Organizational Structure and the Performance of State Corporations in Kenya

Abstract

In the recent past, many state corporations in Kenya have been facing dismal performance trends, a situation that has derailed the sustainability of most of these crucial institutions. While some state corporations have been known to consistently perform well, others have been noted to perennially underperform, over rely on the exchequer, and lose viability in equal measure. Organizational structure is an essential element of any organization. Numerous studies conducted by scholars illustrate that, it is one of the most significant organizational elements in facilitating and increasing innovation, service delivery and performance in organizations. The role of organizational structure however has not been adequately addressed as far as performance of the state corporations is concerned and this study therefore sought to fill the existing gaps by assessing the relationship between organization structure and the performance of state corporations. The study purposed to establish the influence of organizational structure on the performance of state corporations in Kenya. The study reviewed organizational structure as the independent variable and performance of the state corporations as the dependent variable. The study performed a theoretical review of Contingency theory and the New Public Management (NPM) theory. This was followed by an empirical review in tandem with the purpose of this study. It provided a review of scholarly works done in the past identifying the studies, authors, areas of investigation and the findings reported. The study adopted a descriptive research design with an exploratory approach to collect data from 189 state corporations in Kenya. The unit of analysis was all the state corporations in Kenya while the unit of observation was the Heads of Human Resources in each corporation. The study used a sample of 96 state corporations and collected primary data using a self-administered questionnaire. Documentary review was also used to compliment the data collected. To get the most efficient representation of the population the study adopted stratified sampling and Cochran’s (1977) formula was applied to calculate the sample size of 95 Heads of Human Resources departments. The data was analysed using descriptive and inferential statistics. SPSS Version 26 was used. The study concluded that organizational structure had a significant and positive influence on the performance of state corporations in Kenya and recommended that most state corporations should consider leveraging and optimizing key aspects of organizational structure such as concentration of authority degree of bureaucracy and the span of management ratio.