Effect of Heuristic Decision-making on Performance of State-Owned Enterprises in Kenya: A Case of Kenya Power Company

Abstract

Heuristic decision-making is part of strategic decision-making. This study sought to examine the status of heuristic decision-making and organizational performance of Kenya Power Company. Moreover, the extent to which heuristic decision-making influenced the performance of the aforementioned company was analyzed. The study was conducted against a backdrop of acknowledged performance challenges. The poliheuristic theory of decision-making and the balanced scorecard model guided the study. A descriptive research design was adopted. The 31 senior management staff of Kenya Power were targeted. A census design was employed to obtain the study participants. The data collected from these participants were analyzed with the assistance of the Statistical Package for Social Sciences. Descriptive statistics, as well as inferential statistics, were used to analyze the collected data. It was revealed that the relationship between heuristic decision-making and organizational performance was positive though weak (rs = 0.340) and not statistically significant (p = 0.104 > 0.05). The effect of heuristic decision-making on organizational performance was established not to be statistically significant (F1,22 = 3.181; p = 0.088 > 0.05). Consequently, the null hypothesis (There is no significant effect of heuristic decision-making on the performance of Kenya Power) was not rejected. Instead, it was also concluded to be true. Heuristic decision-making was inferred to have minimal effect on the organizational performance of Kenya Power. It was recommended that senior managers should have a duty to ensure that the heuristics embraced by the company are reliable in making pertinent decisions.