CHALLENGES OF STRATEGY IMPLEMENTATION IN PRIVATE HOSPITALS IN

KENYA: A CASE OF AGA KHAN UNIVERSITY HOSPITAL

Maurice Omondi Ooko: Masters Student at Jomo Kenyatta Universityof Agriculture and Technology

Dr. Jane Omwenga lecturer: Jomo Kenyatta University ofAgriculture and Technology

Citation: Maurice Ooko. (2015). Challenges of Strategy

implementation in Private Hospitals in Kenya. A Case of Aga Khan

University Hospital. International Journal of Current Business

and Social Sciences, 1 (3), 193-213.

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ABSTRACTThe global business environment has evolved since 1990. Themodern business environment and fast changing global economydemands high productivity, speed and flexibility fororganizations that seek to thrive. This has brought new realitiesin the form of new business opportunities for growth and, at thesame time has exposed companies to new competitors. Data from therecent studies in Kenya has shown that effective implementationof strategy has become the goal of many organizations. However,in translating their grand plans into action, unacceptably highrates of failure has been reported among many companies. Thisstudy examined the challenges of strategy implementation in thehealth sector of a developing economy, and more specifically, thechallenges posed by leadership, corporate structure,technological changes and communication in the implementationprocess. It adopted a descriptive research design approach. Thetarget population for this study was the managerial staff at theAga Khan Hospital. A sample of 89 respondents was selected from atarget population of 115. Primary data was collected throughquestionnaires that was administered through “drop and picklater” method while secondary data was collected through documentreview. A detailed review of literature on strategyimplementation and the effect of the selected factors wereexamined. Quantitative data collected using questionnaires wasanalyzed by the use of descriptive statistics and correlationanalysis. The statistical Package for Social Sciences (SPSS) wasused in the analysis. Content analysis was used to analyzequalitative data. The data collected was tested in relation tothe results of the study and conclusions were drawn. The studyrevealed that corporate communication affected the mostimplementation of strategies; followed by leadership andcorporate structure, with technological changes rated the least.Based on the findings, it is recommended that for privatehospitals to improve on the implementation of their strategiesthere is need to sensitize management staff on the importance oforganizational structure. The study recommends that theleadership invest more time in ensuring employees at all levelsfeel engaged in and motivated by the execution process. A“cascading” design and implementation process should be adoptedto enhance communication and employees ownership of the process.

KEY WORDS: Strategy, Strategy Implementation, Private Hospitals,Leadership, Corporate Structure, Communication, TechnologicalChanges.

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INTRODUCTION

Business organizations’ interest in strategy execution has grownin recent years and will continue to do so. The focus onexecution is expected to endure as a critical business issue.Strategy implementation involves organization of the firm'sresources and motivation of the staff to achieve its setobjectives. The ability to execute the strategy is a biggermanagement challenge today than determining the right vision andthe quality of the strategy itself (Kaplan and Norton, 2001). Inthe Conference Board’s list of the top ten CEO challenges in2007, “execution excellence”, ranked number one worldwide.According to the respondents execution is a bigger challenge forthem than is risk management, staying on top of the markettrends, or even ensuring top-line growth. Clearly, the ability totransform strategic plans into action is a universal concern.With increased competition, rapid technological advancement,shifting economic regulations and increased demand on non-pricecompetitive advantage most companies have been compelled toreview their business strategies. The magnitude speed and impactof change are greater than ever before, new production processesand services have emerged. To deal effectively with everythingthat affects the growth and profitability of a firm, the managersemploy management processes that they feel position it optimallyin its competitive environment by maximizing the anticipation ofenvironmental changes and of unexpected internal and competitivedemands (Pearce and Robinson, 2007). The concern is that focus isoften lost as the realities of day-to-day operations and theissues that arise soon overwhelm any notion of strategicdirection.Successful CEO’s know that strategy gets you to the startingline, but it is its execution that gets you to the finish line(Zagotta & Robinson, 2002). A well formulated strategy, greatproduct, or breakthrough technology can put an organization onthe competitive map, but only a solid execution can keep itthere. Strategy formulation on its own cannot make a company gaincompetitive advantage over its competitors thus theimplementation process is quite essential for a company.

StrategyThere is no single universally accepted definition of strategy.Different authors and managers use the term differently. Thompson(2005) defines it as a management’s action plan to grow thebusiness, attract and please the customers, compete successfully,conduct operations and achieve target levels of organizational

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performance. According to Johnson, Scholes and Whittington (2005)strategy is “the direction and scope of an organization over thelong term, which achieves advantage in a changing environmentthrough its configuration of resources and competences with theaim of fulfilling stakeholder expectations.” Strategy definitions reflect the cognizance of the turbulentexternal and internal environment (Johnson and Scholes, 2004).Change in the external environment, dictates that an organizationredraws its strategy, and realigns itself accordingly forsurvival, growth, or takes opportunity of emerging synergy. The concept of strategy defines how a firm relates to itsenvironment and it takes into account the internal capabilitiesof the firm which defines the firm’s competitive advantage.Ansoff and McDonnell (1990) observe that strategy is used as ayardstick to measure firm’s performance and to define itsrelationship with the external environment. It takes intoconsideration both the immediate and remote environments.Strategy outlines the obligation of the firm to its stakeholders(Johnson & Scholes, 1999). It helps to define the specificbusiness of the firm in terms of products, markets andgeographical scope. It is about achieving competitive advantagethrough being different in delivering unique service or product(Porter, 1996).

