Strategic Management Practices and Organizational Performance of Housing Construction Companies in Kenya: A Case of Kasarani Sub-County, Nairobi

Abstract

This study examined the effect of strategic management practices on the organizational performance of housing construction companies in Kasarani Sub-County, Nairobi County. The study investigated the effect of financial management practices, technology adoption, and government policy on organizational performance. There is limited empirical evidence on the combined effect of these strategic management practices or organizational performance of housing construction companies within the local context. The study was anchored on the Resource-Based View (RBV), Stakeholder Theory, and the Technology Acceptance Model (TAM). A descriptive research design was adopted, targeting managerial staff from housing construction companies operating within Kasarani Sub-County. Using Yamane's formula, a sample size of 166 respondents was selected. Primary data were collected using structured questionnaires, while data analysis was conducted using descriptive and inferential statistical techniques, including correlation and multiple regression analysis. Out of the 166 questionnaires distributed, 148 were successfully completed and returned, resulting in a response rate of 89.16%, which was considered adequate for analysis. The reliability test confirmed that all study variables achieved Cronbach's Alpha values above the recommended threshold of 0.70, indicating that the research instrument was reliable. Descriptive analysis showed that financial management was the most highly adopted strategic management practice among the firms (M = 4.12, SD = 0.62), followed by organizational performance (M = 4.08, SD = 0.60), technology adoption (M = 4.05, SD = 0.58), and government policy (M = 3.89, SD = 0.66). These findings suggest that most housing construction companies place considerable emphasis on sound financial management while progressively embracing technology and complying with government regulations. Correlation analysis revealed that all the independent variables had positive relationships with organizational performance. Financial management recorded the strongest relationship (r = 0.68), followed by technology adoption (r = 0.60), while government policy showed a moderate positive relationship (r = 0.52). Regression analysis further established that the overall model was statistically significant, with R = 0.74 and R² = 0.55, indicating that 55% of the variation in organizational performance could be explained by the combined effect of financial management, technology adoption, and government policy. The ANOVA results also confirmed that the regression model was significant (F = 102.6, p < 0.001). Among the predictor variables, financial management had the greatest influence on organizational performance (β = 0.41, p < 0.001), followed by technology adoption (β = 0.33, p < 0.001) and government policy (β = 0.25, p = 0.001). The study concludes that strategic management practices play a significant role in enhancing the performance of housing construction companies in Kasarani Sub-County. Effective financial management, increased adoption of technology, and compliance with government policies contribute positively to organizational performance by improving operational efficiency, decision-making, and competitiveness. The study recommends that construction firms strengthen financial planning and internal control systems, invest in modern construction technologies, and enhance compliance with regulatory requirements. Additionally, government agencies should simplify regulatory procedures to create a more conducive business environment for the construction industry. Future studies should examine other determinants of organizational performance, including leadership style, organizational culture, innovation capability, and supply chain management, across different geographical regions to broaden the understanding of strategic management practices in the construction sector.