Professional Documents
Culture Documents
JAMES KIILU
D61/73483/2012
SURPERVISOR:
DR J. KAGWE
AUGUST, 2018
TABLE OF CONTENTS
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3.3 Data Collection .........................................................................................................16
REFERENCES .................................................................................................................18
APPENDICES ..................................................................................................................22
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CHAPTER ONE: INTRODUCTION
mandates they are required to make appropriate actions to these dynamics by developing
effective and responsive strategies which calls for planning in anticipation of any
uncertainty in future to enable them survive in the environment they operate in (Beck et
al., 2010). This situation has raised various environmental and leadership challenges to
Haunschild & Khanna, 2012). Indeed, for organizations to stay competitive and relevant
over a volatile environment, they must realign themselves to the dynamic changes to the
The study will be guided by various theories to support it and among them is Institutional
theory, it argues that institutionalization is when repeated actions are awarded shared
meanings by the actors and the institution grows stable and durable and realigns strategy
and processional neo-institutional. Mc Kinsey 7-S theory posits that organization must
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develop a degree of realignment to all the seven Ss, (Peters &Waterman, 1982).
thoroughly so as to keep a closer evaluation of all the variables that affect the current and
Ansoff & McDonnell (1990) argued that organizations are environment-serving; they
interact with the environment in such a way that they get inputs from the environment,
process and give back to the environment. The study is very important as it will expound
how the Kenya National Treasury addresses the effectiveness of response measures in
implementing Integrated Financial Management System (IFMIS). It will analyze how the
National Treasury responds to external changes and variables taking place in the
environment. The role of strategy is to position and timely realign any organization in
1.1.1Strategy Implementation
According to Kotler (1984) strategy implementation is defined as the process of putting
plans into action for the accomplishment of set objectives. It is through implementation
of strategy that an organization can figure out its future and benefit from the opportunities
the future provides. Strategy implementation can also be defined as intervention with
regard to the structures within an organization, the systems and key personnel aimed at
organization to effectively put in place plans into action, policies and programs that helps
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Harrington (2006) noted that successful strategy Implementation involves two key
refers to developing operational plans and tactics through which an abstract strategy will
work efforts directly relate to the strategy. It is more specific, concrete and short-term in
organization to achieve its set strategic objectives as expected using the allocated
resources within the planned time. Effectiveness of strategy implementation must be built
culture, support systems, processes and policies. Strategy implementation can be defined
in terms of change. Thus, analysis of strategy can be done by examining how much an
organization will have to change for its successful implementation. However, strategy
control systems.
Effectiveness in organization is evaluated and measured with four areas of approach: the
strategic constituency approach, the system resource approach, the organizational goal
approach and internal approach. (Balduck &Buelens, 2008). This determines the
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effectiveness and efficiency approaches which are contingent upon the rise of any
situation during strategy implementation. Control mechanism must be put in place for
continuous evaluation of the strategy to address any deviation from the target objectives.
county governments, this is from the promulgation of 2010 constitution of Kenya. There
are three independent arms of government that sum up the National government which
includes: Judiciary, Legislature and the Executive (Kenyan Constitution, 2010). IFMIS
supports financial functions and reporting for all these government units. The executive
arm of National government forms the cabinet which is chaired by the President and is
National Treasury.
policies help in spurring economic growth and development. It works hand in hand with
all other state departments and regulatory bodies including Central Bank of Kenya (CBK)
The National Treasury supports fiscal and financial relationship between the county and
national governments while assisting them to come up ways of ensuring efficient and
transparent use of public funds. It plays an important role in preparation of the national
budget and promotes efficiency in public financial management. It also prepares budget
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estimates and allocations for approval by legislature for the whole country-public
strategy implementation by the National Treasury because the National Treasury is the
custodian of IFMIS and is responsible for its implementation and management across all
government entities.
