EFFECT OF SOCIO-CULTURAL ENVIRONMENT ON STRATEGIC PLANNING IN INSURANCE INDUSTRY IN KENYA: A STUDY OF INSURANCE COMPANIES IN NAKURU CBD, KENYA

ABSTRACT 
Firms are open systems that interact with their environment and are affected by environmental changes. This study was conducted to find out the effect of socio-cultural environment on strategic planning in insurance companies in Nakuru CBD. The objectives of the study were to determine the effect of the population demographics on strategic planning, effect of class structure factors on strategic planning and effect of cultural factors on strategic planning. A correlational survey research design was adopted for the study. The target population was all the 21 insurance companies in Nakuru CBD. Census study was conducted for all the 21 insurance companies. Primary data was collected using close-ended questionnaires. The respondents were managers who are involved in strategic planning in the insurance companies. Data collected was analyzed using descriptive statistics, Pearson correlation analysis and multiple regression analysis. The results of the analysis were presented using charts and tables. The results revealed that perception of socio-cultural environment affects strategic planning in the firms. The findings also revealed that cultural factors had the greatest effect on strategic planning, followed by population demographics then the least was class structure factors. Since the results revealed that there was a positive relationship between socio-cultural environment and strategic planning, strategic planning managers need to align their strategic planning to the socio-cultural environmental factors.

CHAPTER ONE 
INTRODUCTION 
Background of the Study 
Firms and environment are related in one way or another; firms do not exist in a vacuum; they depend on and are part of the environment. They depend on the environment for their survival and also organizations obtain their raw materials from the environment, thus organizations must adapt their strategic planning to fit in the environment so as to be successful. 

External environment like economic environment, socio-cultural, technological and political environment aims to help an organization to obtain opportunities and threats that will affect the organization’s competitive situation. Therefore, organizations must formulate appropriate strategies to take advantage of the opportunities while overcoming the threats in order to achieve their strategic goals. 

Companies worldwide are struggling to understand and adjust to wide ranging external and internal changes that are altering modes of production, rapidly increasing competition, eroding their traditional audience and advertiser bases, altering established market dominance patterns, and changing the potential of the firms. Picard (2004) observes that the need for companies to understand and adjust to the new conditions grows daily because such changes can lead to failure of both existing and new products and, ultimately, lead to the loss of value or collapse of firms. 

Environmental analysis must overcome difficulties of interpretation, inaccuracy, misperception and short-term orientation, as well as the complex environments of various firms. Ansoff (1999) states that for a given environment, an organization must come up with a suitable strategy and proposes that there has to be a fit between the existing strategy and the prevailing environment for the organization to remain successful and says that once the strategy has changed to fit in the new environment, such a change requires a corresponding change in the internal capability of the firm. Here the most important aspect of managing changing environmental conditions is the real time response. This refers to the immediate changes that involve immediate capability transformation as soon as the environment changes. Despite the formal strategic plan, informal changes must be undertaken to respond to the environmental changes as they happen or are about to happen.

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Item Type: Kenyan Postgraduate Material  |  Attribute: 54 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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