Revisiting Link between Strategic Management Practices and Operational Performance: The Moderating Role of Corporate Governance in Kenya’s Commercial State Corporations

Abstract

This study sought to determine the moderating effect of corporate governance on the relationship between Strategic Management Practices and the operational performance of commercial State Corporations in Kenya. The target population of the study consisted of 317 respondents in top and middle-level management within the five key departments. Our sample size was 177 respondents selected using the Yamane sampling technique and distributed to the various management strata using the Neyman allocation formula to ensure proportionality. Quantitative data were collected using a five-point Likert-scale structured questionnaire. Both descriptive and inferential statistical tools were applied to analyse the data. Statistics revealed that while the direct effects of strategic management (β = -0.670, p = 0.062) and corporate governance (β = -0.439, p = 0.042) became negative, the interaction term was significantly positive(Unstandardised β=0.328, p= 0.002, stadardized β = 1.203, p = 0.002 <0.05), confirming the moderating role of corporate governance on the strategy-performance nexus. These findings provide new insights into why organisations with similar strategic initiatives may realise varied performance results, revealing that this could be due to the quality of their governance structures and reaffirming the importance of an integrated approach to strategic management and corporate governance. It has also provided invaluable insights expected to inform the revitalisation of public strategy, realignment of corporate governance, and enhancement of performance.