A CASE OF KENYA FOREST SERVICE JOSEPH ANUNDA KEGERA A RESEARCH PROJECT REPORT SUBMITTED TO THE DEPARTMENT OF COMMERCE AND ECONOMIC STUDIES IN THE COLLEGE OF HUMAN RESOURCE DEVELOPMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

A CASE OF KENYA FOREST SERVICE JOSEPH ANUNDA KEGERA A RESEARCH PROJECT REPORT SUBMITTED TO THE DEPARTMENT OF COMMERCE AND ECONOMIC STUDIES IN THE COLLEGE OF HUMAN RESOURCE DEVELOPMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY. 2018 DECLARATION Declaration by student I declare that this research project report is my original work and has not been presented for a degree in any other university. Signature _______________________ Date _______________________ JOSEPH ANUNDA KEGERA Declaration by the Supervisor This research project report has been submitted for examination with my approval as University Supervisor. Signature ______________________ Date ______________________ Dr. JOYCE NZULWA JKUAT. DEDICATION To my wife Stella Moraa Momanyi for her invaluable support and inspiration to enable me accomplish this research project report, my late parents Mr. Ibrahim Otukia Kegera and Mrs. Selina Gesare Kegera (May their souls rest in peace). ACKNOWLEDGEMENT I would like to acknowledge and offer my appreciation to my supervisor Dr. Joyce Nzulwa for offering her valuable time, expertise and advice and for her patience in ensuring the completion and success of this research project report. ABSTRACT Spending represents a form of resource investment in the creation of enterprise results it acts as determinant, the driver and the consequence of the functioning of an enterprise. A number of cost management strategies have been applied by many organizations which in turn have effect on their performance. The purpose of this research study was to establish the effect of cost reduction strategies on the performance of Kenya Forest Service. The objectives of this study were To evaluate the effect of planned recruitment and training as a cost reduction strategy on the performance of Kenya Forest Service To establish the effect of process automation as a cost reduction strategy on the performance of Kenya Forest Service To examine the effect of outsourcing as a cost reduction strategy on the performance of Kenya Forest Service and To determine the effect of community participation as a cost reduction strategy on the performance of Kenya Forest Service. The study targeted 219 employees of Kenya Forest Service from which a sample size of 33 employees were selected to represent 219 employees from various management levels of Kenya Forest Service. Descriptive survey research design was used to achieve the studys objectives and bring out the relationships between the variables. Stratified random sampling was used to sample 33 respondents. The data was obtained from the respondents by use of structured closed and open ended questionnaires. Moreover, frequencies, percentages, mean mode and median as measures of central tendency were used to analyze descriptive data while correlation and regression analysis were used to study the relationship among the variables and analyze inferential statistics. The content analysis was used to analyze the respondents views. Tables were used to present the collected data for ease of understanding. The study found out that planned recruitment and training has enhanced the performance of Kenya Forest Service through improved operations and reduction of conflict between the staff and members of the public as well as defining the job holders position. Process automation has improved saving in revenue through increased revenue collection, its average use in community and security operations due the sensitivity of security matters that requires dialogue and consultations. Further, the study revealed that outsourcing helps to improve skills and knowledge that improve the performance of an organization. Community participation was found to be very important in an organizations performance through structured guidelines, policies and regulations. Based on the findings, the study recommends for planned recruitment and trainings to improve performance of an organization, outsource goods and services that cannot totally be provided by the organization as well as provide capacity building to increase skills and knowledge of the staff. The study further recommends inclusion and participation of community in day to day operations of an organization being the main stakeholders and consumers of the services provided. Finally, the findings of this study will help all stakeholders, Kenya Forest Service, private and Government in decision making and developing appropriate legislations towards organization performance as well as act as an invaluable source of information to scholars. TABLE OF CONTENTS TOC o 1-3 h z u HYPERLINK l _Toc522641460 DEDICATION PAGEREF _Toc522641460 h iii HYPERLINK l _Toc522641461 ACKNOWLEDGEMENT PAGEREF _Toc522641461 h iv HYPERLINK l _Toc522641462 ABSTRACT PAGEREF _Toc522641462 h v HYPERLINK l _Toc522641463 LIST OF TABLES PAGEREF _Toc522641463 h ix HYPERLINK l _Toc522641464 ABBREVIATIONS AND ACRONYMS PAGEREF _Toc522641464 h xi HYPERLINK l _Toc522641465 DEFINITION OF TERMS PAGEREF _Toc522641465 h xii HYPERLINK l _Toc522641466 CHAPTER ONE PAGEREF _Toc522641466 h 1 HYPERLINK l _Toc522641467 INTRODUCTION PAGEREF _Toc522641467 h 1 HYPERLINK l _Toc522641468 1.1 Background of the Study PAGEREF _Toc522641468 h 1 HYPERLINK l _Toc522641469 1.2 Global Perspective on Cost Reduction Strategies PAGEREF _Toc522641469 h 2 HYPERLINK l _Toc522641470 1.3 Regional Perspective on Cost Reduction PAGEREF _Toc522641470 h 3 HYPERLINK l _Toc522641471 1.4 Local Perspective on Cost Reduction PAGEREF _Toc522641471 h 4 HYPERLINK l _Toc522641472 1.5 Firm Performance PAGEREF _Toc522641472 h 6 HYPERLINK l _Toc522641473 1.6 Kenya Forest Service PAGEREF _Toc522641473 h 7 HYPERLINK l _Toc522641474 1.7 Statement of the Problem PAGEREF _Toc522641474 h 8 HYPERLINK l _Toc522641475 1.8 Objectives of the Study PAGEREF _Toc522641475 h 10 HYPERLINK l _Toc522641476 1.9 General Objective PAGEREF _Toc522641476 h 10 HYPERLINK l _Toc522641477 1.10 Specific Objectives PAGEREF _Toc522641477 h 10 HYPERLINK l _Toc522641478 1.11 Research Questions PAGEREF _Toc522641478 h 10 HYPERLINK l _Toc522641479 1.12 Justification of the Study PAGEREF _Toc522641479 h 11 HYPERLINK l _Toc522641480 CHAPTER TWO PAGEREF _Toc522641480 h 12 HYPERLINK l _Toc522641481 LITERATURE REVIEW PAGEREF _Toc522641481 h 12 HYPERLINK l _Toc522641482 2.1 Introduction PAGEREF _Toc522641482 h 12 HYPERLINK l _Toc522641483 2.2 Theoretical Review PAGEREF _Toc522641483 h 12 HYPERLINK l _Toc522641484 2.3 Resource Based Theory PAGEREF _Toc522641484 h 12 HYPERLINK l _Toc522641485 2.4 Agency Theory PAGEREF _Toc522641485 h 13 HYPERLINK l _Toc522641486 2.5 Transaction Cost Theory PAGEREF _Toc522641486 h 15 HYPERLINK l _Toc522641487 2.6 Resource Dependency Theory PAGEREF _Toc522641487 h 16 HYPERLINK l _Toc522641488 2.7 Stakeholders Theory PAGEREF _Toc522641488 h 17 HYPERLINK l _Toc522641489 2.8 Conceptual Framework PAGEREF _Toc522641489 h 19 HYPERLINK l _Toc522641491 2.9 Planned Recruitment and Training PAGEREF _Toc522641491 h 20 HYPERLINK l _Toc522641492 2.10 Process Automation PAGEREF _Toc522641492 h 21 HYPERLINK l _Toc522641493 2.11 Outsourcing PAGEREF _Toc522641493 h 25 HYPERLINK l _Toc522641494 2.13 Empirical Review PAGEREF _Toc522641494 h 29 HYPERLINK l _Toc522641495 2.15 Process Automation and Organization Performance PAGEREF _Toc522641495 h 30 HYPERLINK l _Toc522641496 2.16 Outsourcing and Organization Performance PAGEREF _Toc522641496 h 30 HYPERLINK l _Toc522641497 2.17 Community Participation and Organization Performance PAGEREF _Toc522641497 h 31 HYPERLINK l _Toc522641498 2.18 Critique of the Existing Literature PAGEREF _Toc522641498 h 32 HYPERLINK l _Toc522641499 2.19 Summary of the Literature Review PAGEREF _Toc522641499 h 34 HYPERLINK l _Toc522641500 2.20 Research Gap PAGEREF _Toc522641500 h 34 HYPERLINK l _Toc522641501 CHAPTER THREE PAGEREF _Toc522641501 h 36 HYPERLINK l _Toc522641502 RESEARCH METHODOLOGY PAGEREF _Toc522641502 h 36 HYPERLINK l _Toc522641503 3.1 Introduction PAGEREF _Toc522641503 h 36 HYPERLINK l _Toc522641504 3.2 Research Design PAGEREF _Toc522641504 h 36 HYPERLINK l _Toc522641505 3.3 Target Population PAGEREF _Toc522641505 h 36 HYPERLINK l _Toc522641507 3.4 Sampling Procedure PAGEREF _Toc522641507 h 37 HYPERLINK l _Toc522641508 3.5 Sample Size PAGEREF _Toc522641508 h 37 HYPERLINK l _Toc522641510 3.6 Data Collection Instruments PAGEREF _Toc522641510 h 38 HYPERLINK l _Toc522641511 3.7 Pilot Testing PAGEREF _Toc522641511 h 39 HYPERLINK l _Toc522641512 3.8 Validity of the Data Collection Instrument PAGEREF _Toc522641512 h 39 HYPERLINK l _Toc522641513 CHAPTER FOUR PAGEREF _Toc522641513 h 43 RESEARCH FINDINGS AND DISCUSSION..43 HYPERLINK l _Toc522641514 4.1 Introduction PAGEREF _Toc522641514 h 43 HYPERLINK l _Toc522641517 4.4 Duration in the Kenya Forest Service PAGEREF _Toc522641517 h 45 HYPERLINK l _Toc522641519 4.6 Organization Performance PAGEREF _Toc522641519 h 46 HYPERLINK l _Toc522641522 4.7 Satisfaction on Quality of Services PAGEREF _Toc522641522 h 46 HYPERLINK l _Toc522641524 4.7 Improvement of Services since the Enactment and Implementation of Forest Act 2005 PAGEREF _Toc522641524 h 47 HYPERLINK l _Toc522641526 4.9 Planned Recruitment and Training and Organization Performance PAGEREF _Toc522641526 h 48 HYPERLINK l _Toc522641529 4.10 Planned Recruitment and Training Improvement on Organization Operations PAGEREF _Toc522641529 h 49 HYPERLINK l _Toc522641531 4.11 Planned Recruitment and Training on Reduction of Conflict between Staff and Members of the Public PAGEREF _Toc522641531 h 49 HYPERLINK l _Toc522641533 4.12 Planned Recruitment and Training on Defining Job Holders Position PAGEREF _Toc522641533 h 50 HYPERLINK l _Toc522641535 4.13 Process Automation and Organization Performance PAGEREF _Toc522641535 h 50 HYPERLINK l _Toc522641538 4.14 Process Automation in Communication PAGEREF _Toc522641538 h 51 HYPERLINK l _Toc522641540 4.14 Process Automation in Security Operations PAGEREF _Toc522641540 h 51 HYPERLINK l _Toc522641542 4.14 Process Automation and Efficiency PAGEREF _Toc522641542 h 52 HYPERLINK l _Toc522641544 4.15 Outsourcing and Organization Performance PAGEREF _Toc522641544 h 53 HYPERLINK l _Toc522641547 4.15 Capacity Building and Organization Performance PAGEREF _Toc522641547 h 53 HYPERLINK l _Toc522641549 4.16 Outsourcing and Skills Development PAGEREF _Toc522641549 h 54 HYPERLINK l _Toc522641551 4.17 Community Participation and Organization Performance PAGEREF _Toc522641551 h 54 HYPERLINK l _Toc522641553 4.18 Formulation of Policies and Regulations PAGEREF _Toc522641553 h 55 HYPERLINK l _Toc522641555 4.19 Organization Policies on Community Participation PAGEREF _Toc522641555 h 56 HYPERLINK l _Toc522641557 CHAPTER FIVE PAGEREF _Toc522641557 h 58 HYPERLINK l _Toc522641558 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS PAGEREF _Toc522641558 h 58 HYPERLINK l _Toc522641559 5.1 Introduction PAGEREF _Toc522641559 h 58 HYPERLINK l _Toc522641560 5.2 Summary PAGEREF _Toc522641560 h 58 HYPERLINK l _Toc522641561 5.3 Conclusions PAGEREF _Toc522641561 h 60 HYPERLINK l _Toc522641562 5.4 Recommendations PAGEREF _Toc522641562 h 61 HYPERLINK l _Toc522641563 REFERENCES PAGEREF _Toc522641563 h 63 HYPERLINK l _Toc522641564 APPENDICES PAGEREF _Toc522641564 h 70 HYPERLINK l _Toc522641565 APPENDIX I PAGEREF _Toc522641565 h 70 HYPERLINK l _Toc522641566 LETTER OF INTRODUCTION PAGEREF _Toc522641566 h 70 HYPERLINK l _Toc522641567 Appendix III (a) Gantt chart showing schedule of project activities PAGEREF _Toc522641567 h 76 HYPERLINK l _Toc522641568 Appendix IV Research Budget PAGEREF _Toc522641568 h 78 LIST OF TABLES Table 3.1 Target Population PAGEREF _Toc522641506 h 37 Table 3.2 Sample Size PAGEREF _Toc522641509 h 38 HYPERLINK l _Toc522641515 Table 4.1 Response Rate PAGEREF _Toc522641515 h 43 HYPERLINK l _Toc522641516 Table 4.2 Distribution of Respondents by Level of Education PAGEREF _Toc522641516 h 44 HYPERLINK l _Toc522641518 Table 4.3 Distribution of Respondents by their working for Kenya Forest Service PAGEREF _Toc522641518 h 45 HYPERLINK l _Toc522641525 Table 4.6 Improvement of Services PAGEREF _Toc522641525 h 47 HYPERLINK l _Toc522641523 Table 4.5 Satisfaction on Quality of Services PAGEREF _Toc522641523 h 46 HYPERLINK l _Toc522641521 Table 4.4 Organization Performance PAGEREF _Toc522641521 h 46 HYPERLINK l _Toc522641528 Table 4.7 Improvement of Services PAGEREF _Toc522641528 h 48 HYPERLINK l _Toc522641530 Table 4.8 Improvement on Organization Operations PAGEREF _Toc522641530 h 49 HYPERLINK l _Toc522641532 Table 4.9 Reduction of Conflict PAGEREF _Toc522641532 h 49 HYPERLINK l _Toc522641534 Table 4.10 Defining Job Holders Position PAGEREF _Toc522641534 h 50 HYPERLINK l _Toc522641537 Table 4.11 Revenue Collection PAGEREF _Toc522641537 h 50 HYPERLINK l _Toc522641539 Table 4.12 Process Automation in Communication PAGEREF _Toc522641539 h 51 HYPERLINK l _Toc522641541 Table 4.13 Process Automation in Security Operations PAGEREF _Toc522641541 h 52 HYPERLINK l _Toc522641543 Table 4.14 Process Automation and Efficiency PAGEREF _Toc522641543 h 52 HYPERLINK l _Toc522641546 Table 4.15 Outsourcing and Organization Performance PAGEREF _Toc522641546 h 53 HYPERLINK l _Toc522641548 Table 4.16 Capacity Building and Organization Performance PAGEREF _Toc522641548 h 54 HYPERLINK l _Toc522641550 Table 4.17 Outsourcing and Skills Development PAGEREF _Toc522641550 h 54 HYPERLINK l _Toc522641552 Table 4.18 Community Participation and Organization Performance PAGEREF _Toc522641552 h 55 HYPERLINK l _Toc522641554 Table 4.19 Involvement in Formulation of Policies and Regulations PAGEREF _Toc522641554 h 56 HYPERLINK l _Toc522641556 Table 4.20 Organization Policies on Community Participation PAGEREF _Toc522641556 h 56 LIST OF FIGURES Figure 2.1 Conceptual Framework PAGEREF _Toc522641490 h 20 ABBREVIATIONS AND ACRONYMS CFA Community Forest Association DSPs Direct Support Professionals Ha Hectares ICT Information Communication Technology KFS Kenya Forest Service PELIS Plantation Establishment and Livelihood Improvement Scheme PFM Participatory Forest Management PFMP Participatory Forest Management Plan PwC PricewaterhouseCoopers SPSS Statistical Package for Social Sciences TCT Transaction Cost Theory PELIS Plantation Establishment and Livelihood Improvement Scheme DEFINITION OF TERMS Cost Reduction This is a process of reducing some expenses in the organization with the aim of increasing productions. Firm Performance It comprises the actual output or results of a firm as measured against its intended outputs or goals and objectives. Forest Activity This is an execution of operations, development, works or conduct within gazetted forests. (Forest Conservation and Management Act, 2016). Forestland Means a track of land including its flora and fauna that is devoted to growing trees for the production of timber, wood and other forest products (Forest Conservation and Management Act, 2016). Forest Community Means a group of persons who have a traditional association with a forest for the purposes of livelihood, culture or religion, (Forest Conservation and Management Act, 2016). Kenya Forest Service Is a corporate body established under the Forest Conservation and Management Act no 34 of 2016 State Forest means any forest declared by the Cabinet Secretary to be a central forest, a forest area or nature reserve before the commencement of Forests Act No. 7 of 2005, and which has not ceased to be such a forest or nature reserve. Sustainable Management- in relation to a forest, means management of the forest so as to permit only such use of it as constitutes sustainable use. (Forest Conservation and Management Act, 2016). CHAPTER ONE INTRODUCTION This chapter introduces the study by giving background information on the effect of cost reduction strategies on organization performance, statement of the problem, objectives of the study which entail general objective and specific objectives, research questions, justification of the study and scope of the study. 