Strategic Direction and Organization Effectiveness of Savings and Credit Cooperative Societies in Kenya

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By: Justus Bundi Miriti,*1 | Thomas Anyanje Senaji,2Nancy Gacheri Rintari,3Wilson Nzengi Muema.3Kenya Methodist University*1,3The East African University2

ABSTRACT
Organizations of all types have an imperative to post performance results that are satisfactory to their stakeholders. To achieve such results, organizational leadership is  important since it determines the direction the organization takes. However, some organizations post poor output and this has attracted attention from scholars in order to establish the causes of poor output. Cooperative societies play an important role in socio-economic development of a country through economic empowerment and poverty alleviation. The study examined strategic directions of organizations and the
prediction of organizational effectiveness through a quantitative survey of 133 senior managers in Savings and Credit
Cooperatives (SACCOs) across Kenya. Drawing from the transformational leadership theory and strategic leadership
model, the study respectively assessed vision and business development (as observed through exploration of opportunities).

Findings of the study show that whereas business development significantly increased the probability of organizational
effectiveness (B = 1.189, Wald = 14.706, exp (B) = 3.284, p < .001) organizational vision did not (B = .055, Wald = .041, p = .839 > .05, exp (B) =1.056). However, both vision and business development had a positive significant (p < .05) linear relationship with organizational effectiveness. Study results show that the managers were slightly more visionary than they explored and pursued more business opportunities. It is recommended that managers of SACCOs emphasize strategic leadership through active exploration of new markets and recognition of potential new clients (strategic leadership) even as they maintain clarity of vision (transformational leadership) for their organizations.

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