1.2Research Problem
It is generally argued that, successful IFMIS implementation can lead to efficiency and
can aid financial managers to effectively budget and manage resources at optimal
government bodies and agencies should fully execute and integrate their financial
functions on IFMIS platform, this has however not been actualized in most of the
government institutions.
contexts. In Kenya for instance, Rozner (2008) evaluated how best to implement IFMIS
for USAID funded projects. Kahari, Gathogo & Wanyoike (2015) looked at the
Adero and Odoyo (2014) examined how IFMIS implementation affects management of
These studies identified challenges that face the implementation of IFMIS and proposed
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county governments not the National Treasury and they did not provide sufficient
This was realized because the study by Kahari, Gathogo & Wanyoike (2015) focused on
Treasury while study done by Chumba, Adero and Odoyo (2014) focused on IFMIS
implementation and cash management in Eldoret West District again focusing on county.
While the study by Rozner (2008) purely focused on USAID funded project. There is
National Treasury of Kenya. This study will go into filling and addressing this gap. The
study seeks to find answers to this question: What is the effectiveness of IFMIS strategy
economic policies. The Government of Kenya will have detailed knowledge of the
IFMIS implementation and this will provide a platform to make further decision on
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governments would find the results of this study particularly useful in addressing
The study provides insights on the way National Treasury responds strategically to the
challenges and identifies effective responses for further enhancement or adoption as best
practices. The National Treasury would be able to identify the gaps in the strategic
responses that it could exploit in order to cope with the current and future challenges.
Future scholars and academicians will also use the findings to advance more knowledge
on IFMIS. The study will add to theory and practice with regard to IFMIS
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CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This chapter looks at past studies that relates with the current study. The review is done
using current materials. The review is further done in line with the study objectives.
Three fundamental models will be used as the bases of this study and to explain the
considered are the open system theory (Ansoff & McDonnell, 1990) and institutional
based theory by Philip Selznick (1957). Other model is resource base theory by Penrose
organization in achieving its objectives. An organization does not exist in a vacuum but
rather, within the environment that is made up of forces (either internal or external)
(McDonnell & Ansoff, 1990). This theory suggests that by virtue of existing in an
environment, there must be constant interaction between an organization and the forces
of the environment. This interaction affects the way organizations carry out operations
where they function as open systems. This interaction helps in production and marketing
of products (services). They are then expected to make informed decisions in adopting
effective responses strategies that will realign them and maximize the opportunities the
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environment offers and correct and adverse effects in order for them to remain
competitive and achieve the intended objectives. According to this theory, it is important
for National Treasury to match the IFMIS strategy implementation processes with the end
users’ requirements and closely monitor and address all deviations in order to achieve the
environmental forces. The theory suggests that all organizations have to undergo a
process of institutionalization.
Institutionalization refers to this adaptive process: "In what is perhaps its most
significant meaning, 'to institutionalize' is to infuse with value beyond the technical
base which brings an enabling organizational environment that enables ease in choosing
implementation by National Treasury can only be realized when all the processes and
linked with the work of Barney (2001). The Resource Based Theory of the organization
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advocates that an organization seizes a sustainable competitive advantage when “it is
used to realize value creating strategies are categorized into three forms of assets: which
This theory suggests that for sustainable competitive advantage, the resources of an
The National Treasury of Kenya has to anchor the IFMIS strategy implementation
constituency approach, the system resource approach, the organizational goal approach
and internal approach (Buelens & Balduck, 2008). They determine the effectiveness and
efficiency approaches which are contingent upon the rise of any situation.
In organizational approach, business entities are displayed as goal seeking, logical and
planned with aim of achieving one or more predefined goals and objectives. Thus,
internal objectives of an organization form the basis for determining efficiency. In view
of the system approach, it is assumed that business entities seek for inputs that are
outputs. The key focus of internal approach on the other hand is on internal tasks. Here,
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constituency approach is on the ability of an organization to efficiently attain the
organization must lay out clear goals and how they can be achievied. Chatterjee (2006)
used the term top management to define managerial principles about e-commerce
competitive advantages in firms and input in those initiatives. The findings of Chatterjee
and policies of e-commerce are influenced by top management commitment and support.
organization is able to access timely information for better performance (Chatterjee et al.,
2006).
constituency approach, the system resource approach, the organizational goal approach
successful strategy has to fall into all mainstream measurement of strategy effectiveness,
realign the strategy with objectives and again, it has to put corrective measures to address
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2.4 Challenges of Strategy Implementation
full of challenges that include resistance to change, inadequate legal and policy
and changes in design of systems. Other challenges include shortage of training and
The whole process of implementing IFMIS projects requires a lot of resources, it is risky
and it is complicated. The process demands major changes in procedures and systems
within an organization. It requires skilled professionals that are committed and dedicated
to the push for reforms (Chêne, 2009). Implementation of IFMIS requires that
organization is deeply committed to reforms and change. This change could be in terms
of the systems, processes and procedures within an organization, the available skills set,
tasks and responsibilities and the general culture of employees in an organization (Rodin-
therefore important that all stakeholders are fully aware of degree of the undertaking.
