strategic planning and performance of local …
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STRATEGIC PLANNING AND PERFORMANCE OF LOCAL
GOVERNMENT IN RWANDA
A CASE STUDY OF NYANZE DISTRICT
JOHN HABIMANA
MBA/0089/12
Research Project submitted in Partial Fulfillment of the Requirements for the Award of Degree of Master of Business Administration (Strategic
Management Option) of Mount Kenya University
MAY 2017
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DECLARATION
This research study is my original work and has not been presented to any other institution.
No part of this research should be reproduced without the authors’ consent or that of Mount
Kenya University (Kigali).
Students Name: HABIMANA John
Sign ____________________ Date _____________
Declaration by the supervisor
This research has been submitted with our approval as Mount Kenya University Supervisor.
Name: Dr Mulegi Tom
Sign ____________________ Date ___________
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DEDICATION
This work is dedicated to my wife Dr NSIGAYE Matilda and my son KAYIJUKA
Abisha Ambert
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ACKNOWLEDGEMENTS
First of all, my immeasurable thanks go to the Almighty God for having protected me till
today.
I acknowledge Mount Kenya University Kigali Campus for providing me and other students
with relevant means and materials to accomplish this research project report.
I am very grateful to my supervisor Dr Muregi Tom for the guidance throughout the research
and for the continuous intellectual inspiration.
I extend my sincere gratitude to the District of Nyanza that accepted and gave me
authorization of collecting the data for my research.
My special thanks also go to the staff of Nyanza District.
I feel indebted to thank my wife for always keeping me posted, always being there for me,
always praying for me and above all for supporting me morally in every single step of this
Master’s degree program.
Last but not least are my fellow classmates in MBA Strategic Management: It is because of
their support and cooperation that my studies are completed.
May God bless you all!
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ABSTRACT
The purpose of this study was to find out the importance of strategic planning on the performance of local government in Rwanda, a case study of Nyanza District. The specific objectives of the study were to assess the operational efficiency of the strategic plans at Nyanza District, Examine the performance of Nyanza District in service delivery and to examine the relationship between strategic planning and performance in local government in Rwanda. The sample size used was 160 drawn from a target population of 265 using stratified sampling technique. One hundred and sixty (160) questionnaires were sent to the District and all were responded to and obtained representing a response rate of 100%. The researcher used the test-retest reliability technique where a pilot test of two questionnaires were given to two senior managers from the district executive committee so as to examine the appropriateness of responses given by respondents before applying the questionnaire to the entire population. The researcher used the content validity technique whereby items on the questionnaire relate to the construct being measured and gathered data from respondents who actually work in the planning department. The primary and secondary information gathered from questionnaires and documentary reviews were presented in tables and figures. The interpretation and analysis of data is reflected by the percentages and frequencies of respondents views presented in the tables and figures. Data analysis was done using editing and descriptive statistics techniques. A five point likert scale was used as a tool for measurements, which assigns a weighted value to the extent of agreement or disagreement for a factor analysis. The findings of the administered questionnaires showed a fairly high level of agreement for the features of the various dimensions (mission, planning, system, productivity, service quality, service innovation, financial performance, customer service and leadership) of an effectively and efficiently managed District. However, this study showed that structures put in place for bottom-up information flow were not known to employees and they were also ignorant of program evaluation in the District. This study concludes that, the strong agreement of factors of various dimensions of strategic planning and performance indicate the effectiveness and efficiency of such planning adopted by employees of the District and hence affects its performance positively. The researcher recommends that all factors of the various dimensions especially system (mission, planning, system, productivity, service quality, service innovation, financial performance, customer service and leadership) should be put into the right perspective so as to help the general workforce of the District to understand the main objectives and strategic plans in place to achieve objectives. The research helped the researcher to gain practical research skills and the report serves for reference to the MKU community and the entire general public. The researcher also proposes practical recommendations to the District of Nyanza on how to improve its performance.
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TABLE OF CONTENTS
DECLARATION ...................................................................................................................... ii
DEDICATION ......................................................................................................................... iii
ACKNOWLEDGEMENTS ..................................................................................................... iv
ABSTRACT ...............................................................................................................................v
TABLE OF CONTENTS ......................................................................................................... vi
LIST OF TABLES ................................................................................................................... ix
LIST OF FIGURES ...................................................................................................................x
LIST OF ABBREVIATIONS AND ACRONYMS ................................................................ xi
OPERATIONAL DEFINITIONS OF TERMS ...................................................................... xii
CHAPTER ONE: INTRODUCTION ........................................................................................1
1.0 Introduction to the study ..................................................................................................1
1.1 Background to the study ...................................................................................................1
1.2. Statement of the problem ................................................................................................3
1.3. Objectives of the Study ...................................................................................................4
1.3.1 General Objective ..........................................................................................................4
1.3.2. Specific Objectives .......................................................................................................4
1.4. Key questions ..................................................................................................................4
1.5. Significance of the study .................................................................................................5
1.6. Limitations of the Study ..................................................................................................5
1.7. Scope of the study ...........................................................................................................5
1.8. Organization of the study ................................................................................................6
CHAPTER TWO: LITERATURE REVIEW ............................................................................7
2.0 Introduction ......................................................................................................................7
2.1 Theoretical literature ........................................................................................................7
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2.1.1 Concepts of strategic planning ......................................................................................7
2.1.2 Strategic Management .................................................................................................10
2.1.3 Strategic Planning in Public Organizations .................................................................11
2.1.4 Benefits of Strategic Planning .....................................................................................13
2.1.5 Barriers to Strategic Planning .....................................................................................14
2.1.6 The Process of Strategic Planning ...............................................................................15
2.1.7 Performance in Public Organizations ..........................................................................16
2.3. Critical review and Research gap identification ...........................................................26
2.4 Theoretical framework ...................................................................................................28
2.5 Conceptual framework ...................................................................................................30
2.6 Summary ........................................................................................................................31
CHAPTER THREE: RESEARCH METHODOLOGY ..........................................................33
3.0. Introduction ...................................................................................................................33
3.1. Research Design ............................................................................................................33
3.2. Target population ..........................................................................................................33
3.3. Sample size and design .................................................................................................34
3.3.1 Sampling size ..............................................................................................................34
3.4 Data collection Methods.................................................................................................35
3.5. Data analysis .................................................................................................................37
3.6 Ethical Consideration .....................................................................................................38
CHAPTER FOUR: PRESENTATION OF FINDINGS ..........................................................39
4.0 Introduction ....................................................................................................................39
4.1 Demographic Data..........................................................................................................39
4.2 Presentation of Findings .................................................................................................41
4.3 The relationship between strategic planning and performance of the firm ...............50
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Chapter five: summary, conclusion, and recommendation ......................................................53
5.0 Introduction ....................................................................................................................53
5.1 Summary ........................................................................................................................53
5.2 Conclusions ....................................................................................................................54
5.3 Recommendation ............................................................................................................55
5.4 Suggestions for further ...................................................................................................56
References ............................................................................................................................57
Appendices…………………………………………………………………………………...63
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LIST OF TABLES
Table 3. 1Targeted population ................................................................................................ 34
Table 3. 2Sample size ............................................................................................................. 35
Table 3. 3Interpretation scale .................................................................................................. 36
Table 4. 1Gender and Age Group of Respondents ................................................................. 39
Table 4. 2Mission as a strategic planning component ............................................................ 41
Table 4. 3Planning as a strategic planning activity................................................................. 43
Table 4. 4 System as a Strategic planning component ............................................................ 45
Table 4. 5Leadership as a strategic planning component ....................................................... 47
Table 4. 6Performance indicators of the district of Nyanza ................................................... 48
Table 4. 7Factor analysis of performance indicators .............................................................. 50
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LIST OF FIGURES
Figure 2. 1Strategy Framework .............................................................................................. 10
Figure 4. 1Educational level of Respondents ......................................................................... 40
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LIST OF ABBREVIATIONS AND ACRONYMS
DDPs: District Development Plans
EDPRS: Economic Development & Poverty Reduction Strategy
MBA: Master of Business Administration
MINALOC: Ministry of Local Government
MKU: Mount Kenya University
SPSS: Statistical Package for the Social Sciences
SWOT: Strength, weaknesses, opportunities and threats
SSP: Sector Strategic Plans
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OPERATIONAL DEFINITIONS OF TERMS
Economy: Minimizing the cost of resources used for an activity.
Effectiveness: The extent to which objectives are achieved and the degree to which targeted
problems are solved.
Efficiency: The relationship between what is actually produced or performed with what can
be achieved with the same consumption of resources (time, labor, money). It is an important
factor in determination of productivity.
Public sector: The public sector consists of the general government sector plus government-
controlled entities, known as public corporations, whose primary activity is to engage in
commercial activities.
Strategic planning: An organization’s process of defining its strategy, or direction, and
making decisions on allocating its resources to pursue its strategy and also extend to control
mechanisms for guiding the implementation of the strategy. It involves setting goals,
determining the actions to achieve the goals, and mobilizing resources to execute the actions.
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CHAPTER ONE: INTRODUCTION
1.0 Introduction
This chapter aims at reviewing the back ground, statement of the problem, objective of the study,
the research questions, and significance of the study, limitations and scope of the study and also
it describe the organization of the study.
1.1 Background to the Study The use of strategic planning in local government has grown in the last three decades. Denhardt
writes that in 1985, strategic planning was rare in local government but that interest was
growing.
A survey by Poister and Streib in 1994 found that sixty-three percent of the cities surveyed used
strategic planning, but only about thirty-eight percent of the cities swore using strategic planning
citywide. An update to that survey in 2005 found that forty-four percent of the cities surveyed
were using strategic planning city-wide. Though the number of cities using strategic planning
city-wide only slightly increased in the decade between the two surveys, satisfaction with
strategic planning, on the other hand, greatly increased.
