Organizational Innovations and Performance of Public Universities in Kenya

Organizational Innovations and Performance of Public Universities in Kenya

Sila Musyoka Cyrus¹, Dr. Kegoro Ongoto Henry², Dr. Njagi Elias³

¹Kenyatta University, Department of Business Administration

²Kenyatta University, Department of Business Administration

³Kiriri Women’s University of Science and Technology

DOI: https://dx.doi.org/10.47772/IJRISS.2024.802072

Received: 30 January 2024; Accepted: 09 February 2024; Published: 08 March 2024

ABSTRACT

Despite the important place that research on strategic innovations has in the literature on strategic management, little is known about the relationship between strategic innovations and university performance. The limitations of measuring organizational innovation constructs, methodological ambiguities, and contentious conclusions from earlier studies served as the foundation for this study. This study set out to look into how organizational changes affected the performance of Kenya’s public universities. This study made use of the balanced scorecard approach and resource-based theory. The research design used was cross-sectional. This study’s target audience consisted of Kenya’s 31 public universities. This study’s sample frame consisted of 10 public universities. The population’s 100 respondents were picked. Using a stratified random sample method, respondents from Kenya’s 10 public universities were selected. The Israel (2009) formula was used to establish the sample size for the 80 respondents. Structured questionnaires with both closed- and open-ended questions were used to collect primary data. A Likert-type scale was used to evaluate the questionnaire items. The administration and administrative staff of Kenya’s public universities served as the study’s respondents. The deputy vice chancellors, directors, deputy directors, managers, and senior administrators were among the respondents to the survey. While Cronbach Alpha coefficients were used to test the reliability of the research instrument, the validity of the research instrument was evaluated by academic researchers and business specialists. Tables and figures were used to present the results of the descriptive statistics and linear regression method analysis of the data. The study found a strong correlation between organizational innovations and public university performance (F, 41,247= 57.8, p 0.000). The study concluded that organizational changes like restructuring, transformative leadership, and employee retraining can successfully explain the performance of public universities. According to the report, it is important to reconsider organizational changes if public universities in Kenya are to perform better. It is inferred that the findings of this study will have a substantial impact on theory, management practice, and decision-makers like the Commission for University Education and the Kenyan Ministry of Education.

Key Words: Organizational Innovations and Performance of Public Universities

BACKGROUND OF THE STUDY

Universities in particular are thinking about strategic innovations to maintain their relevance in the higher education service industry in the dynamic and unpredictably changing business environment (Allen & Seaman, 2013). Organizations all across the world are doing the same. Strategic innovation is the process of redefining corporate, business, strategic, and operational techniques within the firm to generate greater performance (Aswani, 2013). Strategic innovation, according to Brynjolfsson and McAfee (2011), may be regarded from multiple angles, including the use of appropriate technology and significant advancements in service delivery procedures. Practices attributed to strategic innovations include the creation of new products as well as ongoing improvements to existing ones in order to satisfy clients (Guday & Kilic, 2011). Strategic innovations are techniques that improve new customer service methods and digitize processes to increase corporate performance and efficiency (Gupta & Malhotra, 2013). According to Jakovljevic (2020), a number of initiatives aimed at enhancing the total customer service delivery experience can be linked to strategic innovations in the university setting. In addition to forcing a reevaluation of strategic innovations, the globalization of higher education services has also forced the development of fresh approaches to increasing customer lifetime value (King’oo, 2014). Innovation is regarded as an essential part of carrying out a strategy.

It is also regarded as the sole tool that businesses, and particularly universities, may use to achieve their objectives in the challenging business environment (Kiptoo & Koech, 2019). According to Odhiambo (2013), innovations in higher education institutions are viewed as methods for creating new economic prospects with specific risk mitigation strategies, value addition, and reduction. Strategic innovations are necessary for any higher education institution to be globally competitive (Nikolai, 2017). According to Selwyn et al. (2014), strategic innovations can assist public organizations—and universities in particular—deliver services more effectively and efficiently. Strategic improvements to improve university performance are unavoidable (Valentina, Olga, & Boris, 2017). According to the literature on strategic management, every business can increase performance by effectively adopting strategic innovations (Upadhaya, Munir, and Blount, 2014). The impact of strategic innovations on the success of higher education institutions has been evaluated by academics in the USA on a global scale (Brynjolfsson & McAfee, 2011; Christensen & Eyring, 2011; Allen & Seaman, 2013; Brunner, 2013).