1.1 Background of the Study Organizations spend resources when carrying out activities representing the basic mechanism that enables the organization to function. Spending represents a form of resource investment in the creation of enterprise results it acts as determinant, the driver and the consequence of the functioning of an enterprise (Figar, 2009). Dess (2008) argued that when organizations are faced with high costs of production, there is need for major and minor changes in a business organizations strategic direction. Carroll (2009) avers that, it is essential that a firm implements the strategy of cost reduction whenever the organization experiences tough time or to propel future growth. John, Brierley, Cowton and Colin, (2008), suggest that cost reduction can be achieved through several approaches. Kaplan and Norton (2009) on their part observe that most organizations have their management strategies focused on the financial themes of increasing revenues, minimizing cost and increasing productivity, enhancing asset utilization and reducing risk as a way of attaining and sustaining competitive advantages in the market. Davis (2010) points out that the dual challenge facing many organizations today is to improve the quality of goods and services while cutting corporate overhead costs. 1.2 Global Perspective on Cost Reduction Strategies Robotic production has grown tremendously in the United States since the 1920s, when automobile factories first began automating the processes involved in producing new cars (Duhamel, 2013). By reducing total labor hours and increasing productivity, the use of robotic production has reduced costs and created more affordable cars for consumers. The senior management of modern organizations no longer sets the fixed percentage of cost reduction as the target, but also allows managers at lower management levels to use their creativity and research in order to come up with a number of options for reducing costs (Kerr Pauwels, 2014). Organization needs to constantly promote search for new ways of strategic approach to reducing costs at all organizational levels. Porter (2014) observed that cost reduction can be achieved either by performing the existing activities in the value chain cheaper, or by restructuring the value chain. Performing the existing activities with fewer resources represents the use of internal reserves, while restructuring the value chain requires radical changes. However both of these actions are achieved by implementing different strategies which give priority to the reduction of different types of costs. Human Resource Management is one of the areas targeted for cost reduction. It involves recruitment of suitable staff to meet organizational needs in the most cost effective way. It also involves training of staff to enhance their capacity and improve efficiency. Thompson et al. (2015), observes that training is an important strategy in a firm especially where technical know-how is changing so rapidly that an organization loses its ability to compete with other organizations. Tyson (2016) argues that it is necessary for an organization to establish the objective of staff training in order to develop employees knowledge, skills and attitudes for the effective performance of their work and hence for the achievement of the organizations aims and objectives by the most cost effective means available. The benefits of learning curve effects are realized due to the experience gained by the firm personnel. The cost of performing an activity in the organization can decline over time as the employees experience builds up while reduction of management levels will reduce corporate overhead costs (John Richard, 2013). Use of modern technology as part of automation in the organization is also a strategy of reducing costs of production. Organizations face the challenge of increasing competition, expanding markets, and rising customer expectations. This increases the pressure on organizations to lower total costs (Umble, 2013). Organizations increasingly rely on Information Systems (IS) to acquire a competitive edge, with this often translating to an increased budget allocation to support their investments in an IS infrastructure (Irani, 2016). Investment in IS should contribute to an organization value and also to the individual (Applegate et al, 2015). Organizations are increasingly turning to outsourcing as a strategy of reducing costs in an attempt to enhance their competitiveness. 1.3 Regional Perspective on Cost Reduction Most organizations are partnering with the local communities to improve its business and the livelihood of the communities. Hernandez (2009) cites that organization community partnerships may be a means to expand and improve employment opportunities, reduce costs, enable business diversification, increases market shares, and take advantages of local and governmental financial and logistic support. Flexible development of organization-community partnerships may allow collaboration for mutual gains and benefits to the environment and society. Organization-community partnerships may bring economic pay-offs to partners, benefits to local livelihoods and public common good. The unique context presented in the African state setting such as Rwanda sometimes presents semi democratic kid of governance, ethnically polarized environment, financial resource scarcity, high inflation, fast growing population, structural governance constrains, market liberalization and strong government involvement in the financial sector, gives the company a reason to develop strong unique strategies which will stabilize the organization to be in more competitive position (BTI, 2010). 1.4 Local Perspective on Cost Reduction PwC (2016) noted that most of the organizations in Kenya have adopted the cost reduction strategies in order to make profit and maintain their viability in the business environment. One of the challenges of local privatization has been its failure to provide lower cost service delivery. Inadequate understanding and management of local government service delivery markets are partly to blame. Miralles (2008) analyzed the effect of recent privatization of water services on the difference between the marginal price paid by the average residential and industrial consumer by building a simple theoretical model with two types of consumers, industrial and residential, where the local regulator solves a maximization problem of a weighted sum of surpluses and profits. Organizations increasingly rely on Information Systems (IS) to acquire a competitive edge, with this often translating to an increased budget allocation to support their investments in an IS infrastructure (Irani, 2016). Ogutu and Mbula (2012) established that Multinational corporations (MNCs) operate in a global environment unfamiliar in political, economic, social, cultural, technological and legal aspects. Increased competition among multinational corporations and the entry of other players in the Kenyan market necessitate the design of competitive strategies that guarantee performance. Duhamel (2013) noted that creating strategies for coping with competition is the heart of strategic management which is critical for the long term survival of any organization. Organizations face the challenge of increasing competition, expanding markets, and rising customer expectations that increases the pressure on firms to lower total costs (Umble, 2013). Financial management can be strengthened through reduction of costs and strict control on expenditure, rationalization of various categories of staff both administrative and support to ensure optimum utilization of available manpower (Gogo, 2012). Proper management of costs is a crucial determinant of whether your business succeeds or not. Expense management is thus a critical task in small business management (Mugisha, 2016). The challenges posed by the changing environment cannot be resolved in a haphazard manner. According to Pearce and Robison (2011) strategy is an organizations game plan for winning. There is need for organizations to adopt a strategic approach to dealing with the changes, if they are to survive. 