In a 1990 article, Poister and Streib reported that sixty percent of the respondents rated strategic
planning as “somewhat effective.” The 2005 survey found that almost ninety percent of
respondents thought the benefits outweighed the costs of strategic planning. Therefore,
satisfaction increased tremendously from 1990 to 2005, even if utilization did not, which could
be an indication that the tool is being used more effectively and that local governments are
applying strategic planning better so that it is more useful.
Most of the reasons that local governments implement strategic planning are due to
organizational change. Some of these are unique to local governments (Gibson, 1993; Wheeland,
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1993, 2004). For example, many cities are dealing with the decline of industry, or even the loss
of one major employer, in their geographical areas that result in population and job loss. Other
cities are dealing with population growth and need to plan for increased demand for services.
Still other cities are facing demographic changes in their population and need to account for
possible tensions and change in demand for services.
There are also certain barriers that are particular to local governments (Kovach & Mandell
1990). The financial cost of doing strategic planning can be difficult for cash-strapped local
governments that need to focus on day-to-day operations. Also, the decision-making process in
local governments can prove to be a difficult issue, due to complexity. Citizens tend to be more
directly involved in city-wide decision-making than other levels of government through citizen
boards and city council meetings. This can make consensus building on what goals the city
should be pursuing very difficult. Furthermore, local governments are relying more and more on
cooperation and networking with other governmental, nonprofit, and private organizations to
carry out their operations. This interdependence of local governments can make it difficult for
the implementation of strategic planning because of the need to include all relevant stakeholders.
However, local governments can gain many benefits from implementing a strategic plan,
according to Pindur (1992). Strategic planning can help identify important issues in a community
and how resources should be used. The planning process can also help educate citizen
participants about the functions and goals of the municipality. The process can also assist local
governments in bringing together various stakeholders (citizens, business owners, and staff of all
levels) through consensus building. Finally, strategic planning can improve organizational
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performance and the ability of the government to reach stated objectives because city staff and
citizens are working toward the same mission.
In May 2006, during the dialogue for the design of Economic Development and Poverty
Reduction Strategy (EDPRS), the government of Rwanda introduced Imihigo (Performance
contracts) as a performance-based management tool to strengthen strategic planning and
management and improve service delivery in the local government. The exercise culminated in
institutionalizing performance contracts in the central and local government planning system in
order to increase the rate and the quality of the execution of government programs and priorities.
Imihigo is now integrated into the national planning system via the EDPRS Sector Strategic
Plans (SSP) and District Development Plans (DDPs). Annual evaluation is conducted to
determine the extent to which districts have achieved their objectives and contributed to
improvements in the socio-economic wellbeing of citizens. While significant positive outcomes
have been realized, a number of gaps still exist for local government to achieve their objectives.
Most notable among these is the challenge related to planning: indicators, baselines and targets.
This study seeks to examine these planning-related challenges in detail and provide
recommendations for further improvement.
1.2. Problem Statement In Rwanda, local government has been reluctant to formulate strategic plans; assuming that is the
role of the central government. This may be attributed to inadequate capacity to perform this task
or unwillingness to attach importance to strategic planning and therefore do not have consistent
strategic plans for their management processes. This is inconsistent with the strategy of
performance contracts (Imihigo); an approach that has been adopted by local government
authorities for setting local priorities, annual targets, and defining activities to achieve them.
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As reported in the Annual District performance evaluation of 2011-2012, it was revealed that in
most districts including Nyanza, planning gaps still exist in the activities. Indicators, baselines
and targets were found not to be logical and consistent. This made it difficult and often
impossible to measure progress made and has consequential impacts on development.
This background of problems has raised the need to carry out this research and to highlight the
approaches in improving Districts performance taking Nyanza as a case study.
As such, this study is aimed at finding out the importance of strategic planning on the
performance of local government in Rwanda, a case study of Nyanza District. The goal was to
perform an in-depth analysis on the current practices of strategic planning at Nyanza District and
how they make subsequent follow-up and measurement of performance.
1.3. Objectives of the Study
This study is comprised of general objective and specific objectives.
1.3.1 General Objective The general objective of the study is to assess the importance of strategic planning on
performance of local government in Rwanda; with particular reference to the District of Nyanza/
Southern Province.
1.3.2. Specific Objectives Specifically, the objectives of the study are as follows.
(i) To assess the operational efficiency of the strategic plan in Nyanza district.
(ii) To examine the performance of Nyanza District in service delivery.
(iii) Examine the relationship between strategic planning and organizational performance.
1.4. Research Questions (i) What is the operational efficiency of the strategic plan at Nyanza District?
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(ii) To what extent has Nyanza District achieved its targets in relation to service delivery
mandate?
(iii) What is the relationship between Nyanza District’s strategic plan and its overall
organizational performance?
1.5. Significance of the Study The focus of the study is to highlight the relationship between effective strategic planning and
performance and will be of great value to management of Nyanza District and its stakeholders;
and by extension, to other organizations in the Public Sector.
1.6. Limitations of the Study Similar to any research, this study had several challenges that limited the generalization of its
findings. There was difficulty in accessing some officials because of their limited availability and
knowledge about the topic. Some questionnaires were not adequately completed; which made
information inadequate and left the researcher to use publications and reports. This provides a
room for further studies on the same to be conducted.
1.7. Scope of the Study The study analyzed the impact of strategic planning on performance in local government
specifically limited to Nyanza District. Nyanza District was chosen as the geographical scope of
the study using random sampling technique. The research examined the District’s performance
for the period of 2011-2012 and how this was impacted by the effectiveness of its strategic plan.
2011-2012 was chosen as the period of the study because it was the midterm of the second
decentralization policy implementation and the researcher wanted to provide data on the
decentralization implementation status.
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1.8. Organization of the study This study is made up of five chapters. Chapter one deals with the background of the study
which brings out the general overview of strategic planning from the global perspective to
Rwandan context. It also includes the statement of the problem, objectives of the study,
significance of the study, research questions and the scope of the study. Chapter two covers the
review of past studies on the concepts related to strategic management streaming from the basic
definitions and terms used in the field of strategic management. It also identifies the gap in the
existing literature consulted. The literature review ends with the summary of key issues raised.
Chapter three includes the study design, the target population, sample design, data collection
procedures and instruments, data processing procedures and data analysis. Chapter four presents
the output of data analysis. While chapter five presents summaries of the study findings as per
the study objectives, draws conclusions and make recommendations for future research.
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CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0 Introduction This chapter explains the work of others who carried out similar research in the past, it identifies
and highlights the important variables and document the significant findings from earlier
research that served as the foundation on which the theoretical framework for the current
investigation is built. It aims at reviewing written theories that are related to the topic.
2.1 Theoretical Literature The literature review covers the review of past studies on the concepts related to strategic
management streaming from the basic definitions and terms used in the field of strategic
management. It also identifies the gap in the existing literature consulted. The literature review
ends with the summary of key issues raised.
2.1.1 Concepts of strategic planning Strategic planning cannot be defined in isolation, separate from other strategic concepts.
Strategy, strategic management, strategic planning, and to a lesser extent comprehensive
planning, are terms that are used often in research but without much attention to their explicit
definitions. Halachmi (1987) pointed out that we have a serious semantics problem when it
comes to these terms. Strategy, strategic management, and strategic planning are not identical
ideas.
However, they are closely related and the lines that would explicitly define each term have the
tendency to be blurred, particularly between strategic planning and strategic management. These
unclear definitions have meant that some researchers use strategic planning when other
researchers would define their application as strategic management. Thus, this section begins by
clearly defining strategy, strategic management and strategic planning, as well as demonstrating
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how the concepts are related. Strategy is a broad term used in public sector research to define
how organizations relate to their environment and progress purposely into the future by
improving services and performance (Boyne & Walker 2010).
Wechsler and Backoff (1987) define strategy from two perspectives: process and content.
Process strategy refers to the tools, as well as analyses, used by public managers to make
decisions about the direction of the organization. These tools include a wide range of concepts
that help managers plan for the future, such as comprehensive planning and strategy formulation.
Recent process strategy tools include strategic planning, human resource management strategies,
performance management strategies, and the various budgeting strategies of public
organizations. Content refers to the long-term orientation of an organization to internal and
external influences.
Several typologies of strategy content in public organizations exist in public sector research
(Stevens and McGowan, 1983; Wechsler & Backoff, 1986; Rubin, 1988; Nutt & Backoff, 1995;
Osborne & Plastrik, 1997). A more recent typology by Boyne and Walker (2004) relies on
private sector research on strategic stance (Miles and Snow 1978) and strategic actions (Porter
1980) to characterize how public organizations strategize. Strategic stance refers to an
organization’s enduring relationship with their environment. The strategic stance of public
organizations can be characterized as prospector, defender, or reactor. Prospectors are
entrepreneurial organizations that tend to try new approaches and management strategies before
other organizations.
Defenders are more interested in maintaining core operations. Reactors strategize when they are
forced to by their environment. Strategic actions, which are similar to the balanced scorecard
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approach, includes: markets, service, financial viability internal management, and external
relationships (Boyne and Walker 2004).
As described above, strategic planning is one part of an organization‘s management effort and is
seen by some as the principal part of that effort (Poister et al.2010). Bryson and Roering (1988)
define strategic planning as “a disciplined effort to produce fundamental decisions and actions
that define what an organization (or other entity) is, what it does, and how it does it. The
strategic planning process helps to unify the organization around a common mission, goals, and
objectives based upon appropriate internal and external analyses.
Figure 2.1 demonstrates the relationship between strategy, strategic management, and strategic
planning. Strategy encompasses the processes and content of an organization. Strategic
management integrates the tools that an organization uses to pursue their process strategies,
including strategic planning.
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Figure 2. 1 Strategy Framework
Source: Roering (1988)
2.1.2 Strategic Management Strategic management is defined by Bryson and al. (2010) as “the appropriate and reasonable
integration of strategic planning and implementation across an organization (or other entity) in
an ongoing way to enhance the fulfillment of its mission, meeting of mandates, continuous
learning, and sustained creation of public value” (495). Strategic management is a way for
organizations to be forward-looking so that they can strengthen their position in their
environment, both internally and externally (Poister & Streib, 1999).
