STRATEGIC PLANNING SYSTEMS, 

ORGANIZATIONAL LEARNING, STRATEGY 
IMPLEMENTATION AND PERFORMANCE OF FIRMS 

IN EXPORT PROCESSING ZONES IN KENYA 
 
 

 

 

 

 

 

Juliana Mulaa Namada 
 

 

 

 

 

 

 

 

A Thesis Submitted in Partial Fulfillment of the 
Requirement for the Award of the Degree of Doctor of 

Philosophy in Business Administration 
School of Business, University of Nairobi 

 

 

 

November, 2013 



ii 
 

DECLARATION 

I declare that this thesis is my original work. I developed it through a thorough 

research process according to the regulations and guidelines of the School of 

Business, University of Nairobi. No part of this work has ever been submitted to any 

University.  The works of other scholars cited in this study have been dully 

referenced.   

 

Signed: ______________________   _______________________ 

Juliana Mulaa Namada     Date 

D80/80084/09 

 

Supervisors 

The thesis has been developed under our guidance as the university supervisors. 

 

Signed: _______________________   _______________________ 

Prof. Evans Aosa, PhD     Date 

Department of Business Administration 

School of Business, University of Nairobi 

 

Signed: ___________________________  _______________________ 

Dr. Zachary B. Awino, PhD     Date 

Department of Business Administration 

School of Business, University of Nairobi 

 

Signed: ___________________________  _______________________ 

Prof. Gituro Wainaina, PhD     Date 

Department of Management Science 

School of Business, University of Nairobi 



iii 
 

COPYRIGHT 

All rights reserved. No part of this thesis may be used or reproduced in any form by 

any means, or stored in database or retrieval system, without prior written permission 

of the author or the University of Nairobi, except in the case of brief quotations or 

references universally acceptable for purposes of reviews, articles and research papers 

with due acknowledgement. Making copies of this thesis other than personal use will 

be in violation of the Kenyan and international copyright laws.  

 

 

For any further information please contact: 

 

Juliana Mulaa Namada 

 P.O. Box 14093 - 00100 

GPO, Nairobi 

KENYA. 

 

Telephone +254 722 883 641 and +254 734 488 998 

Email: juliesimonis@yahoo.com 



iv 
 

DEDICATION 

 

 

 

 

 

 

 

 

To my children, 

Simonis Waneku Namada and 

Namada Simoni Josephat Jnr.  

Who endured long hours of my absence in pursuit of the Doctoral Programme 

and to my husband 

Namada Josephat Simoni 

For being there for me, always. 

 



v 
 

ACKNOWLEDGEMENTS 
The development of this doctoral thesis was supported by many individuals and 

institutions.  I express my gratitude to my supervisors, Professor Evans Aosa, Dr. 

Zachary Awino and Prof. Gituro Wainaina for their guidance, corrections and many 

hours of consultation that provided direction to the completion of this thesis. 

Similarly, I thank Prof. Peter K’Obonyo, Prof. Nzomo and other resource persons in 

the School of Business, University of Nairobi for their valuable insights during 

presentations. Specifically, I thank Prof. Martin Ogutu and Dr. Kate Litondo who 

chaired my departmental and open forum presentations, respectively.  I owe special 

gratitude to Dr. Munyoki and Dr. Owino Okwiri for their administrative support.  

 

I am further thankful to Mr. Benjamin Chesang, the Manager Research, Policy and 

Planning at Export Processing Zones Authority (EPZA) who facilitated my access to 

all firms in the Export Processing Zones (EPZs).  I thank Mr. Fabian Olaba of EPZA 

Athi River and Mr. Francis Itegi of EPZA, Mombasa who were instrumental in data 

collection.  I am indebted to Mr. Charles Kyalo of Kenya College of Accountancy 

University who assisted in the development of Social Package for Social Sciences 

(SPSS) code book for data entry and management, Mr.Wanjohi Mwangi of Githuku, 

Mwangi & Kabia Accountants, Mr. San Lio of Finance Essentials and Ms. Ann 

Nyokabi of Strathmore University who spent long hours computing the financial 

measures of performance.  I sincerely thank my colleagues and friends who gave me 

moral support through words of encouragement.  On this note, I thank Dr. Damary 

Sikalieh for encouragement.  

 

I sincerely thank my editorial team for voluntarily, editing and correcting my work.  

Your efforts and time dedicated to this work cannot be taken for granted.  In this 

regard, I want to mention Ms. Mary Concepter Obiero of Church World Services for 

editing chapter 1, Ms. Lineth Oyugi of Federation of Kenya Employers for editing 

chapter 2, Ms. Amina Ndinya of Taita Taveta University College for editing chapter 

3, Dr. Paul Katuse of United States International University for editing chapter 4 and 

Ms. Joyce Ndegwa of Catholic University for editing chapter 5 and 6.  Finally, I 



vi 
 

sincerely appreciate the efforts made by my husband Namada Josephat Simoni who 

read and edited the entire document to ensure logical flow and clarity. 

 

I have shared a lot with colleagues and friends in the doctoral class of 2009.  The 

contribution of Dr. Vincent Amooti Bagire of Makerere University Business School 

to this thesis is difficult to quantify.  I sincerely thank him for tirelessly supporting me 

throughout the program in terms of mentorship, peer review and critique.  The 

sacrifice of your time and your meticulous review of every chapter of the thesis is 

much appreciated.  Further, I thank Dr. Vincent Machuki, Dr. Ken Ogolla, Ms. Laura 

Orobia, Mr. Edward Owino, Ms. Winnie Njeru and Ms. Mercy Gacheri for support 

and encouragement throughout the program.  I recognize the support from sisters, 

brothers and relatives who called to get updates on the progress.  

 

This thesis was earnestly supported by different institutions among them, the 

Organization of Social Science Research in Eastern Africa (OSSREA), the Academy 

of Management (AOM) and the Africa Academy of Management (AFAM).  I thank 

OSSREA entity for strengthening my technical capacity in social research and data 

management aspects through methodology training.  I am sincerely indebted to 

AFAM and AOM who through their sponsored Africa Faculty Development 

Workshop (AFDW) enhanced my skills in dissertation writing and development of 

PhD discussions.   

 

With cardinal gratitude, I appreciate the moral, technical and material support from 

my dear husband Namada Josephat Simoni.  I thank him for ensuring that all financial 

requirements were catered for and taking care of the family whenever I was away 

doing research, attending workshops and conferences.  Lastly, I distinguish my 

children Simonis Waneku Namada and Namada Simoni Josephat Jnr. to whom, this 

work is dedicated.  May this piece of work motivate you to great heights, inspire you 

beyond the horizon and instigate you to face the future with courage!   

 

Above all, I thank God the Almighty for enabling me to reach this far 

and pray that He blesses the work of my hands. 



vii 
 

TABLE OF CONTENTS 

DECLARATION ..................................................................................................... ii 
COPYRIGHT ......................................................................................................... iii 
ACKNOWLEDGEMENTS ..................................................................................... v 

LIST OF FIGURES ............................................................................................. xvii 
ABBREVIATIONS AND ACRONYMS ............................................................ xviii 
ABSTRACT .......................................................................................................... xix 
 

CHAPTER ONE : INTRODUCTION .................................................................... 1 

1.1 Background of the Study ................................................................................... 1 

1.1.1  Strategic Planning Systems ................................................................... 3 

1.1.2  Organizational Learning ....................................................................... 4 

1.1.3  Strategy Implementation ....................................................................... 5 

1.1.4  Organizational Performance ................................................................. 6 

1.1.5  Export Processing Zones in Kenya ....................................................... 7 

1.2  Research Problem ............................................................................................ 9 

1.3  Research Objectives ........................................................................................ 11 

1.4  Value of the Study .......................................................................................... 11 

1.5  Structure of the Thesis .................................................................................... 13 

 

CHAPTER TWO : LITERATURE REVIEW ..................................................... 15 
2.1  Introduction .................................................................................................... 15 

2.2  Theoretical Perspectives.................................................................................. 15 

2.3  Strategic Planning Systems ............................................................................. 22 

2.4  Organizational Learning.................................................................................. 27 

2.5  Strategy Implementation ................................................................................. 31 

2.6  Organizational Performance ............................................................................ 32 

2.7  Strategic Planning Systems and Firm Performance .......................................... 35 

2.8  Organizational Learning and Firm Performance .............................................. 37 

2.9  Strategy Implementation and Firm Performance.............................................. 38 

2.10  Strategic Planning Systems, Organizational Learning and Firm Performance .. 39 

2.11  Strategic Planning Systems, Strategy Implementation and Firm Performance.. 41 

2.12  Summary of Previous Studies and Knowledge Gaps ....................................... 43 



viii 
 

2.14  Conceptual Framework ................................................................................... 46 

2.15  Hypotheses of the Study.................................................................................. 48 

2.16  Chapter Summary ........................................................................................... 48 

 

CHAPTER THREE : RESEARCH METHODOLOGY ..................................... 49 
3.1  Introduction .................................................................................................... 49 

3.2  Research Philosophy ....................................................................................... 49 

3.3  Research Design ............................................................................................. 50 

3.4  Population of the Study ................................................................................... 51 

3.5 Data Collection ............................................................................................... 52 

3.6  Reliability and Validity Tests .......................................................................... 53 

3.7  Operationalization of Research Variables ........................................................ 55 

3.8  Data Analysis.................................................................................................. 59 

3.9  Common Methods Bias ................................................................................... 62 

3.10  Response Rate ................................................................................................ 63 

3.11.  Pretesting for Regression Assumptions .......................................................... 64 

2.12  Chapter Summary ........................................................................................... 67 

 

