RELATIONSHIP BETWEEN ORGANIZATIONAL FACTORS AND PERFORMANCE OF INSURANCE BROKERAGE FIRMS IN KENYA
John A. Ockley - Kenya Methodist University, Kenya
Dr. Thomas A. Senaji, R. Eng. - Kenya Methodist University, Kenya
Martin Kinyanjui - Kenya Methodist University, Kenya
ABSTRACT
Little empirical evidence exists to explain how firms can develop the capabilities by focusing on their organizational factors. The rivalry between the 192 insurance brokers in Kenya is very intense as they compete for the small number of insurance customers in the market. Though a number of studies have been conducted in the Insurance sector, very few have focused on the strategic agility enablers in the insurance brokerage firms. The purpose of this study was to analyse the relationship between organizational factors and performance of insurance brokerage firms in Kenya; specifically, the influence of organizational structure, innovativeness, human capital, information technology, and operational processes on performance of insurance brokerage firms. The study adopted a descriptive research design. A stratified proportionate random sample of 249 was surveyed. Primary data was obtained using self-administered questionnaires. Descriptive statistics were used to generate frequencies, percentages, mean score and standard deviation while correlation and multiple regression analysis were used to ascertain the association between pairs of variable and the influence of the variables on performance. The qualitative data from the open-ended questions were analyzed using conceptual content analysis. It was found that information technology integration and advancement had the greatest effect on the performance of insurance brokerage firms, followed by organization structure, then discontinuous innovation, and then human capital while operational processes effectiveness had the least effect to the performance of insurance brokerage firms. The study also found that exploration of new paradigms, pursuit of new strategies and exploration of new knowledge all affects performance of insurance brokerage to a great extent. The study deduced that skills and attitude, staff experience, employee competences, cooperation with suppliers as well as customers being components of human capital possess significant influence over performance of insurance brokerage firms. The study further concluded that I.T. integration and advancement has little significance on the performance of insurance brokerage firms because aspects of I.T. integration and advancement were not considered as the independent variable despite their high significance. It is therefore recommended that Experimentation with new ideas was found to have a strong influence on performance. Therefore, this study recommends that management staff be allowed to try out new ideas in their respective firms. The study also recommends that insurance brokerage firms adopt proper teamwork values and encourage teamwork collaboration with other firms to enhance industry cohesion. This is bound to bring in exchange of ideas within the industry resulting in better performances on an industry level.