Strategic management and strategic planning are often used interchangeably; but they are not
identical concepts (Poister 2003). Current research tends to see strategic planning as the
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cornerstone in the overall strategic management process (Poister et al., 2010). However, this
relationship was not so evident in earlier studies. Eadie and Steinbacher (1985) wrote that it was
hard to define how strategic planning fit into strategic management because it was not initially
clear what strategic planning involved. They wrote that “strategic management is not so much
the outcome of the evolution of strategic planning as it is a reaction to an early preoccupation of
the field with analytical techniques for strategy formulation.
According to Vinzant and Vinzant (1996a), strategic planning is but one part of strategic
management. The other two components are resource allocation and evaluation and control.
Resource allocation includes not only budgeting tools but also tools for human resource
management. The control and evaluation component of strategic management ensures that the
goals laid out in strategic planning are met, often incorporating performance management. This
is the identification of indicators and measurement of those indicators, which helps organizations
determine whether they are successfully progressing towards their stated goals. Strategic
management requires the integration of all of these components (Vinzant and Vinzant 1996b).
In the terms of Wechsler and Backoff (1987), strategic management is the integration of process
strategy tools: strategic planning, tools for resource allocation, and tools for control and
evaluation.
2.1.3 Strategic Planning in Public Organizations The roots of strategic planning are planted firmly in private sector research (Bryson 1981,
Eadie1983, Bryson and Roering 1987, and Gibson 1993). Gibson (1993) noted that there are
several similarities between strategic planning in the private and public sectors. Strategic
planning requires support from management, internal communication, and understanding of an
organization’s history and future regardless of the organization’s type.
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However, researchers were quick to point out that these early methods should take into account
the differences between private and public organizations (Eadie & Steinbacher, 1985; Ring &
Perry, 1985; Nutt & Backoff 1992). These differences include three different types of factors:
environmental, transactional, and organizational processes (Nutt & Backoff, 1992).
Environmental factors include what guides decision making, constraints or mandates, and the
political influence found in public organizations. The coerciveness or choice of citizen customer
to consume services, broad societal impact, public scrutiny, and a large variety of stakeholders
are considered transactional factors. Organizational factors include ambiguous goals, authority
limits, vague but high performance expectations, and a different set of incentives to work (Nutt
& Backoff, 1992).
Ring and Perry (1985) advised early adopting public organizations that when adopting private
sector practices, such as strategic planning, they should maintain flexibility to account for the
issues that might arise due to sectorial differences. With the current level of attention given to
strategic planning in the public sector, public organizations can build off models of strategic
planning built for the public realm and no longer solely rely upon private sector practices.
In early research, strategic planning was often contrasted with traditional planning in the public
sector, comprehensive or long range planning (Denhardt, 1985; Eadie & Steinbacher, 1985;
Bryson & Einsweiler, 1987; Bryson & Roering, 1987).
The major expansions of strategic planning were attention to actions that would help
organizations reach their listed goals, more attention to all possible stakeholders, and
environmental analyses. However, the most important distinction between the traditional
planning and strategic planning is that traditional planning was based upon certain, narrow
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functions in municipal government, like transportation or education, or upon land use planning
(Bryson & Einsweiler, 1987). Strategic planning, on the other hand, is typically done at the
organizational level, paying more attention to the complexity of the whole organization and
coordinating people at various levels (Denhardt 1985).
2.1.4 Benefits of Strategic Planning Many proponents of strategic planning point to the benefits for organizations. Proponents claim
that strategic planning has the potential to improve management, decision-making, stakeholder
involvement in public organizations, and performance. As far as helping improve internal
management, strategic planning can help unify various parts of an organization through better
communication (Denhardt, 1985; Berry & Wechsler, 1995; Boyne 2001) and an enhanced ability
to respond to the organization’s environment, in terms of responding to crisis or to take
advantage of new opportunities (Bryson, 1981; Denhard, 1985, Bryson & Einsweiler, 1987;
Boyne, 2001; Bryson 2004).
Strategic planning can also help public organizations make better decisions due to a clearer
direction (Denhardt, 1985) and a unified vision (Pindur, 1992). Improved decision-making
applies to better choices regarding the budget, policies, programs, and goals (Denhardt, 1985).
The strategic planning process can help to bring various stakeholders together, including citizens
business leaders, employees of the city, and politicians (Berry & Wechsler, 1995).Because
strategic planning can increase the communication between stakeholders and educate external
stakeholders about the goals and purposes of a public organization (Pindur, 1992), strategic
planning can facilitate consensus building between all stakeholders with an interest in the
organization (Pindur, 1992 & Gibson, 1993).
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Finally, strategic planning can lead to the accomplishment of stated objectives and improved
performance and efficiency (Pindur, 1992 & Bryson, 2004).
2.1.5 Barriers to Strategic Planning However, as with all management strategies, there are barriers to implementing strategic
planning efficiently and costs that can potentially outweigh any benefits gained (Eadie &
Steinbacher, 1985). Strategic planning requires some complex techniques in complex
environments and the techniques from the private sector are not always readily applicable in the
public sector. Strategic planning also requires more resources, in terms of time, money, and
people, than public organizations typically have to invest. Resources are needed for analysis,
meetings, administration of the planning effort, and, later in the process, for writing report and
disseminating results. These costs often lead researchers to conclude that strategic planning is not
worth the investment of the resources required in public sector organizations.
Boyne (2001) summarizes the arguments against planning. First, the advice of planning
researchers is too difficult to actually accomplish in real organizations because data for analysis
are often difficult to obtain and even more difficult to analyze. Politically, planning is also
difficult, because of the short attention spans of elected officials on the strategic issues. What is
important one day may very well be of little importance the next day? Second, the author points
to research in the private sector that says strategic planning can have a negative impact on
performance because planning becomes more of a burden on organizations than a benefit (for
example see Mintzberg, 1994). Essentially, organizations feel as if they are spending more time
planning rather than actually accomplishing anything. Furthermore, strategic planning can create
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uncertainty and conflict that can potentially destabilize rather than unify an organization
(Mintzberg1994).
2.1.6 The Process of Strategic Planning A well-thought out and comprehensive process for strategic planning could potentially overcome
some of these barriers. Denhardt (1985) writes that “strategic planning produces both a plan and
a process” This may, at first glance, seem like a simple statement. Nevertheless, it is important to
note that many organizations get as much, if not more, benefit from going through the strategic
planning process than the implementation of the plan. According to Bryson and Bromiley
(1993), managers often find more value in the process of planning than in the plan the process
produces.
In Wheeland’s 2004 book about the experience of Rock Hill, South Carolina with strategic
planning, the author lists the specific benefits that the city gained from their ongoing strategic
planning initiative. First, Rock Hill was able to manage the uncertainty all localities face because
of improved decision-making. Rock Hill was also able to sustain citizen participation and
engaged in consensus building throughout the process that resulted in effectively resolving
conflicts. The city capitalized on the interdependent nature of local governments by building a
network through the strategic planning process.
The process also helped to bring stakeholders from around the community together in a way that
will have lasting benefits for the community beyond a cohesive strategic plan. Public
organizations cannot expect to gain any of the benefits achieved by RockHill without investing
in a quality strategic planning process. Rock Hill’s strategic planning process is an example for
how a well-thought out process can produce desired benefits. Rock Hill’s process was ongoing
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for ten years and required much time out of many participants, including both paid workers and
citizen participants. A comprehensive process brings people together and gives public
organizations the chance to take a long, hard look at themselves and their environments
(Denhardt, 1985 & Pindur, 1992). Without the proper investment of resources and time, the
benefits of strategic planning will not likely be gained (Bryson, 2004).
A handful of researchers have offered advice concerning specific components for the strategic
planning process in public organizations (Nutt & Backoff, 1992). Many of them have the same
components in a similar order, with some variation. However, Bryson (2004), as well as many
other researchers, states explicitly that the combination of his proposed steps are only a generic
model and any use of them must take the particular characteristics and environment of the
individual organization into account. There is clearly not a one-size-fits-all approach to strategic
planning (Bryson & Roering, 1987). This is best articulated by Eadie (1983), who wrote, “Tailor
the application tothine own organization, with its unique conditions and needs”.
2.1.7 Performance in Public Organizations Over the past few decades, public management literature has focused very heavily on
organizational performance. Ingraham (2005) noted in a speech at the national conference for the
American Society for Public Administration that “performance, at its heart is about governance
and accountability” (391). Measuring performance helps public managers manage more
efficiently and provide public services more effectively.
Performance measures are “periodic measurement in order to permit tracking of problems,
progress, and trends” (Hatry et al. 1977). In a public organization, these measures should be
derived from the stated missions, goals, and objectives of the organization (Poister, 2003).
Performance measurement is defined by Poister as the process of defining observing, and using
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such measures” (2003). The system that combines gathering data for performance measures and
monitoring progress is called performance management (VanDooren et al., 2010).
The topic of performance in public organizations is an ongoing research topic for many public
sector researchers. This continued interest in the subject of performance is largely due to recent
efforts in the public sector to remake public sector organizations more in the image of private
sector firms.
Reinvention efforts like the New Public Management have generated an intense focus upon
measuring performance. Bouckaert wrote a detailed history of performance measure utilization
in the public sector in 1990 (also see Williams, 2003). This article points to a very long history of
using measures in the public sector, beginning in the early 1900s because of the desire for a more
efficient government. From the 1940s until the 1970s, public organizations were particularly
interested in performance measures as a way to help keep costs down. In the 1970s, cost control
efforts were replaced with the call to be efficient with taxpayer dollars. In the1980s and 1990s,
the movements were toward reinventing government to ensure maximum efficiency and
effectiveness. Therefore, performance measures have been utilized throughout the twentieth
century but for different purposes.