1.5 Organization Performance Performance at the organization level is measured in many different ways. Such ways include accounting measures of profitability, the Lerner index, sales per input, and total factor productivity. Although correlated, the various measures capture different aspects of organization performance, and exposure to a global market is not expected to affect these aspects in the same way (De Loecker et al, 2011). The commonly used measures of performance determinants include demand and cost primitives, as well as the market structure of the industry. Despite its relevance, research into firm performance suffers from problems such as lack of consensus, selection of indicators based on convenience and little consideration of its dimensionality (Crook, Ketchen, Combs, Todd, 2008). This is particularly critical in the case of firm performance, one of the most relevant constructs in the field and a construct commonly used as the final dependent variable (Richard, Devinney, Yip, Johnson, 2009). Two other aspects must also be considered when attempting to define performance its time frame and its reference point. It is possible to differentiate between past and future performance past superior performance does not guarantee that it will remain superior in the future (Carneiro, 2015). Another issue related to time is the duration of the interval such as short, medium or long term considered. The reference against which performance is being measured including the industry average, the results of main competitors, an established target, or past performance (Carneiro, Silva, Rocha, Dib, 2009), is also important. Comparisons in relation to targets and past performance indicate the efficiency and evolution of the company. However, they are not suitable for comparing companies from different sizes and industries. Using the average value of the industry or of the main competitors as the baseline indicates companies competitive position and may be more useful for strategic analyses. 1.6 Kenya Forest Service Kenya is one of the least forested countries in sub-Saharan Africa with forest cover area 7.2 percent equivalent to 4,195,051.20 hectares. A total of 1.9 million hectares are classified as state forest areas under the jurisdiction of the Kenya Forest Service (KFS, 2017). Kenya Forest Service is one of the organizations in Kenya that has restructured itself to incorporate cost reduction strategies for effective delivery of services hence improvement of their organization performance. The Kenya Forest Service (KFS) was established by an act of Parliament as a body corporate under the Forest Act, 2005 laws of Kenya, to provide for the establishment, development and sustainable management, including conservation and rational utilization of forest resources for the socio-economic development of the country (Forest Act, 2005). The Forests Act (2005) introduced participatory forest management, through the engagement of local communities, and the promotion of the private sector investment in gazetted forest reserves, accompanied by concomitant institutional and organization change, notably the establishment of the Kenya Forest Service and the formation of Community Forest Associations (Forest Policy, 2014). To enable the KFS remain focused to the sensitive needs of its clients and to the changes in the environment, it has defined its vision as to be the leading organization of excellence in sustainable forest management and conservation and their mission as to enhance conservation and sustainable management of forests and allied resources or environmental stability and socio-economic development (KFS, 2012). Some of the main functions of KFS are Recruitment and selection, Quality assurance standards, Promotion, discipline, Transfers (Forest Act, 2005). The role of the KFS Management is to make and formulate policies, deal with financial matters, strategic planning of legal issues, maintain a register of KFS Staff in Kenya and advice the minister in charge of the Ministry of Environment and Natural Resource (Forest Act, 2005). 1.7 Statement of the Problem The changing business environment has brought about so many changes in organizations including policies on cost management (Richtel, 2008). Robert (2009) stated that a company with adequate cost structure possesses the higher chance of attaining its profit target. The increasingly competitive global economy pushes firms to exploit all of their available resources as a means of achieving competitive advantage (Andersen, 2009). Innes, et al (2013) assert that the survival triplet today for any company is how to manage product or service cost, quality, and performance. Santos, (2012) noted that although organizations have formal performance measurement systems, they differ in their degree of comprehensiveness. The major challenges facing organizations in measuring their performance are mainly the size of the organization and its affiliation with international organizations, the qualification and experience of partners and managers needed for the design and implementation of similar performance measures, the resources required for the introduction of such performance measure and the peculiarity of the organization and client relationship with the need to maintain independence and confidentiality while providing high-quality services (Mohammed, 2015). Other key challenges also include entrepreneurs characteristics, processes of founding, venture attributes, and environmental characteristics. There is heavy dependence of new ventures upon environmental developments, many of which may be very difficult to predict. Thus, well-conceived ventures can fail because of unforeseen environmental shocks and the lack of deep pockets to ride out hard times. These same factors can cause organization performance to swing widely confounding attempts to identify predictors of good or poor performance. The Kenya Forest Service customers are continuously demanding high quality and better performance products and services and at the same time, they want the price for forest produce, forest products and services to be reasonably low an issue that has remained a challenge for the Kenya Forest Service. The Kenya Forest Service performance being an organization is also affected by the aforementioned factors. Thus, this study therefore seeks to investigate effects of cost reduction strategies on organization performance in KFS Headquarters, Nairobi. 1.8 Objectives of the Study This study was guided by general and specific objectives. 1.9 General Objective The general objective of this study was to establish the effect of cost reduction strategies on the performance of Kenya Forest Service. 1.10 Specific Objectives The guiding objectives of this study include- To evaluate the effect of planned recruitment and training as a cost reduction strategy on the performance of Kenya Forest Service. To establish the effect of process automation as a cost reduction strategy on the performance of Kenya Forest Service. To examine the effect of outsourcing as a cost reduction strategy on the performance of Kenya Forest Service. To determine the effect of community participation as a cost reduction strategy on the performance of Kenya Forest Service. 