CHAPTER FOUR : DATA ANALYSIS AND RESULTS ................................... 68 
4.1  Introduction .................................................................................................... 68 

4.3  Respondent Demographic Profiles .................................................................. 68 

4.4  Profiles of Firms in Export Processing Zones .................................................. 70 

4.5 Descriptive Statistics of the Study Variables ................................................... 74 

4.6  Strategic Planning Systems and Performance .................................................. 75 

4.7 Organizational Learning and Performance ...................................................... 99 

4.8  Organizational Learning, Strategic Planning Systems and Performance ........ 104 

4.9  Strategy Implementation, Strategic Planning Systems and Performance ........ 110 

4.10 Strategic Planning Systems, Strategy Implementation and Performance ........ 121 

4.11 Chapter Summary ......................................................................................... 129 

 

CHAPTER FIVE : DISCUSSION OF FINDINGS ............................................ 130 
5.1  Introduction .................................................................................................. 130 

5.2  Strategic Planning Systems and Firm Performance ........................................ 130 



ix 
 

5.3  Organizational Learning and Performance .................................................... 139 

5.4  Organizational Learning, Strategic Planning Systems and Performance ........ 141 

5.5   Strategic Planning Systems, Strategy Implementation and Performance ....... 143 

5.6  Joint Strategic Planning Systems and Strategy Implementation on Performance

 .................................................................................................................... 145 

5.7  Chapter Summary ......................................................................................... 148 

 

CHAPTER SIX : SUMMARY, CONCLUSION AND RECOMMENDATIONS
 .............................................................................................................................. 149 
6.1  Introduction .................................................................................................. 149 

6.2  Summary of the Findings .............................................................................. 149 

6.3  Conclusion .................................................................................................... 157 

6.4  Implications of the Study .............................................................................. 158 

6.5  Limitations of the Study ................................................................................ 161 

6.6  Suggestions for Future Research ................................................................... 162 

6.7 Chapter Summary ......................................................................................... 163 

 

REFERENCES .................................................................................................... 164 

 

APPENDICES ..................................................................................................... 175 
Appendix 1:  Questionnaire ................................................................................... 175 

Appendix 2:  Firms in Export Processing Zones in Kenya ..................................... 181 

Appendix 3:  Introduction Letter from University of Nairobi ................................. 185 

Appendix 4:  Introduction Letter from Export Processing Zone Authority ............. 186 

Appendix 5:  Researcher’s Introduction Letter ....................................................... 187 

Appendix 6:  Histogram of Financial Performance ................................................ 188 

Appendix 7:  Q - Q Plot for Financial Performance................................................ 188 

Appendix 8:  Histogram for Non Financial Performance ........................................ 189 

Appendix 9:  Q- Q Plot for Non Financial Performance ......................................... 189 

Appendix 10:  Scatter Plots for Strategic Planning Systems and Internal Business 

Process Performance .................................................................................. 190 

Appendix 11:  Scatter Plots for Strategic Planning Systems and Market 

Performance ............................................................................................... 190 



x 
 

Appendix 12:       Scatter Plots for Strategic Planning Systems and Sales Growth Rate 

Performance……. ...................................................................................... 191 

Appendix 13:  Scatter Plots for Strategic Planning Systems and Return on 

Investment Performance ............................................................................. 191 

Appendix 14:   Correlation Coefficients of the Variables .................................. 192 

 



xi 
 

LIST OF TABLES           

Table 1.1: State of Firms in the Export Processing Zones in Kenya ....................... 8 

Table 2.1: Summary of Previous Studies and Knowledge Gaps ........................... 43 

Table 3.1:  Reliability Tests of Results ................................................................. 53 

Table 3.3:  Objectives, Hypotheses and Statistical Tests ....................................... 60 

Table 3.4:  Sector Distribution of Respondent Firms ............................................ 63 

Table 4.1:  Respondent Gender and Designation .................................................. 69 

Table 4.2:  Respondents Gender and Level of Education ...................................... 69 

Table 4.3:  Respondent Designation and Work Experience ................................... 70 

Table 4.4:  Firm Location in Relation to Sector .................................................... 71 

Table 4.5:  Firm Age in Relation to Sector ........................................................... 72 

Table 4.6:  Firm Age in Relation to Ownership .................................................... 72 

Table 4.7:  Firm Ownership and Expatriate Employment ..................................... 73 

Table 4.8: Firm Age and Expatriate Employment ................................................ 73 

Table 4.9:  Export Processing Zones Export Destinations ..................................... 74 

Table 4.10 Summary of Descriptive Statistics ...................................................... 74 

Table 4.11:  Planning Resources and Return on Investment Performance ............... 76 

Table 4.12:  Analysis of Variance of Planning Resources and Return on Investment 

Performance ................................................................................................. 76 

Table 4.13:  Coefficients of Planning Resources and Return on Investment 

Performance ................................................................................................. 77 

Table 4.14:  Planning Resources and Sales Growth Rate Performance ................... 78 

Table 4.15:  Analysis of Variance of Planning Resources on Sales Growth Rate 

Performance ................................................................................................. 78 

Table 4.16:  Coefficients of Planning Resources and Sales Growth Rate  

Performance ................................................................................................. 79 

Table 4.17:  Planning Resources and Internal Business Process Performance ......... 79 

Table 4.18:  Analysis of Variance of Planning Resources on Internal Business 

Process Performance .................................................................................... 80 

Table 4.19:  Coefficients of Planning Resources and Internal Business Process ...... 80 

Table 4.20:  Planning Resources and Market Performance ..................................... 81 



xii 
 

Table 4.21:  Analysis of Variance of Planning Resources Market Performance ...... 81 

Table 4.22:  Coefficients of Planning Resources and Market Performance ............. 81 

Table 4.23:  Management Participation and Return on Investment Performance ..... 82 

Table 4.24:  Analysis of Variance of Management Participation on Return on 

Investment Performance ............................................................................... 83 

Table 4.25:  Coefficients of Management Participation and Return on Investment 

Performance ................................................................................................. 83 

Table 4.26:  Management Participation and Sales Growth Rate Performance ......... 84 

Table 4.27:  Analysis of Variance of Management Participation Sales Growth Rate 

Performance ................................................................................................. 84 

Table 4.28:  Coefficients of Management Participation and Sales Growth Rate 

Performance ................................................................................................. 85 

Table 4.29:  Management Participation and Internal Business Process Performance85 

Table 4.30:  Analysis of Variance of Management Participation and Internal 

Business Process Performance ..................................................................... 86 

Table 4.31:  Coefficients of Management Participation and Internal Business Process 

Performance ................................................................................................. 86 

Table 4.32:  Management Participation and Market Performance ........................... 87 

Table 4.33:  Analysis of Variance of Management Participation on Market 

Performance ................................................................................................. 87 

Table 4.34:  Coefficients of Management Participation and Market Performance ... 88 

Table 4.35:  Planning Techniques and Return on Investment Performance ............. 89 

Table 4.36:  Analysis of Variance of Planning Techniques on Return on Investment 

Performance ................................................................................................. 89 

Table 4.37:  Coefficients of Planning Techniques and Return on Investment 

Performance ................................................................................................. 90 

Table 4.38:  Planning Techniques and Sales Growth Rate Performance ................. 90 

Table 4.39:  Analysis of Variance of Planning Techniques and Sales Growth Rate 

Performance ................................................................................................. 90 

Table 4.40:  Coefficients of Planning Techniques and Sales Growth Rate 

Performance ................................................................................................. 91 

Table 4.41:  Planning Techniques and Internal Business Process Performance ....... 91 



xiii 
 

Table 4.42:  Analysis of Variance of Planning Techniques on Internal Business 

Process Performance .................................................................................... 91 

Table 4.43:  Coefficients of Planning Techniques and Internal Business Process 

Performance ................................................................................................. 92 

Table 4.44:  Planning Techniques and Market Performance ................................... 93 

Table 4.45:  Analysis of Variance of Planning Techniques on Market Performance 93 

Table 4.46:  Coefficients of Planning Techniques on Market Performance ............. 93 

Table 4.47:  Strategic Planning Systems and Return on Investments Performance .. 95 

Table 4.48:  Analysis of Variance of Strategic Planning Systems on Return on ...... 95 

Table 4.49:  Coefficients of Strategic Planning Systems and Return on Investment 

Performance ................................................................................................. 95 

Table 4.50:  Strategic Planning Systems and Sales Growth Rate Performance ........ 96 

Table 4.51:  Analysis of Variance of Strategic Planning Systems on Sales Growth 

Rate Performance ......................................................................................... 96 

Table 4.52:  Coefficients of Strategic Planning Systems and Sales Growth Rate 

Performance ................................................................................................. 96 

Table 4.53:  Strategic Planning Systems and Business Process Performance .......... 97 

Table 4.54:  Analysis of Variance of Strategic Planning Systems on Internal ......... 97 

Table 4.55:  Coefficients of Strategic Planning and Business Processes 

Performance… ............................................................................................. 98 

Table 4.56:  Strategic Planning Systems and Market Performance.......................... 98 

Table 4.57:  Analysis of Variance of Strategic Planning Systems on Market 

Performance ................................................................................................. 98 

Table 4.58:  Coefficients of Strategic Planning Systems and Market Performance.. 99 

Table 4.59:  Organizational Learning and Return on Investment Performance ...... 100 

Table 4.60:  Analysis of Variance of Organizational Learning and Return on 

Investment Performance ............................................................................. 100 

Table 4.61:  Coefficients of Organizational Learning and Return on Investment 

Performance ............................................................................................... 100 