Today, the push for more performance measurement is still present in the public sector due to the
prescriptions laid out by New Public Management proponents and Osborne and Gaebler’s
Reinventing Government(1993) (see also Williams 2000, Poister2003, and Ingraham 2005). As
pointed out by Williams (2000), performance measurement was not a new idea in the public
sector as part of the reinvention movement. However, the intensity of the calls for performance
measurement and the reasoning for implementing performance management did change. This
18
attitude is reflected in a line quoted often from Osborne and Gaelber (1993), “What gets
measured gets done” (146). Not all public sector researchers have been comfortable with this
focus on performance, though (see Behn, 2002). Recent research has pointed to the benefits of
performance measurement for public organizations, on the condition that measures are used
appropriately (Noordegraaf & Abma, 2003) and its limitations in the public sector, such as
ambiguous goals, costs, and reputational fears, are acknowledged (Ammons, 1995; Behn, 2002;
Bouckaert & Peter 2002; Brewer, 2006; Van Dooren et al., 2010).
The nature of performance in the public sector is complex because of ambiguous goals and
objectives that are difficult to measure (Chun &Rainey, 2005). Furthermore, administrators may
attempt to focus upon objectives that are measurable while paying less attention to the overall,
complex goals that are common in public organizations (Bohte &Meier, 2003).
Poister (2002) suggests several types of performance measures that public organizations should
focus upon: output, efficiency, productivity, service quality, outcome, cost-effectiveness, and
customer satisfaction (Poister, 2003). Output measures, also called workload measures, gauge
the amount of direct products, or units of services produced as part of a program. Efficiency
measures are typically ratios of output measures per the cost spent to produce the output.
Likewise, productivity measures are typically ratios of output measures per the resources, like
staff, to produce the output.
Service quality measures relate to the quality of the service produce and stands in contrast with
output measures that indicate the quantity of products. Effectiveness measures are indicators
directly related to the mission of the program and cost-effectiveness measures are ratios of
effectiveness measures per the cost to produce them. Customer satisfaction measures are similar
19
to service quality measures but are from the standpoint of the citizen consuming the service.
These measures are obtained from existing program document, surveys of employees or
customers, self-assessments, technical measurements, or measurements made by external
observers (Van Dooren et al., 2010).
Measures can be either objective or subjective. Objective measures have been treated as the gold
standard in evaluation and more desirable of the two because they supposedly minimize the
discretion of individuals. These measures are meant to represent an impartial view of the
organization’s progress (Andrews et al., 2006). For example, Meier and O’Toole often use
student exam scores to measure the performance of Texas school districts (for example, see
O’Toole and Meier 2004).Subjective scores, on the other hand, are judgments made internally or
externally about the performance (Andrews et al., 2006). Because of the potential of subjective
measures for partiality, most researchers seek objective measures instead.
However, some argue that objective measures are just as prone to bias as subjective measures
(Brewer 2006) and subjective measures can be just as useful in relating performance (Andrews et
al., 2006; Brewer, 2006; Shingler et al., 2008; Brewer & Walker, 2010).Perception of how
public organizations are doing is more important to most citizens than how they are actually
doing, which should not be ignored by evaluators of public services (Brown & Coulter, 1983).
There are many reasons that public organizations decide to measure performance, including
evaluation, strategic planning, budgeting, monitoring progress of processes and quality of
outputs, improve performance, accountability to stakeholders, and benchmarking (Altman, 1979;
Hatry 2002; Behn, 2003; Poister, 2003; Ingraham, 2005; VanDooren et al., 2010).
20
Public sector research often utilizes performance measures, as well, to determine whether
management styles and strategies have a positive impact on the government (see O’Toole &
Meier, 1999). This pursuit is often complicated for researchers for the same reasons that public
organizations have difficulty measuring performance. Furthermore, public organizations rarely
have a unified manner of measuring performance. This makes comparison across similar
organizations very difficult to accomplish.
2.1.8 Linkage of Strategic Planning with Performance
It may appear that making profit which is the obvious intention of any commercial enterprise is
enough. A survey conducted on a number of Chief Executive Officers (CEO"s) in America
however, showed that they did not place “strong and consistent profit" as their top priority, in
fact it was ranked fifth (Hitt et. al., 2003). Instead they regarded a strong and well thought-out
strategy as the most important factor to make a firm promising in the future. Indeed, Thomas J
Watson Jr. formerly IBM chairman is quoted as having once cautioned people to remember that
“corporations are expendable and that success at best is an impermanent achievement which can
always slip out of hand” ( ibid p.9).
For example, Levi Strauss, a once successful company with a global brand and good financial
performance suffered setbacks in the 1990s and began its first lay-offs in 1997 as a result of
mistakes and ineffective strategy. This was exploited by Gap and Tommy Hilfiger its closest
rivals. Xerox, a name synonymous with photocopying in the 1970s and 80s also lost out to its
competitors for lack of focus and foresight (Business Week, 2001).
Achieving acceptable financial results is crucial because without adequate profitability and
financial strength, a company's pursuit of strategic vision, long term health and ultimate survival
21
is jeopardized. Shareholders, potential investors and lenders will hesitate to advance more
money. However, it is as important to note that good financial performance alone is not enough
in itself.
Thompson et al (2004) therefore, recommend two very distinct performance yardsticks; one
relating to performance and the other relating to strategic performance. The former looks at
performance indicators like sales revenue and profitability whereas the latter includes output
growth, technical progress, efficiency, shareholder value added, economic value added and
human resource capital etc.
The company's performance in terms of its strategic well-being, its competitiveness and market
position is crucial and unless its performance in the market place reflects improving competitive
strength and market penetration, its progress is not inspiring and its ability to continue posting
good financial performance is in doubt. A firm’s financial performance measures are Jagging
indicators" that reflect the result of the past decisions and organizational activities. Its „lead
indicators" are future financial performance expectations to achieve competitiveness and strength
in the market place (Thompson et al, 2004).
2.2 Empirical literature
Many researchers have attempted to conduct research on strategic planning and financial
performance of Telecommunication sector. Here we are reviewing some of them; (Ansoff et al.,
2001; Herold, 2001; Karger & Malik, 2000; Thune and House, 1999) have indicated that
strategic planning results in superior financial performance, measured in terms of generally
accepted inanciall measures (e.g., sales, net income, ROI, ROE, ROS). Subsequent studies
(Armstrong, 1999; Greenley, 1996; Mintzberg, 1990; Shrader et al., 1984; Akinyele, 2007) have
22
contradicted the notion of a strategic planning-superior performance relationship. 1960s (Hemy,
1999).
Although the studies employed diverse methodologies and measures, they shared a corn non
interest in exploring the financial performance consequences of the basic tools, techniques and
activities of formal strategic planning, i.e., systematic intelligence-gathering, market research,
SWOT analysis, portfolio analysis, mathematical and computer modeling, formal planning
meetings and written long-range plans.
With respect to firms in the banking industry, many have diversified into new markets in recent
years. This has resulted in increased pressure for banks to offer new and better services to their
customers, which has required them to become more focused on their market niche as well as
their financial policies. Moreover, bank managers are focusing more intensively on their bank's
external and internal environments, placing greater emphasis on setting direction (i.e.,
articulating a vision and a mission) and evaluating strategy alternatives more carefully (Hector,
1991; Robinson, 1994; Shepherd, 1997; Steiner, 1997; Thompson & Strickland, 1997;
Armstrong, 1995).
These activities correspond precisely with the strategic planning process components (i.e.,
formulating, implementing and controlling strategy). The fact that bank managers are becoming
more intensively engaged in these activities implies that they acknowledge (either consciously or
unconsciously) a relationship between strategic planning intensity and improved financial
performance (Hunger, 1990; Johuson, 2002; Kallman & Shapiro, 1998; McCarthy, 1997; Paley,
2004; Porter, 1989). Indeed a recent study tested this relationship and found that banks that
planned with greater intensity, regardless of whether their strategic planning process was formal
23
or informal, outperformed those banks that planned with less intensity (Hopkins and Hopkins,
1994).
Strategic planning is a step by step process with objectives and end-products that can be
evaluated. Performance is the end result of activities while strategic planning aims to improve
the quality of these results. It can be measured by quantitative methods (net or gross profit, return
on investment, equity or capital, return on equity employed, etc) or qualitative methods
(absenteeism levels, job satisfaction, industrial relations, team work, best management practices,
Corporate Social Responsibility, new product development, operational sufficiency, employee
and stakeholder satisfaction, among others) according to (Foster, 1993).
Performance on the other hand is the heart of every organization. Researchers and analysts have
over the past decades investigated the influence of strategic planning on organizational
performance but up to date the correlation between strategy and firm performance is an on
ongoing debate (Bolo, Muturia & Oeba, 2000). Whereas some authors argue that there is quite
minimal (if any) correlation between strategic planning and high firm performance, others argue
that firms with well-conceived and excellently executed strategic plans have high probability of
high performance (Ansoff, 1990). For instance, Mazzarol (2009), reports that some twelve
research papers from 1950s to the early 1980’s indicated that planning was positively correlated
with better performance. Indeed, planning-performance findings are inconsistent and
inconclusive.
Researchers suggest that strategic planning positively influences firm performance and that
measurement methods and contingency factors are primarily responsible for the inconsistencies
reported in literature. For instance, Armstrong (1982), argues that without a proper description of
24
the planning techniques, it’s not possible to assess value of planning in a scientific manner.
Pearce, Freeman and Robinson (1987), also assert that methodologies can limit impact on the
researcher’s ability to understand the effect of strategic planning on performance. Strategic
planning viewed as systematized, step by step, chronological procedures to develop or coordinate
an organizational strategy leads to the concept of formality in strategic planning (Johnson et al,
2008).
Formality is the extent to which a strategy is deliberate, documented, communicated and the time
spend on planning as well as the degree of involvement of participants and specification of the
process, resources and responsibilities (Gode, 2009). Generally, greater formality in strategic
planning positively correlates to high firm performance. Although Wheelen and Hunger (2008)
cautions that some studies have found out that too much formalization of the strategic planning
process may actually result in reduced performance. Ansoff (1990) notes that deliberate and
systematic preplanning of acquisition of strategy produces significantly better financial
performance than unplanned opportunistic, adaptive approach. Sababu (2007), echoes the same
views that, formal strategic management systems significantly influences organizational
performance.