Similar to this, academics from the region think that universities can accomplish their goals more quickly and successfully if they automate their service delivery models, train staff in computer skills, digitize documents, integrate technology into teaching, and provide financial services (Jakovljevic, 2020). Further, a 2019 research from Egypt’s National Management Institute shows that the success of higher education institutions differs depending on how well technology innovations are adopted. In contrast to universities that employ traditional models of service delivery deemed inefficient and ineffective, those that continuously improve their models of service delivery to adapt to shifting consumer trends in the turbulent business environment are more likely to achieve global competitiveness (King’oo, 2014). Organizational strategic innovation research is important because it drives global competitiveness (Najmaei, 2010). However, it has been found in the literature on strategic management that research on strategic innovation in the university setting is underrepresented. As a result, there is a need for a study to clarify how the performance of universities can be assessed using the three strategic innovation indicators chosen—organizational, market, and product innovations. According to Valentina et al. (2017), organizational innovation refers to a company’s ability to implement new strategies, ideas, structures, products, processes, technologies, and services.

Any corporation that adopts innovations strives to realign with shifting business trends, according to Verma and Jayasimha (2014). Changes in regulations, greater competition, and altering consumer needs encourage firms to innovate as well as work toward achieving their goals more successfully and efficiently (Zhou & Wu, 2010). Organizational innovations are thought to be a function of organizational performance when successfully implemented (Gupta et al., 2016). Utilizing fresh concepts, practices, products, or services is referred to as strategic innovation (Tavassoli & Karlsson, 2015). According to Sawhney, Wolcott, and Arroniz (2016), an organization’s innovations can be assessed in terms of restructuring, retraining employees, re-engineering service delivery models, and fostering bottom-up and top-down communication mechanisms. According to Polder, Leeuwen, Mohnen, and Raymond (2013), organizations can substitute innovative approaches for traditional ones by creating an environment that encourages employee creativity and innovation.

In order to enter new markets, increase the client base in the current market, and provide the company with a competitive edge, one of the main elements of growth strategies is strategic innovation (Nybakk & Jenssen, 2012). The different financial measures that operationalize the multidimensional concept of organizational performance include sales, net asset value, and profit, to name just a few. Additionally, customer satisfaction, market share, and employee morale are non-financial criteria used to evaluate organizational effectiveness. Organizational performance cannot be accurately evaluated unless both financial and non-financial measures are considered (Zahra, 1993). It is a relevant contextual concept for the phenomenon being studied. Profitability is the main financial statistic used to evaluate an organization’s success since it acts as a barometer of the effectiveness and efficiency of its operations (Bora & Bulut, 2008).

In the past, the success of a business has been evaluated using financial indicators like profit, return on investment, earnings per share, market share, revenue growth, and current ratio (Bora & Bulut, 2008). According to Guday and Kilic (2011), evaluating an organization’s performance in relation to its short- and long-term objectives constitutes organizational performance. According to Upadhaya, Munir, and Blount (2014), three distinct aspects of a firm’s performance—financial performance, product market performance, and shareholder return on investments—are accounted for by organizational performance. The financial performance includes investments, return on assets, and earnings produced during a specific time period. According to Verma and Jayasimha (2014), product market performance refers to the quantity of goods or services a firm can sell within a specific time period as well as the total number of customers using the products and services the company produces during that time period. This study plans to evaluate performance in the university setting using certain measures, such as effectiveness, efficiency, customer loyalty, and policy implementation. Despite the relevance of strategic innovations for organizational growth, there is a dearth of organizational innovation research in the context of universities, necessitating more study to examine the impact of organizational innovations on university performance.