However, the benefits accruing to an organization with IFMIS are more than what it costs
Khemani and Diamond (2006) indicated that commitment from top management team
IFMIS. Among countries where IFMIS has been successful include Ethiopia, Tanzania,
Slovak Republic and Kosovo. The key driving forces for success of IFMIS in all these
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2.5 Integrated Financial Management Information System (IFMIS)
An IFMIS is government to government or inter-agency association software. It is the
increasing efficiency and effectiveness while at the same time reducing fraud and misuse
outdated or has been devastated (Oliver, 2001). Employees counter attack change since
they have to learn something new.Strassman (1985) argues that low acceptance for
change is the fear that staffs will not be able to mature to new skills and actions that are
Oliver (2001) notes that failure to effectively control IFMIS results into gaps and this
necessitates a control feature on the system. This is because through IFMIS, spending
against announcements from the exchequer is controlled. This can be done in line with
the available budgetary limits. By allowing over expenditure against the budget,
resources may be diverted from the crucial areas that were initially targeted by
accounting officers (Diamond &Khemani, 2009). IFMIS was initially developed for
commercial use by companies implying that there was need to modify some modules for
example budgeting.
According to Armstrong (2000) notes that staff training helps in modification of the
equipping them with skills on how to handle activities proficiently. Training helps an
organization to achieve the goals, values and mission states. Training is the ability to
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capitalize on people in order to allow them to effectively utilize their capabilities and
abilities.
Seifert, (2003) noted that e-government interconnects many legislative matters, including
confidentiality, digital rift, and public access to government info, service provision, and
success of the inventiveness. The design of IFMIS should incorporate the controlling and
legal frameworks and determine basic changes to the whole outline public financial
having in place clearly established lawful responsibilities, roles and errands of all firms in
management, regulation and monitoring of budgets. Other roles that require legal
management and asset besides public borrowing and speculations (Rozner, 2008).
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2.6 Summary of Knowledge Gaps
on
Nyandarua County
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CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
This chapter is the backbone of how the researcher will attain the objectives of the study.
It discusses the various research designs, the study population, techniques of determining
sample size, instruments to be used to collect responses and how these responses will be
analyzed.
A research design is simply a plan that guides the researcher in attaining the study
objectives. A researcher design dictates the methods to collect and analyze data from
respondents (Kothari, 2004). There are three major research designs; Descriptive,
design is found to be more preferable and justifiable for this study because. The design
will help the researcher to reports on the status of study variables of the study.
The study will rely on primary data that shall be collected by use of semi-structured
questionnaires. They will be administered through drop and pick later method. The target
population census will be done and shall consist of junior, middle and senior staff from
the National Treasury. The questionnaire shall have four sections: Section A-Respondent
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Effectiveness of Strategy Implementation. The data will be both qualitative and
quantitative.
The collected data will undergo the process of cleaning and coding into Statistical
Package for Social Sciences (SPSS). The coded responses will then be analysed using
both descriptive and inferential statistics. Descriptive statistics will include use of means
study, the researcher will use inferential statistics. The key inferential statistic will be the
Using these statistics, the study will seek to extract the challenges of implementing
IFMIS and response strategies applied. It will further seek to establish the effectiveness
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REFERENCES
Ansoff, H.I. & McDonnell, E.J. (1990).Implanting strategic management. New York:
Prentice-Hall.
Baum, J.R., & Wally, S. (2003). Strategic decision speed and firm performance.Strategic
Management Journal, 24, 1107-1129.
Beck, T., Cull, R., Fuchs, M., Getenga, J., Gatere, P., Randa, J. &Trandafirl, M. (2010).