Similarly, Ayieko (2009), reports a meta-analysis of 21 studies including 29 samples and 2,496
organizations done by Boyd (1971), who concluded that there were modest positive correlations
between strategic planning and financial performance. On the other hand, other authors argue
that it would be naïve to conclude that formal planning is the sole cause of success in firms
because firms may be using other management practices such as organization design, good
human resource practice, or corporate culture to steer high performance (Nzuve, 2007, Robin &
Coulter, 2012; Hatch & Cunliffe, 2006). In the same vein, others such as Robinson and Pearce
25
(1993), have argued for and against the concept that formal strategic planning is suited solely for
large firms and that it improves performance in both large and small firms (Gode, 2009). Small
firms do not focus on market positioning and competitive advantage but the entrepreneur
engages in creative ways of generating resources and sales in an unplanned and purely
guesswork manner. Indeed, s/he is the executer of the process and due to lack of formal
structures to undertake the corrective adjustments formally; strategy changes assuming an
experimental approach, (Carter et al, 2006).
In spite of this, Foster (1993), asserts that although strategy making and planning in small firms
is opportunistic and informal, strategic management process is significant in both small and large
enterprises. This is largely true if planning can be thought of as the reflective activity that
precedes the making of decisions. As such general recommendation is that strategic planning
should be practiced in all firms regardless of size since it reduces focus on operational details and
promotes strategic thinking, (Bruce & Longdon, 2000). Ideally strategy must be conceived
informally (strategic thinking) before it’s programmed formally (strategic analysis). However
there are dangers in formality of a strategy.
Johnson et al (2007), asserts Henry Mintzberg’s concern that formal systems of strategic
planning can lead to misunderstanding the purposes of planning, problems in the design and put
into effect of strategic planning systems and the strategic planning system may fail to gain
ownership of the strategy. Elaborate formality in strategy planning could lead to loss of
innovativeness and authenticity as well as inflexible and time consuming plans being equated to
strategy. Of essence therefore, is the fact that there is an inherent knowledge gap in the
relationship between strategic planning and firm performance. This is the basis on which this
26
study is designed; to establish whether practice of strategic planning in public institutions
influences performance.
2.3. Critical review and Research Gap Identification According to Kotler (1991) Strategic planning is a managerial process of developing and
maintaining a viable fit between an organization’s objectives and its changing market
opportunities. Strategic planning also deals with making long-term decisions that enable
organizations to respond to changing environments.
Several researchers have attempted to understand these contradictory findings. Armstrong (1982)
published one of the first such papers. His analysis of 14 studies generally supported the
hypothesis that formal planning was useful but, noted that there were “serious research
problems” with the studies. He was very much concerned with the lack of description or
definition of the strategic planning process provided to the study subjects. He concluded that
“without a description of the planning techniques, it is not possible to assess the value of
planning in a scientific manner”.
Pearce, Freeman, and Robinson (1987) also concluded that the evidence that formal strategic
planning enhances a firm’s financial performance is “inconsistent and often contradictory.” They
had concerns about the methodology’s limiting impact on the researchers’ ability to understand
the effect of strategic planning on performance. Their conclusions were based on a review of the
results of 18 papers which examined the relationship between formal strategic planning, using a
definition similar to Armstrong (1982) for strategic planning, and organizational performance.
They were concerned about the “lack of consistent definition” of strategic planning, how the
strategic planning construct was “measured”, and the “impact of corporate context” and the
27
factor of business size. Venkatraman and Grant (1986) noted that there is no widely accepted
definition of strategy and that the inability to measure the strategic planning construct has
hindered research attempting to identify substantive relationships between independent and
dependent variables.
Boyd (1991), based on the results of his meta-analysis of 21 studies published between 1970 and
1988, including 29 samples and 2,496 organizations, concluded that there were modest positive
correlations between strategic planning and financial performance. However, he was concerned
with the significant measurement errors in these studies and concluded that this most probably
resulted in an underestimate of the true strategic planning–performance relationship. However,
one significant work, Miller and Cardinal (1994), seemed to put the issue to rest: they concluded
that “Planning was found to be strongly and positively related to growth in studies in which
industry effects were controlled, an informant source of performance data was used, planning
was defined as not requiring written documentation and the quality of the assessment strategy
was high”. (Miller & Cardinal, 1994, 1660).
A study by Sarason and Tegarden (2003) focused on the configuration theory and firm’s resource
based view to understand the relationship between strategic planning and the firm’s performance.
Their findings also provide partial support for a positive relationship between strategic planning
and performance. However, they concluded that this relationship is moderated by organizational
stage of development and that it is beneficial to early stage firms.
The underlying premise for these conclusions are based on the development competitive
advantages provided by the structure and the future thinking incorporated into the strategic
process and the nun-sustainability and erosion of these advantages in late stage firms, whose
28
processes are more prone to imitation. This research tends to study strategic planning in
improving performance in local government as it is a new area of research and previous
researchers did not give it a special focus.
2.4 Theoretical Framework
As improving performance is the main goal of all institutions, be it public or private,
management theorists have made much effort to pursue this goal. Scientific management (also
called Taylorism) is a management theory that rationalizes and standardizes production
techniques, with the objective of improving efficiency and productivity (Sheldrake 1996). This
theory was developed by Frederick Winslow Taylor and published in The Principles of Scientific
Management. He formalized the relationships between workers and their jobs, and redesigned
the work process. Taylorism theory is widely adopted and forms the core of organizations. This
section first outlines the principles of Taylorism and then critically assesses how they have
influenced the management of modern organizations.
Being an industrial engineer interested in practical outcomes, Frederick Taylor observed workers
and measured what they did in a time-and-motion study (Ellis, 2000). By conducting this study,
Taylor discovered that much resource was wasted and a one-best way in performing the task
should be found in a scientific analysis. After this observation, Taylor proposed four principles to
determine optimal production methods: Replace rules-of-thumb with methods based on a
scientific study of the tasks; Cooperate with the workers to ensure that the scientifically
developed methods are being followed; Scientifically select, train, and develop each worker
rather than passively leaving them to train themselves; and An acceptable level of performance
and a reward system for a task should be established to motivate people.
29
Although Taylor's pay system is useful to some extent, it is only practical when the goals of both
sides are the same: profitability. If their goals are contradictory, employees will prefer working
for their own interest to companies' goals. Therefore, it is important for managers to strike a
balance between pay motivation, product quality and the companies' goals. To achieve this,
managers, on one hand, should "track employees' behavior and employees' attitude regularly"
(Rynes, 2004) to ensure workers' effort are in line with organizations' objectives. This assists
managers to implement appropriate pay systems. On the other hand, managers can use other
intrinsic motivators, such as self actualization and responsibilities to offset the disadvantages of
pay motivation and improve workers' satisfaction.
To conclude, Taylorism is still one of the classic theories that can be applied to management of
local government. It proposes scientific analysis of tasks, the separation of conception from
execution, the scientific selection and training of workers and the provision of an incentive-pay
scheme. These ideas have been widely adopted; from the business sector to the public service
sector as they boost efficiency and performance in both sectors. Although critics argue that
Taylorism is in decline due to its drawbacks, such as inflexibility, labor resistance and de-
humanization of working conditions, Taylorism still sets the norm for how organizations are
managed. However, it is now modified, updated and usually combined with other management
methods, such as Human Relations Movement, to offset its shortcomings.
30
2.5 Conceptual Framework Independent Variable Dependent Variable
Intervening Variables
Moderating Variables
Source: Compiled by the Researcher
Figure 2.2 Conceptual Framework
According to Figure2.2, it can be learnt that strategic planning as independent variable facilitates
the performance of local government, for instance, in this period of tight public budget, it is of
critical importance for local government to achieve their goals in the most effective, efficient and
economical way. This can only be achieved by setting;
First, a Mission statement which explains why the organization exists and its overall purpose.
The mission statement states what the organization does right now, in the most general sense. In
this way, the mission also sets parameters for what the organization, through omission, does not
STRATEGIC PLANNING
1. Mission
2. Planning
3. System
4. Leadership
5. Performance
PERFORMANCE
1. Labour productivity
2. Service quality
3. Financial performance
4. Service innovation
5. Customer satisfaction
1. Gender
2. Age
31
do and this finally gives a proper direction in the utilization of public resources in conformity
with the laid down priorities.
Second, Setting goals are a key component in effective strategic planning. Goals can be defined
as a written target of where your company wants to be within a specific time frame. Some goals
will take time to achieve, so it is important to measure your progress regularly.
Goal setting is crucial if you want to remain successful and competitive. The key to success in
setting goals for your organization is making sure they are attainable and measurable.
Third, it is important that your company have several key strategies in place for a positive
outcome. When you look at key strategies, you are measuring what approach will help you to
accomplish your goals.
And finally performing a Strategic evaluation or SWOT analysis that encompasses the internal
and external factors that affect the organizational business strategy. The business strategy is
compared against the industry's key success factors and competitive resource requirements and
the organizational internal capabilities and resources.
2.6 Summary Only a few academic studies have examined the role of strategic planning on the performance of
public entities and even in one of the very few studies have examined the effect of strategic
planning on firms’ financial performance.
For instance, Pearce, Freeman, and Robinson (1987) concluded that the evidence that formal
strategic planning enhances a firm’s financial performance is “inconsistent and often
contradictory.” They had concerns about the methodology’s limiting impact on the researchers’
ability to understand the effect of strategic planning on performance. Their conclusions were
based on a review of the results of a number of papers which examined the relationship between
32
formal strategic planning, using a definition similar to Armstrong (1982) for strategic planning,
and organizational performance.
