IMPACT OF SHARED VISION ON FIRM PERFORMANCE OF MOBILE TELEPHONE SERVICE PROVIDERS IN KENYA

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1 Research Article e-issn Open Access Abstract IMPACT OF SHARED VISION ON FIRM PERFORMANCE OF MOBILE TELEPHONE SERVICE PROVIDERS IN KENYA Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3 PhD student *1, Co-author & Supervisor 2, 3 Jomo Kenyatta University of Agriculture and Technology This study sought to establish the relationship between shared vision and firm performance of mobile telephone service providers in Kenya. It specifically sought to establish whether shared vision influences the firm performance of mobile service providers in Kenya and the role of employee commitment and shared images of the organization by both the management and staff. The study used a cross sectional survey research design and targeted the mobile telephone service providers in Kenya. Data was collected using questionnaires and interview guides. Data analysis was done using SPSS version 20. Linear regression models were fitted and hypothesis testing was done. The results established that shared vision had a significant positive relationship with firm performance of mobile telephone service providers in Kenya. The results of this study revealed that firms should invest heavily in system wise training and learning of employees on requisite competencies before and while on the job to acquire a shared vision of the organization. The study recommended stepping up frequent on the job training in the public sector to ensure that employees merge their personal visions with those of the organization to ensure increased firm performance. Keywords: Shared vision, Mobile telephone service provider, Firm performance, Organizational vision, Mission. Introduction Firm performance is positively influenced by organizational learning components such as shared vision, personal mastery, mental models and systems thinking (Senge, 1990). This is because organizational learning has become a key driver of competitive advantage in the global market in the 21st century. This concept of organizational learning is not confined to a particular type, size or form of organization (Smith, 2001). This is an area that has attracted a lot of research as the global market has become awash with cut throat 6 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3 competition. Watson (2002) posits that organizational learning has proven to be somewhat an elusive concept, making its practical implementation difficult. This is because different firms view learning from a different perspective. He proposed a re- conceptualisation of organizational learning and a new framework to guide management practice. Senge (1990) further noted that the rate at which organizations learn may become the only sustainable source of competitive advantage. McGill et al (1992) defined the learning

2 organization as a company that can respond to new information by altering the very programming by which information is processed and evaluated. Hence organizational learning is part and parcel of the learning organization. This study therefore focuses on one of the five disciplines of the learning organization; shared vision and how it facilitates firm performance of mobile telephone service providers in Kenya. This choice was made on the premise that organizational learning takes place within a learning organization. Individuals, groups and the entire system continuously learn to attain overall transformation culminating to increased firm performance (Nadler et al, 1992). Review of related literature opened gaps for study in the area of strategic HRM practices which can be diffused more readily to enhance firm performance and other determinants of firm performance not addressed in the study by Waiganjo (2013). The study recommended further research to determine which other HRM practices could enhance firm performance. This study addressed the relationship between shared vision and firm performance. Effects of organizational learning on firm performance as recommended by Njuguna (2008) opened yet another research gap. Nzuve s recommendation on further study to assess the impact of organizational culture, organizational structure, leadership, management and inadequate resources to a firm s competitive strategy (Nzuve, 2013) in deed prompted the proposed study. Manica and Vescovi (2011) recommended the need for looking into ways of alleviating the problems brought in by the introduction of the mobile phone and ICT which impact on culture of the people. This called for research on how to improve the firm performance of the key mobile service providers in Kenya. The study of the relationship between shared vision and firm performance of mobile 7 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3 telephone service providers in Kenya sought to address these gaps. Objective of the Study The study sought to investigate the relationship between shared vision and firm performance of mobile telephone service providers in Kenya. Theoretical Framework Shared vision involves individuals building a sense of commitment within particular workgroups, developing shared images of common and desirable futures, and the principles and guiding practices to support the journey to such futures Senge (1994). Shared vision is a component of organizational learning which has attracted a lot of research in the 21 st century. However, the debate dates back to the early 1990s, whereby various scholars gave their passionate ideas on this vast subject. McGill, Slocum and Lei (1992) do not distinguish between Learning Organization and Organizational Learning. They define Organizational Learning as the ability of an organization to gain insight and understanding from experience through experimentation, observation, analysis, and a willingness to examine both successes and failures. Nadler and Gerstein (1992) posited that organizational learning is the intentional use of learning processes at the individual, group and systems level to continuously transform the organization in a way that is increasingly satisfying to all the organizational stake holders. Organizational learning is the process by which an organization gains new knowledge about its environment, goals, and processes. Herbert Simon (1997) posits three ways in which organizations learn: (1) individuals within the organization learn some new fact or procedure, (2) the organization ingests outsiders with knowledge not already in the

