Strategic planning is described as a process that involves an organization developing a strategy for fulfilling its responsibility and also achieving its goals more effectively. It is referred to as a formal but flexible process used to determine where an organization is currently and where it should ideally be in the future (Young, 2003).Therefore, a sound strategic planning process enables a firm to clarify its mission, articulate a vision of success, and prioritize specific goals.
According to Lassner (2008), there exists three types of planning, which include operational, tactical, and strategic planning. While operational and tactical planning are short-term and narrow in direction respectively, strategic planning is a long-term planning which involves all management areas of an organization. Moreover, its contents are relatively general. Strategic planning is characterized by vision and mission statements, core values, key result areas (KRA), KRA drivers, key objectives, strategic priorities, and key performance indicators (KPI). It centres on both broad and long-lasting issues that facilitates long-term effectiveness and survival of the organization.
According to Bryson, Crosby and Bryson (2009) strategic planning is popular due to the fact that in many circumstances it seems to work, whereby it helps decision makers find out what their organizations are supposed to be doing, how, and also why. In the same perspective, Giradeau (2008) asserts that strategic planning may work; however, the issue of whether and how it works, in what ways, for whom, when, and why is an open question. Though, there exists critics who argue that strategic planning does not work effectively, it is asserted that their arguments may be premised on how they define strategic planning, the methodology employed to study its effectiveness, typical lack of attention to the reasons behind undertaking the process, how the strategic management process was managed, among other critical factors (Bryson et al., 2009).
1.1.1 Internal Factors Affecting Strategic Planning Effectiveness
It is acknowledged that over the past few decades, the Danish agricultural research and consultancy has witnessed both development and implementation of strategic planning. A survey of Danish projects focused on implementation of strategic planning on farm businesses (Lumd& Christensen, 2003). Of particular interest were experiences drawn in respect of the aim of strategic management in agriculture, development of the vision and long-term strategy on business farms, and implementation of the formulated business strategy. Other crucial areas of interest include among others, identifying how research facilitates development and implementation of strategic planning, delivery of strategic consultancy to farm managers, and also understanding the function of learning in strategic management.
Agribusinesses in the United States, over the past 20 years, have been subject to several substantive structural changes. In the same breadth, data from a comparative analysis of strategic planning practices in Michigan Agribusiness firms in 1992 and 2012 indicate that the agribusinesses in the region have become larger, more diverse, and have also increased their adoption of strategic planning activities (Lopes & Ross, 2013). It is further pointed out that increased levels of uncertainty and complexity have most probably strained strategic planning activities in the agribusiness sector.
According to the European Commission (EC) both public and private sectors have a lot in common in sustaining the state, striving for excellence, fulfilling the European Union (EU) 2020 Strategy, and also for the best results. Yet, the two sectors are also significantly different (EC, 2010). In respect of strategic planning, it is advisable for the public sector entities to borrow the entrepreneurial strategies of the private sector. Nartisan, Putans and Muravska (2012) assert that the aforementioned differences are basis for applying benchmarking method with the aim of identifying possibilities for improvement.
A joint initiative of the Organization for Economic Cooperation and Development (OECD) and the EU noted that the system of strategic planning at the central public administration level is presently composed of two key components. These are management and budget components. The first component constitutes of mission statement, vision, core values, environmental analysis (both internal and external), medium term priorities, directions of activities, monitoring and evaluation (M&E), and reporting. On the other hand, the budgeting component encompasses the present situation analysis, objectives, both results and performance indicators of the budget programmes, and also funding programmes. It is important to reckon that in reference to state institutions or corporations, a strategic plan supports the shift from resources-oriented management to results-based management (Dinu, 2007).
A review of strategic planning practices applicable by the South African National Planning Committee identified several characteristics that could contribute to effectiveness of the strategic planning process (Paterson, 2009). The first is the process providing an opportunity for participants to understand more clearly what they want to achieve, and how and when they can do it. The planning as a discovery process since it brings to the fore concealed opportunities and unseen solutions. Openness of the process to different views and understandings fundamental to findings solutions to problems constitute another characteristic. Centering on matters of strategic importance where there is clear separation of strategic issues from others could also enhance effectiveness of strategic planning. In addition, involving decision making, adopting a realistic view of expectations, and factoring in contingencies are part of factors that contribute towards effectiveness of strategic planning.
In the Egyptian context, Elbanna (2008) noted that in order to enhance the success of an organization, it is imperative to put to use various strategic planning tools. Both strategic management practice and management participation (management support) are pointed out to jointly enhance effectiveness of strategic planning amongst organizations in Egypt. In the relation to institutions of higher education in the country, it is held that the balanced scorecard (BSC) is an important tool in analyzing the effectiveness of strategic planning (Abdrabou, 2015). In order for excellence to be realized in the aforementioned institutions, they are required to have a clear mission statement and realistic goals which can be interpreted within a strategic planning framework.
