Influence of Strategic Planning on Performance of Women-Owned Businesses in Nairobi: A Case of Kenya Women Holding Company Limited

Abstract

Due to increasing complexity and volatility of the environment, organizations need to engage in strategic thinking and planning in order to perform and survive. It is estimated that 15-30% of women-owned businesses register poor performance. Investigations on the same have pointed to inadequate financing and management skills when infact, the problem could be routed in strategic planning. However, studies in strategic planning have focused on the direct relationship between it and organizational performance. Individual steps of strategic planning have not had attention. There is lack of knowledge on how key steps in strategic planning influences organizational performance. The purpose of this study was to investigate influence of strategic planning on performance of women-owned businesses in Nairobi focusing on Kenya Women Holding Company Limited. The specific objectives were to examine influence of environmental scanning, influence of strategy formulation, and influence of strategy monitoring and evaluation on performance. The study was guided by a conceptual framework in which strategic planning is an independent variable and organization performance is the dependent variable. The study adopted a correlational research design. The study population comprised the 310 management employees at the Nairobi head office. Stratified random sampling was used to pick 62 respondents. Questionnaires were used to collect the primary data which was used. Reliability of the data collection instrument was established through pilot test and found to stand at Cronbach's alpha of 0.89. Validity was established through exposing the instrument to experts in the subject. Findings for ~1 ~1 and ~1 Were O.l62(p=.044), 0.215(p=.014) and 0.363(p=.000). This means that environmental scanning, strategy formulation and strategy monitoring and evaluation positively and significantly predicted performance at KWH. Multiple regression resulted in R 2 = 0.398 at 5% significance level. This means that the model is stable at 39.8% and can be relied on to estimate at that level. The conclusions are that higher levels of environmental scanning, strategy formulation and strategy monitoring and evaluation results in higher performance and vice versa. The study recommends that the strategic planning should be emphasized by KWH. It is expected that KWH, other women owned businesses and the government would benefit from the study through increased understanding of contribution of strategic planning while researchers may benefit by basing their future studies on this.