3 organization, and (3) the organization incorporates new knowledge into its files and computer systems. Broader organizations, governments and policymaking communities also learn, as alluded to by Smith (2001). Argyris (1977) defined organizational learning as the process of detection and correction of errors. In his view organizations learn through individuals acting as agents for them: The individuals' learning activities, in turn, are facilitated or inhibited by an ecological system of factors that may be called an organizational learning system. Huber (1991) considered four constructs as integrally linked to organizational learning: knowledge acquisition, information distribution, information interpretation, and organizational memory. He clarified that learning need not be conscious or intentional. Further, learning does not always increase the learner's effectiveness, or even potential effectiveness. Moreover, learning need not result in observable changes in behavior. Huber (1991) further noted that, an entity learns if, through its processing of information, the range of its potential behaviours is changed. Shared vision includes developing principles and guiding practices used to reach organizational goals. A shared vision is an all-encompassing worldview which provides focus for an individual and the team concerning what is to be learnt and what is to be valued (Bierema & Berdish, 1996).It answers the question, what will success be like? A shared vision creates a sense of mutual commitment through collaboration to achieve individual and organizational goals. In many organizations the mission or vision statement is often a tangible symbol of the shared vision (Kapp, 1999). The organizations mission statement and vision are often availed to new employees as a means of building a commitment to the set goals and core values (Aswathappa, 2000).Mobile telephone service providers like all other organizations strive to build consensus towards the firm s mission and vision. This is achieved through constant consultation between leaders and all stakeholders in the articulation of core values to ensure individual as well as collective ownership of the same. This sense of collective responsibility motivates staff towards higher levels of firm performance. 8 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3

4 Conceptual framework International Journal of Science and Engineering Invention (IJSEI) Personal Mastery Personal vision Organizational goals Training Mental Models Mental maps Beliefs about system Induction Shared vision Commitment to goals Shared images Systems thinking Patterns Relationships Leadership Styles Autocratic leadership Democratic leadership Laissez-faire leadership Firm Performance Profitability Regional expansion Customer care satisfaction Network coverage Returns to investment Dependent variable Independent variables Moderating variable Figure 1 : Conceptual Framework Methods The study adopted a qualitative as well as a quantitative research approach, using cross sectional survey research design to establish the relationship between shared vision and firm performance of mobile telephone service providers in Kenya. The target population comprised over 7000 employees of the four major mobile service providers in Kenya. They include; Safaricom Kenya Limited, Airtel Kenya, and Orange Kenya. The study specifically targeted CEOs, senior managers and key departmental heads. These employees are specifically chosen because they are pivotal in the day to day running of the mobile service firms in Kenya. They are hence deemed a vital source of information in this study. Stratified random sampling technique was used to single out the 9 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3

5 mobile service providers within the wider telecommunication industry in Kenya. Stratified random sampling involves selecting set criteria such that the existing subgroups in the population are more or less reproduced in the sample (Mugenda, 2003). Within the selected sampling unit (a mobile telephone service provider) systematic random sampling was further used to obtain the actual sample cases. The sample comprised 40 senior managers and departmental heads from Safaricom Limited, 36 from Airtel Kenya and 24 from Orange Kenya. Systematic random sampling was chosen to ensure that each category of workers is given an equal chance of inclusion (Kothari, 2004) and also to minimise systematic error in sampling (Mugenda, 2003). In systematic random sampling every K th (10 th) case in the population will be selected for inclusion in the sample to obtain 100 respondents. This sampling frame of 100 respondents is within the recommended size of at least 30 or more cases per group for correlation studies as recommended (Bryman, 2004). Primary data for the study was obtained by use of an interview guide for the senior managers covering key variables in the study. Both closed ended and open ended questions were employed to obtain indepth information vital to the study on a face to face basis. A structured questionnaire that focused on the key variables of the study was administered to heads of department and the line staff. The questionnaire contained both open ended and closed ended questions to obtain gather information on the proposed study. The closed ended items helped to minimise biased opinions while the open ended items granted respondents the freedom to express their views and give vital suggestions to enrich the study (Kothari, 2004). Table 1: Sample size Mobile Service Population Sampling percentage Sample Provider Safaricom Limited Airtel Kenya Orange Kenya Total Data analysis Descriptive data was analyzed using the measures of central tendency, dispersion, skewiness or one way ANOVA using SPSS version 20. Quantitative analysis was done by use of parametric and nonparametric tests of hypothesis testing. A logistic regression model was estimated to establish the relationship between shared vision and firm performance of mobile telephone service providers 10 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3 in Kenya. Logistic regression is a useful means of representing decision outcomes, makes relatively few statistical assumptions for example normality (Matanda, 2008) and is robust to the statistical assumptions that are made (Matanda, 2008, & Nzomo et al., 2007). Results The study proposed that shared vision does not have a significant relationship with firm performance of