In Kenya, it is stated that state corporations adopt strategic planning practices in order to remain competitive and also improve their performance (Kathama, 2012). Many such local entities are actively engaged in strategic planning with clearly documented vision and mission statements. In addition to boosting the performance of state corporations, strategic planning practices facilitate service delivery. In respect of state corporations in Kenya, Ogutu (2017) notes that firm characteristics moderate how strategic planning impacts on the performance of the state corporations.
1.1.2 Agriculture Sector State Corporations in Kenya
State corporations in Kenya are corporate bodies which are established under Section 3 of the State Corporations Act, Cap 446, or by an Act of Parliament, or under the Companies Act, Cap 446 as long as the Government controls at least majority of the shares. There are a total of 220 operational state corporations. The corporations fall under eight broad categories founded on their mandate and core functions. These include financial, commercial or manufacturing, regulatory, public universities, training and research, service, regional development authorities, and tertiary education and training categories (Inspectorate of State Corporations, 2018). Agricultural State Corporations which falls within the purview of this study include Agriculture Food & Fisheries Authority (AFFA), Agricultural Development Corporation (ADC), Kenya Dairy Board (KDB), Kenya Agricultural &Livestock Research Organization (KALRO), and Kenya Plant Health Inspectorate Service (KEPHIS).
1.2 Statement of the Problem
Strategic planning has been underscored to be a very important component in boosting both the performance and service delivery amongst state corporations (Kathama, 2012). The mission of agricultural state corporations is to extend various services to Kenyan farmers and consumers of agricultural produce and products in conformity to their mandate as stipulated in various Acts. Effective strategic planning is one of the key aspects in ensuring successful execution of the aforementioned mission and accompanying goals and objectives. The ideal situation in regard to strategic planning in state corporations is ensuring that the process is effective by involving all pertinent stakeholders. This is premised on the fact that an ideal strategic plan should address the needs of all stakeholders both fairly and equitably.
However, it is stated that state corporations are significantly slow in dispensation of requisite services. This is in spite of massive funds they obtain from the taxpayers through the National Treasury every financial year. Moreover, there is failure to involve employees, who are strategy implementers, in strategy planning. In light of this, it is evident that the firm has been facing challenges in strategic planning, which has subsequently impacted negatively on strategic implementation and service delivery respectively. The present manner of strategic planning falls short of the desired situation mainly due to lack of involving interested stakeholders, failure to consider prevailing and projected environmental factors and resources, and also inadequate management support of the strategic planning process.
In order to address the stated problem, this study will seek to investigate internal factors that potentially influence strategic planning effectiveness in state corporations in Kenya where it will narrow down to selected corporations under the purview of the Ministry of Agriculture. The study will particularly evaluate the extent to which each of the selected internal factors (stakeholder involvement, top management support, organization’s environment, and resource imbalance level) influences effectiveness of strategic planning in AFFA, ADC, KDB, KALRO, and KEPHIS.
1.3 Objectives of the Study
The study will address both the general and specific objectives as stated below.
1.3.1 General Objective
The general objective of the study will be to investigate the relationship between strategic planning effectiveness and performance of agriculture sector state corporations in Kenya.
1.3.2 Specific Objectives
i. To determine the relationship between stakeholder involvement and performance of agriculture sector state corporations in Kenya.
ii. To establish the relationship between top management support and performance of agriculture sector state corporations in Kenya.
iii. To determine the relationship between organization’s environmentand performance of agriculture sector state corporations in Kenya.
iv. To establish the relationship between resource imbalance level and performance of agriculture sector state corporations in Kenya.
1.4Justification of the Study
The study is expected to bring forth immense benefits to policy makers in state corporations particularly the ones falling under the purview of the Ministry of Agriculture. The top leadership of these entities encompassing the directorship and senior management are likely to benefit from the findings of this study and recommendations thereof. These are hoped to be informative enough to enable the top leadership to come up with policies and/or formulate policies that will enhance strategic planning. Moreover, the study findings and recommendations are expected to inform practitioners working with state corporations on the best ways of taking part in strategic planning. The study is further expected to add to the body of knowledge in strategic management particularly in respect of strategic planning in state corporations and related organizations. To this end, scholars and other entities in the field of academia are anticipated to find the study resourceful in their literary and/or scholarly pursuits.
1.5Scope of the Study
The study will be carried out amongst selected State Corporations under the Ministry of Agriculture. These will include AFFA, ADC, KDB, KALRO, and KEPHIS. The study will primarily focus on the management staff working with the aforestated state corporations at the organizations’ head offices. The choice of the management staff is premised on the assertion that they are the ones who spearhead strategic planning of the organization. Moreover, the study will be delimited to a set of predictor variables that shall include stakeholder involvement, top management support, organization’s environment, and also level of resource imbalance. On the same breadth, effectiveness of strategic planning will constitute the dependent variable. The study is projected to be conducted over a period not exceeding three calendar months and the budgetary estimates will be Ksh. 100,000.
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