According to the Commission for University Education’s 2018 report, public universities are regarded as institutions of higher learning that were created by the University Act and wholly governed by the government. All Kenyans must have access to education, research, and training under the universities’ mandate. The higher education services industry has undergone enormous growth since the country’s declaration of independence in 1963. The demand for higher education has caused a significant expansion in the number of universities. 31 public universities have been founded, but there are still six universities operating as constituent colleges under interim letters, making Nairobi University College the only institution in Kenya that offers higher education services (Waithaka, 2014).

The rise in the number of students enrolling in various academic programs is blamed for the expansion of the higher education services industry. The Kenyan government has established quality assurance regulatory organizations like the Commission for University Education (CUE) to ensure that services are delivered effectively at institutions (Inter-University Council for East Africa (IUCEA), 2014). According to Wambui (2011), the higher education system is undergoing significant changes due to fierce competition from private universities and overseas universities. Universities have also reconsidered alternate strategies for raising performance as a result of changes in technology, industry restrictions made by the ministry of education, and student demands.

Investment in innovations is viewed as a driver of global competitiveness for the relevance of any institution of higher learning, and universities in particular (Shisia, Sang, Matoke & Omwario, 2014). Public universities’ current situation is related to financial limitations, and their inability to offer courses that are driven by the market is linked to their unwillingness to innovate (Melchorita, 2013). Graduates lack the requisite skills as a result of universities’ aversion to modern technologies and slow economic growth (CUE, 2018). The adoption of strategic innovations is regarded to be a stimulant for university performance if adequately managed for the strategic survival of universities in the globalized higher education industry (Melchorita, 2013). Additionally, a practice ingrained in a culture of transformative leadership that prioritizes strategic innovations as a means of attaining university objectives more effectively and efficiently is what makes the institution’s vision a reality, not the number of years it has been in existence.

 Statement of the Problem

Despite the crucial role that public universities play in the development of higher education services in Kenya through teaching, research, and training (Nikolai, 2017), these institutions face a variety of difficulties that have a negative impact on their performance (King’oo, 2014). Stakeholders are concerned about challenges such as financial limitations, service gaps, a sluggish response time to shifting business trends, and the inability to execute Commission for University standards (Mbuchi, 2013). In light of these difficulties, reevaluating strategic innovations would not only help universities perform better, but will also make them more competitive on a global scale in the higher education services market (Aswani, 2013).

Numerous studies have shown that, when properly adopted, strategic innovations can have a favorable impact on an organization’s performance (Guday & Kilic, 2011; Aswani, 2013; Jin, Hewitt & Thompson, 2013). Despite the studies’ conclusions, there are still gaps in the evidence about the relationship between strategic innovations and organizational success, demanding further academic study to close these gaps. Therefore, while some studies have established discrepancies in the relationship between the variables (Shisia, Sang, Matoke, & Omwario, 2014; Namusonge, Muturi, & Olaniran, 2016), others have shown a strong correlation between strategic innovations (Jin et al., 2013; Kiptoo & Koech, 2019).

In order to evaluate whether the outcomes are converging or diverging, a study must examine how strategic innovations affect universities’ performance in light of the contentious findings of the preceding investigations. However, numerous studies have only comprehensively and separately addressed the study’s factors (White & Bruton, 2011; Zhou & Wu, 2010 & Slivko, 2013), necessitating additional research to evaluate the variables in a comprehensive manner. Furthermore, varied operationalizations of the study’s variables by academics urge for additional research to clarify conceptual restraints and to reconsider how strategic innovations might help institutions become more competitive globally. Gaps in contextual research are clear from earlier empirical studies.

The scope of a study by Namusonge et al. (2016) was restricted to Nigerian Stock Exchange companies. A different study by Kiptoo and Koech (2019) was restricted to Kenyan manufacturing companies. Kirabo, Gregory, and Mike (2020) investigated the strategic performance and innovation of Rwandan telecommunications businesses. A study by Jin (2014) sought to ascertain the relationship between Chinese manufacturing companies’ success and their level of innovation, whereas a study by Simiyu (2013) focused only on Kenyan commercial banks. The new study, which focuses on the university context in Kenya, will bridge the geographical and social research gaps identified by previous studies. Additionally, it is evident from the empirical studies described that several research approaches were employed. For instance, Kirabo et al. (2020) used questionnaires and interview schedules in their study. A study by Jin et al., 2013, used an exploratory research design, whereas Maroa and Namusonge (2019) used a case study research approach. There is a need for a study to be undertaken employing a cross-sectional research design, stratified random sampling approach, and inferential statistics to assess the coherence of the results in light of these methodological research gaps. as well as contextual and methodological research gaps from the previous empirical studies based on the controversial findings revealed on the connection between the variables of the current study Based on these premises, this study sought to assess how strategic innovation can influence performance of public universities in Kenya.