Most of Researchers who searched on the same topic, took interest on semi-public institutions
and private firms. Mohammad Sihab, Ridwan, and John. Marti (2012), Talked about Strategic
Planning and Organizational Performance in the Regional Government Owned Banks in
Indonesia while Hossein Ghazanfari and Shakib Zohrevandi (2012), searched on the role of
strategic planning in transportation management to improve the performance of Transportation
Company. However, Jehad S. Aldehayyat (2011) wrote on Strategic Planning and Corporate
Performance Relationship in Small Business Firms. Other researchers like Enver Kutllovci, Ph.D
and Venet Shala, Ph.D went preferred to write on the role of strategic management on small
business growth.
All the researches carried out on strategic planning as listed but not limited to the above, did not
catch up the role of strategic planning on the performance of public entities and especially local
government entities. Therefore, helping to bridge this gap will be one of the main contributions
of this study
33
CHAPTER THREE: RESEARCH METHODOLOGY
3.0. Introduction
This chapter narrates the methodology and procedures that were used in research study. William
and Grinnell (1990), defined methodology as a set of principles and procedures that are used in
the data collection, data analysis and interpretation, when conducting a research study on a
particular subject or doing particular kind of work. This chapter provides descriptions of the
research study, research design, the sample design, source of data, simple size, sampling design,
and procedures, data collection methods data processing techniques, data analysis and
interpretation and how the research questions were answered.
3.1. Research Design
A research design is a framework that guides a researcher in studying a research problem
(Mugenda, 1999). It guides a researcher to know what to do in the whole research process. The
researcher used descriptive research design to determine the influence of strategic management
on performance of local government in Rwanda.
3.2. Target Population The target population in this study is in four categories; the executive committee, district council
members, middle managers and other staff in the district of Nyanza
34
Table 3. 1Targeted population
District staff Position Number
Executive committee members 3
District council members 5
Sector executives 84
Others staff 173
Total 265
Source: Organizational structure of Nyanza District
3.3. Sample size and design 3.3.1 Sampling size Ordho (2004), defines a sample as a representative of a population. By studying a sample one
can learn about the population without having to study the whole population. This sample size
was determined from population of 26 5Persons working or benefiting from Nyanza District
using the Slovin’s formula at a confidence interval of 95% and margin of error of 5% or 0.05.
Sample size for students.
Given: e (marginal error) =5%=0.05, n (sample size), N (Total population),
=160.12 approximately 160 people
Therefore from solvin’s formula, 160 people was the most appropriate sample size.
35
Table 3. 2 Sample size
District staff Position Population Sample size % of Population
Executive committee members 3 3 100
District council members 5 5 100
Sector executives 84 49 58.3
Others 173 103 60
Total 265 160 60.4
Source: Researcher, 2014
3.3.2 Sampling Techniques
The identified respondents were sampled by first listing all the members in the target population
and them different inclusion and exclusion techniques employed. The sample was stratified as
indicated in Table 3.2 and then randomly sampled so as to obtain the 160.
3.4 Data collection Methods The data collection methods illustrates the various methods that the study used in putting the data
together that then was used for analysis.
3.4.1 Data collection instruments
The research instrument for this study was a self-structured questionnaire, for all respondents.
Self-structured questionnaire
The study used a self-structured questionnaire to collect data from the respondents. The
questionnaire had both close and open ended questions. The questionnaire utilized the use of a 5
(five) point Likert scale. The five point scale requires that the respondents indicate the selected
option for a given statement from strongly disagree to strongly agree and the interval between
each point on the scale was assumed to be equal. The scaling was composed of the following.
36
1-Strongly Disagree, 2- Disagree, 3-Neutral 4-Agree, 5- Strongly Agree.
Table 3.3 illustrates the interpretation scale used and the ranges that was used in interpreting the
means of the findings.
Table 3. 3Interpretation scale
Weight scale Likert scale
5 Strongly Agree (SA)
4 Agree (A)
3 Neutral (N)
2 Disagree (D)
1 Strongly Disagree (S D)
Source: Hairt et al., (2010)
3.4.2 Administration of Data Collection Instruments
After testing the validity and reliability of the instrument, authorization letters was requested
from the director of graduate studies, Mount Kenya University and from the various schools
under study, so as to enable and give a conducive environment for data collection.
3.4.3 Reliability of Research Instrument
Reliability refers to random error in measurement. Reliability indicates the accuracy or precision
of the measuring instrument (Norland, 1990).
The researcher used the test-retest reliability technique where a pilot test of two questionnaires
were given to two senior managers from the district executive committee so as to examine the
appropriateness of responses given by respondents before applying the questionnaire to the entire
population. This enabled the researcher to address any errors or irregularities that could appear
during the research exercise.
37
Validity of research instrument
Mugenda and Mugenda (1999) define validity of results as a degree to which results obtained
from the analysis actually represent the variables of study. Thus, validity refers to whether the
findings accurately reflect the situation and are supported by evidence. Validity is established by
correlating the scores with a similar instrument.
The researcher used the content validity technique whereby items on the questionnaire relates to
the construct being measured and gathered data from respondents who actually work in the
planning department.
3.5. Data Analysis The primary and secondary information gathered from questionnaires and documentary reviews
were presented in tables and figures while interpretation and analysis was done using
percentages and frequencies of respondents’ views. This careful analysis of the study was done
through various techniques which are editing and statistical method.
3.5.1 Editing
Editing is the process of examining errors and omissions in the collected data and making
necessary corrections. For the purpose of this research, editing was done both on the field to
ensure the completeness, consistency and readability of the data.
3.5.2 Statistical Method
The researcher used SPSS software to summarize and analyze data using descriptive statistics
such as tables, frequencies and percentages which enabled the researcher to describe
meaningfully the distribution of scores and measurements.
38
3.6 Ethical Consideration At the beginning of data collection, the researcher sought permission from the office of the
Mayor at Nyanza District and requested authorization for the research to proceed in the District.
In addition, the researcher sought permission from the selected respondents to collect the
relevant data. Each questionnaire had an opening introductory letter requesting for the
respondents cooperation in providing the required information for the study. The respondents
were assured of confidentiality of the information they provided and they were made aware that
the study findings would be used for academic purposes only.
39
CHAPTER FOUR: PRESENTATION OF FINDINGS
4.0 Introduction This chapter presents the findings of this study by first presenting the demographic
characteristics and then the findings.
4.1 Demographic Data The demographic characteristics included the gender and age of the respondents as presented in
Table 4.1.
Table 4. 1Gender and Age Group of Respondents
Detail Male Female Total Percentage 20-29 years 33 35 68 42.5% 30-39 years 28 21 49 30.63% 40-49 years 16 9 25 15.63% 50-59 years 10 8 18 11.26% 60 and above 0 0 0 0.00% Total 87(54.38%) 73(45.62%) 160(100.00%) Source: Primary data The composition of respondents’ gender as shown in Table 4.1 was found to be mainly males
which constituted 54.38% whiles females also represented 45.62%, this structure is due to the
fact that, the males were more willing to respond to the questionnaires than the females, hence
the females have a fair representation in the analysis. This is essential in order to have a combine
view of both male and female in the analysis.
Moreover, the age categories show that, the study is composed of mainly youth within the ages
of 20-29 which constitutes 42.5%,followed by those within 30-39 representing 30.63%, 40-49
years, 50-59 years and 60 and above also constitute 15.63%, 11.26% and 0.00% respectively.
There is evidence in literature that personal factors such as gender, age, education level among
others affect job relations and performance. In the study of Pala, Eker, and Melek(2008) the level
40
of commitment to organization varied by these factors and there was a positive statistically
significant relationship between the age of the respondents and their level of commitment in the
organization. Therefor given the youthful age and the male majority in this study, demographic
factors influenced the findings.
Figure 4. 1 Educational level of Respondents
Source: Primary data
Figure 4.1 shows the educational level of the respondents, 52 % of the respondents holds a
commercial/Technical certificate. This finding is consistent with the workforce statistics of
Rwanda, since the sector doesn’t require high caliber of working force to operate the activities. A
significant majority (25%) of the respondents have tertiary level education and 15% had
Bachelor degree while only 8% had other professional qualifications. This indicates that at the
sector level, selected positions are given to highly qualified professionals though the majority
have basic educational level.
41
4.2 Presentation of Findings A five point Likert scale was used for measurements, which assigns a weighted value to the
extent of agreement or disagreement for a factor as shown below
1— Strongly Disagree, 2 - Disagree, 3 — Uncertain/Neutral, 4 — Agree, 5 — Strongly Agree
4.2.1 Strategic Planning Dimensions (Operational Efficiency of strategic plans)
Mission
A mission is a statement of the purpose of a company or organization. The mission statement
guides the actions of the organization, spells out its overall goal, provides a path, and guides
decision-making. It provides "the framework or context within which the company's strategies
are formulated. The mission of Nyanza District is the general and long term value of what the
district wants to achieve, it comprises the primary business and services it wants to offer. Table
4.2 presents the findings under the Mission as a strategic planning activity.
Table 4. 2Mission as a strategic planning component
Nyanza district has a Agreement Uncertain Disagreement Mean
clearly articulated and agreed upon purpose 139 17 4 4.18
consensus on the primary activities 124 28 8 4.02
shared values and beliefs that guide the district and staff
127 33 4
clear and agreed upon vision of what to accomplish and what it will take to make the vision happen
120 40 4.01
Mission over all assessment 139 21 4.14
Source: Primary data
According to Table 4.2, 139 (87%) of the respondents were in agreement that Nyanza district
had a clearly articulated and agreed upon purpose, 17 (11%) were uncertain and only four (3%)
42
disagreed. On whether there was always a consensus on the primary activities or services of the
district, 124 (78%) of the respondents were in agreement, 28 (18%) uncertain and 8(5%)
disagreed. The mean (M) agreement was 4.02 implying agreement with the statement.
A total of 127 (79%) were in agreement, 33(21%) uncertain and a mean of 4 that Nyanza district
had a shared value and belief. The overwhelming agreement on whether the district had a clear
vision was supported by 41 (75%), and 79 (25%) agreement and uncertainty respectively.