Hospital Industry in KenyaThe health sector in Kenya comprises of the public system, withmajor players being the Ministry of Health and parastatalorganizations; and the private sector, which includes private forprofit, Non-Governmental Organizations (NGO’s), and Faith BasedOrganizations (FBO) facilities. Health services are providedthrough a network of over 4,700 health facilities countrywide,with the public sector system accounting for about 51 percent ofthese facilities (Muga et al, 2004).Kenya’s health management system consists of eight administrativeregions, divided into counties. Under the country’s newdecentralization strategy, counties are responsible fordelivering health services and implementing health programs andare considered to be the central element of the public healthsystem (Wamai 2009). At the regional level, managementresponsibilities are split between the Provincial HealthManagement Team (PHMT) and the Provincial Medical ServicesManagement Team (PMSMT). The PHMT is headed by the ProvincialDirector of Public Health and Sanitation while the PMSMT ishoused at the provincial general hospital of the province and isheaded by the Provincial Director of Medical Services. The PMSMTfocuses on curative services (generally levels 4-6).

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The country’s service delivery system infrastructure includes thenational teaching and referral hospitals (Kenyatta and Moi),provincial hospitals, county and sub-county hospitals, healthcenters and dispensaries. National referral hospitals are at theapex of the health care system, providing sophisticateddiagnostic, therapeutic, and rehabilitative services. The countyhospitals concentrate on the delivery of health care services andgenerate their own expenditure plans and budget requirementsbased on guidelines from the Ministry of Health. The government health service is supplemented by privately ownedand operated hospitals and clinics and FBO hospitals and clinics.The extensive network of private healthcare facilities rangesfrom small local clinics, to large, high-class hospitals. Theprivate sector delivers approximately one-third of the outpatientcare and 14% of inpatient care in the country (GOK, 2009).

Aga Khan University Hospital, NairobiThe Aga Khan University Hospital Nairobi (AKUHN) is a private,not-for-profit institution established in 1958 under the aegis ofthe Aga Khan Health Service, Kenya. It became a teaching hospitalon May 1, 2005 and came under the management of Aga KhanUniversity (AKU). The decision to upgrade the Hospital to atertiary level teaching hospital was taken in order to respond tothe health care needs of the people of East Africa. AKUHN is apremier provider of ambulatory care and quality inpatientservices, including critical care.

AKUHN has set the standard for comprehensive health care andmodern medical education in East Africa. In recent years, theHospital has grown, expanding services and upgrading theirfacilities. The expansion program has emphasized the introductionof new diagnostic services and the raising of the quality of careto international standards. As the teaching hospital for Aga KhanUniversity’s Medical College and School of Nursing and Midwifery,AKUHN practices an evidence-based approach to medicine, driven bythe cutting-edge research conducted by its experienced facultymembers (www.agakhanhospitals.org/nairobi).

Statement of the ProblemThe amount of an organizations goal achievement and how toconsider all aspects for reaching the desired ends remainsimportant to many organizations worldwide. However, the greatestchallenge for contemporary managers is competition and dynamismof environment and unknowns of the outside and inside of theorganization that each affect the implementation of plansespecially strategic ones. Executives invest enormous energy inproduct designs and long-range strategic plans, though many of

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these initiatives become obsolete as markets and competitorsadapt, social norms and regulations evolve, and technologiesadvance (Lowell & Claudia, 2007). In Kenya today, the competitive environment that dominatesvarious sectors of business surrounding has made the need forsound business strategy and strategy development increasinglyapparent. But the real value of a strategy can only be recognizedthrough execution. The ability to execute a strategy is moreimportant than the quality of the strategy itself (Martin, 2010;Muguni 2007).

Private hospitals operate in an environment faced with everchanging technology, government policies and ever increasingshareholder expectation making strategy implementation unique andquite challenging for the managers. Yet strategies adopted bythese hospitals have significant effect on costs, quality, andaccess to health care. 70% of private hospitals in Kenya havetried to modify their development to be in accordance with thetechnological, economic and demographic changes, but despitethis, new strategies still create administrative problems andeconomic inefficiencies (Wamai, 2009). This has had significantfinancial impact on the private hospitals profits and competitiveadvantage. Surprisingly, not many local studies have focused onthe challenges of strategy implementation within the hospitalindustry in Kenya. It is against this backdrop that the purposeof this study was to highlight and examine some of the challengesfaced by private hospitals in strategy implementation.

