The Strategic Planning Capabilities and Performance of State-Owned Enterprises in Zimbabwe

Abstract

The purpose of the study was to evaluate the impact of strategic planning capabilities of state owned enterprises (SOEs) in Zimbabwe on organisational performance given the strategic importance of SOEs to national economic growth and development. A dearth exists on studies that focus on the role of strategic planning capabilities on the performance of SOEs in Zimbabwe, hence the undertaking of this study to address that knowledge gap. Some of the performance challenges affecting Zimbabwean SOEs include poor service delivery to the citizens, obsolete equipment, poorly maintained infrastructure, poor financial performance, persistent power outages, mismanagement, inadequate investment, lack of liquidity, limited access to credit, and huge debt overhangs. The primary objective of the study was, therefore, to examine the extent to which strategic planning capabilities influence organisational performance among Zimbabwean SOEs. In addition, the study sought to determine the moderating effect of environmental factors on the relationship between strategic planning capabilities and SOE performance. The study adopted a pragmatist research philosophy and employed a cross-sectional survey research design. The target population comprised managers from all SOEs across Zimbabwe. A sample size of 23 participants was used for qualitative data collection while 377 participants comprised the sample for quantitative data collection. Reliability was checked using Cronbach’s alpha (α) while data validation was done through exploratory factor analysis, convergent validity and discriminant validity prior to carrying out structural equation modelling. Data were analysed using SPSS® version 21 and AMOS® version 21. The study findings indicate that the different variables of strategic planning capabilities; environmental scanning, strategy formulation, implementation, monitoring, evaluation and control, have a significant positive impact on organisational performance. The results imply that an improvement in the managers’ strategic planning capabilities and the effective application thereof would lead to an improvement in organisational performance. The study also confirmed that macro environmental factors have a moderating effect on the relationship between strategic planning capabilities and organisational performance. SOEs are therefore recommended to invest in the continuous training of managers in strategic management, focusing on improving their strategic planning capabilities, so that there is greater scope for them to significantly contribute to the improvement of the performance of the organisations they lead. It is also recommended that the carrying out of strategic planning processes and development of strategic plans be given the importance they deserve, as opposed to the current practice in most SOEs wherein the exercise is done routinely. While the current study focused on SOEs, future studies could expand the target population to include private vi sector players and organisations in the non-governmental sector, as these also have significant contribution to national economic development.