Kaplan, 2005).

McKinsey’s model places shared values which are basically organizational culture in the middle of
the model and emphasizes that these values are central to the development of all the other critical
elements. The company's structure, strategy, systems, style, staff and skills all stem from why the
organization was originally created, and what it stands for.

5.3 Influence of Organization Leadership on SI

The study sought to find the effects of organization leadership on the strategic plan implementation
in EIC. The findings also revealed that lack of transformational leadership hindered the success of
strategy implementation. The finding significantly indicated that organization leadership accounted
for 47.1% of variation in strategy implementation. The findings demonstrate that organization
leadership and strategy implementation have significant relationship. A theory of transformational
leadership posits that the role of leader in an organization is the ability to motivate the follower to
accomplish more than what the follower planned to accomplish (Mithas, Krishnan and Fornell,
2005). Leaders transform their followers in three ways: increasing their awareness of task
importance and value, getting them to focus first on team or organizational goals, rather than their
own interests and activating their higher-order needs. Transformational leaders use their personal
values, vision, commitment to a mission, and passion to energize and move others towards
accomplishment of organizational goals (Arbon, Facer and Wadsworth (2012).Hetland and Sandal
(2008) revealed another side of transformational leadership in their study to investigate the
relationship between transformational leadership and followers rating on satisfaction, effectiveness
and work motivation as well as the relationship between transformational leadership and personality
in five private and public institutions. The results yielded substantial support for a strong and
consistent link between satisfaction, effectiveness and motivation. Griffith (2004) on the other hand
conducted a study on the impact of transformational leadership on job satisfaction, staff turnover
and job performance. It was found that schools in which principals were perceived as
transformational leaders had school staff that were more satisfied with their jobs and had less staff
turnover. While, school principals with transformational leadership skills are found to have the
ability to imbued, inspire and equip teachers with the vision
of the future, and strengthen commitment of teachers to school affairs (Yu, 2002). Another study by
Ejimofor’s (2007) in Nigeria concluded that transformational leadership behavior affected teachers’
job satisfaction. Schaap (2012) study's findings further revealed that consensus is vital in the
implementation process. The study also indicated that frequent communication up

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And down the organization structure enhanced strategic consensus through the fostering of shared
attitudes and values. Study by Mapetere, Mavhiki, Nyamwanza, Sikomwe and Mhonde (2012)
revealed that a relatively low leadership involvement in strategy implementation led to partial
strategy success. The study concluded that leadership should be able to craft a vision for any
strategic programmed, design effective communication strategies as well as to role model behavior
changes that are consistent with new strategies.

5.3.3 Organization Resources Effects on SI

The study sought to find out whether human and financial resources in EIC influenced the success
of strategy implementation. The study findings revealed that insufficient funds affected the
programs such as staff training which significantly affected strategy implementation. Organization
resources are inputs that are used in production. Resource based theory which is said to originate
from Penrose’s idea (1959) of the firm as a coordinated ‘bundle’ of resources, tackles the question
of a firm’s goals and strategic behavior (Barney, Corte and Sciarelli 2008).
According to Bateman and Zeithman (1993), a strategy is a pattern of actions and resource
allocations designed to achieve the goals of the organization. The amount and nature of resources an
organization has access to and how these resources are allocated has a significant role in strategy
implementation. Similarly, Johnson and Scholes (2002), view strategy as the direction and scope of
an organization over the long-term, which achieves advantage for the organization through its
configuration of resources within a changing environment, and fulfill stakeholders’ expectations.

Strategic management is, hence, both a skill and an art. Good strategic management requires both
clear thought and sound judgment. Kirui (2013) also analyses factors influencing implementation of
strategic plans in local authorities in Migori County and found that financial resources affected
strategic implementation through budgetary allocations, financial controls and revenue efficiency.

