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Research Paper | Management | Rwanda | Volume 7 Issue 11, November 2018
Effect of Strategic Orientation on Organizational Performance: A Case Study: Sonarwa General Insurance Company Ltd
Abstract: Companies have long known that, to be competitive, they must develop a good strategy and then appropriately realign structure, systems, leadership behavior, human resource policies, culture, values and management processes. Doing insurance business in Rwanda is increasingly becoming a challenge to both established and newly establishing insurance organization. This is compounded by the fact that Rwanda is a small country by geographical size and population with a rising number of insurance firms. Further, the country is struggling out of serious political turmoil but with a desire to get the country back to shape as demonstrated by the strategies laid down by the Rwandan Government. Multiple evidences from the strategic orientation literature indicate that theoretical development on the adoption of multiple strategic orientations has failed to catch up with contemporary organizational practices. Although many studies in the Management literature incorporated strategic orientation, the effect on organizational performance and the relationship between strategic orientations remains unclear. Some found positive connections between orientations and organizational performance. However, the majority of the studies only researched the direct relation between a specific orientation and performance discarding moderating and mediating variables that potentially affect the relation between orientation and performance. To address the aforementioned knowledge gaps on strategic orientations and organizational performance, this study investigated the strategic orientations such as innovativeness, risk taking, customer and market orientations. The case study was SONARWA General Insurance Company ltd. The target population was SONARWAs staff and sample size was 80 potential respondents. The descriptive research approach was adopted, where the semi-administered questionnaire was applied. Data collected from the field was cleaned, sorted, coded, tabulated and statistically analyzed by using SPSS. In data analysis, the One-sample T test was used to compare the means with hypothesized mean. The results obtained concluded that innovativeness, risk-taking, customer and market orientation had a significant effect on organizational performance. Thus, having new ideas, new solution-products and service and new behaviors under innovativeness had positive effect on organizational performance. Under risk taking, large risky new investments, initial investment and uncertain projects (unknown returns) had a significance on organizational performance. In customer orientation, the elements like Understanding/perception, satisfaction and customer loyalty had significant effect on business performance. In market orientation, competitive advantage pricing and promotions had an influence on organizational performance. Finally, the recommendations have been given, and the areas for further researches had been identified.
Keywords: Strategic orientation, Organizational performance
Edition: Volume 7 Issue 11, November 2018,
Pages: 321 - 328