ABSTRACT

Strategic leadership globally, regionally and locally is increasingly and becoming a crucial issue

that most organizations are facing today. Kenyans need an adequate, efficient, readily available

and affordable public transport. Matatu industry is Kenya’s leading mode of public transport with

over 170 registered Sacco’s. The Sacco’s experiences poor performance including de-registration

due to non-compliance, loss of fleets to other Sacco’s, frequent accidents attributed to careless

driving, poor working condition for employees and poor customer services may be attributed to

leadership of the Saccos. Prior research had focused on factors affecting performance of Matatu

Sacco and has focused on Nairobi County but none has studied the effect of strategic leadership

on performance of Matatu Saccos.Although Several studies in different organizational settings

found that there is a significant positive relationship between leadership styles and organizational

performance positively contributing to organizational performance over and above the

contribution made by other variables. The aim of this study was to determine effective strategic

leadership on the performance of Matatu Sacco in Kisumu County, Kenya. The objective of the

study was to establish the effect of strategic direction, management competencies and

organizational culture on performance of Matatu Sacco in Kisumu County, Kenya. The study

adopted correlation research design to determine the effect of strategic leadership on the

performance of Matatu Sacco in Kisumu County, Kenya. Theories that were adopted to inform the

study include; Behavioral–authoritarian leadership, and transformational leadership Theory. The

study adopted a census approach during data collection where information was collected from 300

employees including Sacco manager, driver’s conductors and other office staff working in 18

registered Matatu Saccos operating in Kisumu County, Kenya was included. Pilot test was done

with a small representative sample of 5 respondents. Primary data was collected using

questionnaires. Stratified Random Sampling technique and primary data collections methods were

used to conduct the study. Validity of the research instruments using explanatory factor analysis

found a high construct validity in all the variable since all exceeded the prescribed threshold of

0.40.Cronbach’s Alpha exceeded the prescribed threshold of 0.7.Correlation analysis method were

used to find out the statistical relationship between variables of the study. Before conducting

regression analysis diagnostic tests which include normality, autocorrelation and sampling

adequacy were conducted. The data was analyzed and presented in the form of tables. The study

revealed the significance values of the three variables of the study. The study found that

management monitored progress towards goal and vision achievement, that their organization had

a vision which was their focus of and that management inspires employees to strive for

organization vision. The strategic direction was the most reliable with an alpha value of (0.854),

followed by organization culture with an alpha value of (0.716) and Management competencies

was the least reliable with an alpha value of (0.728). Overall, the strategic direction –vision had

the greatest effect on performance of Matatu Saccos in Kisumu County, Kenya followed by

organisation culture while management competencies had the least effect on performance of

Matatu Saccos in Kisumu County, Kenya. The study recommends that SACCO members should

elect people with managerial competence to manage their SACCOs.