Table 4.62:  Organizational Learning and Sales Growth Rate Performance .......... 101 

Table 4.63:  Analysis of Variance of Organizational Learning on Sales Growth Rate 

Performance ............................................................................................... 101 



xiv 
 

Table 4.64:  Coefficients of Organizational Learning and Sales Growth Rate 

Performance ............................................................................................... 101 

Table 4.65:  Organizational Learning and Internal Business Process Performance 102 

Table 4.66:  Analysis of Variance of Organizational Learning on Internal Business 

Process Performance .................................................................................. 102 

Table 4.67:  Coefficients of Organizational Learning and Internal Business Process 

Performance ............................................................................................... 102 

Table 4.68:  Organizational Learning and Market Performance ............................ 103 

Table 4.69:  Analysis of Variance of Organizational Learning on Market 

Performance ............................................................................................... 103 

Table 4.70:  Coefficients of Organizational Learning and Market Performance .... 103 

Table 4.71:  Mediation of Organization Learning on Strategic Planning Systems and 

Return on Investment Performance ............................................................ 106 

Table 4.72:  Mediation of Organization Learning on Strategic Planning Systems and 

Sales Growth Rate Performance ................................................................. 107 

Table 4.73:  Mediation of Organizational Learning on Strategic Planning Systems 

and Internal Business Process Performance ................................................ 108 

Table 4.74:  Mediation of Organization Learning on Strategic Planning Systems and 

Market Performance ................................................................................... 109 

Table 4.75:  Moderation of Strategy Implementation on Strategic Planning Systems 

and Return on Investment Performance ...................................................... 112 

Table 4.76:  Analysis of Variance of Strategy Implementation on Return on 

Investment Performance ............................................................................. 112 

Table 4.77:  Coefficients of Moderation of Strategy Implementation on Strategic 

Planning Systems and Return on Investment Performance.......................... 113 

Table 4.78:  Moderation of Strategy Implementation on Strategic Planning Systems 

and Sales Growth Rate Performance .......................................................... 114 

Table 4.79:  Analysis of Variance of Strategy Implementation on Sales Growth Rate 

Performance ............................................................................................... 114 

Table 4.80:  Coefficients of Moderation of Strategy Implementation on Strategic 

Planning Systems and Sales Growth Rate ................................................... 115 



xv 
 

Table 4.81:  Moderation of Strategy Implementation on Strategic Planning Systems 

and Internal Business Process Performance ................................................ 115 

Table 4.82:  Analysis of Variance of Strategy Implementation on Internal Business 

Process Performance .................................................................................. 116 

Table 4.83:  Coefficients of Moderation of Strategy Implementation on Strategic 

Planning Systems and Business Process Performance ................................ 116 

Table 4.84:  Moderation of Strategy Implementation and Strategic Planning Systems 

on Market Performance .............................................................................. 120 

Table 4.85:  Analysis of Variance of Strategy Implementation and Market 

Performance ............................................................................................... 120 

Table 4.86:  Coefficients of Strategy Implementation, Strategic Planning Systems 

and Market Performance ............................................................................ 121 

Table 4.87:  Strategic Planning Systems and Strategy Implementation on Return on 

Investment Performance ............................................................................. 122 

Table 4.88:  Analysis of Variance of Joint Strategic Planning Systems and Strategy 

Implementation and Return on Investment ................................................. 123 

Table 4.89:  Coefficients of Strategic Planning Systems and Strategy Implementation 

on Return on Investment Performance ........................................................ 123 

Table 4.90:  Strategic Planning Systems and Strategy Implementation on Sales 

Growth Rate Performance .......................................................................... 124 

Table 4.91:  Analysis of Variance of Strategic Planning Systems, Strategy 

Implementation on Sales Growth Rate Performance ................................... 125 

Table 4.92:  Coefficients of Strategic Planning Systems and Strategy Implementation 

on Sales Growth Rate Performance ............................................................ 125 

Table 4.93:  Strategic Planning Systems and Strategy Implementation on Internal 

Business Processes Performance ................................................................ 126 

Table 4.94:  Analysis of Variance of Strategic Planning Systems, Strategy 

Implementation on Internal Business Process Performance ........................ 126 

Table 4.95:  Coefficients of Strategic Planning Systems and Strategy Implementation 

on Internal Business Process Performance .................................................. 127 

Table 4.96:  Strategic Planning Systems and Strategy Implementation on Market 

Performance ............................................................................................... 128 



xvi 
 

Table 4.97:  Analysis of Variance of Strategic Planning Systems, Strategy 

Implementation on Market Performance..................................................... 128 

Table 4.98:  Coefficients of Strategic Planning Systems and Strategy Implementation 

on Market Performance .............................................................................. 128 

Table 6.1:  Summary of Objective One Findings ................................................ 155 

Table 6.2:  Summary of Objectives Two to Five Findings .................................. 156 

 



xvii 
 

LIST OF FIGURES 
Figure 2.1:      Conceptual Model ............................................................................. 47 

Figure 4.1:     Two Way Interaction Plot of Strategic Planning Systems and Strategy          

                    Implementation on Business Process Performance .............................. 119 

 

 



xviii 
 

ABBREVIATIONS AND ACRONYMS 
AFAM:  Africa Academy of Management 

AFDW:  Africa Faculty Development Workshop 

AGOA: African Growth and Opportunity Act 

ANOVA: Analysis of Variance 

AOM:  Academy of Management 

CEO:  Chief Executive Officer 

EPZ:  Export Processing Zone 

EPZs:  Export Processing Zones 

EPZA: Export Processing Zones Authority 

IBP:  Internal Business Processes 

ISO:  International Organization for Standadization 

GOK:  Government of Kenya 

KAM:  Kenya Association of Manufacturers 

MFA:  Multifibre Arrangement 

OL:  Organizational Learning 

OSSREA: Organization of Social Science Reaserch in Eastern Africa 

PLC:  Product Life Cycle 

SAS:  Statistical Analysis System  

SBU:               Strategic Business Units 

SMEs:  Small and Medium Enterprises 

SPE:  Strategic Planning Effectiveness 

SPS:  Strategic Planning Systems 

SPSS:  Statistical Package for Social Sciences 

SWOT: Strengths, Weakness, Opportunites, Threats 

UK:  United Kingdom 

USA:  United States of America 

VAT:  Value Added Tax 

VIF:  Variance Inflation Factor 

4i:  Intuition, Interpretation, Integration, Institutionalization 



xix 
 

ABSTRACT 
The main objective of this study was to determine the influence of strategic planning 

systems, organizational learning and strategy implementation on performance of firms 

in the EPZ in Kenya. This study premised on the view that strategic planning systems 

influences performance both directly as well as through mediation and moderation 

effects. This study adopted a multi theoretical approach where an integration of the 

open systems theory, the resource based view, dynamic capabilities theory, 4i 

(Intuition, Interpretation, Integration, Institutionalization) framework of 

organizational learning and institutional theory formed the theoretical anchorage. The 

study adopted a positivistic orientation utilizing cross section research design. To 

achieve the objectives, five hypotheses were tested. Objective one was subdivided 

into four sub hypotheses focusing on planning resources, management participation 

and planning techniques and confirmed significant results only on non financial 

performance except planning resources. Similarly, objective two confirmed 

significant influence on non financial performance. Notably, the third and fourth 

objectives confirmed the mediation of organizational learning and moderation of 

strategy implementation while objective five which focused on joint influence 

confirmed significant results on both the financial and non financial performance 

measures. The findings of this study are partially consistent with past studies. These 

results supported the theoretical view that firms achieve superior performance through 

the configuration of resource bundles and transformation of learning and 

implementation processes into valuable dynamic capabilities. This study extends the 

knowledge frontiers in the field of strategic management through the discovery that 

strategic planning systems affect firm performance both directly and indirectly 

through mediation of organizational learning and moderation of strategy 

implementation. It supports the perspective that a firm’s competitive advantage is a 

function of scarce, valuable and inimitable resources within the planning systems. The 

findings provide diverse implications on theory, policy and practice. Policy makers 

will utilize the findings from the study as a device of determining key success factors 

within EPZ firms. In essence, the policies informed by these findings will facilitate 

the achievement of the Vision 2030.  Future studies need to focus on other planning 

techniques and moderating variables in different relationships. 



1 
 

CHAPTER ONE 

INTRODUCTION 
1.1 Background of the Study 

Strategic planning concepts and performance implications are key areas of 

investigation in strategic management research.  Scholars advocate for strategic 

planning as a basis of better performance. Armstrong (1982) argued that strategic 

planning enables firms to achieve an alignment with the environment. Similarly, 

Ansoff (2007) argued that strategic planning produces better alignment than trial and 

error learning. Despite the intuitive appeal, critics of strategic planning contend that 

explicit strategies are dysfunctional. They posit that strategic planning channels 

attention and behavior to specific plans thereby driving out important innovations and 

creativity (Miller and Cardinal, 1994).  Hence, the debate on the relationship between 

strategic planning and firm performance is inconclusive (Mankins and Steele, 2005; 

Jennings and Disney, 2006). Empirical research has sought to elucidate the 

relationship but the results are fragmented, contradictory and no consensus has yet 

emerged (Elbanna, 2008; Falshaw, Glaister and Tatoglu, 2006).  