General ObjectiveTo determine the challenges of strategy implementation in privatehospitals in KenyaSpecific Objectives To determine whether leadership affects strategy implementationin private hospitals in Kenya.To establish whether corporate structure affects strategyimplementation in private hospitals in Kenya.To examine whether communication affects strategy implementationin private hospitals in Kenya.To determine whether technological changes affects strategyimplementation in private hospitals in Kenya.Literature ReviewTheoretical ReviewSequential Thinking TheoryHrebiniak and Joyce (2006), suggests that implementation is notonly an important and difficult process but also a complex field

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of research. Most often than not, it is regarded asmiscellaneous, interdisciplinary and particularly concerned withthe integration of management disciplines. The proponents of thistheory provide a step–by–step analysis that is relevant to therational development of the implementation process by fragmentingthem into smaller and manageable parts. In an extensive analysis of firms exhibiting and sustaining anunusual high-performance and firms able to achieve such a statein the short run, they identified four key factors influencinghigh performance. These are, Direction: developing a clearstrategic direction; Efficiency: establishing a fast andeffective organization; Adaptability: developing an adaptiveculture; and Focus: Shifting from focus on customer and costreduction to the broad picture. According to Hrebiniak and Joyce(2006), the people in charge of implementation need both asequential and a simultaneous thinking. This particularly appliesto key decisions. The sequential thinking defines a logical sequence or chain ofcausality or the relationship between consecutives andinterconnected events. To design this chain, a manager shoulddecide on the event or the first action (A) to be implemented.This raises the questions of what are the effects on event (B)and alternatively what are the necessary changes in (B) tosupport the implementation of (A). This implies that therelationship between event A and B must be established. Afterwhich it will be necessary to discern the link between thefollowing events until the last relationship is established (Z).Although the utility of such step–by–step analysis is relevant tothe rational development of the implementation process, theunderlying simplicity and narrowness of scope is not enough.Consequently, the manager will need an integrative vision of theevents to infer the total or final effect in the function andstructure of the organization if each event is implemented andtakes place. Analysis in the implementation process should therefore beconceptually broad and not entirely focused on specific events.Embedding sequential and simultaneous thinking into the decision-making process of organizations is not an easy task and in somecases, it might be impossible. The complexity of theimplementation process can be reduced by fragmenting it intosmaller and manageable parts, often at the cost of losing thebroader perspective. Just like at the formulation stage, the roleof managers and their individual capabilities can provide thenecessary combination of specific and integrative analysis.However, an organization must be able to institutionalize keycapabilities embedded in individuals in order to sustainfunctions over time (Joyce, 2009).

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Holistic Strategy Implementation Theory In quest of finding a model for strategy implementation thatcould overcome existing challenges and deficiencies, Bourgeoisand Brodwin (2004) have created a five-model system for strategyimplementation categorizing strategy implementation practices.The most significant being the commander model, the change modeland the collaborative. The commander model draws its influencesfrom the military life, in the sense that the CEO wields absolutepower. In this model the CEO is the rational agent behind thestrategy decisions and plays no role in implementation. The CEO-models works best with a powerful executive with few personalbiases and vast and accurate sources of information (Bourgeoisand Brodwin, 2004). The change model is based on planned interventions in theorganization’s structure and systems, which will set off thedesired behavioral outcomes. This model creates the ability tocarry out more complicated strategic plans than the commandermodel, but also creates an additional inflexibility forunanticipated events and changes of plan (Ibid). The collaborative model extends the power of strategic decision-making from the CEO to the organization’s management team. Thismodel helps to motivate the managers and also provides thestrategic decision-making–process with more information andcognitive capital. The problem of this model results from thefact that collaboration does not reach beyond top management.More decision making also means more politics and conflicts ofinterest, which may mean less rationality (Ibid).Conceptual FrameworkIndependent variables Dependent Variable

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Corporate Structure Formal/ Informal Supportive Vertical/Horizontal

Communication Open Clear Informative

Leadership Motivating Supportive Rewards progress

Strategy Implementation Improved performance Market Share Improved Internal efficiency

Technological changes Open new opportunities Improve processes Save costs

E

Eempirical Literature ReviewAccording to the White Paper of strategy Implementation of theChinese Corporations in 2006, strategy implementation has become``the most significant management challenge which all kinds ofcorporations face at the moment.’’. The survey reported in thewhite paper indicates that 83 percent of surveyed companiesfailed to implement their strategies smoothly, and only 17percent felt they had a consistent strategy implementationprocess. The key challenge for today’s organizations are many(soft, hard and mixed) and the factors that influence the successof strategy implementation range from the people who communicateor implement the strategy to the systems’ mechanisms forcoordination and control ( Yang et al, 2008). The challengesdiscussed included: strategy formulation, organization structure,organization culture, changing environment, operation planning,poor communication, resource allocation, and poor execution.Raps (2004) note that strategy implementation processesfrequently result in problems if the assignments ofresponsibilities are unclear. Clear understanding of strategy isa pre-requisite in strategy implementation. Clear understandingof strategy gives purpose to the activities of each employee andallows them to link whatever task at hand to the overallorganizational direction (Byans et al, 1996). Additionally,Aaltonen and Ikava (2001) also asserted that lack ofunderstanding of strategy is an obstacle of strategyimplementation. Implementing strategies successfully is about matching theplanned and the realizing strategies, which together aim atreaching the organizational vision. The components of strategyimplementation – communication, interpretation, adoption andaction – are not necessarily successive and they cannot bedetached from one another.

