Abstract:
Performance is key and crucial to the success of any organization as it helps set goals,
and drives the organization to achieve the goals. However, there has been a problem
of performance in National Government Administration which emulates from strategy
development, and implementation and leadership competency. This study examined
the moderating effect of institutional culture on the relationship between strategic
leadership and performance of the National Government Administration. The specific
objectives were to determine the influence of strategic direction setting, assess the
influence of core competence exploitation, investigate the influence of risk taking,
evaluate the influence of innovation capabilities and establish the effect of
institutional culture on performance of National Government Administration.
Additionally, the study sought to establish the moderating effect of institutional
culture on each of the relationships above. The New Management theory, Institutional
theory and the Upper Echelons theory anchored this study. Positivism research
philosophy and explanatory research design were adopted for the study to provide the
researcher with meaningful insights on the topic. Cluster and simple random sampling
techniques were used in the sample selection for the study. The study targeted a total
of 259 Administrators in Nairobi County with the sample size of 155 finally arrived
at. Closed ended questionnaires was used to collect data. Both descriptive (standard
deviation, mean) and inferential statistics (correlation and hierarchical multiple
regression model) were used. The findings of the study revealed that strategic
direction (β = 0.696, p =0.001, <0.05) risk taking (β = 0.352, p =0.025, <0.05); and
innovative capabilities (β = 0.745, p =0.000, <0.05) had positive and significant effect
on organizational performance. Core competence exploration (β = -0.847, p =0.000,
<0.05) was negative but had a significant effect on organizational performance. The
moderator (institutional culture) was found to have a positive and significant effect on
organizational performance (β = 0.832, p = 0.000, <0.05). Further, institutional
culture moderates the relationship between strategic direction setting (β = -1.150, p =
0.000, <0.05) risk taking (β = -2.005, p = 0.000) and innovative capabilities (β = -
1.182, p = 0.018, <0.05) and employee performance while it does not moderate the
relationship between core competencies exploration and employee performance (β = -
0.170, p = 0.575, >0.05). The study concludes that strategic direction, risk taking and
innovative capabilities had positive and significant effect on organizational
performance while core competence exploitation had a negative and was not
significant on organizational performance. Moreover, the study concludes that
institutional culture moderates the relationship between strategic direction setting and
innovative capabilities on organizational performance but does not moderate the
relationship between risk taking and core competencies exploitation on organizational
performance. The study recommends that, policymakers should implement cultural
practices to increase performance of National Government Administration in the
presence of strategic direction, risk taking and innovative capabilities.