TURNAROUND STRATEGIES AND PERFORMANCE OF PRIVATE UNIVERSITIES IN KENYA

Main Article Content

CYNTHIA JERONO TOROMO
JOHN MUTINDA, PhD

Abstract

The focus of this study was on turnaround strategies and performance and specifically on management, asset and financial restructuring and staff rationalization as elements affecting private universities’ performance. Stage theory of successful turnaround anchored the research as supported by resource-based view theory and the balanced scorecard model. This study adopted a descriptive research design and targeted the top five private universities in Kenya based on uni-ranking. The study respondents were principals of colleges and directors, the sample size was 83 respondents and 64 filled and returned the questionnaire, making a response rate of 77%. There was collection of primary data from semi-structured questionnaires but the instrument was first pilot tested using 8 respondents from Daystar University. The aggregate Cronbach Alpha of 0.788, confirmed the reliability of the instrument as it was above the threshold of 0.7. For the collected quantitative data, descriptive and inferential analysis was done and revealed positive association between the variables. The findings showed that staff rationalization had the biggest effect on performance of the private universities in Kenya. Management restructuring had the second largest effect to performance, followed by asset restructuring and financial restructuring. For the qualitative data, the conducted content analysis established that respondents agreed that these four types of turnaround strategies affected performance. The study concluded that the top five private universities have adopted and implemented turnaround strategies by restructuring its management structure to a leaner and efficient operation system. It has also reduced and laid-off excess number of employees and retained only the most competent and qualified staff to handle different tasks at the university. The study further concludes that restructuring the assets, selling off the assets that are not needed and optimal use of financial resources resulted in high performance in terms of high enrolment and graduation numbers of students. The study recommended the custom-making management structure, and recruiting and retaining highly skilled and talented employees to handle different assignments at the university. The recommendations further suggested disposing off obsolete assets and prudent management and use of financial resources for attaining the university’s mandate. It also shows the value of private universities and through utilizing the turnaround strategies, the universities can offer quality higher education. Quality graduates will contribute to socio-economic growth and development of the nation through innovations and inventions that can solve the problems facing the general public.

Article Details

Section
Articles
Author Biographies

CYNTHIA JERONO TOROMO, MBA (Strategic Management) Student, School of Business, Kenyatta University, Kenya

MBA (Strategic Management) Student, School of Business, Kenyatta University, Kenya

JOHN MUTINDA, PhD, Lecturer, Department of Business Administration, Kenyatta University , Kenya

Lecturer, Department of Business Administration, Kenyatta University           , Kenya

References

Adeyemo, S. A. (2021). Impact of Strategy Implementation Drivers on the Performance of Small and Medium Enterprises in South-West, Nigeria (Doctoral dissertation, Kwara State University (Nigeria)

Ahmed, A. I., Kakkar, G., & Sharma, K. D. (2016). A review of the effects and challenges of staff retrenchment on organizational performance of commercial banks. International Journal for Innovative Research in Multidisciplinary Field, 2(10), 12-19

Alando, J. (2016). Coping strategies adopted by private universities in response to increased demand for higher education: The case of four private Universities (Doctoral dissertation, United States International University-Africa).

Andritzky, J., Christofzik, D. I., Feld, L. P., & Scheuering, U. (2019). A mechanism to regulate sovereign debt restructuring in the euro area. International Finance, 22(1), 20-34.

Audi, Z. O. (2022). Influence of financial restructuring on the performance of non-financial firms listed in Nairobi Securities Exchange, Kenya. Reviewed Journal International of Financial Management, 3(1), 18-28

Baliouskas, P., Llopis, J., Gasco, J., & Gonzalez, R. (2022). Implementing turnaround strategies as an entrepreneurial process. International Entrepreneurship and Management Journal, 1-27.

Barney, J. (1991). Special theory forum the resource-based model of the firm: origins, implications, and prospects. Journal of Management, 17(1), 97-98

Chacha, S. J. (2019). The Impact of Turnaround Strategies on Business Performance at Kenya Airways (Doctoral dissertation, United States International University-Africa).

Chowdhury, S. D. (2002). Turnarounds: A stage theory perspective. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l'Administration, 19(3), 249-266.

Creswell, J. W., & Creswell, J. D. (2017). Research design: Qualitative, quantitative, and mixed methods approach. Sage publications

Cristian, Ș., & Monica, L. (2017). Measuring performance in organizations from a multi-dimensional perspective. Annals of the University of TâRgu Jiu, Economy Series, 4, 217-223.

