Focus strategy-firm structure fit and performance of star rated hotels in Kenya

Jane Nyokabi Njuguna,Maina Muchara,Juliana Namada

doi:10.20525/ijrbs.v8i5.469

Abstract

The purpose of this study was to examine the influence of focus strategy-firm structure fit on the performance of star-rated hotels in Kenya. The study adopted the positivism research philosophy and descriptive-correlative research design. Multi-stage sampling that included proportionate stratified sampling and simple random sampling was used. The sample consisted of 267 general managers and functional managers from Kenya’s three, four and five star rated vacation and town hotels as in 2018. 253 managers responded out of which 59 respondents were found to represent hotels pursuing a focus strategy. Structural equation modeling was used for hypothesis testing. The study concluded that focus strategy-firm structure fit has a significant influence on the performance of star-rated hotels in Kenya. The study recommends that a hotel’s pursuit of focus strategy be internally consistent with its organizational structure.

Highlights

Organizations pursue focus strategy by targeting specific market segments (Pearce & Robinson, 2015)
This study examined the influence of focus strategy-firm structure fit on performance of star rated hotels in Kenya
The positivism research philosophy and descriptive-correlative research design were adopted in the study

Summary

Introduction

Organizations pursue focus strategy by targeting specific market segments (Pearce & Robinson, 2015). Lampel, Quinn and Ghoshal (2003) emphasize that a winning strategy is one that creates a fit that locks out imitators. It is from the contingency theory that the strategy-structure-performance theory emanates (Baier, 2008). Seminal contributions have played a key role in creating an understanding of strategy fit (Garlichs, 2011). Chandler (1962) examined the contingent association between corporate strategy and organizational structure. In an extension of Chandler’s seminal work, it was underscored that the level of fit between strategy and structure has significant impacts on performance (Rumelt, 1974). Many different scholars have supported the notion that strategy-structure mis-fit has negative implications on performance (Enz, 2010; Macharia, 2014)

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Conclusion