The Effect of Employee Empowerment Strategies on Organizational Performance of Serena Hotels in Kenya

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by Linet Kinyua (14-0110)

A thesis presented to the School of Business and Economics

Daystar University Nairobi, Kenya

in partial fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION in Strategic Management

May 2017

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APPROVAL

THE EFFECT OF EMPLOYEE EMPOWERMENT STRATEGIES ON ORGANIZATIONAL PERFORMANCE OF SERENA HOTELS IN KENYA

Linet Kinyua (14-0110)

In accordance with Daystar University policies, this thesis is accepted in partial fulfillment of the requirements for the Master of Business Administration degree

Date

Moriasi Maranga, MBA, 1st Supervisor

Dorcas Mwamba, MBA, 2nd Supervisor

Thomas Koyier, MSc, HOD, Commerce Department

Evans Amata, MFC, Dean, School of Business and Economics

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DECLARATION

THE EFFECT OF EMPLOYEE EMPOWERMENT STRATEGIES ON ORGANIZATIONAL PERFORMANCE OF SERENA HOTELS IN KENYA

I declare that this thesis is my original work and has not been submitted to any other college or university for academic credit

Signed: Date: Linet Kinyua (14-0110)

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ACKNOWLEDGEMENTS

I give glory to God for giving me the strength and determination to complete this thesis. I

owe special thanks to my husband, Lawi Mamai, and my children, Talisa Nasike and

Natalia Amo Njeri, who were quite understanding throughout the period of my studies. I

also appreciate my supervisors, Mr.Moriasi Maranga and Mrs. Dorcas Mwamba, for their

guidance in the writing of this thesis.

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TABLE OF CONTENTS

APPROVAL ...... ii DECLARATION ...... iv ACKNOWLEDGEMENTS ...... v TABLE OF CONTENTS ...... vi LIST OF TABLES ...... ix LIST OF FIGURES ...... x LIST OF ABREVIATIONS AND ACRONYMS ...... xi ABSTRACT...... xii CHAPTER ONE ...... 1 INTRODUCTION AND BACKGROUND TO THE STUDY ...... 1 Introduction ...... 1 Background of the Study ...... 2 Strategic Management ...... 2 Employee Empowerment Strategies...... 4 Organizational Performance ...... 5 Employee Empowerment Strategies and Organizational Performance ...... 6 Profile of Serena Hotels ...... 7 Statement of the Problem ...... 9 Purpose of the Study ...... 11 Objectives of the Study ...... 11 Research Questions ...... 11 Justification for the Study ...... 12 Significance of the Study ...... 12 Assumptions of the Study ...... 13 Scope of the Study ...... 14 Limitations and Delimitations of the Study ...... 14 Definition of Terms...... 15 Summary...... 16 CHAPTER TWO ...... 17 LITERATURE REVIEW ...... 17 Introduction ...... 17 Theoretical Framework ...... 17 Structural Empowerment Theory ...... 17 Institutional Theory ...... 18 Resource Based Theory...... 19 Dynamic Capabilities Theory...... 20 General Literature Review ...... 23 Employee Empowerment...... 23 Employee Empowerment Strategies...... 23 Delegation of Authority ...... 24 Employee Recognition...... 25

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Influence of Employee Empowerment Strategies ...... 27 Challenges of Implementation of Employee Empowerment Strategies ...... 29 Organizational Performance ...... 31 Indicators of Organizational Performance ...... 32 Empirical Literature Review ...... 35 Conceptual Framework ...... 40 Discussion...... 40 Summary...... 41 CHAPTER THREE ...... 43 RESEARCH METHODOLOGY...... 43 Introduction ...... 43 Research Design ...... 43 Population ...... 44 Target Population ...... 44 Sample Size...... 45 Sampling Techniques ...... 45 Data Collection Instruments ...... 45 Types of Data...... 46 Data Collection Procedure ...... 46 Pretesting ...... 46 Data Analysis Plan ...... 47 Ethical Considerations ...... 47 Summary...... 48 CHAPTER FOUR ...... 49 DATA PRESENTATION, ANALYSIS, AND INTERPRETATION ...... 49 Introduction ...... 49 Presentation, Analysis and Interpretation ...... 49 Response Rate ...... 49 Demographic Information of the Respondents...... 50 Employee Empowerment Strategies...... 54 Influence of Employee Empowerment Strategies on Organizational Performance at Serena Hotels...... 59 Challenges Encountered in Implementation of Employee Empowerment Strategies at Serena Hotels in Kenya...... 62 Summary of Key Findings...... 70 Summary...... 71 CHAPTER FIVE ...... 72 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ...... 72 Introduction ...... 72 Discussions of Key Findings ...... 72 Employee Empowerment Strategies at Serena Hotels, Kenya ...... 72 Influence of Employee Empowerment Strategies on Organizational Performance at Serena Hotels, Kenya ...... 74

