Influence of Strategic Management Practices on Performance of National Health Insurance Fund, Kenya

Abstract

Strategic management remains crucial for organizations, regardless of their size, as it defines their success in navigating the external environment while optimizing internal resources. This study addressed a contextual problem where the National Health Insurance Fund (NHIF) in Kenya struggles to fully achieve its performance objectives despite implementing strategic management practices. The research identified a gap in understanding how specific dimensions of strategic management practices—strategic intent, formulation, implementation, and control of strategy—affect NHIF's performance. Financial strategies, technology, human resource planning, and customer service, often mistaken as strategic management practices, were re-examined under the correct strategic management dimensions. The study employed a descriptive research design to examine the influence of strategic management practices on NHIF's performance, targeting a sample size of 135 respondents selected using stratified random sampling from a population of 206 NHIF employees. Data collection was conducted using structured questionnaires, and the tools were pre-tested for validity and reliability, yielding a Cronbach Alpha index of 0.715, indicating satisfactory internal consistency. Data analysis was performed using descriptive statistics, including mean and standard deviation, and inferential statistics, specifically multiple linear regression analysis. The regression model indicated an R-squared value of 0.887, suggesting that 88.7% of the variability in NHIF's performance could be explained by the independent variables: strategic intent, formulation, implementation, and control of strategy. The adjusted R-squared value of 0.884 further confirmed the model's robustness. Findings revealed that strategic management practices significantly influence NHIF's performance. Specifically, strategic intent, formulation, implementation, and control were positively associated with improved financial management, technological adoption, human resource optimization, and enhanced customer service. For instance, financial strategies, when aligned with strategic planning, demonstrated a significant positive impact (β = 0.01, p < 0.05). Similarly, the adoption of technology as a strategic tool also showed a substantial positive effect (β = 0.01, p < 0.05). The study concludes that strategic management practices exert a substantial and statistically significant influence on NHIF's performance. This highlights the necessity for NHIF to continually refine its strategic planning processes, embrace technological advancements, optimize human resource planning, and prioritize customer service to enhance overall performance and service delivery. The recommendations emphasize the need for NHIF to develop comprehensive strategic plans, invest in modern technology, implement effective human resource management practices, prioritize customer satisfaction, and engage in continuous monitoring and adaptation to remain responsive to the dynamic healthcare environment.