6 mobile telephone service providers in Kenya. The dimensions of shared vision which the study focused on were, well articulated mission and vision, development of commitment to core values of the organization, becoming committed to a shared future, team building and shared vision, creation of team building and recreation activities and team learning and commitment to mission and vision of the organization. The study findings depicted that on overall the Cronbach s Alpha was This is the independent variable with the highest positive significance with firm performance of mobile telephone providers in Kenya. Shared vision by employees is hence the greatest predictor of firm performance. Majority (53.3%) of the respondents agreed that team building and commitment to a shared vision increases the chances of higher firm performance. 98.3% of the respondents half that the missions and visions of their organizations were well articulated and openly displayed at strategic places creating individual ownership and higher productivity. Merging personal goals with organizational goals was seen by 46.7% of the employees as a key contributor to increased firm performance. 52. % of the respondents agreed that 51-75% of them have embraced the organizational mission and vision.78.7% strongly agreed that they are given opportunities for recreation and team building to foster shared vision.68% of respondents wished that administrative hierarchy could be shortened. These findings are in alignment with the earlier findings of Njue(2012) in a case study on the use of MPESA by Safaricom Kenya as a platform for multiplay services. He recommended use of organizational learning to create customer confidence and increase innovation through involvement of all stakeholders this in essence translates to shared vision. The third objective was 11 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3 to find out if shared vision increased firm performance. The study findings depicted that there is a significant positive relationship between firm performance and shared vision (rho=0.719, p- value<0.001). Shared vision is a vital strategy in rallying employees towards higher firm performance. Discussions Based on the study findings, it was concluded that shared vision contributed greatly to increased firm performance of mobile telephone service providers in Kenya. The study findings depicted that there is a significant positive relationship between firm performance and shared vision. This was the independent variable with the highest positive significance with firm performance of mobile telephone providers in Kenya. Shared vision by employees is hence the greatest predictor of firm performance. Organizations can therefore make use of organizational learning to create customer confidence and increase innovation through involvement of all stakeholders this in essence translates to shared vision. Shared vision is a vital strategy in rallying employees towards higher firm performance. These findings are in alignment with the earlier findings of Njue (2012) in a case study on the use of MPESA by Safaricom Kenya as a platform for multiplay services. He recommended use of organizational learning to create customer confidence and increase innovation through involvement of all stakeholders this in essence translates to shared vision. Shared vision is indeed one of the key strategies in rallying employees towards higher firm performance. From the study findings shared vision was deemed to be a the key predictor of firm performance, as such firms should invest heavily in system wise training and learning