Research Objectives

To evaluate the influence of organizational innovations on performance public universities in Kenya.

THEORETICAL REVIEW

The balanced scorecard methodology and resource-based theory served as the study’s foundations. Barney developed the resource-based perspective of the firm in 1991, and it explains how companies might preserve their competitive advantage in the face of unpredictability. According to this idea, a corporation is a business with unique resources and skills that may be applied to meet stakeholder demands (Barney, 1991). Resources are collections of readily accessible parts that a business owns or controls and can use to create finished products or services. The ability of the company to use organizational procedures and resources, usually in combination, to produce the desired outcome is known as capability. According to Ali and Marjan (2012), resources must be valued, uncommon, imitable, and incomparable in order for sustainable competitive advantage to be realized. When properly managed, resources like assets, capabilities, organizational procedures, firm attributes, information, and knowledge can lead to increased operational effectiveness and efficiency (Muraguri, Kimencu, & Thuo, 2014).

Based on the idea that universities may use their knowledge and resources, both material and intangible, to improve performance, this hypothesis guides this study. If properly managed, universities that prioritize personnel development, restructuring, and service renewal would perform better. Additionally, marketing innovations like new markets, distribution channels, and communication methods can help institutions perform better. Therefore, universities can better explain performance by using product innovations including patenting academic programs, creating new academic, and automating services. Norton and Kaplan proposed this concept in 1997. The academics’ four suggested viewpoints—internal business operations, financial perspectives, innovation and learning, and consumer perspective—are used to assess success in enterprises. The capacity of the company to deliver products and services that satisfy customer needs and preferences is known as the customer viewpoint. It involves the business’s capacity to create goods and services that are focused on what clients want.

The ability of the company to generate enough cash in the form of earnings and dividends to shareholders is known as its financial perspective. The financial perspective also includes how much an organization can increase income by implementing appropriate, more effective, and efficient tactics. Internal business processes consider how effectively and efficiently a firm can use the appropriate technology. It refers to how much an organization reinvents itself and uses new technologies. This study will use this paradigm to clearly show how training personnel in new information technology skills and investing in cutting-edge equipment are both efforts to improve an organization’s overall performance. According to this approach, colleges can evaluate their success using strategic innovations like organizational, market, and product innovations, just like other firms.

Empirical Review

Organizational Innovations and Organizational Performance

Organizational Performance and Organizational Innovations 2.1.1 According to a Chinese study by Quan Chun-Hsien and Shi-Zheng (2020), which included 265 manufacturing enterprises as a sample, technical innovations were found to be a positive moderator of the relationship between organizational innovations and organizational performance. The study came to the conclusion that management should be able to recognize the mediating function of technological innovations on the relationship between organizational innovations and organizational performance in order for manufacturing enterprises to reach superior performance. In order to investigate the direct relationship between strategic innovations and university performance, data analysis used structural equation modeling (SEM). The current study’s variables were evaluated independently, necessitating additional research to investigate the factors collectively. Makimi (2015) found that organizational innovations, innovative activities, and information technology had a positive and significant impact on the performance using a sample size of 120 that included Safaricom customers, agents, and workers in Nairobi.