 

A key premise of strategic planning is an alignment between the firm and the 

environment to achieve competitiveness (Grant, 2003). Ansoff (2007) posited that all 

organizations are environment serving. They depend on the environment for inputs 

and emit outputs to the environment. Learning enables the organizations to align to 

the external environment. Through alignment, firms learn, unlearn and relearn based 

on past behaviors (Fiol and Lyles, 1985). Strategic planning systems are seen as 

bundles of resources which firms use to achieve superior performance. Bustinza, 

Molina and Aranda (2010) argued that dynamic capabilities enable firms to create 

new products and respond to changing market conditions. Strategy implementation 

enables firms to develop dynamic capabilities used in coordination and integration.  

Firms operate as open systems by engaging in continuous interactions with the 

environment for survival and sustainability. They use specific capabilities created 

through learning and strategy implementation to transform resources from the 

environment into outputs. Wernerfelt (1984) argued that firm based resources are used 

to achieve competitive advantage. Resource transformations require specific 



2 
 

capabilities which Garvin (1993) posited that are achieved through learning at 

individual, group and institutional levels. In a plausible extension of the foregoing 

argument, Crossan, Lane and White (1999) argued that learning is a cybernetic loop 

made possible through intuition, integration, interpretation and institutionalization. 

Therefore, in line with resource based theorists (Penrose, 1959; Wernerfelt, 1984; 

Barney, 2001) the growth of the firm depends not only on the manner in which 

resources are employed but also on the way resources are transformed through value 

adding processes as posited by the dynamic capability theorists (Helfat,  Finkelstein,  

Mitchell, Peteraf,  Singh, Teece, Winter, 2007). 

 

Organizational learning is considered important to adaptive strategic change 

(Cummings and Whorley, 2009; Crossan, Lane and White, 1999). Scholars who 

support the foregoing trend deemphasize strategic planning.  Although the view is 

appealing, it begs for support because organizational learning provides evidence of 

influencing strategic planning.  Organizations achieve strategic alignment by 

embracing organizational learning (Srimai, Damsaman and Bangchokdee, 2011).  

Organizational learning is a means of developing capabilities hence contribute 

positively to competitive advantage (Crossan and Bedrow, 2003). When implemented 

well, strategic planning encourages creativity and innovation. When implemented 

badly, it breeds rigidity and discourages strategic thinking. Schauffer and Willauer 

(2003) argued that strategic planning is a learning process and organizational learning 

introduces strategic thinking in the planning process. Although organizational 

learning leads to capability development, there are few empirical studies that have 

addressed the linkage. 

 

In this study, an integration of the open systems theory, the resource based view, 

dynamic capabilities theory, the 4i framework of organizational learning and 

institutional theories formed the theoretical anchorage. Strategic planning systems are 

considered as resource bundles which firms use to achieve competitive advantage 

hence informed by the resource based view of the firm. On the other hand, 

organizational learning and strategy implementation are vital dynamic capabilities 

within organizations which draw insights from the dynamic capabilities theory. 



3 
 

Organizational learning is informed by the 4i framework which links all the four 

psychological processes of learning through intuition, interpretation, integration and 

institutionalization. Further, institutional theory informs strategy implementation 

process specifically the aspect of institutional alignment. Ultimately, the firms affect 

and are affected by the environment therefore, they operate as open systems within 

the environment. 

 

Export Processing Zones (EPZ) are industrial estates specializing in export products. 

In Kenya, EPZs were established in 1990 through a legal framework, the Export 

Processing Zone Act, Chapter 517 of the Laws of Kenya to stimulate investments 

with deliberate orientation towards exports. Adala (2008) observed that EPZs are 

treated as separate entities and are covered by a policy framework designed by the 

government with the intention of promoting export policy objectives. The Kenyan 

EPZ firms are given special incentives and in turn the government expects high 

performance from them (EPZA, 2010). Despite the high expectations by the 

government, EPZ firms have generated mixed performances. Some EPZ firms in 

Kenya have been successful while others have performed poorly as exemplified by 

the rate of entry and closures. An examination of firm specific planning systems, 

organizational learning and strategy implementation in EPZ firms could offer deeper 

insights about their performance.   

 

1.1.1  Strategic Planning Systems  

Strategic planning systems are multifaceted management systems that are 

contextually embedded in organizations (Ramanujam, Venkatraman and Camilus, 

1986). They are structured entities that organize and coordinate the activities of the 

managers who do the planning. An effective strategic planning system takes into 

account specific firm situations along the dimensions of time and diversity. While 

extending this line of argument, King (1983) defined strategic planning systems as 

complete sets of processes and entities through which a firm does planning. 

Therefore, strategic planning systems consist of the people who do the planning as 

well as the mechanisms of planning. The strategic planning systems play a significant 

role towards the achievement of long term objectives against specific inputs. 



4 
 

 

Strategic planning systems are among the least evaluated functions in organizations. 

Empirical research has been directed to the planning processes rather than systems 

(Elbanna, 2008; Falshaw, Glaister and Tatoglu, 2006). However, focusing on 

planning processes does not provide results that are operationally useful to 

management (King, 1983). To fairly asses strategic planning, attention should be 

focused on the degree to which diverse benefits are achieved and the specific systems 

that facilitate achievement of various benefits. Strategic planning evaluation needs a 

methodological framework involving the assessment of the system inputs, outputs, 

feedback mechanisms and the relative impacts made in terms of goal achievement. 

Ramanujam and Venkatraman (1987) posited that strategic planning systems are 

multidimensional in nature and affect organizational learning.  

 
1.1.2  Organizational Learning 
Organizational learning is a process which develops new insights which have the 

potential to influence organizational behavior. Cummings and Whorley (2009) 

defined organizational learning as a change process that seeks to enhance the 

organizational capability to acquire and develop new knowledge. Organizational 

learning takes place through individuals in an organization. Senge (1990) posited that 

learning in organizations entails continuous testing and transformation of experiences 

into knowledge relevant to the core purpose of the whole organization.  

Organizational learning is therefore both a process and an outcome (Levitt and March, 

1988) and links cognition to action (Crossan, Lane and White, 1999). Through 

organizational learning, firms strategically plan for desired outcomes, which enable 

them to achieve specific objectives.  

 

Through organizational learning, firms build an understanding and interpretation of 

their environment. This enables them to effectively assess viable strategic options 

(Daft and Weick, 1984). In turn, through learning capabilities, firms create alignment 

with the environment. This leads to associations, cognitive actions and development 

of memories within the organization. Organizational learning theorists have 

recognized the strategic importance of organizational learning as a means of 

providing a sustainable competitive advantage and achieving strategic renewal. 



5 
 

Bustinza, Molina and Aranda (2010) observed that organizational learning enables 

firms to create new products, processes and respond to changing environment. 

However, few empirical studies have sought to elucidate this relationship. 

 

1.1.3  Strategy Implementation 
Strategy implementation is the process through which a chosen strategy is put into 

action. Ogbeide and Harrington (2011) posited that strategy implementation is 

concerned with the design of systems that achieve the best integration of the people, 

structures, processes and resources. Effective strategy implementation is facilitated 

through action planning, coordination and systems alignment. Action planning entails 

assigning responsibilities, indicating timelines, determining expected output and 

estimating resource requirements which all have to be well coordinated. Ghamdi 

(2005) established that 75 percent of the firms reported ineffective coordination 

during strategy implementation. Alignment in terms of structure, culture and systems 

is a precursor to successful strategy implementation. Communication, decision 

making and commitment building stem from the compatibility of institutional 

alignment and facilitate firm performance (Carlopio and Harvey, 2012). Therefore, 

effective strategy implementation is critical to firm performance. 

 

Strategy implementation encompasses activities and choices required for the 

execution of a strategy. Transforming strategies into action is complex and difficult to 

achieve (Aaltonen and Ikavalko, 2002; Kazmi, 2008). Strikingly, organizations fail to 

implement 70 percent of their strategies (Miller, 2002). In a plausible extension of the 

foregoing argument, Mankins and Steele (2005) observed that 40 percent of the 

planned value is never achieved due to implementation challenges. Sterling (2003) 

while concurring with Miller (2002) posited that 70 percent of strategies are never 

implemented successfully due to changing market conditions, shorter Product Life 

Cycles (PLC), emergence of new technologies and insufficient resources. Therefore, 

institutional alignment within the organization is pertinent to the success of strategy 

implementation. 

 



6 
 

1.1.4  Organizational Performance  
Performance is a debatable area in strategic management research. Researchers in 

strategic planning have different views on the measures and purpose of performance. 

Behn (2003) posited that performance measures serve different purposes in an 

organization. He observed that performance enables managers to evaluate, control, 

budget, motivate, promote, celebrate, learn and improve different aspects in an 

organization. Therefore, no single measure is appropriate for all the eight purposes of 

organizational learning. Recently, there has been a drift from financial measures to 

incorporate non financial indicators such as market, business processes, learning and 

growth perspectives. Chakravarthy (1986) posited that performance is a 

multidimensional construct and observed that any single index may not provide a 

comprehensive understanding of the performance relative to different constructs.  

Performance is a construct with multiple indicators (Srimai, Damsaman and 

Bangchokdee, 2011). Financial measures were popular for many years but have been 

criticized for limitations based on the scope of accounting manipulations, 

undervaluation of assets and distortions due to depreciation policies (O’Regan, Sims 

and Gallear, 2008). Further, Kaplan and Norton (2008) emphasized on the 

comprehensive performance measurement systems comprising of both financial and 

non financial measures through the balanced score card. This study used both 

financial and non financial measures of organizational performance. 