Corporate StructureAt the firm level, extant research has observed that effectiverelationship between strategy and structure is a necessaryprecondition to the successful implementation of new businessstrategies (Drazin & Howard, 2004; Olson et al., 2005; Miller etal., 2004). Ngulube and Tafor (2006) in a study on impact ofmanagement of records in the public sector in Africa found thatstructure in organizations in developing countries wassignificant in effective management of the sector. This isbecause structure leads to efficiency in operation. However, theresearchers observed that structure in most public sectors in

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developing countries were poorly managed and hence the poorperformance of most public institutions.Kaithia (2014), in his study aimed at investigating the factorsinfluencing implementation of strategic plans and the challengesin public secondary schools. Insights that were obtained fromsystematic evaluation of 25 secondary schools in Igembe Southdistrict using the proposed research framework was used todevelop an instrument to measure the effect of organizationalstructure on the implementation of strategic plans. He indicatedmanagement commitment and organization structure as the mostimportant to successful implementation of strategic plans.CommunicationExecutives and project managers around the world agree that poorcommunications contributes to project failure. The ForbesInsights 2010 Strategic Initiatives Study “Adapting CorporateStrategy to the Changing Economy,” found that nine out of tenCEOs believe that communications is critical to the success oftheir strategic initiatives, and nearly half of respondents citedcommunication as an integral and active component of theirstrategic planning and execution process. Similarly, the Towers Watson 2011-2012 “Change and CommunicationROI Study Report” shows that companies that have highly-effectivecommunication practices are 1.7 times more likely to outperformtheir peers financially. In a study by Mbindyo (2011) on theChallenges of Strategy Implementation Kenya National AuditOffice, found that lack of communication creates resistance fromstaff and lack of buy-in of the strategies and this does notenhance the understanding of the strategies. His study concludesthat for any organization to experience successful strategyimplementation and achieve its targeted performance there must bean elaborate policy on internal communication. This is contraryto Magambo (2012) findings that indicated that poor communicationwas never a challenge in state corporations. An IABC/Watson Wyatt study Communication Competence and BusinessSuccess a Comparative Review of Communication Programs, 2001; and2007/2008 Communication ROI Study found that just over half ofhigh-performing companies had "well-defined communicationstrategies that allow employees to understand better theirorganization's business goals. Their conclusion was that poor orinadequate communication can lead to employee skepticism oroutright resistance. Clearly, organizations are very aware of just how criticaleffective communications is to the success of strategic projectsand, ultimately, organizational success. However, the Pulsecommunications research finds that only one in four organizationscan be described as highly-effective communicators. This suggeststhat the majority of organizations have opportunities to identify

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problem areas and chart a course to improve the effectiveness oftheir project communications. The Pulse communications reportquantifies just how much effective communications can lead tomore successful strategies, and just how much ineffectivecommunications can cost an organization.

LeadershipLack of leadership, and specifically strategic leadership by thetop management of the organization, has been identified as one ofthe major barriers to effective strategy implementation(Alexander 1985: 91–97; Business Day 1999: 37; Beer & Eisenstat2000: 29; Kaplan & Norton 2004: 277; Hrebiniak 2005: 17). A studyby Odadi (2002) revealed need for organization to carry out anevaluation of its leadership and organization readiness beforeembarking on the implementation program,Jooste and Fourie (2009) investigated the Role of StrategicLeadership in Effective Strategy Implementation: Perceptions ofSouth African strategic leaders, their study deduced thatstrategic leadership contributes positively to the effectiveimplementation of a strategy within an organization. This findingcorresponds positively with the findings from the literaturereview.Many authors discuss strategic leadership as a key driver ofstrategy implementation (Hrebiniak 2005; Hitt et al. 2007; Hsieh& Yik 2005; Bossidy & Charan 2002; Thompson & Strickland 2003;Kaplan & Norton 2004). In fact, the successful transition fromstrategy formulation to the implementation of strategy ultimatelydepends on the strategic leaders of the organization.Bossidy and Charan (2002), in their book Execution: TheDiscipline of Getting Things done, note that most executives andmanagers don’t understand the “discipline” of execution. Theauthors recommend a core set of processes built on a foundationof leadership behaviors, which create a culture of execution. In Leadership Excellence, Murphy (2005), CEO of Leadership IQ,reiterated that lack of execution is much more damaging to aCEO’s career than lack of vision. Interviews with board membersof 286 firms that had asked their CEOs to leave revealed thatcommon reasons for ousters included mismanaging change, ignoringcustomers, tolerating low performers, denying reality, and havingtoo much talk and not enough action.