It was determined that telecommunications firms can only accomplish their goals more successfully and efficiently if they implement the necessary organizational innovations, such as new structural systems, new strategies, and new systems, as well as provide staff with new training and skills. Despite the report’s assertion, it should be highlighted that its research methodology—a case study—was restricted to the telecommunications sector and was a case study. It is therefore necessary to do additional research in the higher education sector to examine the combined effect of strategic innovations, such as organizational, market, and product innovations, on the performance of public institutions. Organizational innovations have a positive and significant impact on the performance of small-medium organizations, according to Salim and Sulaiman’s (2011) study in Malaysia on small-to-medium businesses in the ICT industry. The study concluded that organizational changes are important for small- to medium-sized businesses to improve performance. 115 computerized questionnaires were used to collect data from small- to medium-sized business owners in Malaysia’s ICT industry, therefore despite the study’s conclusions, contextual research gaps must be filled by future research. Studies concentrating on the universities in underdeveloped nations may produce different results because Malaysia is a developed nation.

The outcomes of the current study cannot be generalized because organizational innovations were measured using many metrics. In their 2010 study, Richard and Fariborz looked at how performance management affected the relationship between management innovations and organizational performance. The relationship between management innovations and organizational performance was shown to be weak, while performance management was proven to be a helpful mediator. Despite the study’s assertion, it should be highlighted that it only examined China, a country with distinctive geographical and cultural traits. Additionally, the study attempted to determine the direct and indirect connections between the study’s variables in contrast to the direct link that the current study seeks to address. However, the data analysis method used was structural equation modeling, necessitating additional research using linear regression to judge the results’ generalizability across settings.

Conceptual Framework

It was hypothesized that organizational innovations had an impact on university performance, as seen in Figure 2.1. Three metrics; restructuring, transformational leadership, and worker retraining were used to assess organizational innovations. Last but not least, four metrics; efficiency, effectiveness, customer loyalty, and policy are used to assess the dependent variable, which is university performance.

Figure 1: Conceptual Framework

RESEARCH METHODOLOGY

Cross-sectional research designs were used in this study. This research strategy was deemed suitable since it enables the researcher to get primary data from a sizable population, improving the accuracy of the research findings. It facilitates both quantitative and qualitative data analysis (Mertler & Vannatta, 2010). The 31 public universities operating in Kenya were the study’s target audience, as shown in Appendix (3). The examination was limited to public universities that had been in existence for at least 15 years. This time frame was thought to be sufficient for the university to fulfill its strategic innovation vision. The sample frame was composed of 10 public colleges due to the magnitude of the target group. Ten participants were chosen by the researcher from each public university. Deputy vice chancellors, directors, deputy directors, managers, and senior administrators were among the responders.

The sample frame consisted of 10 public universities, and a total of 100 respondents were chosen from among them. Only permanently hired managerial and administrative workers were included in the group of responders. Depending on the type of investigation, probability and non-probability sampling approaches can both be used. This study used 10 public universities that are currently operating in Kenya as its sample frame. A stratified random sampling procedure was used to choose respondents from among the 10 public universities that are active in Kenya. The study’s respondents were the administrative employees of Kenya’s state universities.

The Deputy Vice-Chancellor for Academic Affairs and the Deputy Vice-Chancellor for Administration, respectively, selected the respondents. Deputy vice chancellors, directors, deputy directors, managers, and senior administrators were among the responders. The method from Israel (2009) was used to estimate the suitable sample size out of the total population of 100 respondents received from the 10 public universities. In the sampled public universities, 80 management staff members were chosen as the study’s sample size. There were both closed-ended and open-ended questions. A Likert-type scale with a score of 5 signifying Strongly Agree (SA) and 1 designating Strongly Disagree (SD) was used by respondents to rate the questionnaire’s items. It was tested using the Split-Half reliability approach.  Each respondent was given a self-administered questionnaire during business hours, which was then collected and analyzed by research assistants.

After removing outliers, the data was entered into the computer system to allow for quantitative data analysis. SPSS version 21 was used to analyze the data. Descriptive statistics including percentages, mean scores, and standard deviations were employed to evaluate the overall pattern of the data. The linear regression techniques were employed to determine the statistical association between the predictor variables and the dependant variable. R-square was used to evaluate the statistical significance between the variables. T-tests and F-tests with a 95% level of confidence. Tables and Figures were used to show and analyze data. This study’s regression model used the following formula: Y= βо+β₁X₁ + ε

Where;

Y=Performance of Public Universities in Kenya

β₀ = Y-intercept

β₁ = regression coefficients

X₁ = Organizational Innovations

ε= Other factors not included in the model (Error Term)

DATA ANALYSIS

Analyzing primary data was done using descriptive and linear regression techniques. Deputy vice chancellors, directors, deputy directors, managers, and senior administrators from Kenyan public institutions served as the study’s respondents. 80 participants were chosen for the study’s sample from a total of 100 participants. Only 73 of the 80 surveys that were distributed to respondents were actually returned. Two questions were not returned, while five questionnaires were filled out improperly. A total of 73 questionnaires were employed in the research, yielding a 91% response rate, exceeding Fisher (2010)’s proposed cutoff point of 50%.