The mission of Nyanza District had a higher scores of agreement (87%) mean for all factors
assessed of above 4.0 indicating a high acceptance of the mission by the staff and management.
shows the mission of Nyanza district is part of the strategic plan. Moreover, these outcomes
indicate that, the district has a clear articulated mission which thrives on consensus primary
business including shared values and beliefs of the district- a mandated for all employees to
fulfill.
4.2.2 Planning
Planning (also called forethought) is the process of thinking about and organizing the activities
required to achieve a desired goal. It involves the creation and maintenance of a plan. As such, it
is a fundamental property of intelligent behavior for Nyanza district. This thought process is
essential to the creation and refinement of a plan, or integration of it with other plans within the
organization; that is, it combines forecasting of developments with the preparation of scenarios
of how to react to them. Table 4.3 shows the response to the planning of activities in Nyanza
district.
43
Table 4. 3Planning as a strategic planning activity
Detail Agreement Uncertain Disagreement Mean
N N% N N% N N%
There are shared and explicit values and beliefs which serve as the foundation on which the organization and its members do their work
143 89% 17 11% 4.22
A three to five year strategic plan is in place. The plan is reviewed yearly and modified as needed to reflect trends in the environment, current and future client needs, and the bank's capacity to meet those needs
125 78% 31 19% 4 3% 4.02
There is an annual process to set program goals and budget
72 45% 85 53% 3 2% 3.59
There is a written annual operational plan that includes timelines and identification of who is responsible for which outcomes or activities
124 78% 35 22% 1 1% 4.01
There is an agreement on overall major strategies that the bank uses for the allocation of resources. (Strategies are priority responses that an organization will use to best accomplish its purpose)
132 83% 22 14% 6 4% 4
Over all Planning Mean 119 75% 36 24% 3 2% 4
Source: Primary data
According to Table 4.3, 143 (89%), 17(11%) and 4(3%) of the respondents were in agreement,
uncertain and disagreement respectively that there are shared and explicit values and beliefs
which serve as the foundation on which the organization and its members do their work. The
mean accorded this statement was 4.22 implying an agreement. Similarly, a total of 125 (78%)
were in agreement that a three to five year strategic plan is in place and is reviewed yearly and
44
modified as needed to reflect trends in the environment, current and future client needs, and the
district's capacity to meet those needs, 31(19%) were uncertain and 4(3%) in disagreement
though the mean (4.02) indicated an agreement.
The respondents were asked whether there is an annual process to set program goals and budget
in the district. A total of 72 (45%) were in agreement, 85 (53%) were not sure, and 3 (2%) were
in disagreement. The mean was 3.59 implying the majority were uncertain. The budget process is
not an activity that is done by everyone but rather by the budget department in most government
institutions, hence the high uncertainty observed. According to the table 4.3 above, 124 (78%) of
respondents were in agreement that the district has a written annual operational plan that includes
timelines and identification of who is responsible for which activity or outcomes. The same table
says that in a like manner, 132 (83%) agreed that there is an agreement on overall major
strategies that the District uses for the allocation of resources. (Strategies are priority responses
that an organization will use to best accomplish its purpose). The overall mean of the above table
4.3 shows that 119 (75%) agreement was accorded to the planning item of strategic planning in
the District with a mean of 4.0.
The decentralized governance policy adopted by Rwanda is to ensure political, economic, social,
managerial, administrative and technical empowerment of local populations to fight poverty by
participating in the planning and management of their development process(Ministry of Local
Government [MILOC], 2013). This fact therefore justifies the high agreement observed in this
study.
45
4.2.3 System
System of communication involves the use of electrical devices such as the telegraph, telephone,
and teleprinter, as well as the use of radio and microwave communications, fiber optics and their
associated electronics, plus the use of the orbiting satellites and the Internet to transfer
information to colleagues and to external stakeholders of an organization. Table 4.4 shows a
summary of the findings on system as a strategic planning.
Table 4. 4 System as a Strategic planning component
Agreement Uncertainty Disagreement Detail N N% N N% N N% Mean
Systems are networked, all staff members have email access and an intranet/web presence exists
73 46% 25 16% 62 39% 3.23
Sufficient training and support exist to facilitate staff use of information technology
41 26% 41 26% 78 49% 3.01
The district uses computers, email and electronic media to streamline communication
121 76% 39 24% 3.98
There is uniformity in operating standards for products and services
143 89% 13 8% 4 3% 4.17
There are internal control systems in place to shield the district from mismanagement
144 90% 16 10% 4.38
A budgeting process is in place that ensures the effective allocation of resources
61 38% 99 62% 3.53
System: Overall assessment 116 73% 42 26% 16 10% 3.814
Source: Primary data
Table 4.4 shows that 73(46%) of the respondents were in agreement that systems in the district
are networked with all staff members having email access and intranet/web, 25 (16%) were
uncertain, and 62 (39%) were in disagreement. The mean was 3.23 implying the respondents
were not certain about this item. A total of 41(26%) agreed that sufficient training and support
46
exists to facilitate staff use of information technology while 78(49%) disagreed. The mean was
3.01 implying the majority were uncertain.
A total of 121 (76%) of the respondents agreed that the district used computers, emails and
electronic media to streamline communication, 39(24%) were not certain and the mean was 4.02.
This implies that the majority were in agreement with the item. The uniformity in operating
standards for products and services had 143 (89%) agreement, 13 (8%) uncertain, 4 (3%)
disagreement and the mean of 4.17. This proves that operating stands are present in the district
and in a like manner, 144 (90%) agreed that there were internal control systems in place to shield
the district from mismanagement though 16 (10%) were in disagreement. There was uncertainty
38% as to whether a budgeting process that ensured effective allocation of resources was in place
though 38% were in agreement.
The findings as shown in Table 4.4 shows that 116 (73%) agreed that systems in place are a
strategic planning tool, 42 (26%) were uncertain and 16 (10%) disagreed. The district systems
are not well utilized for strategic planning and most of the respondents (as shown by the mean =
3.18) were in support of this. Rwanda has made great strides as far as information technology is
concerned however much is still required to utilize the technology in improving efficient service
delivery
4.2.4 Leadership
Leadership has been described as “a process of social influence in which one person can enlist
the aid and support of others in the accomplishment of a common task", it represents the
organization’s general management style and the team’s responsibilities of taking actions with
47
regards to the operations of the organization. Table 4.6 shows the summary of the responses on
leadership aspect.
Table 4. 5Leadership as a strategic planning component
Detail Strongly
Agree
Agree Uncertain Disagree Mean
The district's management is a model for effective leadership
13 23 85 39 3.06
The management team takes responsibility for creating an environment in which all personnel feel supported and motivated to produce quality results
44 20 32 64 3.28
Leadership is not just personified in one person, but it is a shared function among many people
13 60 75 12 3.46
Leadership inspires employees to provide commitment to achieve organizational goals
26 59 42 33 3.49
Leadership: Overall assessment 41 34 76 9 3.67
Source: Primary data
Table 4.6 shows that 36 of the respondents were in agreement, 85 were uncertain and 39
disagreed that the district’s management are a model for effective leadership. It was also
observed that 64 out of 160 respondents agreed that the management team takes responsibility
for creating an environment in which all personnel feel supported and motivated to produce
quality results while 32 out of 160 were uncertain and 64 out of 160 disagreed. The mean
agreement of both of these statements was less than 3.5 implying uncertainty.
48
A total of 73 out of 160 of the respondents agreed that leadership is not just personified in one
person, but it is a shared function among many people, 75 out of 160 were uncertain and 12
disagreed. From the results, 85 out of 160 respondents agreed that leadership inspires employees
to provide commitment to achieve organizational goals, 42 out of 160 were uncertain while 33
out of 160 disagreed. The mean was 3.49 implying uncertainty.
The overall assessment on leadership showed that 75 out of 160 respondents were in agreement,
76 out of 160 uncertain and 9 out of 160 in disagreement and the mean was 3.67. The findings in
this table imply that leadership as a strategic planning activity is weak in the district. Citing
several instances of incompetence in his leadership the Mayor of Huyu pointed out poor
performance in the performance contract evaluation (Sabiiti, 2016). While a report by MINLOC
cited lack of proper management as an impediment to the realization of the decentralization
policy in Rwanda (Ministry of Local Government [MILOC], 2013).
4.2.5 Performance of the District Table 4. 6 Performance indicators of the district of Nyanza
Performance Much
better
Just the
same
Much
worse
Mean Standard
deviation
Labour productivity 78 45 37 3.7 0.8
Service quality 123 28 9 4 0.8
Financial performance 93 30 37 3.8 0.9
Service innovation 74 30 56 3.7 0.9
Customer satisfaction 66 32 62 4.2 0.6
Source: Primary data
49
According to Table 4.6 the respondents held an optimistic view of their district’s performance.
As a score of 3 stands for ‘about the same’ compared with its other districts, attention was
focused on those answers with scores of 4 and 5, which reflect the view that the district had
performed. In comparison to other districts, the respondents observed that Nyanza district labor
productivity was much better (78/160), 45/160 that it was just the same and 37/160 said it was
much worse. The service quality was likewise much better by 123/160 respondents, just the
same (28/160) and much worse by 9/160. The mean agreement was 4 implying it was much
better than other districts.
A total of 93/160 observed their financial performance much better, 30/160 just the same and
37/160 much worse. The mean was 3.8 implying just the same as other districts.
Asked whether Nyanza district provides innovative services, 74/ 160 much better, 30/160 just
about the same and 56/160 much worse. The mean was 3.7 and standard deviation 0.9 implying
just about the same as other districts. And to 66/160 customer satisfaction is much better, 32/160
it was just the same and 62/160 it was much worse. The mean was 4.2 and standard deviations
was 0.6 implying majority so it much better.
The indicators used to measure performance in this study are both financial and non- financial in
nature. To understand the underlying structure associated with the indicators, a factor analysis
was considered. Factor analysis is defined as a set of techniques for determining the extent to
which variables that are related can be grouped and treated as one combined variable or factor
(Cramer, 2006; Lewis-Beck, 1994). These techniques are broadly used in the social sciences to
determine whether the response to a set of items used to measure a particular concept can be
grouped to form an overall index of that concept (Cramer, 2006).
