Abstract:
This study examined the influence of organisational capabilities on strategy execution in deposit-taking Savings and Credit Cooperative Organisations in Kenya. This is on the backdrop that building organisational capabilities can help deal with the strategy execution challenge that many organisations experience. However, there is inadequate evidence to show how or which organisational capabilities influence strategy execution. The study specifically evaluated the influence of four organisational capabilities namely, leadership, innovation, collaboration, and organisational restructuring, on strategy execution. Four research objectives in line each capability were formulated and respective research hypothesis tested empirically. A fifth research objective focused on the collective influence of the four capabilities on strategy execution.
The study pursued objectivity in investigating the research problem by blending quantitative and qualitative research methods. A combination of descriptive and explanatory research designs enabled the profiling of the data and testing of the hypotheses. For the quantitative study, 222 heads of departments were sampled from a population of 500, using stratified sampling. Self-administered survey questionnaires were sent out, out of which 191 were returned and of these, 183 were found usable for analysis. For the qualitative data, 15 chief executive officers were selected using purposive sampling from the 164 organisations. Structural Equation Modeling was the main analytical framework used for hypotheses testing. The qualitative data was analysed by identifying common themes corresponding to the study variables. The findings from the qualitative study were used to enrich those from the quantitative study.
The study findings showed that the four organisational capabilities significantly influenced strategy execution, both individually and collectively. Leadership, innovation, collaboration, as well organisational restructuring capabilities had a significant, positive relationship with strategy execution. The hypothesised positive relationships between the four organisational capabilities and strategy execution were therefore supported by the data collected. Collectively, the four organisational capabilities explained 86 percent of the variation in strategy execution.
The study concludes that building each of the four organisational capabilities is of paramount importance in supporting strategy execution. Leadership capability at the board and CEO level sustains strategy execution by giving direction. Innovation capability which is embedded in the organisational culture and dependent on the quality of staff, supports execution of new ideas, products, services, and processes. Similarly, the study deduces that collaboration capability, both internal and external, boosts strategy execution. Additionally, the study concludes that the ability to restructure the organisation by focusing on pre-restructuring efforts and post-restructuring results positively influences strategy execution.
This study offers significant insights and presents scholars and practitioners in strategic management, policymakers, and the leadership in SACCOs with valuable recommendations. The main recommendations revolve around the need for SACCOs to be more intentional in building the four organisational capabilities to drive strategy execution. The study also makes suggestions on how to improve leadership, innovation, collaboration, organisational restructuring and strategy execution by looking at organizations from the inside. Finally, the study opens opportunities for further research in the area of strategic management and in the SACCO sector, especially on taking a capabilities-based approach to tackling the strategy execution challenge.