7 of employees on requisite competencies before and while on the job. Frequent on the job training could be stepped up in the public sector and promotions done on merit but not personal interests. Policy makers can also make use of stakeholder involvement and marketing skills before passing decrees which affect the masses. The mobile telephone industry values customer satisfaction and hence this can be replicated when policy on health, education or national security are being passed by law makers in any given country. According to the findings, the three mobile service providers have a young workforce which abhors micro management. To retain this vibrant workforce, firms should provide an enabling environment for creativity and innovativeness to ensure higher staff retention rates hence higher performance. The high staff turnover being witnessed in the private sector can be slowed by coming up with a system of rewarding and promoting creativity and innovativeness through shared vision of the firms future. References 1) Aswathappa, K. (2000).Human resource and Personnel Management, New Delhi: Tata McGraw Hill. 2) Argyris, C. (1977). On Organizational Learning (2nd Ed.). Oxford: Blackwell Publisher. 3) Bierema, H. & Berdish, D. (1996). Implementing the learning organization: collaboration between business and Education, Alexandria, ASD Books. 4) Bryman, A. (2004) Social Research Methods (3 rd Ed.) Oxford: Oxford University Press. 5) Huber, G.P. (1991). Organization Science, Special Issue: Organizational Learning: Papers in Honor of (and by) James G. March. 2(1): ) Huber, G.P. (1999). Organizational learning: an examination of the contributing processes and a review of literatures. Organizational Science, 2(1): ) Kapp. K. M. (1999).Transforming your Manufacturing Organization into a learning organization, Institute for Interactive Technologies, Bloomsburg University, Pennsyvania. Hospital material Management Quarterly, 20(4): ) Kothari, C.R. (2004). Research Methodology, New Delhi: New Age International Publishers Ltd. 9) Kenya Telecommunication Report Q1 (2010). Nairobi, Kenya. 10) Manica, L. & Vescovi, M. (2011). Mobile telephony in Kenya: is it making life better? Nairobi, Kenya. Retrieved December ) Matanda, M.J., Ndubisi, N.O & Sigual, J. (2008). Evaluating variations in market orientation within; and across stages of supply chain in small and large businesses, Melbourne: Australia. SME Entrepreneurship Global conference, July ) Mugenda O.M. & Mugenda A.G. (2003). Research Methods; Quantitative and Qualitative approaches; Nairobi, Kenya. Acts press. 12 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3

8 13) McGill, M.,Slocum, J. & Lei, D. (1992). Management practices in learning organizations. Organizational dynamics. 21(1): ) Nadler, D.A., & Gerstein, M.S. (1992).Designing High Performance Work Systems: Organising People, Work, Technology and Information. San Fransico. Jossey Bass. 15) Njue, D. (2012). Case study: Safaricom is using MPESA as a platform for multiplay services, Unpublished M.A Thesis, University of Nairobi. 16) Njuguna, I.N. (2008).Organizational learning, competitive advantage and firm performance: An empirical study of Kenyan small and medium sized enterprises in the manufacturing sector, Unpublished, PhD, Thesis, JKUAT, Kenya. 17) Nzuve, S.N.M (2013).Competitive strategies adopted by Safaricom Kenya Limited to tackle competition, Dec, Unpublished PhD Thesis, University of Nairobi, Kenya. 18) Senge, P.M. (1990).The Fifth Discipline. The art and practice of the learning organization, New York: Doubleday. 19) Senge, P., Kleiner, A., Roberts, C., Ross, R.B. & Smith, B.J.(1994). Realizing Unlimited Potential in people and Organizations. (The fifth Discipline field book) New York: Doubleday Publishers. 20) Smith, M.K. (2001). Donald Scon: Learning, reflection and change, London: Sage publication. 21) Simon, H.A (1997). Administrative Behaviour, (4th Ed.), New York: The Free Press. 22) Waiganjo, E.W. (2013). Effect of competitive strategies on the relationship between strategic HRM and firm performance of corporate organizations in Kenya, Unpublished PhD, Thesis JKUAT, Kenya. 23) Waburi, N. (2009).The impact of mobile phone to the Kenyan economy, Unpublished M.A thesis Kenyatta University, Kenya. 24) Watson, B. (2002). Rethinking organizational learning. Melbourne: Unpublished Doctorate thesis, Faculty of Education, The University of Melbourne. Acknowledgements My sincere appreciation goes to my two supervisors; Dr. Esther Waiganjo and Prof. Elegwa Mukulu from the College of Human Resource Development who offered me very significant professional guidance and positive criticism each step of the thesis development. Professor Kihoro of Corporative University and Patrick Mwendwa of Jomo Kenyatta University of Agriculture and Technology who guided me in data analysis are highly appreciated. Polycarp Otieno, a statistician at the Ministry of Education and my colleagues in the PhD in Human Resource Management class 2012 are highly appreciated for their support in vital inputs and suggestions during the preparation of this thesis. My spouse and children are profoundly appreciated for their prayers, patience, financial and moral support throughout the development of the proposal. I owe completion of this thesis to the grace and strength of the Almighty God. 13 Corresponding Author - Theresia Mueni Mutetei *1, Esther Waiganjo 2, Elegwa Mukulu 3