 

Strategic planning systems, organizational learning and strategy implementation are 

linked to performance. They are complimentary processes because important 

decisions revolve around them (Andersen, 2000).  Organizational learning supports 

strategic planning systems because new insights and experiences inspire proactive 

business initiatives (Crossan, Lane and White, 1999). Strategic planning systems and 

organizational learning processes facilitate strategic adaptation across the 

organization. Prahalad and Hamel (1994) posited that firm performance is determined 

by the ability of the organization to acquire strategic competencies through learning. 

Dynamic capabilities which are created through strategy implementation process 

facilitate the integration between the people, systems and structures within an 

organization.  



7 
 

1.1.5  Export Processing Zones in Kenya 
Conceptually, EPZs refer to geographically/juridical bound areas where different 

levels of trade are permitted to produce goods for export (Johansson and Nilsson, 

1997). In Kenya, EPZ were developed as part of the industrial sector adjustment 

program aimed at restructuring the industrial sector to stimulate investments with 

deliberate orientation towards exports. The Kenyan EPZs were established in 1990 

through the Export Processing Zone Act, Chapter 517 of the Laws of Kenya. This law 

also created EPZA as a regulatory body to manage the EPZs (EPZA, 2008). The 

Kenyan EPZ rides on the African Growth and Opportunity Act (AGOA), an initiative 

by the United States of America (USA) to assist developing countries in export trade.  

The Act that created EPZs provided three categories of incentives for the export 

processing zones. They include fiscal, procedural and infrastructural incentives 

(EPZA, 2010). The fiscal category reduces taxation costs like exemptions from 

income tax, import duty, withholding tax, Value Added Tax (VAT) and stamp duty. 

Procedural incentives reduce bureaucracy and fast track investment activities through 

exemptions from compliance with various national laws. Infrastructural incentives 

reduce the start up time and costs by providing ready factory units, serviced land and 

office spaces. Despite the incentives provided, some EPZ firms in Kenya have been 

unable to sustain a high level of performance as indicated by the closure rates. This 

calls for an empirical study of the strategic planning systems, learning abilities and the 

practice of strategy implementation in EPZ firms to fill the knowledge gaps.  

 

Due to competition, EPZ firms are compelled to increase their production efficiencies 

to survive in the export market (Nauman, 2006). These efficiencies are achieved 

through learning at individual, group and institutional levels. According to the EPZA 

annual report (2011) foreign direct investments in EPZ injected new technology and 

skills for production to international standards. Expatriates employed in technical 

areas transfer skills to other workers. As the workers interact with counterparts, they 

learn different skills which become integrated in different departments to benefit the 

whole organization.  



8 
 

EPZ firms have not performed to the expectation of the policy makers. In 2007, 

Kenya Association of Manufacturers (KAM) survey indicated that 72 percent of the 

enterprises closed down while 18 percent scaled down operations in Kenya from the 

time of inception. This has been attributed to stiff competition, high cost of 

production and global recession (EPZA, 2011).  

 

Despite the above scenario, EPZs are expected to facilitate the achievement of Vision 

2030 which seeks to make Kenya a newly industrialized nation by the year 2030 

(EPZA, 2011). Therefore, there is need to evaluate the contributions of strategic 

planning systems, organizational learning and strategy implementation in EPZ firms 

in order to get rich insights into their performance. Table 1 indicates the state of EPZ 

firms in Kenya over the last decade. 

 
Table 1.1: State of Firms in the Export Processing Zones in Kenya 
State of 
Firms 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Gazzeted 
Zones 

23 31 37 41 43 39 41 38 41 42 42 

New Entry 
Firms 

15 18 15 13 3 8 7 9 16 14 9 

Closed 
Firms 

4 2 3 7 10 5 9 3 11 10 4 

Operating 
Firms 

39 54 66 74 68 71 72 77 83 75 84 

Source: (EPZA, 2011) 

 

The table indicates that firm entry into EPZs steadily declined from the year 2001 to 

2005 while the closure rate rose steadily during the same period. Notably, in 2005, the 

lowest number of firm entry and high firm closures was recorded. It was attributed to 

competition, Multifibre Arrangements (MFA) and low demand in destination markets 

occasioned by the global financial crisis. Competition in the global garment industry 

intensified following the likelihood of termination of MFA that governed trade in 

textile and clothing between 1974 and 2004 thus, firms in EPZ were exposed to stiff 

competition in the export markets from well established producers in China and India 

(Adala, 2008). The low entry and high closure of the EPZ firms in 2005 followed the 

possible termination of MFA in 2004. 

 



9 
 

In 2009, global financial crisis impacted negatively on EPZ firms leading to closure 

and reduction in operations of many firms (EPZ, 2011).  The USA market which 

absorbs a large percentage of the Kenyan EPZs output was adversely affected by the 

economic recession of 2008 (Government of Kenya, 2007). Other than external 

factors attributed to EPZ firm performance, an empirical examination of firm specific 

strategic planning systems, learning abilities and strategy implementation capabilities 

could offer deeper insights on the variations in performance. The current study sought 

to provide this information and insights.  

1.2  Research Problem 

Strategic planning systems, organizational learning and strategy implementation are 

critical to firm performance. Performance provides important feedback about the 

efficiency of the learning processes and the competency of strategic planning systems. 

Organizational learning supports strategic planning systems because new insights and 

experiences inspire proactive business initiatives. Strategy implementation is a vital 

process in strategic management as it achieves the best integration between the 

people, structures, processes and resources. Strategic planning systems and the firm’s 

ability to learn are essential in improving the chances of long term performance. 

 

The EPZs in Kenya facilitate economic development in terms of contribution to total 

output, export earnings and employment creation as identified in Vision 2030. The 

EPZ firms’ output is mainly for export markets hence they face harsh competitive 

markets calling for a critical need for improved performance. However, there is 

inadequate empirical data on non financial performance. Hapisu (2003) established a 

positive relationship between strategic planning and competitive advantage in EPZ 

firms in Kenya. This study neither focused on organizational learning nor strategy 

implementation. Chabari (2000) focused on the role of EPZ firms in Kenya and 

observed that development pattern and success of EPZs is depend on the zone 

management, government policies and the strategies of different firms. The EPZ firms 

are given special incentives but post differences in performance. An empirical 

investigation into firm specific strategic planning systems, organizational learning and 

strategy implementation could explain variations in performance of different firms. 



10 
 

Several studies have provided empirical evidence on the determinants of firm 

performance (Ramanujam and Venkatraman, 1987; Elbanna, 2008). Ramanujam and 

Venkatraman (1987) established a positive link between planning resources and 

performance while Elbanna (2008) concluded that planning practice and participation 

are major determinants of strategic planning effectiveness. These studies 

conceptualized strategic planning systems differently. They focused on western 

contexts which are different from the Kenyan context. Organizational learning has 

been positively associated to firms’ performance (Schauffer and Wallauer, 2003; 

Bustinza, Molina and Aranda, 2010). A study by Bontis, Crossan and Hulland (2002) 

focused on managing organizational learning systems in mutual fund firms in Canada. 

This study did not link organizational learning to strategic planning systems. 

Conversely, Schauffer and Wallaeur (2003) focused on strategic planning processes in 

German firms without focusing on planning resources. Additionally, Bustinza, Molina 

and Aranda (2010) conceptualized organizational learning in terms of dynamic and 

operational capabilities without recognizing different levels of learning.  

 

Many studies in strategy implementation have focused attention on the problems and 

challenges of implementing strategies (Aaltonen and Ikavalko, 2002; Ogbeide and 

Harrington, 2011). Strategy implementation is a vital component in the success of any 

organization.  Aosa (1992) emphasized this role in a study conducted among the large 

manufacturing firms in Kenya. On the other hand, Ogbeide and Harrington (2011) 

confirmed that management participation and implementation success led to higher 

financial performance. Shah and Rivera (2007) found that EPZ firms promoted 

superior environmental performance in Asia. They did not focus on the use of non 

financial measures of performance. Despite contextual differences, these findings are 

useful in understanding the behavior of firms in EPZs.   

 

While studies do not disagree on the positive relationships between strategic planning 

systems, organizational learning, strategy implementation and performance, they have 

differences regarding study contexts, measurements, conceptualizations and 

methodologies.  The variations create the need to determine the critical dimensions of 

strategic planning systems that influence performance in Export Processing Zones 



11 
 

(EPZs). Further, a critical examination of the indirect relationships between strategic 

planning systems and performance through capabilities like organizational learning 

and strategy implementation become critical. Hence, this study addresses the 

following key research question. How do strategic planning systems, organizational 

learning and strategy implementation influence performance of firms in EPZs in 

Kenya? 

1.3  Research Objectives  

Overall, the purpose of this study was to investigate the influence of strategic 

planning systems, organizational learning and strategy implementation on 

performance of firms in EPZs in Kenya. Specifically, the specific objectives were to: 

 

(i) Examine the influence of strategic planning systems on performance of firms in 

EPZs in Kenya. 

(ii) Investigate the influence of organizational learning on performance of firms in 

EPZs in Kenya. 

(iii) Determine the mediating effect of organizational learning on the relationship 

between strategic planning systems and performance of firms in EPZs in Kenya. 

(iv) Assess the moderating effect of strategy implementation on the relationship 

between strategic planning systems and performance of firms in EPZs in Kenya. 

(v) Determine the joint influence of strategic planning systems and strategy 

implementation on performance of firms in EPZs in Kenya. 

 

1.4  Value of the Study 

The value of this study is multifaceted. First, this study recognized that performance 

is a function of how well managers use resources which are valuable, scarce, 

inimitable and non substitutable. This study established that strategic planning 

systems are bundles of resources which are manipulated through strategic planning 

process to facilitate firm performance. Acquisition and transformation of resources is 

based on the open systems approach where firms affect and are affected by the 

environment through acquisition of inputs to the environment and emission of outputs 

to the environment. This study confirms the findings of the earlier studies through a 

different setting that resource bundles enable the firms to achieve competitiveness.  