Technological ChangesLarry Downes (The Industry Standard, 2001) makes this pointpersuasively based on his research into strategy executionmistakes. Specifically, Downes finds that ‘‘technology challengesthe old rules and assumptions’’ and creates daunting ‘‘externalobstacles to execution’’. However, Muhindi (2013) examined the

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Organizational Factors Affecting Adoption of Strategic planningin Mission Hospitals in Kiambu County. The findings of the studyshowed that while an unanticipated technological change can upseta strategy; the failure to recognize and react is whatsignificantly erodes business performance, not the change itself.A survey conducted by the Economist Intelligence Unit andcommissioned by SAP, found that more than 80% of respondentscited technology as being a key factor in their firm’s ability toadapt business models and execute strategy (“Survey Shows,”2005). More than half (54%) said they would pursue competitiveadvantage via new business models as opposed to new products. Inaddition, respondents cited speed of strategy execution andinnovation as their primary challenge over the next five years. Research GapRecent research indicates that strategy implementation, ratherthan strategy formulation alone, is a key requirement forsuperior business. In addition, there is growing recognition thatthe high failure rate of organizational initiatives in a dynamicbusiness environment is primarily due to poor implementation ofnew strategies.This study has identified that the various studies carried out onthe challenges of strategy implementation are not comprehensive.While they have given the study a good basis for information, thestudies are not elaborate enough and therefore one cannot drawgeneralized conclusions based on some of these studies. Mostpast local studies (Obare 2006; Koske 2003; Lumiti 2007; Ateng2007; Kirui 2013; Muguni 2007) done in Kenya concur that goodstrategies have been written but very little has been achieved intheir implementation. They give a good insight about strategyimplementation but they do not explain the challenges that affectstrategy implementation. For example, the study by Varmah in 2012pays a casual attention on the challenges. In addition, thesestudies were not based on the hospital industry. This studytherefore seeks to fill the existing research gap by carrying outa case study on the challenges of strategy implementation inprivate hospitals.MethodologyResearch DesignA Research Design is the arrangement of conditions for thecollection and analysis of data in a manner that aims to combinerelevance to the research purpose with economy in the procedure(Babbie, 2002). The study adopted a descriptive design. Kothari(2004) defines descriptive research studies as those studiesconcerned with describing characteristics of particularindividuals or group. This research design involves gatheringdata that describe events and then organizes, tabulates, depicts,and describes the data. Descriptive design portrays the variables

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by answering the “who”, “what” and “how” questions (Babbie,2002). Mugenda & Mugenda (2003) note that the purpose ofdescriptive research is to determine and report the way thingsare and it helps in establishing the current status of thepopulation under study. The design was deemed appropriate as itprovided an in-depth investigation on the challenges of strategyimplementation within the organization. PopulationA study population comprises of the entire groups of individuals,objects, items, cases, articles or things with common attributesor characteristics existing in space at a particular point intime (Majumdar, 2005). The study population was the 2500 staffmembers of the AKUHN by December 2014. A target populationaccording to Mugenda and Mugenda (2003) is that population towhich a researcher wants to generalize the results of the study.The target population is summarized below.Category Frequency PercentageProgram Administrators 23 20%Section Heads 60 52.17%General Managers 32 27.83%Total 115 100%The target population comprise of the General Managers, ProgramAdministrators and Section Heads. This is because these are thepeople primarily involved in the implementation of chosenstrategies and therefore best placed to provide the requiredinformation.Sample and Sampling Technique A sample as defined by Kumar (2005) is a sub-group or subset of apopulation of interest. Mugenda and Mugenda (2003), a researcherwould have to use 30% of the target population as a sample sizefor it to be accepted as a good representative sample. Yamane(1967) provides a simplified formula to calculate sample sizes. A95% confidence level and P = .5 are assumed for equation. n =______N______ 1+N (e)2

Where n is the sample size of the respondent, N is the populationsize of the respondents and e is the level of precision. Thus atotal of 115 will be selected to participate as respondents inthe study.Category Frequency Percentage Sample SizeProgramAdministrators

23 20% 18

Section Heads 60 52.17% 46General Managers 32 27.83% 25Total 115 100% 89

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Sampling TechniqueSampling is the process of selecting a number of individuals orobjects from a population such that the selected group containselements representative of characteristics found in the entiregroup (Orodho and Kombo, 2002). The study adopted a stratifiedrandom sampling technique to come up with the required samplesince the population was heterogeneous. The goal of stratifiedrandom sampling is to achieve the desired representation fromvarious sub groups in the population (Kothari, 2004). Subjectswere selected in such a way that the existing sub groups in thepopulation were more or less reproduced in the sample. Mugendaand Mugenda (2003) advices that to use stratified randomsampling, one must first decide on the size of each stratum inthe sample. In this study however, departments or sectionsalready existed hence the first step had been met since eachsection performed unique task and therefore was homogeneouswithin itself and heterogeneous between other sections. The studyidentified all the sections of the hospital which will form thedifferent strata before selecting the units from each stratumwhich were included in the sample.

Data Collection InstrumentsThe study deductions were pegged on both secondary and primarydata. The secondary data formed the basis for comparison withfindings and as a building block to answering research questions.It equally provided reliable information needed by the researcherto investigate the phenomenon and seek efficient ways for problemsolving situations (Uma, 2003). This was obtained through deskreviews of documented sources. Primary data was collected throughself-administered questionnaires. According to Dillman (2000) theuse of questionnaires will make each respondent respond to thesame set of questions and provide an efficient way of collectingresponses from a large sample prior to quantitative analysis. ValidityValidity refers to the accuracy and meaningfulness of inferencesbased on the research results (Kothari, 2004). Validity isconcerned with the extent to which an instrument measures what itis intended to measure. It can be obtained by absence of errorsin data collection. To establish the validity of the researchinstruments the researcher sought the opinions of experts in thefield of study especially the lecturers in the department ofbusiness administration. This facilitated the necessary revisionand modification of the research instrument thereby enhancingvalidity. ReliabilityReliability is the measure to which a research instrument yieldconsistent results or data after repeated tools (Mugenda &