Gakenia (2008) sought to determine the factors that influence strategy implementation at Kenya
Commercial Bank. The study found that resources (both financial and human resources),
management support and the organization structure greatly influenced strategy implementation at
KCB

61
5.3.4 Impact of Organization Structure on SI
This study also sought to investigate the effects of organization structure on strategy
implementation in EIC. The findings of this study revealed that organization structure was critical
to strategy implementation since it ensures efficient flow of information from high level to lower
levels. According to the agency theory which explains the relationship between the principal and
the agents in organizations. Organization structure is made up of hierarchal levels where principals
and agents interact in their day to day activities in the view of realizing the set objectives.
Chandler (1962) suggested that organizational structure has been influenced by the organization’s
strategies (structure follows strategy). Concurring with Chandler’s (1962) study, Rajasekar (2014)
revealed that strategy is formulated by top management exclusively and middle-level managers
only implement the strategy unless a wide range of changes is required before implementation
(structure alignment with strategy). In contrast, Contractor and Lorange (2002) presented a concern
with business restructuring and proposed that it has to be outweighed by the anticipated gains of the
new strategy. He said that too often the restructuring / right-sizing efforts lead to the unintentional
discarding of know-how that could have been used for future growth in another context.
5.3.5 Influence of Organization Technology on SI
The study soughttofindtheeffectsoforganizationTechnologyonthestrategicimplementation at EIC the
findings also revealed that technology is a strong and an important variable influencing firm’s
performance. It is an important dynamic capability that is usually embedded in the firm’s processes and
configurations .Technology in an organization need to be adjusted and matched to the current demands
of the society and to the strategy the firm is implementing. Based on the findings of this study it can be
concluded that their new strategies are matched to the technological requirements and environmental
changes enable their organization to perform better and also to maintain a superior competitive edge
.Since technological capacities are embedded in various firms’ processes and practices, then managers
should always stay focused on the technological requirements and challenges posed by the new strategy.
They must also continuously scan the environment for crucial leads regarding to the changes in
technology brought about by the environmental dynamism .Finally ,this study concluded that ,in the
st
contemporary world in the21 Century where almost everything is driven by computers, machines and
ICT, technology is a dynamic capability as postulated by the DCV framework and a major driver in
strategy implementation influencing firm’s performance positively and significantly. Becheikhetal.
[28]observed that technological innovation is a key factor in firm competitiveness and it is unavoidable
for those firms that want to develop and maintain superior per for maintain the current or new markets
.Manima laandVijay [29]maintained that technology adoption is crucial for growth of business in the

62
private sector and Mubaraki and Aruna[22]noted that technology adoption behavior significantly
improves organizational performance in terms of profit growth and market share.

5.4 Conclusions
 Strategy implementation is critical to any company's success, addressing who, where, when,
and how to reach the desired goals and objectives. Having a culture that understands
the core values, belief and principles of an organization is crucial to the success of strategic
plan implementation.
 Leadership is an attitude and a work ethic that empowers an individual in any role to lead
from the top, middle, or bottom of an organization. Organization leadership from board of
directors, top management, supervisors are important in the progress of organizations.
Effective strategy implementation must be spearheaded by strong leadership that is able to
consolidate all the necessary efforts and direct them toward the organization goals.
Organizations with strong and transformational leadership always succeed in strategic plan
implementation than those without strong leadership
 Resources are among the most important aspects of strategy implementation. To successful
implement strategies organizations need resources both human resources and financial
resources. Strategy implementation involves organization of the firm's resources and
motivation of the staff to achieve objectives. Strategy are implemented by the people
therefore, skills, knowledge and experience of the employees of organization contribute to
successful strategy implementation.
 Organizations should have properly working structures for successful strategy
implementation. The manner in which people, department and all other organizational
systems co-ordinate with each other and how employees are supervised in an organization is
also critical in strategy implementation
 An organization's technological capability allows them to implement technology strategies that
best fit their goals. The experience gained from implementing technology strategy feeds back in
to the technological capabilities which then enable firms to improve and build their core
competencies to help them maintain their competitive advantage In a dynamic environment that,
development of technological capabilities becomes very vital in order to cope with the ever
changing demands in the society .New and innovative technological competencies are needed
for survival in a highly competitive environment. One of the key areas of technology is the
information technology which has become a key business function for almost every organization
and most have great expectations of the investment in information technology for future benefits

63
 to the business expectations that will enable the business to reduce cost, enhance productivity,
implement new business strategies, and gain competitive advantage.
 The study established that inadequate funding and untimely disbursement of resources
was not a hindrance to the effective implementation of strategies in EIC. The study
also established that staff resistance to change and lack of skills to some extent affected
the implementation of strategies by the organizations. However, lack of top
management commitment, organizational culture and structure were a challenge to the
implementation of strategies in EIC. The practicing of proper change management in
the organizations would minimize staff resistance to change according to respondents.
Respondents indicated that sponsoring employees to further their education would
improve their skills hence ensuring effective strategy implementation.

