The Relationship Between Financial Planning and the Financial Performance of Public Service Organizations in Kenya

Abstract

The purpose of the research study was to examine the relationship between financial planning and financial performance of public service organizations with particular reference to commercial oriented public service organizations in Kenya. The specific objectives of the study included determining the effect of focus on organization goals, allocation of resources as well as risk management on the financial performance of public service organizations.

The Researcher used descriptive survey research design in collecting data from the respondents. The census-sampling procedure was used which involved the use of the entire target population of forty seven (47) finance managers drawn from commercial oriented parastatal organizations. The researcher used questionnaires in collecting data that was analysed quantitatively and qualitatively.

The Research study established existence of a relationship between focusing on organization objectives, allocation of resources, risk management and financial performance. The research study recommended that there is need for management to focus the whole organization operation towards organizational objectives by defining the line of action to complete the work, setting the blue print of the organization course of action, eliminating the unnecessary activities and focusing on priorities and facilitating the taking of the right decision at the right time.

There is need for management to focus the whole organization operation towards organizational objectives by defining the line of action to complete the work, setting the blue print of the organization course of action, eliminating the unnecessary activities and focusing on priorities and facilitating the taking of the right decision at the right time.

Lastly, there is need for management to undertake effective risk management through active process of regular risk reviews and the commitment to: anticipate and influence events before they happen by taking a proactive approach; provide knowledge and information about predicted events; inform and, where possible, improve the quality of decision making, keep track of the identified financial risks, monitoring the residual financial risks and identifying new financial risks.