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Mugenda 2003). Internal consistency describes the extent to whichall the items in a test measure the same concept or construct andhence it is connected to the inter-relatedness of the itemswithin the test. Reliability is enhanced by including manysimilar items on a measure, by testing a diverse sample ofindividuals and by using uniform testing procedures. The studyused the Conbach’s alpha (α) to test the reliability of the data.Gliem and Gliem (2003) indicate that Conbach’s reliabilitycoefficient normally ranges between 0 and 1. The closer thecoefficient is to 1.0 the greater the internal consistency of theitems in the scale. An alpha score of 0.70 was set as thethreshold and considered satisfactory. The reliability statisticfor each of the identified factor is presented in the tablebelow.Reliability CoefficientsIdentified Factors Cronbach’s AlphaCorporate structure 0.83Communication 0.91Leadership 0.74Technological Changes 0.87It is evident from Table above that Cranach’s alpha for each ofthe identified factors is well above the lower limit ofacceptability of 0.70. The results indicate that thequestionnaire used in this study has a high level of reliability.Data AnalysisData collected was analyzed using descriptive statistics. Thedescriptive statistical tools aided in describing the data anddetermining the respondents’ degree of agreement with the variousstatements under each factor. Quantitative data collected usingquestionnaires was analyzed by the use of descriptive statisticssuch as means, standard deviations and frequencies using SPSS.Content analysis was used to analyze data collected from theunstructured questions that is of qualitative nature. Accordingto Baulcomb, (2003) content analysis uses a set of categorizationfor making valid and replicable inferences from data to theircontext. Multiple regressions were further utilized to analyzethe effect of each variable on implementation.

Data PresentationQuantitative data was presented through statistical tools such asfrequency distribution tables, charts, graphs and other figuresapplicable in data presentation. Also secondary data wasorganized in the appropriate format in excel for analysis. Findings and DiscussionsResponse RateThe study targeted 89 respondents in collecting data with regardto establishing the challenges of strategy implementation in194 | P a g e

private hospitals in Kenya. From the study, 72 out of the 89sampled respondents filled-in and returned the questionnairesmaking a response rate of 80.89%. Mugenda and Mugenda (2003)observed that a 50% response rate is adequate, 60% good, while70% and above rated very well. This collaborates with Bailey(2000) assertions that a response rate of 50% is adequate, whilea response rate greater than 70% is very good. This implies thatbased on this assertion, the response rate of 80.89% is thereforevery good. This reasonable response rate was made a reality afterthe researcher made personal calls and visits to remind therespondent to fill-in and return the questionnaires.

Results of the pilot studyReliability refers to the extent to which a measuring instrument contains variable errors that appear inconsistent from observation during any one measurement attempt or that vary each time a given unit is measured by the same instrument. Construct validity is established by relating measuring instruments to a general theoretical framework in order to determine whether the instrument is tied to the concepts and theoretical assumptions they are employing (Nachmias and Nachmias, 2008). SPSS version 21 program was used as the tool of analysis to test the relationship between the dependent variable and the four independent variables as indicated in the table below. Cronbach’salpha of well above 0.7 implies that the instruments were sufficiently reliable for the measurement. As most item total correlations were reasonably high, the construct validity of the instruments was considered reasonable (Brown, 2000). Reliability and Validity

Variable/ConstructDescription

Items Mean Items Standard Deviation

Cronbach’s Alpha

CorporateStructure

3.3542 0.55731 0.83

Communication 2.9361 0.74895 0.91Leadership 2.8417 0.72379 0.74TechnologicalChanges

2.9444 0.45560 0.87

Corporate StructureIt is evident that respondents differ in their perceptions. Morethan half (65.27%) agree the structure is aligned to theorganizational strategy giving it a mean score of 3.33. Almost 3out 5 (59.72) respondents agree to a ‘less’ and ‘moderate extent’that the structure offers flexibility in decision making withonly 6.94% (5) rating it to ‘no extent’. However, more than halfof the respondents (51.38%) agree to a ‘large extent’ and ‘verylarge extent’ that understanding of the role of organizational

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structure in strategy implementation is a hindrance in theexecution process. Most of the respondents 56.9 % agreed to‘moderate extent’ that the structure promotes clear allocation ofroles and tasks giving it a mean score of 3.35. More than half ofthe respondents agree that the structure allows effectivemanagement of relationships between units with 15.27% rating itto a very large extent. The mean score for this item was 3.50The responses indicate that majority of the respondents are ofthe opinion the structure is relatively flexible in decisionmaking and effective in clear allocation due to the limitedunderstanding of its role thereby a challenge to effectiveimplementation.