1.11 Research Questions The study sought to give answers to the following research questions- What is the effect of planned recruitment and training as a cost reduction strategy on the performance of Kenya Forest Service. What is the effect of process automation as a cost reduction strategy on the performance of Kenya Forest Service What is the effect of outsourcing as a cost reduction strategy on the performance of Kenya Forest Service What is the effect of community participation as cost reduction strategy on the performance of Kenya Forest Service 1.12 Justification of the Study The findings of this study will be an implementation utility for the future of most of the organizations in Kenya. It will contribute to advancement of knowledge and skills on how cost reduction strategies can be effectively integrated in the organizations operations for effectiveness and performance. It will also form a basis for the formulation of appropriate policies by organizations on the nature of the cost reduction and the needs of the organizations. Further, the findings may also be valuable to researchers and academicians in providing more knowledge on contributions of cost reduction strategies to organizations performance as well as bridging an existing research gap and add to the existing body of knowledge on public practices locally, regionally and globally. 1.13 Scope of the Study The study was centered on the effect of cost reduction strategies on the performance of Kenya Forest Service. The study was conducted at Kenya Forest Service Headquarters, Nairobi since it is a state agency that operates within the government regulations. The variables that were considered during this research study include Planned Recruitment and Training Process Automation Outsourcing, Community Participation and Organization Performance. CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter presents the reviews of previous researchers on organizations cost reduction strategies, its performance as well as factors affecting the performance level. It entails the overview, the theoretical review, the critical review and gaps to the study. The conceptual framework, critical analysis and the study gaps justifying the conduct of this study will also be presented. 2.2 Theoretical Review There are many models that exist to analyze cost reduction strategies in organizations. These models are used to identify, explain and predict important aspects of organizations performance. As such, the researcher in this study is convinced that a mixture of various theories will adequately cover the concept of the role of effective implementation of cost reduction strategies in organizations in Kenya. 2.3 Resource Based Theory Barney (1991) notes that organizations are heterogeneous because they possess heterogeneous resources, meaning organizations can have different strategies because they have different resource mixes. The organizations resources are financial, legal, human, organisational, informational and relational resources are heterogeneous and imperfectly mobile and that managements key task is to understand and organise resources for sustainable competitive advantage. This theory was also echoed by Wernerfelt in 1984 and later reviewed by other contributors who expounded on the influence that both tangible and intangible assets have on the performance of an organization (Crook et al, 2008). The resource based theory magnifies the importance of internal resources within the firm and the use of these resources in formulating strategy to achieve sustainable advantage within the organizations competitive markets (Schroeder et al, 2002). According to the Resource Based theory, an organizations internal capabilities determine the strategic choice it makes in competing in its external environment. This is in line with the influence that strategic management practices have on the performance of an organization. Hence, the Resource Based theory can help to explain why planned recruitment and training is integral in organization performance. The Resource Based theory is used to identify and explore man-power expertise and strategic planning systems that can help organizations manage present projects and grab future business opportunities therefore increasing organizations portfolio. Capabilities, resources and knowledge acquired over time create options for future business exploration and gives an organization leverage over its competitors (Kogut and Kulatilaka, 2001). 2.4 Agency Theory Adam Smith (19371776) is perhaps the first author to suspect the presence of agency problem and since then it has been a motivating factor for the economists to cultivate the aspects of agency theory. Ross (1973) and Mitnick (1975) have shaped the theory of agency and came up with two different approaches in their respective works. Ross is responsible for the origin of the economic theory of agency, and Mitnick for the institutional theory of agency, though the basic concepts underlying these approaches are similar. Ross introduced the study of agency in terms of problems of compensation contracting agency was seen, in essence, as an incentives problem. Mitnick introduced the now common insight that institutions form around agency, and evolve to deal with agency, in response to the essential imperfection of agency relationships. Agency theory is concerned with the study of the problems that arise when one party, the principle delegates work to another party, agent (Eisenhardt, 1989 Lassar Kerr 1996). The principal transfers decision rights to the agent. In order to ensure that the agent honors the terms of the contract the principal sets incentives. There are two major concerns in the agency relationship. First, the principal and the agent may have conflicting goals and second the principal may not be able to ascertain what the agent did (Eisenhardt, 1989). Agency theory helps expose problems of divergent interests within both markets and hierarchies. A basic assumption of this theory is that opportunism is an inherent characteristic of principal agent relation. According to Benoit et al (2008), there are three main manifestations of opportunism Moral hazard, adverse selection and imperfect commitment. Moral hazard fallouts from the fact that it is impossible for a principal to observe the behavior of the agent without incurring probative costs. Since the client cannot directly observe the level of effort deployed by its supplier, it cannot easily tell whether a problem is due to negligence on the part of its supplier or to an unforeseeable event. An example agency theory in outsourcing is the awarding of a contract where the organization awarding the contract is the principal while the contractor is the agent. Variables that influence the contract between the two is information systems, outcome uncertainty, goal conflict and relationship length (Eisenhardt, 1989).This theory therefore can explain automation in regard to performance of an organization. 