Challenges faced by agricultural finance corporation Kenya in the implementation of strategic change

Abstract

The process of strategy implementation faces many challenges leading to most organizations failing to successfully implement their strategies. The objective of this study therefore was to establish the challenges faced by Agricultural Finance Corporation in the implementation of strategic changes and how the corporation has responded to those challenges. This was done using a case study and data was collected from the managers of the corporation through an interview guide. The senior managers were the target since they are better placed to provide information the researcher was interested in. The data obtained from the interview guide was analyzed using content analysis. From the findings, all the managers are aware of the overall business strategy of the corporation and are involved in its implementation. This shows that the management is committed to the strategic direction itself and this is the most important thing when implementing a strategy. It was found out that the major challenge Agricultural Finance Corporation faces is the poor strategy implementation. Despite the well layout strategies, no team is charged with the implementation of the strategies. Formulated strategies may fail if implementation is not effectively and efficiently done. Without proper implementation, even the most superior strategy is useless. The process of strategy implementation faces many challenges leading to most organizations failing to successfully implement their strategies. Most managers had a feeling that there is need to involve the employees who are directly and critical to strategy implementation during formulation of the strategies. This is to ensure that implementation is done in accordance with the objectives of the strategy formulation. Failure to involve implementers at the formulation stage has been a major problem that cannot be ignored. In most cases where strategies fail, implementers did not have an input at the formulation stage. Another challenge Agricultural Finance Corporation faces is communication of their strategies to the staff. From the respondents, some members of the staff are not aware of the corporation strategies. Even though studies point out that communication is a key success factor within strategy implementation, communicating with employees concerning issues related to the strategy implementation is frequently delayed until the changes have already crystallized. It is important to institute a two-way-communication program that permits and solicits questions from employees about issues regarding the formulated strategy. The processing of loan in Agricultural Finance Corporation takes long of up to three months compared to other financial providers. This has led to many farmers seeking financial services from other lending institution thus reducing the customer base of the corporation. Agricultural credit delivered through AFC faces challenges like: policy environment, operational prudency and poor lending practices. The study concludes the since Agricultural Finance Corporation operates in a complex and a highly regulated environment, it must improve efficiency in loan processing, capacity building to handle the dynamic environment through training of the managers and seminars to share experience, employment of new technologies and staff motivation. The study recommends that formulation and implementation need the involvement of employee in all the stages from strategy formulation to implementation, evaluation and monitoring of strategy implementation and to link performance to a reward system