INFLUENCE OF EFFECTIVE STRATEGIC PLANNING ON PERFORMANCE OF FIRMS IN THE ENERGY SECTOR IN KENYA

Abstract

This study examined the influence of effective strategic planning on performance of firms in the energy sector in Kenya. The specific objectives were to establish how participative decision-making, communication on planning, organizational culture and innovation influence performance. The theories that guided this study were decision participation theory, organizational information theory, Schein theory of organizational culture, and the diffusion theory of innovation. This study used descriptive design with questionnaire as the instrument for data collection. The target population was 197 firms in the energy sector from three subsectors namely renewable energy, electricity and petroleum. The unit of observation was one operations manager from each energy firm. The study conducted a census on all the firms. Data collected was analyzed using SPSS version 21. to produce frequencies, descriptive and inferential statistics were used to derive conclusions. The study conducted a multiple regression analysis to determine the relationship between effective strategic planning and performance. The study findings revealed that all the four factors that is organizational culture, communication of planning, participative decision making and innovation had a positive significant influence on performance of firms in the energy sector. Based on the study findings, the study recommends that managers in the energy firms should focus on improving the four practices so as to record an improvement in their performance since strategic planning account for 63.4% of the variation in performance of energy firms.