50
A scale is constructed through averaging the questions loading at 0.50 or greater on a single
factor. The results of the factor analysis are shown in Table 4.7
Table 4. 7 Factor analysis of performance indicators
Factors
1
loaded
2
Communalities
Financial performance 0.85 0.28 0.795
Customer satisfaction 0.07 0.86 0.739
Service quality 0.38 0.78 0.760
Labour productivity 0.32 0.72 0.611
Service innovation 0.36 0.64 0.539
Eigen values 4.03 1.03
Cumulative % of variance 57.62 72.38
Cronbach’s alpha 0.88 0.80
Notes: 1. Shaded cells indicate that the associated factors load at 0.50 or greater on a single factor. 2. The principal component extraction with Varimax and Kaiser normalization rotation method was used. Source: Primary data
The first factor is summarized as ‘financial indicators’. This factor includes the financial
performance of the district, ‘non-financial indicators’, and is composed of a set of more
subjective, customer-focused indicators of the district’s performance. Service quality is directly
linked with customer satisfaction, while service quality and labour productivity and service
innovation are also highly correlated.
4.3 The relationship between strategic planning and performance of local government in Rwanda The relationship between strategic planning and performance of the local government in Rwanda
was analyzed using multiple linear regression of the four strategic planning indicators and
performance. Table 4.9 summarized the output of the analysis and shows the Pearson correlation
coefficients and the significance level as represented by the 2-tailed.
51
Performance Mission
Planning
System Leadership
Labour productivity
Pearson correlation
0.53 0.66 0.35 0.34
Significance (2-tailed)
0.00 0.00 0.02 0.02
Service quality
Pearson correlation
0.57 0.55 0.27 0.25
Significance (2-tailed)
0.00 0.00 0.07 0.10
Financial performance
Pearson correlation
0.36 0.62 0.23 0.19
Significance (2-tailed)
0.02 0.00 0.12 0.21
Service innovation
Pearson correlation
0.44 0.63 0.29 0.24
Significance (2-tailed)
0.00 0.00 0.05 0.11
Customer satisfaction
Pearson correlation
0.42 0.52 0.21 0.17
Significance (2-tailed)
0.00 0.00 0.17 0.25
Source: Primary data
Table 4.9 shows the association between the districts’ strategic planning and the performance
when measured by each of the five performance indicators separately. It was found that two of
the strategic planning indicators, mission and planning, show strong associations with the
district’s performance as measured by all five indicators of performance; leadership is
significantly associated with the performance indicator labor productivity; and service also
showed a significant association with labor productivity.
It is shown therefore that strategic planning in Nyanza District does have positive impacts on its
performance, with one of the strategic planning, system, as a mediating factor.
52
The issue of a reverse causal relationship between an organization’s strategic planning and its
performance was addressed by Boselie et al. (2005) and Wright and Haggerty (2005). According
to these authors, rather than strategic planning practices causing an organization’s success,
success has the potential to cause better strategic planning practices.
53
CHAPTER FIVE: SUMMARY, CONCLUSION, AND
RECOMMENDATION
5.0 Introduction This chapter presents the summary of major finding as per the objectives, conclusions derived
from the findings, recommendations and suggestion for further studies.
5.1 Summary of major findings as per the objectives The study reveals that strategic planning in Nyanza District does have positive impacts on its
performance with one of the strategic planning (system) as a mediating factor. This is measured
by the five performance indicators (labor productivity, service quality, financial performance,
service innovation and customer service) against four dimensions (mission, planning, system,
leadership) of operational efficiency of strategic plans. The above dimensions used for the
assessment of the relationship between strategic planning and performance of Nyanza district
show a consistency of the factors measured. Two of the strategic planning indicators (mission
and planning), show strong associations with the district performance as measured by all the five
indictors of performance; leadership is significantly associated with the performance indicator of
labor productivity; and service also showed a significant association with labor productivity.
Again various factors of individual scores show a more agreement or neutrality but with less
insignificant disagreement by the respondents who are staff and management of the district. This
shows that, Nyanza District has an efficient strategic planning in operations in all of its various
departments.
Various factors within the dimensions were found to be affecting the strategic planning at the
district either positively or negatively. This study shows that, all factors under the mission,
planning, structure, people, system, and relationship were consistent and cumulatively contribute
54
positively to the strategic planning in overall terms with the exception of the dimension of
leadership" whose agreement was not so consistent and did not enjoy a comprehensive and
strong agreement among all members. This is very vital due to the fact that, leadership steers the
affairs of the entire corporate body and hence a less comprehensive support may derail the
effectiveness of the process of strategic planning which could ultimately affect the performance
of the institution.
Corporate performance is dependent on policies and planning for every corporate body. The
study reveals that, a thorough support of strategic planning and its execution leads to greater
performance within the industry. The result and quality dimension shows that, clients of the
district show a satisfaction level of service delivered by the district and hence helps the district to
achieve its targets which is part of its performance measure. Hence a positive strategic planning
was found to affect performance of the district. This study shows that, Nyanza district’s strategic
planning is affecting the performance positively.
5.2 Conclusions Strategic planning of corporate bodies is an essential instrument for planning and forecasting
which positions the organization to meet demands and changes which might come up in the
course of discharging its services. This study reveals that, Nyanza District as a public institution
has a clear strategic plan which is articulated to all of its employees at various levels and
departments within the district. It reveals that, the strong agreement of factors of various
dimensions of strategic planning indicate the effectiveness and efficiency of such planning
adopted by employees of the district and hence affects its performance positively.
55
5.3 Recommendation Based on the analysis discussed, the following recommendations are made so as to help the
Nyanza District to enhance its operations.
All factors of various dimensions of strategic plans and performance indictors should be put into
the right perspective, so as to help the general workforce of the district to understand the main
objectives and the strategic plans in place to achieve objectives for fiscal years. This will
enlighten the employees of the district to gear towards delivering services to enhance the general
strategy and to raise its performance.
Moreover, the factor In-depth program evaluation should be conducted as part of the planning
process. This includes assessment based on identified benchmarks for quality and specific
outcomes and process whereby objectives are redefined, well communicated to staff and
corrected when mistakes are committed. This enables the district to achieve a great measure on
its strategic planning policy.
Again all the factors relative to leadership should be well articulated to management and staff of
the district. This will help the employees to know and understand the style of leadership adopted
for the operations and governance of the district and keep them focused in working towards
achieving the objectives. It is also recommended that lines of communication between
managerial and non-managerial staff should be improved in order to encourage and support the
flow of information and feedback mechanisms.
In addition to the above, set program goals and budgets should be properly communicated to
staff for them to have a knowledge of the district’s goals and resources budgetary allocations.
56
5.4 Suggestions for further studies The study suggests the following areas for further studies:
(i) Effect of strategic management on the financial performance of sector organs in the
Ministry of Local Government
(ii) Planning as a competitive advantage for Rwanda firms for survival in the EAC
(iii)Use of internet marketing as a strategic tool for market growth
57
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APPENDICES
63
Appendix A: Research Instrument -Questionnaire for all respondents
Dear respondent,
This questionnaire is an instrument in the thesis for the partial fulfillment of the award of the
masters of Business Administration (MBA) at Mount Kenya University. I therefore kindly solicit
your assistance in the study by providing answers to the questions given below. This study is
mainly for academic purposes, a high degree of confidentiality will be maintained to ensure that
the information obtained in the study is not revealed to any unauthorized persons.
Thank you for your precious time and honest response.
Yours sincerely,
64
SECTION A: DEMOGRAPHIC DATA (TICK (√) ONE OPTION ONLY)
1. Gender: (Tick one option only) Male [ ] Female [ ]
2. Please would you specify your age group? (Tick one option only)
a) 20-29 years [ ] b) 30-39 Years [ ]
c) 40-49 years [ ] d) 50- 59 years [ ]
e) 60 and above [ ]
3. Highest Academic Qualification? (Tick one option only)
a) Diploma/Certificate [ ] b) Bachelors [ ]
c) Masters [ ] d) PhD [ ]
Others, Please Specify___________________________________
Please provide below your personal and professional information according to the scaling system
provided by ticking one of the given answers below.
Nyanza district has a 1 2 3 4 5
Mission
clearly articulated and agreed upon purpose consensus on the primary activities shared values and beliefs that guide the district and staff clear and agreed upon vision of what to accomplish and what it will
take to make the vision happen
Planning There are shared and explicit values and beliefs which serve as the
foundation on which the organization and its members do their work
A three to five year strategic plan is in place. The plan is reviewed
yearly and modified as needed to reflect trends in the environment,
current and future client needs, and the bank's capacity to meet those
There is an annual process to set program goals and budget
65
There is a written annual operational plan that includes timelines and
identification of who is responsible for which outcomes or activities
There is an agreement on overall major strategies that the bank uses
for the allocation of resources. (Strategies are priority responses that
an organization will use to best accomplish its purpose)
System Systems are networked, all staff members have email access and an
intranet/web presence exists
Sufficient training and support exist to facilitate staff use of
information technology
The district uses computers, email and electronic media to streamline
communication
There is uniformity in operating standards for products and services
There are internal control systems in place to shield the district from
mismanagement
A budgeting process is in place that ensures the effective allocation of
resources
The district's management is a model for effective leadership
The management team takes responsibility for creating an
environment in which all personnel feel supported and motivated to
produce quality results
Leadership is not just personified in one person, but it is a shared
function among many people
Leadership inspires employees to provide commitment to achieve
organizational goals
The district's management is a model for effective leadership
Performance measures
For this section 1 implies much worse while 5 = much better
Items 1 2 3 4 5
In your opinion, how do you rate this district’s performance in the
following areas relative to other districts’ average over the past year?
66
The labour productivity
The quality of service
The financial performance
The service innovation
The customers’ satisfaction
The role of HRM in enhancing this district's performance over the
next 3 years will be
The integration of this district’s HRM and its overall strategy over the
next 3 years will be