2.5 Transaction Cost Theory The idea that transactions form the basis of an economic thinking was introduced by the HYPERLINK https//en.wikipedia.org/wiki/Institutional_economics o Institutional economics institutional economist HYPERLINK https//en.wikipedia.org/wiki/John_R._Commons o John R. Commons John R. Commons in 1931. HYPERLINK https//en.wikipedia.org/wiki/Ronald_Coase o Ronald Coase Ronald Coase, in 1937 then used it to develop a theoretical framework for predicting when certain economic tasks would be performed by organizations, and when they would be performed on the HYPERLINK https//en.wikipedia.org/wiki/Market_(economics) o Market (economics) market. He made it one of the first (neo-classical) attempts to define the organization theoretically in relation to the market. One aspect of its neoclassicism lies in presenting an explanation of the organization consistent with constant returns to scale, rather than relying on increasing returns to scale. This theory explains why organizations exist and why they expand. It also explains why organizations outsource activities from other organizations. The theory tries to explain how the organizations work on reducing cost thus they have to weigh between the cost of producing in-house and the cost of outsourcing. Transactions costs comprise the internal costs of searching and information, drafting and negotiating an agreement, and costs of safeguarding the agreement. The ex-post costs entail the costs of evaluating the input, measuring the output, and monitoring and enforcement (Williamson, 1985). Transaction costs are associated with the necessity of investments in durable, specific assets, frequency of transacting, uncertainty and complexity of a task, the ability to measure task performance and the dependency with other function as per the transaction theory (Gottshalk Solli-Saether, 2006). The transaction costs are incurred each and every time a product or service is in transition from one stage to another (Williamson, 1981). The transaction costs that arise from outsourcing include opportunism, environmental uncertainty, core company assets and bounded rationality (Simon, 1961). Williamson (1994) also state that transaction costs include the costs of seeking the suppliers, inspection of goods and establishing and formalizing the terms of agreement with the suppliers. According to Espino-Rodriguez and Gil-Padilla (2006) the greater the transaction costs, the less the possibility of outsourcing the activity. Specifically there are costs to drafting, negotiating, and safeguarding any exchange or transaction that are friction impeding smooth transactions (Williamson, 1985 20). TCT claims that these transaction costs driving economic organization are as important as production costs, or perhaps even more important. 2.6 Resource Dependency Theory This theory can be traced to earlier research by the authors of HYPERLINK http//www.oxfordbibliographies.com/view/document/obo-9780199846740/obo-9780199846740-0072.xml l obo-9780199846740-0072-bibItem-0001 o Emerson, Richard M. Power-Dependence Relations. American Sociological Review 27.1 (1962) 3141. Emerson 1962 HYPERLINK http//www.oxfordbibliographies.com/view/document/obo-9780199846740/obo-9780199846740-0072.xml l obo-9780199846740-0072-bibItem-0002 o Hickson, David J., Christopher R. Hinings, Charles A. Lee, Rodney E. Schneck, and Johannes M. Pennings. Strategic Contingencies Theory of Intraorganizational Power. Administrative Science Quarterly 16.2 (1971) 216229. Hickson, et al. 1971 and HYPERLINK http//www.oxfordbibliographies.com/view/document/obo-9780199846740/obo-9780199846740-0072.xml l obo-9780199846740-0072-bibItem-0005 o Zald, Mayer N. Political Economy A Framework for Comparative Analysis. In Power and Organizations. Edited by MayerN. Zald, 221261. Nashville Vanderbilt University Press, 1970. Zald 1970. HYPERLINK http//www.oxfordbibliographies.com/view/document/obo-9780199846740/obo-9780199846740-0072.xml l obo-9780199846740-0072-bibItem-0004 o Yuchtman, Ephraim, and Stanley E. Seashore. System Resource Approach to Organizational Effectiveness. American Sociological Review 32.6 (1967) 891903. Yuchtman and Seashore 1967. It was formalized by Pfeffer and Salanci in 1978. It has since been used as a basis to study and explain the influences of environments on organizational relations. The theory states that organizations dont have all the resources they need therefore, to some degree, they depend on their external environment for resources (Pfeffer Salanick 1978, Pfeffer 1984). The theory was originally developed to provide alternative perspective to economic theories of mergers and board interlocks, and to understand precisely the types of Return On Investments that have played such a large role in recent market failures (Pfeffer, 2003). There are three core ideas of the theory organizations have strategies to enhance their autonomy and pursue interests, social context matters and power is important for understanding internal and external actions of organizations. Organizational depend on multi-dimensional resources like labor, capital and raw material. They may not able to come out with countervailing initiatives for all these multiple resources. Hence organizations should move through the principle of scarcity. Pfeffer and Salanick (1978) come up three factors that influence the extent of dependency organizations have on certain resources. These factors include the criticality or the importance of the resource to the organization, the scarcity of the resource and the control the organization has on that resource. The strategic options of organization are determined by the environment according to this theory. Critical resources are those the organization must have to function. This theory therefore can be used to explain the community contribution in organization performance. Recently the theory has been under scrutiny in review and meta-analytic studies (Hillman et al 2009), (Davis Cobb, 2010) and (Sharif Yeoh 2014).They all indicate and discuss the importance of this theory in explaining the actions of organizations by forming interlocks, alliances, joint ventures, mergers and acquisitions in striving to overcome dependences and improve an organizational autonomy and legitimacy. 2.7 Stakeholders Theory The stakeholder theory is a theory of HYPERLINK https//en.wikipedia.org/wiki/Organizational_behavior_management o Organizational behavior management organizational management and HYPERLINK https//en.wikipedia.org/wiki/Business_ethics o Business ethics business ethics that addresses morals and values in managing an organization. It was originally detailed by Ian Mitroff in his book Stakeholders of the Organizational Mind, published in 1983 in San Francisco. The contributors to this theory include Friedman and Miles (2002) and Philips (2003). The theory generally identifies five primary stakeholder groups for a company three of them, shareholders, customers, and communities, define the external expectations of a companys performance the other two suppliers, contractual professionals and employees, participate with the company to plan, design, implement and delivers the companys products and services to its customers (Atkinson et al., 1997). A stakeholder-based perspective of value is important from a managerial perspective because managers tend to focus attention on things that lead to higher performance based on what actually gets measured (Kaplan Norton, 1992 Sachs Riihli, 2011). Rather than focusing primarily on economic measures of performance, a stakeholder-based performance measure challenges managers to examine more broadly the value their firms are creating from the perspective of the stakeholders who are involved in creating it. Thus, it gives managers the information they need to engage stakeholders where they are and enhance managerial ability to use such insights to create more value. At its core, this perspective is about creating a higher level of well-being for the stakeholders involved in a system of value creation led by the organization. From an academic researchers perspective, most empirical studies based on stakeholder theory have used a measure of stakeholder performance as the independent variable, with some measure of economic performance as the dependent variable (Berman et al., 1999 Choi Wang, 2009 Hillman Keim, 2001). If a broad-based measure of stakeholder performance instead becomes the dependent variable, with an organizational action or phenomenon as the independent variable, then there is much greater potential to understand how that phenomenon is influencing the overall value the organization creates. Further, this perspective suggests that while recommendations made by business scholars on how managers can create economic value may have merit, they could also lead managers to take actions that create economic value while reducing other types of stakeholder value. This, in turn, not only diminishes the value of the insights, it also raises questions about the ability of the firm to sustain its economic performance over time especially if efforts to focus on financial returns ignore or erode bases of support from some of the organizations stakeholders. 