Strategic Planning Process and Organizational Performance of Deposit-Taking SACCOs in Machakos Sub-County, Kenya

Abstract

Savings and Credit Cooperative Societies (SACCOs) are organizations that pool resources from their members to economically empower and grow them. To achieve this, SACCOs have invested heavily in strategic planning processes to improve their organizational performance. Despite significant investment and consistent efforts in developing strategic plans, many SACCOs have experienced poor performance, caused by poor and unsynchronised strategic planning processes. Therefore, this study investigated how strategic planning processes, specifically strategic visioning, strategic formulation, and strategic choice, affect the organizational performance of DT SACCOs in Machakos Sub-County. Organizational performance measurement was based on Balance Score Card perspectives.The Resource-Based View theory, the Dynamic Capabilities theory, the Contingency theory, and the Balanced Scorecard model formed the foundation for the study. A descriptive survey research design was used in the study. Chief executive officers, human resource managers, operations managers, financial staff, line managers, and supervisors of the four DT SACCOs in Machakos Sub-County formed the target group. Stratified random sampling was used to obtain 62 respondents from this targeted population. The instruments applied in the study were found to be reliable, as the Cronbach alpha, α ≥ 0.7. Descriptive statistics indicated that perceptions were high in all the variables with strategic visioning (M = 4.405), strategic formulation (M = 4.419), and strategic choice (M = 4.509), depicting high agreement among the respondents as to their contribution towards organizational performance. Correlation analysis showed that there are positive and significant relationships between organizational performance and strategic visioning (r = 0.472, p < 0.05), strategic formulation (r = 0.695, p < 0.05), and strategic choice (r = 0.569, p < 0.05). The regression results strategic visioning ( = -0.041, t = -0.198, p = 0.844), formulation ( = 0.810, t = 3.589, p = 0.001) and choice ( = 0.119, t = 0.730, p = 0.469) suggest that their shared variance is accounted for, formulation is the dominant active ingredient while visioning and choice do not add unique explanatory power. This study has found that the primary source of performance was strategic formulation, and greater attention should be paid to its implementation. Adjusted R2 stood at 0.477, and further research is recommended to identify leadership styles, external environment, and digital transformation as explanatory factors for the remaining 52.3 percent variation in performance.