CommunicationThe study found that it is evident that the mean scores for 3 outof the 5 statements are less than 3.00. This is an implicationthat many of the respondents did perceive these factors to beamong the key challenges of strategy implementation in theirorganization. Most of the respondents agreed to a very smallextent that the strategic plans and the progress on theimplementation are regularly and timely communicated. The meanscore was far less than 3.0 (M=1.35). Half of the respondentswere of the opinion that to ‘small’ and ‘moderate extent’ thecommunication links strategic objectives with the day to dayobjectives at different levels and locations in theirorganization with a further 16.66% of the respondents rating itat ‘no extent’. The mean score for this item was 2.86. More thanhalf of 54.16% of the respondents indicated the organizationscommunication did not provide for honest upward conversationsfrom staff. According to the respondents the communication to amoderate extent permitted and solicited feedback from the staffwith regard to implementation as well as sufficiently definingthe key implementation tasks and activities. These items posted amean score of above 3.00 that is (M=3.21) and (M=3.17)respectively.The main finding of the study is that the respondents perceivepoor information flow from the top to the other levels of theorganizations and poor link between the strategic objectives withthe day to day objectives as the challenge to effective strategyimplementation in their organizations.

LeadershipMore than half of the respondents (56.94%) agree that to a smallextent the leadership provides a structured path, clear milestoneand a defined picture of what success looks like. Mostrespondents (73.61%) believed to a ‘moderate extent’ that theleadership invests time in articulating and sustaining the vision

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and the mean score of this item is above 3.00 (M=3.31). However,more than half of the respondents (58.33%) agree to a smallextent that the leadership motivates employees to be committed tothe organizational goals and objectives with a significant 22.22%rating at ‘no extent’. The mean score for this item is less than3.00 (M=2.82). Almost 3 out of 5 respondents (61.11%) agree to asmall extent the leadership provides measurable objectivesreflective of the strategy and the mean score is less than 3.00(M=2.40). Most of the respondents (84.72%) to a small extentagree that leadership recognizes and rewards progress in thechange effort, but the mean score of this item is above 3.00(3.21)The responses indicate that majority of the respondents perceivelow levels of employee motivation as a result of poor recognitionand reward system in the change effort, to be a challenge ineffective strategy implementation. This finding supports thefindings of Jooste and Fourier (2009) which emphasized theimportance of the role that strategic leadership plays in thedetermination strategic direction and effective strategyimplementation.

Technological ChangesIt is evident from the findings that the mean score of four outof the five items exceed 3.00. This is an indication that therespondents were of the opinion that all the mentioned statementson technological changes least affected strategy implementationin their organization. Most of the respondents agreed to a smallextent that technological changes affected strategyimplementation in their organization. Almost all the respondents’(84.72%) agree to a large extent that the organization providesthe necessary training ensure that the employees keep up with thetechnological changes although only 0.08% rated it to a ‘verylarge extent’. The statement mean score was above 3.00 (M=3.25).Similarly, the respondents agree to a large extent theorganization has adopted technological forecasting in coping withthe change processes. The respondents agreed that to a moderateextent, technology adopted is agile and flexible to accommodatethe technological changes and the organization responds better toexisting technological challenges and improve the anticipation offuture developments. These statements mean were 3.71 and 3.76respectively.

Co-efficient of Correlation

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Corporate

structure

Communica

tion

Leadreshi

p

Technolog

ical

changes

STRATEGY IMPLEMENTATION

Pearson Correlation

.508** .601** .443** .714**

Sig. (2-tailed)

.001 .000 .003 .000

N 72 72 72 72There is a positive strong relationship between strategyimplementation and the independent variables as shown by thePearson’s co-efficient correlation which is significant asindicated by the P-value at 95% level of confidence.

Co-efficient of Determination

The co-efficient of determination r- squared, 66.5% which impliesthat 66.5% of variations of changes in the dependent variable canbe explained by variations in the independent variables.The Regression Equation

ModelUnstandardizedCoefficients

StandardizedCoefficients

t Sig.

B Std.Error

Beta

(Constant) .262 .597 .439 .663CorporateStructure

1.724 .279 1.388 6.183

.000

Communication .133 .178 .232 .749 .459Leadership .541 .178 .378 3.04

6.004

TechnologicalChanges

.561 .147 .462 .231 .001

Y = 0.262 +1.721X1 +0.133X2 +0.541X3

+0.561X4

Standard Error = 0.597 0.279 0.178 0.1780.147Y= Strategy Implementation X1= Corporate StructureX2=CommunicationX3= LeadershipX4= Technological Changes

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R R Square Adjusted R Square Std. Error ofthe Estimate

.815a .665 .630 .12468

The model presents a unit change in the corporate structurecaused a 1.721 increase in the strategy implementation. A unitchange in the communication caused a 0.133 increase in thestrategy performance. A unit change in the corporate leadershipcaused a 0.541 increase in strategy implementation while a unitchange in the technological changes caused a 0.561 increase instrategy implementation. Holding all other factors constant withthe absence of corporate structures, communication, leadershipand technological changes caused an increase of 26.2% increase inthe strategy performance. The independent variables identifiedhave effects on strategy implementation though the effect varieswith different variables.