64
.5 Recommendations

Based on the findings of this study the following recommendations were made

 This study recommends that organizations and firms stakeholders should appreciate the
importance of organization culture not only in strategy implementation but also in general
performance of their firms. They should encourage a culture that is results oriented, focused
and discipline in order to succeed. The extent to which organization will be willing to
engage the employee in building a good organization culture will in turn have a positive
correlation with strategy implementation.
 The stakeholders of firms and organizations should understand the role leadership plays in
strategic plan implementation. Organization should strive to look for strong individuals who
have the qualities to imbued, motivate, inspire and equip other staff with the vision of the
future in order to attain the set objectives. Individuals mandated with the responsibilities to
lead other must understand that the success of the organization depended on their abilities to
coordinate all the system in an efficient manner
 Strategic implementation is a process that requires both adequate financial and skilled
human resources. Therefore, organizations that need to succeed in the strategic plan
implementation should invest adequately both in terms of finance and human labor. Training
of the staff should also be undertaken to ensure all employees understand where the
organization is headed and what is required of them.

 Organizations should be structured such that there is timely and effective flow of
information both vertically and horizontal with the organization. Good organization
structures make it easy for junior staff to communicate to their leaders. Good
communication channel make problem solving and decision making less difficult since it
encourage consultations.
 The organization management should steer clear from politics to avoid political
interference in the implementation of strategies in the EIC and the organization should
organize for seminars and workshops where the employees skill will be enhanced
through training and study also recommends that the organizations should sponsor
its staff to further education without segregate the employees.

65
5.6 Suggestion for Further Studies

This study focused on the challenges and success factor of strategy implementation in the Ethiopian
insurance industry in case of diredawa. It is recommended that a study be carried out on other factors and
challenges that affect strategy implementation in the insurance industry. The research should also be
done in government corporations and the results compared so as to ascertain whether there is consistency
on determinants of strategy implementations in the insurance industry in Ethiopian

5.7 limitation of the study

This study depended on questioner to those management and the employees of the
organization. It would have been of value to obtain the views of those served by the
organization or other stakeholders in the firm. The scope and depth of study was also limited
by the financial resource and secondary information from the company constraints. This put the
researcher under immense pressure.

66
Reference

 Waterman, J., Robert, H., Peter, S., Thomas, J., Julien, R., & Phillips, O. (2013)
 Wernerfelt, B. (2014). An Information Based Theory of Microeconomics and its Consequences
for Corporate Strategy. Unpublished Dissertation, Harvard University, Graduate School of
Business Administration, Retrieved from:http://www.harvard.edu
 Sekaran, U. (2013). Research Methods for Business: A Skills Building Approach. New Delhi:
John SFA and increase intake of cis-MUFA. Boston
 Amollo, M. K. (2013). Challenges of Strategy Implementation at at the Parliamentary Service
Commission of Kenya. Unpublished MBA Project, University of Nairobi, Retrieved
from:http://www.uonbi.ac.ke.
 Brenes, E. R., Mena, M., & Molina, G. E. (2008). Key success factors for strategy
implementation in Latin America. Journal of Business research, 61(6), 590-598
 Griffith, J. (2003). Relation of principal transformational leadership to school staff job
satisfaction, staff turnover and school performance. Journal of Educational
Administration, 42(3), 333-356.
 Ravasi, D., & Schultz, M. (2006). Responding to organizational identity threats:
Exploring the role of organizational culture. Academy management journal 49(3),433-
458.
 Richard, P., Kendrick, M., and Vershinina, N. (2010). Management. Thomas Rennie.
Schaap, J. I. (2012). Toward strategy implementation success: An empirical study of the
role of senior-level leaders in the Nevada gaming industry. UNLV Gaming
Organizational culture and leadership (Vol. 2). John Wiley & Sons
 Barney, J. B., & Hesterly, W. S. (2008). Strategic management and competitive
advantage: concepts and cases. Upper Saddle River, NJ: Pearson/Prentice Hall.Barney,
J. B., Della Corte, V., Sciarelli, M., & Arikan, A. (2012). The role of resourcebased
theory in strategic management studies: Managerial implications and hints for research.
Handbook of research on competitive strategy, 109-146.

