Effect of Strategic Planning on Financial Performance of Public Hospitals in Tharaka Nithi County, Kenya

Nancy Kaimuri Mukuru (), Susan Kambura () and Dr. Felix Chesigor ()

International Journal of Finance, 2025, vol. 10, issue 5, 71 - 85

Abstract: Purpose: The purpose of the study was to evaluate the effect of strategic planning on financial performance of public hospitals in Tharaka Nithi County, Kenya Methodology: The study used a descriptive design targeting 120 senior staff in four public hospitals in Tharaka Nithi County. A census approach and structured questionnaires were used. A pilot study ensured validity. Data were analyzed using descriptive and inferential statistics, with diagnostic tests confirming the regression model's robustness. Results: The study found a statistically significant positive relationship between strategic planning and financial performance in public hospitals in Tharaka Nithi County (R = 0.504, R² = 0.254, B = 0.592, p < 0.05). Strategic planning explained 25.4% of performance variance, confirming its importance as a key driver of financial outcomes in Kenya’s public healthcare institutions. Unique Contribution to Theory, Policy, and Practice: This study offers a unique contribution to theory, policy, and practice by demonstrating how strategic planning enhances financial performance in public healthcare institutions. Theoretically, it supports the Resource-Based View (RBV) by showing that hospitals with well-structured strategic plans achieve better financial outcomes through effective resource mobilization. Policy-wise, it urges county governments and health agencies to institutionalize strategic planning in public hospitals, linking plans to budgeting, resource allocation, and performance-based funding. Practically, the study calls for evidence-based planning aligned with institutional priorities and available resources. Hospital managers should adopt data-driven monitoring and evaluation to track progress and improve financial sustainability. These insights are especially relevant for Kenya’s devolved health system, where strategic planning can strengthen accountability, optimize spending, and enhance service delivery in an evolving fiscal landscape.

Keywords: Strategic Planning; Financial Performance; Public Hospitals; Resource-Based View; Health Governance. (search for similar items in EconPapers)
Date: 2025
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