12 
 

Secondly, this study determined and documented transformation of resources through 

strategy implementation. It was established that organizational processes have value 

creating capabilities which facilitate adaptation and integration that foster better 

performance. The findings of this study have given emphasis to different functional 

areas within EPZ firms.  The results indicated that the mechanisms by which firms 

learn, accumulate new skills and translate strategy to outcomes through strategy 

implementation facilitate the achievement of performance. Therefore, this study made 

a positive contribution to the dynamic capability theory by confirming through 

empirical evidence that capabilities created through learning and strategy 

implementation are useful in the achievement of sustained firm performance.  

 

Thirdly, the study serves as a rich source of information to policy makers in Kenya. 

EPZ firms are envisioned to play a key role in the realization of Vision 2030. The 

Vision focuses on attainment of high and sustainable economic growth and 

development to enable the country achieve the status of an industrializing nation by 

the year 2030.  The findings of the study shed light on how EPZ firms could sustain 

superior performance through appropriate configuration of strategic planning systems 

and fostering learning at the individual, group and institutional levels while 

undertaking strategy implementation.  

Fourth, this study has provided a direct operational approach to strategic planning 

practice in Kenya. The results of the study have provided insights to the bleak 

scenario of EPZ practice in Kenya by showing important dimensions of strategic 

planning systems, organizational learning and strategy implementation that are 

relevant to performance.  The findings therefore form the basis of improved 

management practice amongst managers within EPZ firms. In future, important 

managerial decisions in EPZ firms will be based on the outcomes of this study. 

 

Finally, the findings of this study have served as extensions of the knowledge 

frontiers in the field of strategic management. The moderating and mediating 

relationships between strategic planning and performance have offered an alternative 

approach in strategic planning. The two distinct relationships sought to unravel the 

unending debate in the relationship between strategic planning systems and 



13 
 

performance. Further, through specific recommendations made by this study, new 

avenues for future research in the field of strategic management have been opened for 

scholars and researchers. 

1.5  Structure of the Thesis  

This thesis has six chapters. Chapter one presents the introduction of the study. It 

provides a brief background to the study in which the concepts of strategic planning 

systems, organizational learning, strategy implementation and performance are 

discussed. The EPZ context is also highlighted in terms of nature of the incentives 

given to the firms and the operation mode of export business. The chapter further 

explores the research problem, research objectives and value of the study.  

 

Chapter two presents an in depth theoretical and empirical literature review of 

strategic planning systems, organizational learning, strategy implementation and 

performance. The chapter highlights the theories upon which the study is anchored, 

discusses the relationships between the study variables and performance. The chapter 

ends with a tabulated presentation of pertinent empirical studies and knowledge gaps 

which informed the conceptual framework. From the literature review, the conceptual 

model was derived and the hypotheses that guided the study developed.  

Chapter three provides the research methodology of the study. The chapter presents 

the philosophical orientation which was adopted for this study. The research design, 

the study population and data collection instruments are described. The type of data, 

sources and the methods used for data collection, validation of instruments are also 

explained. Further, operationalizations of research variables and data analysis 

techniques are highlighted. The validity and reliability of the research instrument is 

also demonstrated. Finally, the common methods bias is discussed.    

Chapter four has data analysis and presentation of results. First the chapter presents 

the response rate in relation to different sectors. Research findings are presented at 

two levels. The first level deals with descriptive analysis of the data sets in terms of 

the demographic profiles of the respondents and firms. The demographic variables are 

cross tabulated and presented using frequencies and percentages. The second level of 

analysis deals with hypothesis testing where different relationships of the variables of 



14 
 

the study are tested. Hypothesis testing was guided by the research objectives. Each 

hypothesis was tested and subsequently interpreted.  

 Chapter five deals with the discussion of the study findings. The discussion is 

arranged according to the research objectives and the subsequent hypotheses of the 

study. The findings are discussed according to each objective in relation to previous 

empirical studies. Areas of agreement and disagreements are highlighted and 

discussed. The findings from the qualitative data which were collected from the open 

ended questions are discussed in terms of the major emerging themes.  

 

Chapter six presents the summary, conclusions and recommendations of the findings. 

Further, this chapter gives the implications of the study findings with regard to the 

theory, policy and practice. It also recommends possible areas of future research in 

field of strategic management. The chapter highlights the limitations of the study 

showing how the researcher mitigated them.  



15 
 

CHAPTER TWO 

LITERATURE REVIEW 
2.1  Introduction 

This chapter reviews both conceptual and empirical literature with an aim of creating 

an understanding between strategic planning systems, organizational learning, 

strategy implementation and performance. Theoretical perspectives upon which the 

study was based are outlined together with the constructs of strategic planning 

systems. An overview of how strategic planning systems, organizational learning and 

strategy implementation influence performance is discussed. Presented also is a 

summary of selected empirical studies on study variables identifying specific 

knowledge gaps. This chapter concludes by providing a conceptual framework used to 

address the knowledge gaps and the corresponding hypotheses that guided the study.  

 

2.2  Theoretical Perspectives  

Different theories have attempted to explain strategic planning in organizations. 

Literature portrays better performance as a function of strategic planning undertaken 

by firms. Strategic planning recognizes the need for organizations to establish a 

formal link with the external environment. Environment is a source of information, 

opportunities as well as scarce resources sought after by organizations (Grant, 2005). 

Therefore, strategic planning is as a result of both deliberate learning and emergent 

learning.  This study draws from the open systems theory of the firm (Ansoff, 2007), 

resource based view (Wernerfelt, 1984), dynamic capabilities theory (Teece, Pisano 

and Shuen, 1997) and 4i (intuition, interpretation, integration, institutionalization) 

framework of organizational learning (Crossan, Lane and White, 1999).  

 

The resource based theory and dynamic capabilities theory are important to strategic 

moves of different organizations. The resource based theory posits that the primary 

objective of a firm is exploiting resources to maximize long term profits (Penrose, 

1959). Resource based view considers firms as sets of resources that produce 

competitive advantage.  These theoretical frameworks facilitate an understanding of 

the relationships between strategic planning systems, organizational learning and 

strategy implementation on firm performance. 



16 
 

2.2.1  Open Systems Theory 
The open systems theory fosters the view of the interaction between the organization 

and environment. The interactions consist of movement of people, capital, goods and 

services. Firms affect and are affected by the environment. Kreitner (2007) argued 

that all firms are dynamic, evolving and changing in response to the environment. In 

today’s turbulent environment, open systems approach is relevant and meaningful in 

achieving competitiveness. Organizations operate as open systems and interact with 

environment through permeable boundaries (Luthans, 2005).  

 

Organizations are characterized by the dynamism of open systems. The characteristics 

include interaction with the environment, synergy, dynamic equilibrium and 

equifinality (Kreitner, 2007). Interactions with the environment are enabled through 

permeable boundaries while through synergy, open systems add to more than the sum 

of its parts represented by 1+1 = 3 effect. Conversely, through dynamic equilibrium 

firms achieve a balance with the environment.  

 

On the other hand, equifinality means reaching the same result using different means. 

Equifinality enables managers to use different bundles of resources, transform them 

using variety of ways to achieve satisfactory output.  Senge (1990) through his fifth 

discipline popularized the open systems thinking. Borrowing a leaf from Senge 

(1990), Garvin (1993) argued that to turn new ideas into organizational performance, 

managers have to solve internal problems, learn through experimentation, learn from 

organizational experiences and from others.  

 

The open systems theory has made significant contributions to the evolution and the 

operation of firms. It strongly supports and provides evidence of the interactions of 

the EPZ firms with the environment. It has been lauded specifically for the 

achievement of synergy and equifinality. However, with the open systems thinking, 

there is a strong tendency to think by analogy which can create misconceptions. 

According to Kreitner (2007) the theory tends to be more abstract often relabeling old 

ideas with new vocabulary. It is dominated by event level definitions which reflect 

underdevelopment of a system specifically in reference to “closed systems” and “open 



17 
 

systems” in relation to the degree of interaction with the environment. The theory 

assumes that organizational systems operate unaffected by other factors which are not 

environmental may be misleading.   

 

2.2.2  Resource Based View 
 

Resource based view considers firms as sets of resources that produce competitive 

advantage. This theory is rooted in the work of Penrose (1959) who considered firms 

as bundles of resources. Wernerfelt (1984) defined resources as those assets which are 

tied semi permanently to a firm. They are the assets a firm owns and are externally 

available and transferable. They include brand names, trade contacts, technology 

knowledge, efficient procedures and capital. Firms which become resource holders 

maintain relative positions vis – a- vis other holders as long as they act rationally. 

Borrowing from Porter’s five forces, Wernerfelt (1984) contended that entry barriers 

are resources since they contain mechanisms which make resource holder defensible. 

Economies of scale are a prime example of a resource which is an entry barrier. 

    

The growth of a firm internally and externally depends on the manner in which its 

resources are employed. Building on the inroads made by Penrose (1959), Wenerfelt 

(1984) argued that for the firm, resources and products are two sides of the same coin. 

In other words, while the firm’s profits are directly driven by products, they are 

indirectly driven by resources which are used for production. Firms may earn super 

profits by indentifying and acquiring resources which are critical to the development 

of the demanded products. Therefore, the critical task of top management is to 

develop new and valuable products through the exploitation of core competencies.  

