined the moderating role of strategic plan implementation in enhancing this relationship. Grounded in Contingency Theory, Resource-Based Theory, and Transaction Cost Theory, the study employed a positivist research philosophy and adopted a cross-sectional correlational design. The target population comprised of 1,026 senior managers from Commercial State Corporations, with a sample size of 99 managers surveyed using a structured questionnaire. Data analysis involved descriptive statistics and regression analysis, with results presented in tables and figures. Key findings reveal significant positive effects of concentric strategy on financial, customer, and internal business process performance (β = 0.829, p < 0.05; β = 0.648, p < 0.05), while its impact on learning and growth was negligible. Horizontal integration also showed significant effects across all performance metrics (β = 0.536, p < 0.05; β = 0.548, p < 0.05; β = 0.359, p < 0.05; β = 0.201, p < 0.05). Vertical integration similarly influenced all performance aspects (β = 0.474, p < 0.05; β = 0.382, p < 0.05; β = 0.490, p < 0.05). Collaboration strategies produced significant effects as well (β = 0.505, p < 0.05; β = 0.561, p < 0.05; β = 0.420, p < 0.05; β = 0.382, p < 0.05).Moreover, the study identifies the moderating impact of strategic plan implementation, indicated by changes in R² across performance metrics (0.215 for financial, 0.010 for customers, 0.142 for internal processes, and 0.145 for learning and growth). These insights aim to guide Commercial State Corporations in developing and executing effective corporate strategies for enhanced value creation. The study concluded that Strategic plan implementation has a statistically significant moderating effect on the relationship between corporate strategies and performance of commercial state corporations on Kenya. Based on this conclusion, it was recommended that commercial state corporations should develop detailed roadmaps that outlines specific actions, initiatives and milestones needed to achieve the strategic objectives. They should identify and address any barriers, obstacles or resistance to change that may impede the successful implementation of Strategic plans.