2.8 Conceptual Framework A conceptual framework is a hypothesized model identifying the model under study and the relationship between the dependent and independent variables (Mugenda, 2008). Garg and Kothari (2014) define an independent variable also known as the explanatory variable as the presumed cause of the changes of the dependent variable, while a dependent variable refers to the variable which the researcher wishes to explain. A conceptual framework would help researchers define the concept, map the research terrain or conceptual scope, systematize relations among concepts, and identify gaps in literature (Poteete, et al, 2010). Below is a figurative representation of the variables explored by this study. The study was guided by planned recruitment and training, process automation, outsourcing and community participation as independent variables and firm performance as dependent variable. Independent variables Dependent Variable Figure 2.1 Conceptual Framework 2.9 Planned Recruitment and Training Recruitment is nothing but the process of searching the candidates for employment and then stimulating them for jobs in the organization (Flippo, 2012). It is the activity that links the employers and the job seekers. It is also defined as the process of finding and attracting capable applicants for employment. According to Rynes (2015) it is the pool of applicants from which the new employees are selected. It includes converting the leads generated during sourcing into job applicants, generating interest in a company and its jobs, and persuading candidates to accept job offers extended to them (Jean Stanley, 2010). Acquiring and retaining high-quality talent is critical to an organizations success (Neeraj, 2012). As the job market becomes increasingly competitive and the available skills grow more diverse, recruiters need to be more selective in their choices, since poor recruiting decisions can produce long-term negative effects, among them high training and development costs to minimize the incidence of poor performance and high turnover which, in turn, impact staff morale, the production of high quality goods and services and the retention of organizational memory. At worst, the organization can fail to achieve its objectives thereby losing its competitive edge and its share of the market (Richardson, 2014). Developing and implementing a recruitment plan and using effective recruitment strategies require changes in organizational practice. Change has the potential to be difficult, producing resistance from those affected. Resistance to change from current employees can be reduced by involving those employees in the planning process from the beginning (Sheryl Amy, 2012). These workforce changes have been driven by a combination of the technological advancement and associated social change (Jean Stanley, 2010). 2.10 Process Automation The mode of operation of various departments of organizations has changed considerably due to advancement in information communication technologies and information systems. For any organization to be in the frontline in modern business, it has to adopt the rapid change in technology and methods of doing things. Studies that have been carried out on electronic procurement clearly indicate that electronic procurement is a key factor on modern competitive companies in terms of efficiency and effectiveness of supply chains (Mwangi Kagiri, 2016). These workforce changes have been facilitated by technology, one of the other key resources that in itself need to be flexible. Advancement in ICT potentially allows communication between employees and with their customers at any time and in any location. But technological flexibility comes at a cost. Existing telephone and computer systems may not support the mobility and flexibility demanded of the workforce. The necessary ICT infrastructure needs to be developed in parallel with the workforce flexibility. The office environment, combined with the ICT infrastructure, provides the platform for the work processes. As employees undertake their activities in new ways, at different times and in a range of locations, the office environment must be adaptable. This may lead to the provision of different office and other workplace settings to support staff flexibility. Faced with persistent public complaints over dismal procurement performance due to poor procurement practices Osir (2016) observed that an increasing number of state corporations are beginning to adopt e-procurement solution in order to realize its promises that have already been realized by many private sector firms, especially in the developed world. These promises include the realization of value for money in procurement of goods and services enhancement of quality service delivery and bolstering of buyer-supplier relationships. He revealed that Kenyan state corporations are confronted with persistent problems which can easily be addressed by full adoption of e-procurement. These glitches include poor service delivery, high cost of procurement, increased procurement lead-time and non-compliance with procurement policy. Kahiu (2015) echoed the above sentiments and added that despite the government initiative for procuring entities to implement e-procurement, the process has been slowly implemented. He further elaborated that e-procurement is a practice if implemented might lead to efficiency, transparency and reduced cost. His opines that slowed implementation raises concern as to determinants of implementation of e-procurement. Osir (2016) recommends that the government should come up with holistic system integration and technological standards develop legal framework and government policy that makes it mandatory for all bidders to adopt e-procurement install a solid system security and authentication among State Corporations and finally, develop a comprehensive e-procurement implementation strategy and ensure adoption of the same by all state corporations in Kenya. PwC (2016) survey revealed that organizations of all types have been confronted by the challenges and opportunities created by social cultural factors, advances in information and communication technology and the changing business working environment These developments have been a key driver to fundamental business change. Organizations have changed both their internal processes and the way they interact with their customers and clients. The internal impact has allowed streamlining of business processes both through automation and elimination of some stages in a process and allowed a physical dispersion of these processes as the main method of communication becomes electronic. Intranets, shared work files and email have supported this development. From the customers perspective the development of call centres, on-line support services and various e-business solutions have extended the range of ways they can choose to interact with an organization (PwC, 2016).This extended accessibility is seen to improve the service from the customers point of view as that they can now contact organizations at a time that is most convenient to them. Hotels and Agencies in the industry have adapted to these changes. The introduction of call centres to extend and improve customer service, the development of one-stop shop locations for the delivery of integrated services and the provision of on-line services have changed these organizations business processes. It seems clear that these changes are set to intensify and become more pervasive as there continues to be a desire to reduce costs, and the public becomes increasingly demanding in terms of the speed and quality of hospitality services. But what is the impact of these strategic changes on the constituent parts of an organization There is a growing recognition that, in order for organizations to respond effectively to the increasingly dynamic environment, they need flexibility in their resources. The three key resources of people, technology and space have come under particular scrutiny. Each of these resources has been impacted by these strategic changes but also by other factors including social change, environmental factors and the legal framework (PwC, 2016). 