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Challenges Encountered in Implementation of Employee Empowerment Strategies at Serena Hotels, Kenya ...... 75 Organizational Performance ...... 76 Conclusion ...... 77 Recommendations ...... 77 Areas for Further Study ...... 79 REFERENCES ...... 80 APPENDICES ...... 89 Appendix A: Letter of Introduction...... 89 Appendix B: Questionnaire ...... 90 Appendix C: Letter of Permission from Daystar University ...... 94 Appendix D: Authorization Letter From Tourism Promotion Services – Kenya...... 95 Appendix E: Authorization Letter From NACOSTI ...... 96 Appendix F: NACOSTI Permit...... 97

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LIST OF TABLES

Table 3.1: Population ...... 44 Table 3.2: Target Population ...... 45 Table 3.3: Sample Size ...... 45 Table 4.1: Age of the Respondents ...... 51 Table 4.2: Highest Educational Level Held by Respondents ...... 52 Table 4.3: Employee Empowerment Strategies at Serena Hotels, Kenya ...... 56 Table 4.4: Effects of Employee Empowerment Strategies on Organizational Performance at Serena Hotels in Kenya...... 60 Table 4.5:Challenges Encountered in Implementation of Employee Empowerment Strategies at Serena Hotels in Kenya ...... 63 Table 4.6: Organizational Performance ...... 66 Table 4.7: Association Between Age and Highest Education Level ...... 68 Table 4.8: Association Between Age of Respondent and Position Held ...... 69 Table 4.9: Highest Education Level of Respondent versus Position Held ...... 70

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LIST OF FIGURES

Figure 2.1: Conceptual Framework ...... 40 Figure 4.1: Response Rate ...... 50 Figure 4.2: Gender of the Respondents ...... 51

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LIST OF ABREVIATIONS AND ACRONYMS

AKDN: Aga Khan Development Network

AKFED: Aga Khan Fund for Economic Development

HRM: Human Resource Manager

TPSL: Tourism Promotion Services Limited

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ABSTRACT

The purpose of this study was to determine the effect of employee empowerment

strategies on organizational performance of Serena Hotels in Kenya. The

objectives of the study included: identifying employee empowerment strategies

adopted by Serena Hotels in Kenya, determining the effects of employee

empowerment strategies on performance of Serena Hotels in Kenya, and

identifying the challenges encountered by Serena Hotels in Kenya in

implementation of employee empowerment strategies.

Descriptive research design was used and the target population comprised all the

202 employees at Serena Hotel headquarters in Kenya. Data was collected using a

questionnaire, analyzed by use of Statistical Package for the Social Sciences

(SPSS), Version 24, and presented in tables and figures. The study established that:

Serena Hotels, Kenya had a number of empowerment strategies for employees;

employees at Serena Hotels, Kenya owned the decision-making process; there was

greater satisfaction among employees at Serena Hotels, Kenya; and that the

management of Serena Hotels considered the contributions from employees. The

study concluded that: Serena Hotels, Kenya had put in place a number of employee

empowerment strategies such as reward systems, and training programmes; the

hotel was financially viable to meet its business obligations; and that the hotel’s

organizational performance was enhanced by repetitive customers. Among the

study’s recommendations were: that the management of hospitality industry in

Kenya should put in place different employee empowerment strategies as a way of xii enhancing their performance; and that the management of hotels in

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Kenya should involve the staff in decision making processes within the organizations.

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