Daina, O. M., Robert, M. S., & Gicheru, E. N. (2016). Analysis of turnaround strategies on organization performance: Case of Uchumi supermarket, Kenya. Strategies, 8(31)

Dikko, M. (2016). Establishing construct validity and reliability: Pilot testing of a qualitative interview for research in Takaful (Islamic insurance). The qualitative report, 21(3), 521-529

Duong, T. T. N., Phan, H. T., Hoang, T. N., & Vo, T. T. T. (2020). The effect of financial restructuring on the overall financial performance of the commercial banks in Vietnam. The Journal of Asian Finance, Economics and Business, 7(9), 75-84.

Foster, W. M., Hassard, J. S., Morris, J., & Cox, J. W. (2019). The changing nature of managerial work: The effects of corporate restructuring on management jobs and careers. human relations, 72(3), 473-504.

Gogo, O. J. (2018). The Development of University Education in Kenya. The Problem of Human Resources in Private Universities. (Doctoral dissertation, Maseno University)

Gudo, O. C. Ole, A. M., & Oanda, O. I. (2017). University Expansion in Kenya and Issues of Quality Education: Challenges and Opportunities. International Journal of Business and Social Science, 2 (20), 203-214.

Harwood, I. K., Nakola, J. O., & Nyaana, D. N. (2016). Effects of organizational restructuring on firm performance: A case of National Bank of Kenya. Global journal of advanced research, 3(1), 43-49

Heale, R., & Twycross, A. (2015). Validity and reliability in quantitative studies. Evidence-based nursing, 18(3), 66-67

Hitt, M. A., Carnes, C. M., &Xu, K. (2016). A current view of resource-based theory in operations management: A response to Bromiley and Rau. Journal of Operations Management, 41(10), 107-109.

Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: translating strategy into action. Harvard Business Press.

Khomba, J. K. (2011). Redesigning the Balanced Scorecard model: an African perspective (Doctoral dissertation, University of Pretoria)

Kielhofner, G., & Coster, W. J. (2017). Developing and evaluating quantitative data collection instruments. Kielhofner’s research in occupational therapy: Methods of inquiry for enhancing practice, 274-295.

Kimno, W. K., Njuguna, D., & Mwaura, P. (2019). Influence of Programmes Differentiation on Performance of Private Universities in Kenya. American Based Research Journal, 8(02)

Kull, A. J., Mena, J. A., &Korschun, D. (2016).A resource-based view of stakeholder marketing. Journal of Business Research, 69(12), 5553-5560.

Leung, L. (2015). Validity, reliability, and generalizability in qualitative research. Journal of family medicine and primary care, 4(3), 324

Li, H., Chen, Q. X., Hong, L. Y., & Zhou, Q. (2019). Asset restructuring performance prediction for failure firms. Journal of Corporate Accounting & Finance, 30(4), 25-42.

Manimala, M. J. (1991). Turnaround management: lessons from successful cases. ASCI Journal of Management 20 (4), 234-254

Mann, M., & Byun, S. E. (2017). To retrench or invest? Turnaround strategies during a recessionary time. Journal of Business Research, 80, 24-34.

Manodamrongsat, P. (2019). Early Warning Signs of Problem Firms and Their Turnaround Strategies (Doctoral dissertation, Rajamangala University of Technology Thanyaburi)

Maroro, R. K., Kamau, J. G., & Koima, J. (2018). Effect of asset restructuring on return on equity of financially distressed commercial banks in Kenya. International Journal of Business Management and Processes (ISSN 2616-3209), 3(2), 14-14

Masinde, A. B. (2016). Challenges of implementing turnaround strategies at Kenya Railways Corporation. (Doctoral dissertation, University of Nairobi)

Mayr, S., & Lixl, D. (2019). Restructuring in SMEs–A multiple case study analysis. Journal of Small Business Strategy, 29(1), 85-98.

Melchers, R. E., & Beck, A. T. (2018). Structural reliability analysis and prediction. John Wiley & sons

Meyers, L. S., Gamst, G., & Guarino, A. J. (2016). Applied multivariate research: Design and interpretation. Sage publications

Mungai, B. W., &Bula, H. O. (2018).Turnaround strategies and performance of Kenya Airways. The University Journal, 1(2), 1-16.

Muturi, W. K., & Odollo, L. (2019). Turnaround Strategies and Performance of Commercial Banks in Kenya. The International Journal of Business & Management, 7(10)

Muzny, A. M., & Simba, F. (2019). Influence of turnaround strategies on organizational performance: A case of the coast development authority, Kenya. The Strategic Journal of Business & Change Management, 6(2), 225-243.

Mwangi, R. W., & Waithaka, P. (2018). Organizational culture and performance of public universities in Kenya. International Academic Journal of Human Resource and Business Administration, 3(2), 288-313.

