STRATEGIC MANAGEMENT PRACTICES AND PERFORMANCE OF NATIONAL HOSPITAL INSURANCE FUND IN NAIROBI CITY COUNTY, KENYA

Abstract

In the corporate world, the business environment is rapidly changing necessitating organizations to adopt strategic management practices that give them a competitive edge and lead to improved performance. National Hospital Insurance Fund has instituted strategic management practices in bid to boost overall organizational performance as well as improve service efficacy and productivity. However, the current practices have not attained the envisaged results. As much as various scholars have pointed out adoption of strategic management approaches such as strategic planning and strategic formulation often have a tendency to trigger improved organizational performance, limited studies have attempted to prove that these practices can actually yield tremendous results, considering the role of NHIF in the Kenyan populace. The general objective of the study was to determine the influence of strategic management practices on performance of National Hospital Insurance Fund in Nairobi City County, Kenya. The study’s specific objectives were to determine the influence of; strategic planning practices, strategic formulation practices, strategic implementation practices and strategic evaluation practices on performance of NHIF in Nairobi City County, Kenya. The study was anchored on dynamic capability theory, Management by objective theory and Congruence Model Theory, which was useful in supporting the variables of the study. The study employed a longitudinal descriptive research design which was appropriate for a single organization, which in this case was the National Hospital Insurance Fund. The study’s target population comprised of 250 employees from NHIF head office hailing from human resource, administration, research and development, marketing, finance and strategic department. Stratified simple random sampling technique was utilized to choose respondents to get a sample size of 153 respondents. The data was acquired from primary and secondary sources. Primary data was collected through structured (close-ended) questionnaires. Self-administration and drop and pick methods were adopted for questionnaires administration. Collected data was analyzed using Statistical Packages for Social Science. Both descriptive and inferential statistics were used. Descriptive statistics were limited to frequency, percentage, mean and standard deviations. Inferential statistics were limited to Product moment correlation and regression modelling. The research findings were presented using tables. Multiple regression model was adopted to test the strength of the relationship between variables. From the regression model, the findings indicate that study variables significantly influenced performance of National Hospital Insurance Fund. Coefficient of adjusted determination was 0.734 which translates to 73.4%. This indicates that variations in dependents variable was explained by the independent variables (strategic planning practices, strategic formulation practices, strategic implementation practices and strategic evaluation practices). The residual of 26.6% could be explained by other factors beyond the scope of the current study. The study concluded that strategic management practices influence performance of National Hospital Insurance Fund. Further, the study recommend that National Hospital Insurance Fund should ensure that its strategic formulation practices are completely working with negligible hitches as this contributes emphatically towards the improvement of its exhibition regarding the development of client base, upheld hospitals and National Hospital Insurance Fund commitment.