Strategy development and its challenges in Kenyan public corporations: the case of the National Hospital insurance fund

Abstract

Theway managersapproach strategy development in organizations differs and is determined by both the environmental and organizational factors. It has been noted that though various authors and scholars have advocated several approaches to the strategy development process in organizations, the approachesonly offer partial explanation about the process. This study set out to establish how National Hospital Insurance Fund, a Kenyan state corporation established under the NHIF Act No. 9 of 1998, develops its strategies, the challenges faced in the process and to what extent the process addresses the strategic issues of the organization. Data for the study was collected through well-structured questionnaires administered to the CEO, the organizations6 General managers and 20 managers. An in-depth interview with the CEO was also carried out to establish the finer details of strategy developmentin the organization. From the findings, it clearly emerged that there exists a highly formalized processof strategy development in the organization. This is due to the fact that the strategic decisions made by the management of the organization are outcomes of deliberate planning efforts and a rational analysis of the business environment, the organizations objectives, strengths and weaknesses. Government policies, organizational objectives, available resources, customers and stakeholder's interests are among the factors that influence the process. The study established that the process faces challenges, which include resistance to change, organizational culture, organizational politics and communication barriers. These challenges lead to delays in implementation of the strategic plans and plenty of time is spend before coming up with the appropriate strategies. The research findings further indicated that the process addresses the strategic issues of the organization to a very large extent. Finally, the study has come up with discussions, conclusions, suggestions for further studies and recommendations for policy and practice based on the findings.