Banking Sector Stability, Efficiency, and Outreach in Kenya.
Chandler, A. D. Jr. (1962). Strategy and Structure: Chapters in the history of the
industrial enterprise. Cambridge, Mass: MIT Press.
Cooper, D.R. & Schindler, P.S. (2011).Business research methods.11th Ed. New York:
McGraw-Hill.
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Davis, G.F. & Powell, W.W. (1992).Organization-environment relations. Cambridge,
Mass: MIT Press
Diamond J. &Khemani P. (2009). IFMIS in developing countries: IMF paper, pg. 45 46.
Harrington, R. J. (2006). The moderating effects of size, manager tactics and involvement
on strategy implementation in food service, Hospitality Management, vol 25 pp.
373-397.
Johnson, G. & Scholes, K. (2003).Exploring corporate strategy. 6th Edition, New York:
Prentice-Hall.
Kahari, C., Gathogo, G. &Wanyoike (2015). Assessment of the factors affecting the
implementation of integrated financial management information system in county
governments: A case of Nyandudarua County, Kenya. International Journal of
Economics, Commerce and Management, 3(11)1352-1354.
Kothari, C.R. (1990). Research methodology. New Delhi, India: Wiley Eastern.
Kotler, P. (1984). Marketing management: Analysis, planning and control, (5th Ed.).
Englewood Cliffs, New Jersey: Prentice-Hall.
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Lavie, D., Haunschild, P.R. &Khanna, P. (2012). Organizational differences, rational
mechanisms and alliances performance. Strategic Management Journal, 33, 1453-
1479.
Penrose, E. T. (1959). The theory of the growth of the firm. New York: Wiley.
Peters, T. J. & Waterman, R. H. (1982).In Search of Excellence. New York: Harper &
Row.
Rozner, S. (2008). Best practices in fiscal reform and economic governance: Introducing
integrated financial management information systems.
20
Selznick, Philip (1957). Leadership in administration: A Sociological interpretation. New
York: Harper and Row.
The National Treasury (2011). IFMIS Re-engineering Strategic Plan 2011- 2013:
Integrated Financial Management Information System (1).Retrieved on Jul 4,
2018 from http://www.treasury.go.ke/publications/other-publications/category/1-
integrated-financial-management-informaton-system.html
Thompson Jr., A.A., Strickland III, A.J. & Gamble, J.E. (2003).Crafting and executing
strategy: The quest for competitive advantage: Concepts and cases (16th Ed).
Boston: McGraw-Hill-Irwin.
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APPENDICES
Appendix I: Questionnaire
4. Your area of training: [1] – Science [2] - Liberal Arts [3] - Business
[4] – Others (specify) __________________________________
5. Cumulative number of years you have held top management position in National
treasury
[1] 0 – 4 [2] 5 – 9 [3] 10 – 14 [4] 15 – 19 [5] Above 20 years
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SECTION B: IFMIS IMPLEMENTATION STRATEGY
6. Using the scale provided please indicate the extent to which the following
implementation.
(Kindly tick the relevant box for each) [1] – Not at all [2] – To a little extent
[3] – To a moderate extent [4] – To a great extent [5] – To a very great extent
Statements 1 2 3 4 5
Planning
Strategy communication
staff welfare
Organizing 1 2 3 4 5
National treasury
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Identification and classification of required
Activities
authority to Managers
Staffing 1 2 3 4 5
institutions
staff appointment
Poor remuneration
Change management
Leading/Directing 1 2 3 4 5
Result-oriented management
Materials
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Staff unionism
Transformational leadership
Control 1 2 3 4 5
Establishment of standards
andPlans
Quality assurance
Resource Allocation 1 2 3 4 5
National Treasury
National Treasury
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SECTION C: EFFECTIVENESS OF IFMIS STRATEGY
IMPLEMENTATION
7. Using the Likert scale provided please indicate the extent to which the effectiveness of
[1] – Not at all [2] – To a little extent [3] – To a moderate extent [4] – To a great extent
Institutional 1 2 3 4 5
Political 1 2 3 4 5
Technical 1 2 3 4 5
IT security
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8. What are some of the challenges that you are experiencing in IFMIS implementation?
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