Strategic Management Practices and Performance of Firms in the Telecommunication Industry in Rwanda

Abstract

The purpose of this research was to determine the contribution of the telecommunication sector to industrialization and to the world at large and hence the growth of a nation's economy. The main objective of this study was designed to examine the role of Strategic Management Practices on Organizational Performance of Firms in the Telecommunication industry in Rwanda. Specific objectives include: to evaluate the influence of strategic planning, strategic innovation, strategic alliance, strategic marketing on organisational performance of firms in the telecommunication industry in Rwanda and to assess the moderating role of legal and regulatory framework on organizational performance of firms in the Telecommunication industry in Rwanda. This study applied correlational and descriptive design and utilized both qualitative and quantitative data. The distribution of questionnaires was subjected to the top middle level management teams of both MTN and Airtel as an efficient mechanism of collecting data that helped the researcher to arrive at reliable findings. The study population included the 133 Top and middle level, managers of mobile phone operator companies in Rwanda which comprised of MTN and Airtel Company Headquarter and different branches within Kigali City from which a sample size of 100 respondents was calculated using the Slovene’s formula. The data collection instruments were pre-tested using the Cronbach’s alpha and factor analysis of dimensions reductions to determine the validity and reliability of the tests. The data collected was analyzed and presented using tables. The results on, reliability test, descriptive results, demographic information of respondents, correlation analysis, normality test, heteroskedasticity test, and factor analysis and regression results were established on all the variables of strategic planning, innovation, alliance and strategic marketing plus the intervening variable of the legal and regulatory framework. Notably, the correlation results revealed that Strategic Planning has a positive and significant relationship with Performance of Telecommunication industries. Strategic innovation positively correlates with Performance of Telecommunication industry. Moreover, results indicate that a Strategic Alliance positively relates to Performance of Telecommunication industry. Legal & regulatory framework variable was shown to Moderate positively and significantly with Performance of Telecommunication industry. The conclusion here was that the companies benefits tremendously when the strategic planning, strategic innovation, strategic alliance and strategic marketing were taken into account for the efficient organisational performance of firms in the telecommunication industry in Rwanda. This research managerial recommendations emphasized the need for telecom managers to build a strong bottom-up component in the strategic planning structures to ensure that views and opinions of people across all levels of the organization are heard and that they are part of the plan and part of the process. The research recommended policy-makers to intensify the credibility of regulatory commitment, protected from direct political intervention to encourage new telecom investors in the telecommunications industry in Rwanda. Areas for further research should include other sectors of the economy such as; public transport, airlines and learning institutions in order to be studied on a much broader perspective.