Noble, H., & Smith, J. (2015). Issues of validity and reliability in qualitative research. Evidence-based nursing, 18(2), 34-35

Notanubun, Z., Ririhena, R. L., & Batlolona, J. R. (2019). The effect of organization restructuring on organization performance viewed from employee performance and leadership effectiveness at Maluku provincial education office. Journal of Education and Learning (EduLearn), 13(1), 118-124

Nyatsumba, K. M. (2021). The Implementation of Corporate Turnaround Strategies: A Comparative Study of Selected African Airlines. (University of Johannesburg, South Africa)

Nyatsumba, K. M., & Pooe, D. R. I. (2021). Failure to implement a turnaround strategy at South African Airways: Reflections from strategic players. Development Southern Africa, 1-15.

Odundo, A.P., (2018) Effects of University Enrollment on Non-Academic Activities: The Case of Nairobi University. Educational Journal, 4 (2), 51-59

Omwakila, M. A. (2022). Implementation of Turn-around Strategy at Mumias Sugar Company in Kenya (Doctoral dissertation, University of Nairobi)

Othman, R. (2006). Balanced scorecard and causal model development: preliminary findings. Management Decision, 44(5), 690-702.

Panicker, S., & Manimala, M. J. (2011). Successful business turnaround: The role of appropriate entrepreneurial strategies. In International Entrepreneurship Forum, 10 (3) 1-22)

Penrose, R. (1959). The apparent shape of a relativistically moving sphere. In Mathematical Proceedings of the Cambridge Philosophical Society, 55, (1), 137-139). Cambridge University Press

Prahalad, C. H., & Hamel, G. (1990). G.(1990).-“The Core Competence of the Corporation”. Harvard Business Review, 68(3), 295-336.

Rotich, C. (2015). Turnaround Strategy and Performance of Kenya Commercial Bank. (Doctoral dissertation, University of Nairobi)

Santana, M., Valle, R., & Galan, J. L. (2017). Turnaround strategies for companies in crisis: Watch out for the causes of decline before firing people. BRQ Business Research Quarterly, 20(3), 206-211.

Taherdoost, H. (2016). Sampling Methods in Research Methodology; How to Choose a Sampling Technique for Research. International Journal of Academic Research in Management (IJARM), 5

Tansey, P., & Spillane, J. (2016, September). From crisis to opportunity: turnaround strategies of large Irish construction contractors during the period 2007-2015. In Proceedings of the 32nd ARCOM Annual Conference (pp. 269-278)

Thomann, B. (2018). Rationalization, working conditions, and living standards in postwar Japanese coal mining communities. Asian Journal of German and European Studies, 3(1), 1-25.

Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2021). Crafting and executing strategy. McGraw-Hill US Higher Ed USE.

Tongson, M. E., & Rosa, J. D. D. (2020). The Implementation of the Rationalization Program in Selected Schools Division Offices in Ilocos Sur. UNP Research Journal, 29(1)

Ugoani, J. (2020). Turnaround Management Strategy and Profitability in the Distressed Nigerian Textile Manufacturing Industry. Salem Journal of Business & Economy, 6(2)

Valiyan, H., Abdoli, M. R., &Hashemi, A. O. (2018). The Effect of Corporate Asset Restructuring Sensitivity on The Target Leverage of Companies Listed in Tehran Stock Exchange. Journal of Financial Management Strategy, 6(20)

Venusita, L., & Wijayanti, M. N. (2019). Turnaround strategy of the financially distressed company: empirical study of manufacturing company listed on Indonesia Stock Exchange. KnE Social Sciences, 21-39.

Wamiti, G. (2021). Effect of Turnaround Strategies on Organizational Performance of Commercial Banks Listed in Nairobi Stock Exchange (Doctoral dissertation, Africa Nazarene University).

Wangege, W. G., &Nafukho, F. M. (2017). Responses to conditions of decline: The Case of Kenya Public Univesity. Africa Education Review, 8(1), 169-188

Wangenge, O. G. (2016). Public by Day, Private by Night: examining the private lives of public universities. European Journal of Education, 47 (1), 213-227

Waweru, S. W., & Maina, S. (2019). Corporate restructuring and organization performance of national police service in Kenya. International Academic Journal of Human Resource and Business Administration, 3(6), 55-70.

Wenzel, M., Stanske, S., & Lieberman, M. B. (2020). Strategic responses to the crisis. Strategic Management Journal, 41(7/18), 3161

Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic management journal, 5(2), 171-180

Zagirniak, D., Kratt, O., & Zagirnyak, M. (2020). Rationalization of the choice of professional education in the context of the needs of the business environment. Natsional'nyi Hirnychyi Universytet. Naukovyi Visnyk, (4), 158-163.

Zhao, L., Tian, L., Cai, T., Claggett, B., & Wei, L. J. (2013). Effectively selecting a target population for a future comparative study. Journal of the American Statistical Association, 108(502), 527-539.

 (2023, July). Top Private Universities in Kenya. (https://www.4icu.org/ke/private/)