  

Resources enable firms to achieve improved performance both in the short term and 

in the long term. Barney (2001) argued that firms which possessed resources that are 

valuable and rare would attain competitive advantage and improved performance in 

the short term. He contended that, for a firm to sustain competitive advantage over 

time, its resources must also be inimitable and non substitutable. While extending this 

line of argument, Newbert (2007) posited that in addition to possessing valuable, rare, 

inimitable and non substitutable resources, firms seeking competitive advantage must 



18 
 

demonstrate the ability to alter the resources in such a way that the full potential is 

realized. Strategic implementation skills could ensure proper resource exploitation.      

 

Resource based view is useful in understanding the growth of the firm.  However, it 

lacks substantial managerial implications. It emphasizes managerial development of 

the resources but is silent on how it should be done (Connor, 2002). Further it makes 

the illusion of total control, trivializing property rights while exaggerating the extent 

to which managers control resources and predict future value (McGuiness & Morgan, 

2002). According to Connor (2002) resource based view is relevant to large firms 

with significant market power. He contents that small firms can not base survival on 

their static resources thereby falling beyond the bounds of resource based view.  

Further, resource based view is more relevant to firms striving for sustained 

competitive advantage, for firms satisfied with their competitive position resource 

based view is irrelevant. By nature and scope resource based view focuses on the 

resources while ignoring process which transform the resources into customer value. 

 

2.2.3  Dynamic Capabilities Theory 

Dynamic capabilities theory focuses on how firms change valuable resources over 

time through a value creating process. Teece, Pisano and Shuen (1990) working paper 

was the first contribution to dynamic capabilities theory. They (1997) defined 

dynamic capabilities as the firm’s ability to integrate, build and configure internal and 

external competencies to address rapidly changing environment.  Through dynamic 

capabilities, firms avoid developing core rigidities, which inhibit development, 

generate inertia and stifle innovation (Ambrosini and Bowman, 2009). 

 

Dynamic capability theory explains why many once successful firms struggle to 

survive or fail completely as the environment changes due to the inability to adapt 

successfully. Teece, Pisano and Shuen (1997) argued that it is not only the resources 

that matter but also the mechanisms by which firms learn and accumulate new skills.  

Dynamic capability is about the capacity of an organization to purposefully create, 

extend and modify its resource base (Helfat, Finkelstein, Mitchell, Peteraf, Singh, 

Teece and Winter, 2007). Therefore dynamic capabilities are deliberate processes. 



19 
 

The role of dynamic capability is to transform a firm’s resource base in such a way 

that new bundles of resources are created to sustain competitive advantage. They are 

shaped by positions and paths. They include coordination, integration, learning, 

leveraging and configuration (Helfat et al, 2007; Ambrosini and Bawman, 2009). 

Coordination includes aligning activities to achieve the intended output while, 

integration relates to the ability of the firm to combine its resources. Learning allows 

tasks to be performed effectively through cognition and experimentation, leveraging 

involves replicating processes in different units while configuration transforms and 

aligns firm resources.  Managers are critical determinants in the deployment of 

different forms of dynamic capabilities. Advancing the managerial role, Harreld, 

O’Reilly and Tushman (2007) argued that managers sense and judge accurately the 

changes within the environment and seize different opportunities. The ability to do so 

depends on their motivation, skills and experiences.  

 
Dynamic capabilities are process based on value adding mechanisms within the firm. 

Wang and Ahmed (2007)  posited that capabilities are firm’s behavioral orientations 

to constantly integrate, reconfigure, renew and recreate its resources. Firms upgrade 

and reconstruct core capabilities in response to environmental changes to sustain 

competitive advantage. Although the notion of dynamic capabilities compliments 

resource based view, several issues surrounding its conceptualization remain 

ambivalent.  The capabilities exhibit commonalities across firms, however such 

commonalties have not been systematically identified (Barney, 2007). In addition, 

studies on dynamic capabilities addresses firm or industry specific processes 

rendering the findings piecemeal and disjointed.    

2.2.4  Framework of Organizational Learning  
Organizational learning is a principle means of strategic renewal of an organization.  

Crossan, Lane and White (1999) posited that strategic renewal requires that 

organizations explore new ways at the same time, exploit what has been learned over 

time. They argued that for renewal to be strategic it entails the whole organization and 

recognizes the open systems framework. Through exploitation firms develop what has 

been learned through feedback while through exploration discover and acquire new 

knowledge through feed forward. The 4i framework established a connection between 



20 
 

strategy and learning (Vera and Crossan, 2004). Organizational learning is a means of 

developing capabilities which are valued by customers, difficult to imitate and hence 

contribute to competitive advantage. 

 

Organizational learning is a multilevel concept occurring at individual, group and 

institutional levels. The process is linked by four psychological processes of intuition, 

interpretation, integration and institutionalization (Crossan, Lane and White, 1999). 

Organizational learning involves tension between exploration and exploitation due to 

competition for scarce resources. Feed forward learning focuses on proactively 

anticipating environmental changes through individual intuition. Intuition occurs at 

the individual level which is integrated into group learning and then into learning at 

institutional level. Feedback indicates how learning that is embedded in organizations 

affect individuals and groups (Crossan and Bedraw, 2003).  Organizational learning 

affects strategic renewal and firm performance.  

 

The framework of organizational learning provides important insights by linking the 

three levels of individual, group and institutional learning and showing the linkage to 

strategic renewal. It recognizes the fact that learning is a multilevel process linked to 

the four psychological processes of intuition, interpretation, integration and 

institutionalization. However, by its very nature the framework is limited due to the 

overlapping nature of the psychological processes. The framework does not 

distinguish the level at which information interpretation and integration occurs. Since 

the framework involves a tension between exploration and exploitation, it creates a 

conflict between the two processes and remains silent on the issue of competition for 

resources by the two processes within the organization.  Further, the two processes of 

exploitation and exploration are defined by feedback and feed forward mechanisms 

although they are linked to different contexts with different environmental turbulence.   

 
2.2.5 Institutional Theory 
Institutional theory holds that institutions are formed to reduce uncertainty in human 

exchange. Institutions are composed of formal rules, informal constraints and the 

enforcement characteristics of both (North, 1992). Institutional theorists assert that the 



21 
 

institutional environment can strongly influence the development of formal structures 

in an organization, often more profoundly than market pressures. Conformity to social 

expectations contributes to organizational success and survival. Institutional theorists 

are interested in how organizational structures and processes become institutionalized 

over time (Zucker, 1987). Institutionalized activities are the actions that tend to be 

enduring, socially accepted, resistant to change and not directly reliant on rewards or 

monitoring for their persistence (Oliver, 1997). Firms operate within a social 

framework of norms, values and assumptions which shape the strategic planning 

systems embedded in an organization. 

 

Organizations are the players in that they comprise of groups of individuals bound by 

common purpose to achieve objectives. The continuous interaction between 

institutions and organizations in the economic setting of scarcity leads to competition 

which is the key to institutional change (North, 1992). The theory is relevant to the 

institutions aligned to strategy implementation in terms of structure, systems and 

culture. Further, institutional theory together with technology employed determines 

the costs of transacting and producing in an organization. Therefore, institutional 

alignment is critical to firm performance and has an influence on strategy 

implementation. Institutions are not necessarily created to be socially efficient; rather 

the formal rules are created to serve the interests of those with bargaining power to 

create new rules. The individuals and organizations with bargaining power as a result 

of institutional framework have crucial stake in perpetuating the system (North, 

1992). 

 

Institutions help in reducing variance in political behavior therefore facilitate the 

possibility of prediction. However, the theory is based on the premise that institutions 

are unnecessary in a world of instrumental rationality where ideas don’t matter and 

efficient markets characterize economies (North, 1991). It is further argued that 

human beings impose constraints on human interaction in order to structure exchange. 

Thus, there is no implication that the consequent institutions are efficient. Peter 

(2000) posited that institutional theories have limited ability to provide coherent 

explanations of political phenomena within organizations. There is also an inherent 



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difficulty of the theory in measuring institutions and discerning variations across 

different institutions. Further, Goetz and Peter (1999) argued that institutional 

explanation may be excessively static and incapable of copying with dynamism and 

complexity of the contemporary world. 

 

2.3  Strategic Planning Systems 

Strategic planning systems are multifaceted management systems which are  

contextually embedded. They consist of  the people who do the planning as well as 

the mechanisms of planning (King, 1983). Planning systems have specific inputs and 

visible outputs. Dayson and Foster (1982) posited that the inputs of strategic planning 

systems constitute of the people, funds and time while the outputs consist of missions, 

objectives, strategies, goals, resource allocations and strategic programs. Strategic 

planning systems take into account the fundamental requirements of people working 

in organizations. They focus on the systems that enhance people's abilities and 

systematically get the management team to address with real honesty and zeal the 

issues faced if the organization has to thrive, not just survive (Mclarney, 2003). 

Therefore, strategic planning systems are the foundations upon which strategic 

planning is based. 

 

There are two categories of strategic planning systems, notably the design oriented 

systems and the contextual oriented systems. In an attempt to conceptualize strategic 

planning systems, Ramanujam, Venkatraman and Camillus (1986) identified design 

elements and contextual elements. According to them, design elements of strategic 

planning systems consist of factors related to system capability, planning techniques, 

attention to internal facets, attention to external facets and functional coverage. 

Contextual elements on the other hand consist of planning resources and resistance to 

planning. Dayson and Foster (1982) added participation as part of the contextual 

elements. Therefore, the contextual are factors which are associated with the planning 

context while design elements are those related to the inputs and outputs.     

