Effect of Generic Competitive Strategies on the Performance of National Social Security Fund in Nairobi County, Kenya

Abstract

The National Social Security Fund (NSSF) was established in 1965 by an Act of Parliament under cap 258 Laws of Kenya and serves as the first pillar of social security for Kenyan workers. The Kenyan social security sector has recently been growing at a high rate due to the inclusion of new players in social security services, which was previously solely managed by NSSF. Organizations have realized the importance of a strategic plan for shaping the vision and mission, selecting strategies to be executed and allocating resources to facilitate achieving corporate goals. A strategic plan is instrumental in ensuring that strategic goals are aligned with organizational activities with its environment, thereby providing for its continued survival, effectiveness, and improved performance. This study established the influence of strategic planning practices on the performance of the National Social Security Fund in Kenya. Every organization incorporates different strategies to gain a competitive advantage and sustain profitability. Firm performance is a major building block in strategic management. This study was aimed at evaluating the effect of generic competitive strategies on the performance of NSSF in Kenya. The study used secondary data from published financial statements of NSSF with a target population of 60 employees drawn from the 7 divisions and departments – top, middle & low-level management. The quantitative method was utilized in the analysis and interpretation of data in accordance with the research objectives and research questions. The data collected was summarized, tabulated, and analyzed quantitatively, then presented using tables, pie charts and percentages. According to the findings of the study, cost leadership strategy, differentiation strategy, focus strategy, Innovation Strategy have significant positive influence on the performance of NSSF. All the p-values were 0.05, denoting that the relationship therefore were significant. the study findings show that the four generic strategies have a positive relationship with the organizational performance. Product differentiation strategy and innovation strategy were established to be the key measures or drivers of financial performance. This was based on the strength of association, which was established by the study. Cost leadership strategy and differentiation strategy were also found to be other measures though they should not be used in isolation. The study recommended that National Social Security Fund should embrace and invest in cost leadership strategies most especially forming linkages with service providers, suppliers and other supplementary institutions since it will enable them achieve competitive advantage as compared to other organizations that are not investing in these strategies and that universities should first understand and know their motive and capability before adopting a certain competitive strategy for example market focus.