67
 APPENDICES

APPENDIX-1 Questioners

DI
REDAWAUNIVERS IY
SCHOOL OF GRADUATE STUDIES
MBA PROGRAM

Dear Respondent,

REQUEST FOR RESEARCH DATA

I am a Master of Business Administration (MBA) student at Dire Dawa University .I am

required to submit as part of my course work assessment, a research project report on
“challenges and success factor of strategy implementation in case of Ethiopian Insurance
Corporation”. I kindly request you to assist me in this study by filling the attached
questionnaire to the best of your ability as it applies to your organization.
Please be assured that the information you provide will be used solely for academic purposes
and all responses will remain confidential.

Thank you very much for your time.

SECTION 1: GENERAL INFORMATION

1. Gender Male [ ] Female [ ]
2. Age bracket Below 25 years [ ]
25 – 30 years [ ]

68
 31 – 40 years [ ]
41 – 50 years [ ]
Over 50 years [ ]
3. Level of Education
First University degree [ ]
Post graduate degree/diploma [ ]
PhD [ ]
Others specify
4. Designation
5. How long have you been in your current position?
Less than 5 years [ ]
5 – 7 years [ ]
8 – 10 years [ ]
11 – 13 years [ ]
Over 13 years [ ]
6. Does the organization apply strategy in its management? Yes [ ] No [ ]

SECTION 2: Strategy Implementation

Tick a s a p p r o p r i a t e a s 1 = S t r o n g l y D i s a g r e e , 2 =Disagree, 3 =Neutral, 4 =Agree,

5=Strongly Agree.

No Statements 1 2 3 4 5
1 Strategic plan implementation
At EIC is effective.

69
 2 Strategic plan implementation
at EIC has increased revenue
collection
3 Strategic plan implementation
at EIC has increased membership
registration
4 Strategic plan implementation
at EIC has increased staff commitment

5 Strategic plan implementation

At EIC has effectively transformed the
internal processes

SECTION C Organizational Culture and Strategy Implementation

70
Tick as appropriate as 1= Strongly Disagree, 2=Disagree, 3=Neutral, 4=Agree, 5=Strongly
Agree

No Statements 1 2 3 4 5
1 EIC has a good working
culture
2 There is a clear mission that is
understood by all staff
3 Culture of employees at EIC
Encourages work commitment.
4 Organization culture at EIC
Influences effective strategy
implementation.
5 EIC has a culture that
emphasizes on performance
6 EIC has a culture that
emphasizes on achieving set
objectives

What other attributes of organization culture affects strategy implementation at

EIC? .................................................................................................................................

.............................................................................................................................

......................--------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------

71
 SECTION D Organizational Leadership and Strategy Implementation

Tick as appropriate as 1= Strongly Disagree, 2=Disagree, 3=Neutral, 4=Agree,

5=Strongly Agree

No Statement 1 2 3 4 5
1 EIC has transformational

leadership
2 EIC leadership influences
employees’ effectiveness
3 EIC leadership influences
workers motivation
4 Leadership at EIC hinders
strategy implementation
5 Leadership at EIC inspires
their subordinates
6 Leaders in EIC “practice
what they preach”
.

What other attributes of organization leadership affects strategy implementation at

EIC?..................................................................................................................................

..............................................................................................................................................

.............................................................................................................................................

...................................-----------------------------------------------------------------------------

72
SECTION E Resources and Strategy Implementation
Tick as appropriate as 1= Strongly Disagree, 2=Disagree, 3=Neutral, 4=Agree,
5=Strongly Agree

No Statements 1 2 3 4 5

1 EIC has enough physical resources

for strategy implementation

2 EIC has adequate financial

resources
3 EIC has a competent human
resource
4 EIC technological resource
forstrategy implementation

What other attributes of organization resources affects strategy implementation at

EIC?