 

Ramanujam and Venkatraman (1987) argued that planning systems are important to 

strategic planning. They contend that an organization can not succeed unless adequate 



23 
 

resources are allocated to planning. The resources could either be tangible or 

intangible.  Ramanujam, Venkatraman and Camillus (1986) noted that it is important 

for an organization to identify and overcome sources of resistance in planning. 

Organizational members could show resistance in form of withdrawal from planning 

activities, lack of acceptance of planning outputs or gaming behavior. In essence, 

resistance to planning exerts negative effects on the effectiveness of the strategic 

planning systems. Ramanujam and Venkatraman (1987) found that five dimensions of 

strategic planning systems had significant impacts on the effectiveness of strategic 

planning process. These were planning resources, attention to internal facets, attention 

to external facets, functional coverage and use of planning techniques. 

 

Level of environmental turbulence affects strategic planning outcomes. Mclarney 

(2003) research model demonstrated that in different levels of environmental 

turbulence, contextual elements were stressed differently. He observed that in more 

turbulent environments, organizations devoted more resources to the planning 

function, paid more attention to internal and external facets, employed more planning 

techniques and encouraged greater functional coverage. In a plausible extension of the 

above argument, Jennings and Disney (2006) argued that strategic planning systems 

in complex and turbulent environments are more flexible and plans are reviewed 

frequently.  In essence, firm’s planning systems facilitate achievement of a balance 

between adaptation and integration. This study focused on three elements of strategic 

planning systems namely, planning resources, management participation and strategic 

planning techniques.  

2.3.1  Planning Resources 
Resources are tangible and intangible assets while capabilities are dynamic 

endowments leveraged by firms to deliver efficiency and effectiveness. Strategic 

planning systems are considered as sets of resources and capabilities that produce 

competitive advantage (Wernerfelt, 1984). Helfat and Peteraf (2003) defined 

resources as assets which a firm owns, controls and has access to on a semi permanent 

basis. Resources exist in form of brand names, trade contacts, technology, skilled 

personnel and production/service delivery procedures.  

 



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Glaister and Falshaw (1999) argued that firms achieve better performance by 

acquiring certain endowments of resources. Adequacy of resources in relation to 

planning goals is pertinent to goal achievement and competitive positioning. The 

resources as propounded by Kraatz and Zajac (2001) have to be scarce, valuable and 

imperfectly imitable to create sustained performance differences amongst competing 

firms.   McLarney (2003) explored the link between environmental turbulence and 

strategic planning systems and concluded that in turbulent environments, 

organizations devote more resources to the planning function. Management action on 

planning resources is important hence the need to evaluate management participation 

in the planning process.  

 

2.3.2  Management Participation 
Participation focuses on involvement in processes at different levels. Participation 

taps into concepts of breath and depth of involvement.  Ogbeide and Harrington 

(2011) defined management participation as the collective level of management 

involvement within and across the firm. Management spreads beyond the top 

executive to include middle and lower cadre managers (Currie and Procter, 2005). 

Literature suggests that participative management approach could increase the firms 

informational processing, utilize knowledge dispersed across the firm, provide more 

alternatives, facilitate opportunity recognition and help the organization to avoid 

overlooking good ideas (Feigner, 2005; Ogbeide and Harrington, 2011).  

  

Currie and Procter (2005) identified three possible types of middle level management 

involvement in strategic planning. They argued that managers synthesize, interpret 

and channel information to the executive management. Floyd and Wooldridge (1997) 

identified the fourth type of management involvement stemming from the middle 

level as implementing deliberate strategy through action planning. Floyd and 

Wooldridge (1997) argued that a certain degree of uniformity is required among 

middle level managers for an organization to achieve consistency.  He observed that 

such consistency is associated with improved performance. Conversely, Floyd and 

Wooldridge (1990) found that involvement of middle level management increases an 

understanding of the resulting goals, leading to convergence of strategic priorities.  



25 
 

 

Ketokivi and Gastner (2004) observed that management participation generates both 

informational and emotional effects in the organization. Notably, Lines (2004) argued 

that management involvement reduces organizational resistance and creates a higher 

level of psychological commitment among employees towards the proposed changes. 

Participation leads to qualitatively better strategic decisions (Feigner, 2005). One 

reason for this argument is that, broader array of relevant skills, competencies and 

information is brought to bear on each stage in the strategic decision process. Further, 

participation makes the political realities of the organization more salient leading to 

balanced political, social and technical considerations within organizations.  

 

Studies on the influence of management participation on performance have yielded 

mixed results. Dyson and Foster (1982) noted that there is a strong theoretical support 

that management participation enhances achievement of outcomes. Freeman (1989) 

reported that management participation in strategic planning clearly influences 

utilitarian planning consequences (strategic capability, coordination, communication 

and adaptability) and psychological planning consequences (morale, commitment to 

the firm, motivation).  Conversely, a study by Ogbeide and Harrington (2011) 

established that participative management styles were significantly associated with 

high overall profits and financial success within foodservice industry in USA. 

Similarly, Eggers and Kaplan (2013) indicated that managerial cognition plays a 

central role in capability development and deployment. 

Other studies however, have established negative and non significant influence of 

management participation on performance. A study by Elbanna (2008) established no 

significant relationship between management participation and strategic planning 

effectiveness. Possible reason as observed by Lines (2004) could be that management 

participation was moderated by other factors not considered in the study. Further, 

management participation is a complex issue which depends on contextual factors 

such as power politics, organizational culture and the type of leadership. As observed 

by Ogbeide and Harington (2011), the concept of management participation is much 

more complex than has been previously thought. 



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2.3.3  Strategic Planning Techniques 
The maturity of any academic discipline is judged by the extent to which its theories 

and techniques are employed in practice (Stonehouse and Pembertone, 2002). 

Strategic planning techniques are models used in analysis of business environment. 

They are used in translating strategy into business results. When strategic planning 

suffered a downturn in popularity and influence in the 1970s, largely it was due to the 

inability of the strategic planning techniques to deliver what was expected (Glaister 

and Falshaw, 1999).  Ghamdi (2005) argued that using strategic planning techniques 

enhances a manager’s analytical skills. An effective planning approach seeks to learn 

by examining the past (Ghamdi, 2005) and links the future through planning 

techniques (Amran and Kulatilaka, 1999).  Navigating turbulent environment requires 

a strategic compass which relies on the use of analytical strategic planning techniques.  

 

Strategic planning techniques enable firms to think strategically. They are possible 

means of fostering creativity and analytical mindset within organizations. In the 

competitive positioning paradigm, Porter (1980) centers his argument on the premise 

that firms position themselves within the competitive business environment through 

the use of a variety of strategic techniques aimed at generating superior performance. 

Ghamdi (2005) argued that planning techniques could integrate strategic planning into 

the core management process. Similarly, Aldehayyat and Khattab (2011) noted that 

planning techniques enable managers to transform data into valuable decisions and 

suitable actions. To this end, as Dincer, Totaglu and Glaister (2006) posited that the 

benefits of using strategic planning techniques include increasing environmental 

awareness, risk reduction and priority establishment.  

 

Many empirical studies focusing on strategic planning techniques exclusively report 

about their usage without linking them to performance (Stonehouse and Pembertone, 

2002; Ghamdi, 2005; Gunn and William, 2007). A few studies link planning 

techniques to performance. A study by Stonehouse and Pembertone (2002) revealed 

that both small and medium enterprises from the UK emphasized use of planning 

techniques as a way of achieving financial analysis and profit targets. They confirmed 

a predisposition towards short term planning rather that strategic thinking. Ghamdi 



27 
 

(2005) study showed that only 27 percent of the firms investigated in Saudi Arabia 

reported using strategic planning techniques regularly. Conversely, a study done in 

Uganda by Bagire and Namada (2011) focused on strategic planning as a process 

without emphasizing planning techniques as conceptualized by other studies. 

 

According to Ghamdi (2005) study, the most frequently used planning techniques 

were analysis of critical success factors, bench marking, Strengths, Weaknesses, 

Opportunities and Threats (SWOT) analysis, Product Life Cycle (PLC) analysis and 

stakeholder analysis. Cognitive mapping and Porters five force framework were the 

least used techniques. Similarly, Aldehayyat and Khattab (2011) study showed that 

Jordanian hotels engage in strategic planning process using many strategic planning 

techniques. Further, the study established that use of planning techniques were more 

related to hotel size rather than age and ownership. However, these studies did not 

attempt to link the ascertained use of planning techniques to performance of the 

respective organizations.   

 

2.4  Organizational Learning 

Organizational learning is portrayed differently by different scholars. It means new 

insights (Argyris and Schon, 1978), new structures (Chandler, 1962), new systems 

(Miles, 1982) or a combination of the above. Cummings and Whorley (2009) defined 

organizational learning as a change process which enhances the ability of an 

organization to acquire and develop new knowledge.  

 

Learning is organizational only if it is done to achieve organizational purpose, if it is 

shared among members of the organization and if the outcomes are embedded in 

systems, structures and culture. It is both a process and an outcome. As a process, 

organizational learning focuses on improving outcomes of different activities within 

the organization (Fiol and Lyles, 1985) while as an outcome it results into a learning 

organization (Senge,1990).  

 



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 2.4.1  Conceptualizations of Organizational Learning 
 

Organizational learning is one of the concepts with lack of agreement in terms of 

theoretical conceptualizations. Different scholars have conceptualized organizational 

learning differently according to the study interests. Argyris and Schon (1978) 

conceptualized organizational learning in terms of single loop learning and double 

loop learning while  Fiol and Lyles (1985) conceptualized it in terms of the lower and 

higher level learning.  Single loop learning seeks to improve the status quo. Fiol and