Influence of Value Based Management on Strategic Renewal of Insurance Firms in Kenya

Abstract

The objective of the study was to determine the effect of value based management on the strategic renewal of insurance firms in Kenya. Two dimensions of strategic renewal were studied: the insurance firms’ deliberate decision to imitate strategic renewal and strategic renewal by introduction of new product lines and rebranding. The target population was operative managers in 53 insurance firms. The sample size was 5 operative managers in 47 insurance firms resulting to a sample size of 235 respondents. The study used simple random sampling in the determination of respondents and used the Cochran’s formula to determine sample size. The Likert scale questionnaire was used to collect data which was analyzed using descriptive and inferential statistics which were spearman’s correlation and linear regression. Results of ANOVA, goodness of fit were used to make findings and conclusions about the study. Kuder-Richardson (KR21) and Cronbach’s alpha was used to measure reliability of the research instrument. The results of regression showed that value based management had a statistically significant influence on strategic renewal of insurance firms in Kenya. The study therefore recommended that insurance firms’ managers should pay more attention to value based management since it is a major contributor to strategic renewal. The study was grounded on the dynamic capabilities theory which explains the link between a firm’s inward abilities such as research and development, automation and creativity and innovation and its ability to work within those capabilities to initiate strategic renewal.