Table 4.1: Organizational Innovations

Source: Research data (2023)

The respondents were questioned about how much organizational innovations had an impact on the performance of their individual universities. Table 4.1’s findings show that most respondents disapproved of the assertions, with the average mean score for the 8 statements being less than 2.00. The results suggest that, with a mean score of 4.26, respondents agreed, to a lesser extent, that employees in their respective universities were permitted to attend research conferences, while some employees indicated, with a mean score of 4.23, that all non-teaching staff were encouraged to further their education. With a mean score of 3.59, it was also noted that there was good communication between the departments.

Furthermore, the average score for the five statements was less than two, indicating that the majority of respondents disagreed with the claims that lecturers were given opportunities to participate in trainings, that junior employees were delegated tasks, that employees were motivated, and that departments were adaptable to changes. The results of this study are supported by Quan et al. (2020), Richard and Fariborz (2010), who noted that despite the challenges that organizations face when implementing innovations, organizational innovation can, to a large extent, be measured using a variety of indicators, including employee training, research intensity, task delegation, participatory decision-making, communication, and adaptability to changes.

Table 4.2: Correlations Coefficients on the Relationship between Organizational Innovations and Performance of Public Universities in Kenya

Source: Research Data (2023)

According to Table 4.2’s findings, there is a strong correlation between organizational innovations and public university performance (r =.616, p 0.023). These results imply that organizational innovation characteristics and Kenyan public universities’ performance are strongly positively correlated.

Table 4.3: Regression Coefficients on the Relationship between Organizational Innovations and Performance of Public Universities in Kenya

Table 4.3 a: Model Summary

Source: Research Data (2023)

Table 4.3 b: ANOVA^b

Source: Research Data (2023)

Table 4.3 c: Coefficients^a

Source: Research Data (2023)

The findings of regression analysis on organizational innovations in connection to performance of public universities in Kenya are presented in Table 4.3.  The F-test with an ANOVA technique was used to determine whether there was a relationship between organizational innovations and performance of public universities in Kenya. At the 5% level of significance, the findings showed a substantial positive relationship between organizational innovations and the performance of Kenya’s public universities (F, 41,247= 57.8, p 0.000).  The resulting goodness of fit value was R2 = 0.143, indicating that organizational innovations index accounts for 14.3% of the variance in Y and R=37.8%. These results unequivocally show a strong correlation between organizational changes and the success of Kenya’s public universities.

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

The study found a strong correlation between organizational changes and the success of Kenya’s public universities. Despite this stance, it was highlighted that public universities in some cases did not give instructors enough opportunities to participate in formal training. Furthermore, it was discovered that the public universities did not practice participative decision-making, delegation of responsibilities, employee motivation, and departmental flexibility, which raised serious concerns.

Conclusion

The study concluded that organizational innovation indicators like restructuring, transformative leadership, and employee retraining can successfully explain performance of public universities.

Recommendations

This study advises management of public universities to support training of academic staff by increasing training resources in order to improve the performance of public universities in Kenya. Public university administrators should adopt a participative leadership style, inspire staff, and encourage a culture of delegating responsibilities.

Further Research Opportunities

Given that this study looked at the direct relationship between strategic innovations and the performance of Kenya’s public universities, other researchers could also look at the indirect relationship between these two factors by including corporate governance as a moderating variable to see if the results are converging or diverging. To determine whether the results can be replicated, researchers can examine the study’s variables using various indicators in a university setting or other relevant contexts. Comparative research should be done between nations to see whether different outcomes may be obtained.

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