The Influence of board heterogeneity on corporate level strategy choices for Deposit Taking Savings and Credit Cooperatives (SACCOs) in Nairobi
Date
2024
Authors
Muthoni, P. N.
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Publisher
Strathmore University
Abstract
Strategists and researchers agree that corporate level strategies are important for organizations to gain a sustainable advantage or maintain their operations at a given level as a going concern. Such strategies are also critical in responding to changes in the operating environment. The objective of this research was to determine the influence of age, industrial background and gender heterogeneity of boards on corporate level strategy choices among 44 DT SACCOs (Deposit taking savings and credit cooperative organization) in Nairobi. The research adopted the upper echelon theory as the foundational theory. The research applied a descriptive research design where structured questionnaires with closed questions focusing on various aspects of board composition and strategic choices undertaken in the last five years were issued to the respondents between February and March 2024. The target population of the study was 44 respondents comprised of DT SACCO CEOs from all the DT SACCOs under study. A census technique was applied since the population size was small, thereby not requiring any sampling. The data collected was entered and coded into SPSS version 29.0. The data was then be analyzed to establish descriptive statistics while inferential statistics were established through Spearman’s correlation analysis and regression analysis. The results of the regression analysis indicated that board gender heterogeneity had a strong positive influence on the corporate level strategy choices. The results also showed that heterogeneity in the age of the board members had a strong positive influence on the choice of corporate level strategies. The research found that the influence of industrial background heterogeneity on corporate growth strategy choices was insignificant. The study underscores the need for members of DT SACCOs to consider the implication of board demographic characteristics on corporate level strategy choices while voting for representatives. It also contributes to the existing body of literature by demonstrating the independent and interactive effects of board heterogeneity and their influence on the choices of corporate level strategies. The study also recommends that future studies focusing on other factors such as firm characteristics and macroeconomic variables would be resourceful in enriching literature and policy. These would also contribute in addressing the limitations of this study.
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