Strategic Planning Practices and Performance of Pharmaceutical Firms in Kenya

Abstract

Strategic planning practices engross all the processes related to the organization that are aimed at constructing its strategy, that in turn define the direction that the organization should take, including decision-making, allocation of resources and clear communication to the stakeholders on this direction, with the aim of attaining the vision of that organization. This study was anchored on the Open Systems, Contingency and Institutional theories, and sought out to examine the influence of strategic planning practices on pharmaceutical firms in Kenya. The study‟s specific objective was to assess the influence of strategic planning dimensions (formulation, execution and evaluation and control) on the financial performance of Kenya‟s pharmaceutical firms. The target population were 88 pharmaceutical firms with operations throughout Kenya. This was a cencus survey, and had 59 responses, with respondents being Country Directors or their equivalent. Statistics was collected by way of questionnaires and analysis was through Descriptive method as well as by way of inferential statistics,specifically regression analysis. The information got was displayed using charts and tables. The study found out that formulation, implementation and evaluation and control dimensions of strategic planning practice as independent variables established a weak positive influence with financial output of pharmaceutical firms. On the othe hand, the results of the study were found to be statistically insignificant to come to a conclusive determination. Overall, the study concluded that strategic planning practices had a weak positive influence on financial performance of Kenya‟s pharmaceutical firms. This gives the implication that strategic planning practices are vital components in organizational performance of pharmaceutical firms and therefore guiding principles that guarantee appropriate applications of the strategic planning practices should be adopted by the firms. The managers of pharmaceutical firms are required to offer leadership in the entire planning process through strict adherence to strategic planning practices so as to push their firms to enhanced organizational performance. This study is also an invitation to other studies that broaden the understanding of the stimulus that strategic planning practices have on firm performances of Kenya‟s pharmaceutical firms built on other indicators of financial performance.