Abstract
Many public corporations experiencing decline in performance have opted to implement turnaround strategies to improve their performance. This study extends previous research findings by seeking to examine the effect of turnaround strategies on performance of Public Corporations in Kenya, by identifying the turnaround strategies adopted in these Corporations, and to determine the effect of turnaround strategies on their performance. To achieve this objective, correlational research was adopted. The target population comprised 162 public corporations in Kenya. A purposive sample of thirty two (32) corporations was used in the study. A Likert type scale questionnaire was administered to respondents to collect data from the selected public corporations. Primary data was complemented with secondary data collected from the corporations for the previous three years. Data collected was edited and processed using Statistical Package for the Social Sciences (SPSS). Descriptive statistics that is in percentages were used to describe the research variables. Pearsons product moment coefficient was used to examine the relationship between turnaround strategies and organisational performance and multiple regression was used to establish the effect of turnaround strategies on performance of the corporations. The results showed a significant positive relationship between turnaround strategies and performance, P-value<0.05. The positive relationship suggests that when declining corporations implement turnaround strategies (revenue generating and cost reduction strategies) their performance when measured using the balance scorecard measurement tool which measures financial perspective, customer satisfaction, internal business processes and innovation and learning perspectives, will improve positively. The findings also found that cost reduction strategies had a greater effect on the performance of public corporations in Kenya compared to revenue generating strategies. Therefore, it can be recommended that public corporations need to implement turnaround strategies to turn around declining corporations. The study also recommends areas of further research.
Highlights
Organisations adopt various strategies to enhance their performance, to be competitive in the market and to achieve their objectives; these corporations have adopted various strategies
According to Byars, Rue, and Zahra (1996) these strategies are classified in various categories, they include stable growth strategy, which is used by companies that wish to maintain their objectives; this is a relatively low-risk strategy and is quite effective for successful organisations in an industry that is growing and in a nonvolatile environment
The two variables, that is; revenue generating strategies and cost reduction strategies was tested using the Balance score card model developed by Kaplan and Norton, (2001) to determine the effect of turnaround strategies on organisational performance which is hypothesised by the researcher to be positive
Summary
Organisations adopt various strategies to enhance their performance, to be competitive in the market and to achieve their objectives; these corporations have adopted various strategies. The balanced scorecard model developed by Kaplan and Norton in 1991 was used to measure the effect of turnaround strategies on performance of public corporations in Kenya. Robbins and Pearce (1992), presented a model of turnaround based on evidence that business firm turnaround characteristically involved a multi-stage process in which retrenchment could serve as either a grand or operating strategy, while Proropsaltis et al (2002) concluded in their study of UK hospitals, found that inadequacies in existing performance management systems mean that potential or actual failures often go undetected for long periods. In Kenya, there is no known study that has been done to measure extend on how turnaround strategies influenced the performance of the public corporations after implementation. This study, sought to examine the effect of turnaround strategies on performance of Public Corporations in Kenya
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