Effect of Strategic Orientation on Revenue Collection Performance in Public Sector: A Case Study of Homa Bay County Government,Kenya

Abstract

A strong local revenue base is essential for sustainability of decentralized programs. In the last financial year 2017 only two counties namely Turkana and Marsbit met their revenue targets the rest had collections even below what was previously collected by the defunct local authorities. Homabay County in the last fmancial year was among the bottom ten counties in revenue collection performance. The 2016 budget implementation review report 'listed Homabay among the bottom 24 counties in terms of revenue collection. Homabay generated 158 million which was regarded as 0.47percent of total counties collection of Ksh 33.4billion. Existing theory explains tax collection performance as a function of political, socio-economic, and cultural factors. Yet across Kenya, tax collection performance varies greatly between counties that are similar along these dimensions. Analysis of previous work give mixed results of the effects resulting in discord with various scholars getting conflicting outcomes. Majority of these studies focused on profit making institutions and not on public and politically driven institutions. This study addressed these gaps and was anchored on resource based theory, dynamic capacity theory and the theory of Publicness. The main purpose was to determine effect of strategy orientation on revenue collection performance in public sector. Specific objectives were to: examine effect of market orientation; establish effect of learning orientation; determine effect of entrepreneurial orientation; and investigate effect of technological orientation on revenue collection performance. The study adopted a correlation research design using the questionnaire method. The target population was 2,112 employees of County Government of Homa-Bay out from which a proportional stratified sample size of 325 was drawn. Cronbach alpha coefficient, a=0.764 indicated the survey instrument was reliable. Content Validity Index, CV/=0.85 indicated the instrument was valid. The estimated model had a good fit: R2=.42; F=42.546; p=.OOO and Durbin Watson =1.672. Results indicated market orientation (B=.122, p=.OOO); entrepreneurial orientation (B=.127, p=.OOO) and learning orientation (B=.166, p=.OOO) all had positive significant effect on revenue collection performance; while technological orientation (B=-.139, p=.OOO)had negative significant effect on revenue collection performance. This implied direct effect of market, entrepreneurial, and learning orientation on performance while inverse effect of technological orientation on performance ceteris paribus. Concluded that strategy orientation had overall positive significant effect on performance. Recommended enhancing market, entrepreneurial, and learning strategy orientations while mitigating technological orientation. The studyprovided useful information for strategic management as well as county governance.