Strategic Management Institutionalization and Performance in State-Owned Corporations in Kenya

Abstract

State-owned corporations (SOCs) have historically faced criticism for inefficiencies, lack of innovation, and poor performance, primarily due to political interference, misaligned strategies, and weak management structures. This study highlights the need for effective institutionalization of strategic management to address these issues. By embedding strategic objectives into daily operations, aligning organizational structures with strategic goals, and ensuring leadership commitment, SOCs can significantly enhance their operational efficiency, effectiveness, and overall performance. The research is grounded in Selznick's Institutional-Based Theory and Penrose's Resource-Based Theory, which explore how external pressures, such as regulatory frameworks and
political dynamics, interact with internal resource management to shape strategic management practices. This theoretical framework provides insights into how SOCs can leverage their internal resources, such as leadership and organizational culture, while responding to external institutional demands. A desktop research design was adopted, analysing existing literature and case
studies related to strategic management and organizational performance in SOCs. The findings indicate that formalized structures, strong leadership, and supportive organizational cultures are crucial for successful strategy implementation. The study also identifies sector-specific challenges, such as resource constraints and bureaucratic inefficiencies, suggesting that SOCs must
tailor their strategies to address these unique hurdles effectively. The study concludes that the institutionalization of strategic management practices can significantly improve SOC performance by optimizing resource allocation, streamlining decision-making, and aligning organizational goals with national development priorities. The recommendations include strengthening leadership
commitment, aligning organizational structures with strategic objectives, fostering a culture that supports strategic initiatives, and implementing formalized monitoring and evaluation systems to track performance. By adopting these recommendations, SOCs can enhance their effectiveness and contribute more meaningfully to national economic growth and development.

Keywords: strategic management institutionalization, state-owned corporations, organizational performance