..............................................................................................................................................

.............................................................................................................................................

.....................................................-----------------------------------------------------------------

73
SECTION F Organizational Structure and Strategy Implementation
Tick as appropriate as 1= Strongly Disagree, 2=Disagree, 3=Neutral, 4= Agree 5=Strongly Agree

No Statements 1 2 3 4 5
1 EIC structure is very
complex
2 EIC has a transformational
board of directors
3 EIC structure in all branches
and satellites is based on
education qualification of
employees
4 The board at EIC influences
effective strategy
implementation
5 EIC has effective
communication system
7 EIC has good supervisory and
monitoring system

What other attributes of organization structure affects strategy implementation at

EIC?..................................................................................................................................
..............................................................................................................................................

.............................................................................................................................................

.....................................................-----------------------------------------------------------------

74
SECTION G. Technology and Strategy Implementation
Tick as appropriate as 1= Strongly Disagree, 2=Disagree, 3=Neutral, 4= Agree, 5=Strongly Agree

No Statements 1 2 3 4 5
1 EIC uses current technology in the
market to deliver service

2 The level of technology in EIC place

has greatly assisted us to implement
the strategies
3 In EIC there is efficient
Information and Communication
Technology sytem

4 EIC technology level is higher than

that of its competitors

5 All departments in EIC are well

equipped with appropriate
6 technology
EIC is quick to respond to the
changes in technology
7 EIC updates and improves the ICT
systems to ensure effective strategy
implementation

What other attributes of technology affect strategy implementation at

EIC?..................................................................................................................................
..............................................................................................................................................

.............................................................................................................................................

.....................................................-----------------------------------------------------------------

75
SECTION H. Level of effectiveness of strategy design and implementation
Tick as appropriate as 1= Strongly Disagree, 2=Disagree, 3=Neutral, 4= Agree, 5=Strongly Agree

No Statements 1 2 3 4 5
1 EIC strategy design and implementation plan is
effective

2 EIC strategy design and implementation plan

increases its profitability
3 EIC strategy design and implementation plan
enhance customer satisfaction

4 EIC Strategy design and implementation plan

enhance employee commitment to work
5 EIC strategy design and implementation plan
reduces time for service delivery

What other attributes that increase level of strategy design and implementation in EIC?
..................................................................................................................................
..............................................................................................................................................

.............................................................................................................................................

.....................................................-----------------------------------------------------------------

76
SECTION 3: I Challenges facing Strategy implementation
. To what extent do you encounter each of the following challenges in your strategy
implementation? Rate on a 5 – point scale, where
1 = Strongly Dis-Agree
2 = Dis-agree
3 = Neutral
4 = Agree
5 = Strongly Agree
Implementation challenges 1 2 3 4 5
Inadequate funding
Untimely distribution of funds
Lack of top management commitment
Staff resistance to change
Political interference/influence
Culture/organizational culture
Lack of skills
Lack of enough staff
Lack of appropriate structure
Poor communication
Insufficient buy-in or lack of understanding of the strategy
among those who need to implement it

77
SECTION J: MEASURES TAKEN TO ADDRESS THE CHALLENGES
. To what extent do you adopt the following measures to deal with the
implementation challenges? Rate on a 5 – point scale, where
1 = Strongly Dis-Agree
2 = Dis-Agree
3 = Neutral
4 = Agree
5 = Strongly Agree
Measures to address challenges 1 2 3 4 5
Allocating enough resources for each project
Ensuring timely distribution of resources
Improving top management commitment to strategy

implementation
Managing staff resistance to change by practicing
proper change management practice
Recruitment of more staff to the organization when

there is need
Organizing internal training of staff through

workshops and seminars for proper implementation of

strategies

Sponsoring employees to further their studies in

related fields to enhance their skills

Enhancing of organizational structure to suit the

strategies
Management avoiding political influence in the running
of the organization

Management adopting a top down and horizontal

communication with other staff

Thank you

78
79