Content AnalysisWhen asked to describe their role in strategy implementation inthe organization the respondents views varied depending on theirpositions. The managers; anticipate, envision and empower others.They also do budget and planning and are involved in creating anenabling environment through training and development. Theprogram administrators were of the opinion their role involvedcultivating a culture that integrates strategy with the day today activities, managing the change environment and mobilizationand allocation of resources. The department heads roles weremostly centered on day to day activities. On the other factorsthat were perceived to affect strategy implementation majority ofthe respondents mentioned internal creativity and innovativeness,work force capability, market forces, employee motivation andreward were highly rated. These were followed by workforcecommitment, changing customers’ needs and demands, changes ingovernment policy reward system, employee attitude & behavior,corporate identity respectively.SummaryCorporate StructureThe study found that corporate structure to a very extentaffected strategy implementation in the hospital. Theunderstanding of the role of organizational structure wasestablished to be marginally above average. This implied that thestructure was poorly managed thus leading to inefficiency inoperation thus a hindrance in the execution process. Thefindings on organizational structure supports the findings byNgulube and Tafor (2006) in a study on the impact of managementof records in the public sector in Africa that the structure inmost public sectors in developing countries it contradict thefindings of a study carried out by Magambo (2012) that found thatthe organizational structure did not influence strategyimplementation.

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Corporate Communication The study sought to examine whether communication affectsstrategy implementation. The findings of the study revealed thatthe communication to a large extent affected strategyimplementation. Communication was not regular and timely, and didnot solicit feedback from the lower levels. It further revealedthat there was a weak link between the communications done by thetop management on the strategy with the day to day objective atdifferent levels and locations. As a consequent, it created alevel of and doubt with regard to effectiveness of strategyimplementation. The finding of this study is consistent with thefindings of Ng’ang’a and Ombui (2013) on the Factors InfluencingImplementation of Strategic Plans in Public Secondary Schools inLari District, Kiambu County in which communication was found tocontribute substantially to the implementation of strategicplans. Communication was found to serve as the link between thethree levels of management and ensured that responsibilities andduties were clearly explained.

LeadershipThe study revealed that the leadership did very little tomotivate the employees. Moreover, there was no recognition andrewarding of progress in the change effort. It was also evidentfrom the study that the leadership did not provide measurableobjective reflective of the strategy and thereby not clearlyproviding a structured path and definition of what success lookedlike. This indicates that most employees were not inpsychological contract with their employers. The finding of thestudy agrees with the findings of Azhar et. al. (2008) in theirstudy of the role of leadership in strategy formulation andimplementation in which they concluded leadership affectimplementation and that the most important task of leadership isto align its vision with the organization’s goals and objectivesso that organization can compete with dynamic environmentefficiently and to train and motivate the people to achieve thevision.

Technological ChangesFinally, the study sought to determine the influence oftechnological changes on strategy implementation in privatehospitals. Majority of the respondents did acknowledge the roletechnology in the hospital environment but did not find it to bea challenge to the implementation of strategies and rated its’effect to a small extent. The findings of the study contradicts asurvey conducted by the Economist Intelligence Unit andcommissioned by SAP in 2005, in which more than 80% ofrespondents cited technology as being an important factor in

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their firm’s ability to adapt business models and executestrategy.

ConclusionCorporate StructureCorporate structure was found to affect strategy implementationto a large extent. The study concludes that there was need tosensitize the management staff on the importance of corporatestructure on strategy implementation and that the structureshould offer flexibility in decision making.

Corporate CommunicationThe study concludes that a timely and regular communication wasnot done and that the communication done did not solicit feedbackfrom the lower levels. This resulted in uncertainty characterizedby factors like inadequate communication and feedback, confusionover goals or expectations, and conflicting accountabilities.These ratings hint at the turmoil that employees face whenattempting to accomplish goals that support the organization’sstrategy.

LeadershipFrom the findings, the study further concludes that leadership togreat extent affects the implementation of strategies in privatehospitals. The study highlighted that most employees were not inpsychological contract with the leadership and there was ageneral feeling that the leadership did very little to provideclear milestones and a defined picture of what success looks likeresulting into low levels of motivation.

Technological ChangesThe study concludes that the technological changes to a veryminimal extent affect strategy implementation. From therespondents, technology plays a key role in the organizations’ability to adopt new business models and therefore it closelymonitors the factors affecting technological change and they arebetter prepared to accommodate them.

Recommendations of the StudyBased on the findings, the study recommends that the managementstaff be sensitized on the importance and the role oforganizational structure in matching appropriate administrativemechanisms and strategy to reduce uncertainty within the firm,enhance decision making and increase effectiveness. On communication, the study recommends a “cascading” design andimplementation process for the organization in which strategicinformation flow downward from the executive to the managers and

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employees, and back to the executive carrying identified changesthat need to be made in order to successfully implement thestrategy. The process two major objectives are: to engage peoplein the alignment process and to ensure that support from topleaders for the strategy is highly visible. This will helpalleviate uncertainty and doubt.The study recommends that the leadership invest more time inensuring employees at all levels feel engaged in and motivated bythe execution process. The leadership actions play an importantrole in growing internal capabilities and promotingentrepreneurship therefore motivating people and developing theirpriorities should be their priorities. Finally, a number of complex factors hasten technological change.Limits on performance, breakthrough technology, marketcompetition, manufacturing capability, economics, and changingneeds of consumers all play a role and therefore must beconstantly watched if the organization is to succeed.

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