Influence of Balanced Scorecard on Organizational Performance of Kenya Electricity Generating Company Limited: a Case of Central Office in Nairobi City County
Abstract
Balanced Scorecard (BSC) is an integrated strategic planning and management system
that is used to align business activities to the vision and strategy of an organization by
considering both financial and non-financial aspects in a balanced manner. BSC therefore
provides a shift from the traditional financial performance focus only to a balanced view
of the organization through four perspectives (financial, customer, internal processes,
learning and growth). The BSC learning and growth perspective being broad, was
narrowed down to staff training in this study. The purpose of the study was to investigate
the influence of BSC on organizational performance of KenGen using a case of it’s
central office in Nairobi City County in Kenya with objectives to; examine the influence
of staff training on organizational performance, investigate the influence of internal
business processes on organizational performance, examine the influence of customer
satisfaction on organizational performance and investigate the influence of financial
performance on organizational performance. Descriptive survey research design was
adopted including both qualitative and quantitative research methodologies. Proportional
stratified random (probability) sampling was used to select a total sample of 243
management staff comprising (159 in lower management, 56 in middle management and
28 in top management) from a heterogeneous target population of 360 (267 lower in
management, 63 in middle management and 30 in top management) in KenGen’s central
office in Kenya’s capital city of Nairobi using Krejcie and Morgan Table. The data
collection instrument was a structured e-questionnaire to enable the researcher to collect
primary quantitative data from the closed-ended questions and primary qualitative data
from the open-ended questions. In some sections of the questionnaire, a likert scale was
used to weigh the rank of response in terms of strength or weakness on a scale ranging
from one to five. Frequencies, percentages, averages and tables were used for data
analysis using Statistical Package for Social Sciences (SPSS). Qualitative data was used
to compliment, enrich and reinforce the quantitative data. Validity of the questionnaire
was enforced by pilot testing and using unambiguous questions to enhance
standardization of the questionnaire. The reliability of the questionnaire was achieved by
using split-half method. Respect, anonymity, privacy and fairness to the respondents were
exercised through self-administered e-questionnaire in the research process to fulfill the
ethical requirements as per the rules of natural justice and as per the bill of rights in the
(Kenyan Constitution, 2010) in order to avoid unnecessary risks. The e-questionnaire was
sent to 243 respondents by e-mail, out of which only 146 questionnaires were returned,
accounting for 60% return rate. From the research findings based on research objectives,
the respondents agreed that improvement on staff training, customer satisfaction, internal
business processes, financial performance in a balanced manner as anchored in BSC also
improved organization performance. It was recommended that the research findings in
the central office be disseminated to the branches of KenGen to create awareness to all
the staff as stakeholders of the common vision and strategy. It was further recommended
that the research could be conducted in other organizations with KenGen as a benchmark
to encourage them to embrace BSC in order to shift the traditional financial aspect only
to all the BSC perspectives in a balanced manner. The Balanced Scorecard in this
research was based on a profit making organization such as KenGen so there is need for
another study based on a non-profit making organization such as KenGen Foundation
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- Faculty of Education (FEd) [6011]
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