Strategic Management and Performance of Commercial Parastatals in Kenya: A Case of Kenya Electricity Generating Company

Abstract

Strategic management practices are essential in enhancing the performance of organizations. Ideally, organizations that adopt these practices achieve their goals efficiently and effectively. This study aimed to assess strategic management practices and the performance of commercial parastatals in Kenya: a case of Kenya Electricity Generating Company (KenGen). The specific objectives of the study were to evaluate the information technology adoption, strategic partnerships, customer experience management, and team management on the performance of KenGen. The study was anchored on the stakeholder theory, agency theory, and resource-based theory. Descriptive research design was used for the study. The target population included managers of Legal Procurement, Human Resource, Finance, Operations, ICT, Strategy/innovation, Commercial services and Business unit departments at KenGen's head office in Nairobi. The sampling method used was stratified random sampling. The sample size included 121 staff members working in various departments at KenGen's head office in Nairobi. Data was collected using a self-administered structured questionnaire. Descriptive statistics analysis and linear regression analysis was used to analyze and present the data findings. This was augmented by percentages, frequency distributions, means, and standard deviation. Tables and figures were used to present the findings of the study. The study findings indicated that IT Adoption and Strategic partnerships have strong, statistically significant positive effects (coefficients: 0.644 and 0.665, p-values: 0.000). Strategic team management also shows a significant positive impact (coefficient: 0.456, p-value: 0.000). While Strategic Customer experience management has a smaller yet statistically significant effect (coefficient: 0.181, p-value: 0.015). The study concluded that IT adoption is highly regarded but can have both positive and negative consequences due to barriers like limited infrastructure and skills gaps. Additionally, strategic partnerships, customer-centric approaches, and effective team management were identified as key factors that positively influence the performance of commercial parastatals in Kenya. Therefore, the study recommends that for KenGen to leverage ICT transformation, it should enhance its ICT infrastructure, foster innovation, and upskill employees, with timeline so has to improve the organization performance. Additionally, establishing a partnership task force and customer experience management team, along with leadership training and diversity-focused hiring, will enhance overall organizational capabilities