Effect of Adoption of Human Capital Strategies on the Management of Parastatals in Kenya

Abstract

Strategic decision making on strategic choices and options represent the most important product of managerial activities in the organizations. Acceleration of economic growth and industrialization shifts the paradigm and puts human capital as the nuclear of strategic choice and development. Development and implementation of human capital strategies is one of Kenya Vision 2030’s key pillars. A review of global good practice in countries with similar development challenges as Kenya identifies key roles for parastatals in the national development effort. Parastatals are important in promoting or accelerating economic growth and development and are critical to building the capability and technical capacity of the state in facilitating and/or promoting national development as espoused in the Kenya Vision 2030 strategy. The general objective of this study was to determine the effect of adoption of human capital strategies on the management of parastatals in Kenya. The specific objectives aimed at establishing the effect of adoption of talent brand nurturing strategy, assess the effect of adoption of performance monitoring strategy, establish the effect of adoption of leadership development strategy, and examine the effect of adoption of succession planning strategy on strategic management of parastatals in Kenya. Pragmatism paradigm philosophy, mixed method research approach and descriptive survey design were adopted in the current study. The population for this study was drawn from the parastatals in Kenya. The target population for the study consisted 404 employees from 53 purely commercial and parastatals with strategic functions in Kenya from which the sample was drawn. Using a stratified sampling technique of calculating a sample size, a total of 129 respondents from 26 purely commercial and parastatals with strategic functions formed a sample size for the study. Self-administered questionnaire was used to collect both the primary and secondary data. Multi-linear regression model was used as a tool for analysis and the results generated were presented qualitatively and quantitatively. The current study tested the null hypotheses. Based on the results, the null hypothesis in each case was rejected. The model summary indicated the overall coefficients of determination of the four independent variables under study. The study consistently found that there was existence of a strong interrelationship between strategic management of parastatals and the four predictor variables. The study recommends that parastatals in Kenya should adopt all the four human capital strategies to strategically boost and enhance strategic management prowess in order to retain the best talents, improve productivity and performance, exceed the stakeholders’ expectations and create sustainable competitive advantage in their respective parastatals. The study aimed at helping the academicians, policy makers, leaders, and managers in the parastatals and private organizations to make use of the competitive contemporary human capital strategies to achieve desired strategic objectives and create sustainable competitive advantage.