ROLE OF THE BOARD OF DIRECTORS IN STRATEGY PROCESS: A STUDY OF PRIVATE HOSPITALS IN NAIROBI

The purpose of this study is to examine the role of the private hospital board of directors in
strategy process. The investigation is conducted primarily from a theoretical point of view.
The theoretical analysis considers three dimensions of strategy. The first dimension is
concerned with strategy formulation, which has a direct influence on the overall corporate
strategy. It focuses on the role of the board in developing the vision, mission and values. The
second dimension deals with the strategy implementation and focuses on issues relating to
capacity to implement strategy, allocation of resources, institutional and governance
framework to support strategy and capacity of the board to plan, manage and implement
strategic initiatives. The third dimension deals with strategic evaluation and looks at a set of
key performance indicators available to the board members to track success of strategic
initiative, attention paid to abandoning, adjusting and developing new initiatives. By
applying these different perspectives of strategy, we explored the role that boards play in the
strategy process. We used a cross sectional descriptive survey and collected primary data
through interviews with board chair persons.
From the survey, we found that boards of private hospitals spend 33% of their time
discussing strategy. The results also show that 89% of the board chair are either moderately
or considerably satisfied with the firms overall strategy. Overall, only 66.7% of the board
chairpersons are happy with the level of involvement and participation in strategic
management process. From the results of this survey, the most common areas of boardinvolvement are formulation of the mission, vision, and value statement. The boards of
private hospitals also play a very limited role in strategy implementation and evaluation.
Although the study provides useful results for policy makers, academicians and practitioners,
we found one limitation which must be acknowledged. The data for this study was gathered
using a questionnaire. Research based on questionnaires depends on the voluntary
cooperation of the participants. Participants can differ from non-participants, compromising
the interpretation and generalizability of the results (Isaac & Michael, 1990). Since we relied
on subjective data provided by the respondents it was also not possible to externally validate
these responses. Due to difficulty in finding board chair persons, it was difficult to get return
questionnaires and the research assistants had to make several trips to the hospitals. Out of
the targeted 11 hospitals, we managed to get duly filled questionnaires from board chair
persons in 9 hospitals. The response rate was therefore good. To a good degree, the results of
the survey can be generalized for the studied population.
We recommend that future studies on the role of the board focus on differentiating roles of
the faith based and privately funded board’s in corporate strategy. In this case, the studies
will need to define privately funded hospitals verses charity (religious) funded private
hospitals. It would also be interesting to conduct studies on the board of directors as strategic
resource to private hospitals. The researcher will need to discuss from a wide variety of
perspectives, the role of board’s of private hospitals as a strategic resource or even whether
they are considered to be a strategic resource. This should be able to give an interesting
picture of board’s contribution to strategegic growth and leadership of private hospitals.

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