2.11 Outsourcing In Kenya, from the national outlook both public and private organizations are evolving and shifting from providing non-core services to outsourcing them from the other organizations. Most organizations in Kenya are outsourcing services such cleaning from other organizations. Kenyan organizations have also been in high gear to outsource transport services to transport and fleet management organizations and they have also outsourced transport service of its employees to third parties (Kemibaro, 2009). Outsourcing is accredited with many benefits, but particularly the entire outsourcing process also requires proper management to ensure it is successful. The process from developing the business case, tendering and selecting a provider, to negotiating the deal, managing the relationship and dealing with the distributed process and contract management, the management needs to come up with a strategy to be followed by the both parties involved. Cost reduction is the most quoted reason for outsourcing which in turn it enables the both parties to attain the short-term objective of profit maximization. According to the Outsourcing Institutes Outsourcing index 2000 there are numerous reasons why organizations decide to outsource. These reasons include to gain access to expertise. The organization is able to access to exceptional expertise from the external resources which are not available internally. Organizations improve the company focus. Through outsourcing, organization is able to concentrate on its core activities giving the other organization to concentrate on theirs. Organization cannot be jack of every port. There is reduction and control of operating cost. The main reason for outsourcing is reduction of cost (Benmoffat, 2015). An organization is able to reduce cost of staffing, training, health insurance, employment taxes and retirement plans. The organization is able to access resources which are not available internally. If it is a manufacturing organization they can be able to access plant and equipment which the organization cannot be able to afford by that time. Internal resources are freed for other purposes. Some people in the organization do not concentrate on their area of expertise. Through outsourcing they will be able to handle exactly what they were hired to do. This can benefit the organization to improve its productivity. The organization is able to maximize its restructuring benefit. When an organization is restructuring it needs to improve costs, quality, service, or speed, and non-core business functions may get pushed aside. They still need to be handled, however, and outsourcing is an optimal way to do this (Benmoffat, 2015). 2.12 Community Participation The concept of community participation originally grew out of radical criticism of mainstream development projects in the 1960s and 1970s. In forest protection, participation is often associated with community forestry, which refers to forest management or co-management by people living close to the forest (Kagombe, 2012). ARPIP (2009) report pointed out that the law supporting PFM in Kenya was operationalized on 1st February 2007 whereas piloting of PFM in this country started way back in 1997 with the first case being in Arabuko Sokoke forest reserve. This was followed by a number of similar initiatives in other forest ecosystems mainly supported by donors through local Non-Governmental Organizations (NGOs) and projects within the Forest Department (KFS, 2009). It is important to provide technical backstopping, guidance on prudent business management, strategic planning and building capacity on value addition, identify niche markets and possibly link the producers to the markets. Ogweno et al. (2004) observed that Kenya has some positive experience in butterfly farming at the Arabuko Sokoke forest at the coast where pupae are exported to overseas markets. Provision of technical guidance also calls for aggressive product development, which translates into goods fetching premium prices in the market (ARPIP, 2008). However, as noted by UNIDO (2012), outcomes of enterprises associated with PFM depend on initiatives that promote alternative livelihoods. Mbugua (2012) said Indeed here in Kenya, forest destruction, encroachment, conversion to other uses and unsustainable exploitation, had become the hallmark of forest management. In line with this, Kenya together with other like minded countries, set out to put in place measures to mainstream this new management approach within national forestry programmes. In Kenya, recent experiences at the local level, in community forestry programmes, provide lessons in new forms of local governance aimed at addressing the interests of people who depend on the forest (Emerton, 2008). This is because of the enactment Forest Act, 2005 that identifies community participation in forest protection (GOK, 2005). Several studies have been conducted on community participation in forest management, effects of PFM on household poverty and opportunity cost of forest conservation and protection (Emerton, 1999 Mogaka et al., 2001 Colfer, 2005 Mbuvi et al., 2007 Ongugo, 2007 Guthiga et al., 2008 Borner et al., 2009). The introduction of Participatory Forestry Management (PFM) under the Act has led to the formation of 325 Community Forest Associations (CFAs) at the community level countrywide, including in Cherangany Hills and Mount Elgon. These CFAs are formed by forest adjacent communities and are working with KFS to sustainably manage forest resources. Most of the CFAs are currently preparing to enter into forest management agreements with KFS based on agreed forest management plans (Lowe Ombai, 2013). The community participation forest protection and management through Plantation Establishment and Livelihood Improvement Scheme (PELIS), has reduced problems created by the wasteful use land under the traditional agricultural production systems, improves food and income security of the community and establishes plantations (KFS, 2014). Because of the benefits that our planet and ourselves get from trees, such as trees being oxygen filters, providing shelter and food for humans as well as other animals and their influence on the climate it is essential that we make sure we make up for all the trees we lose or use. If performed properly tree planting can ensure the successful restoration of a deforested area, hence creating ecologically sustainable resource use (UNEP, 2015). 2.13 Empirical Review The researcher has provided the fundamental relationship between the independent variables and dependent variable. Planned recruitment and training, automation, outsourcing and community participation are the independent variables and organization performance is the dependent variable. 2.14 Planned Recruitment and Training and Organization Performance Training is designed to provide learners with the knowledge and skills needed for their present job (Fitzgerald, 2010) because few people come to the job with the complete knowledge and experience necessary to perform their assigned job. Becker (2012) provides a systematic explanation of investment in human capital and associated productivity, wages, and mobility of workers. Such investment not only creates competitive advantages for an organization (Salas Cannon-Bowers 2011), but also provides innovations and opportunities to learn new technologies and improve employee skills, knowledge and firm performance Thang et al (2010). In fact, there is an increasing awareness in organizations that the investment in training could improve organizational performance in terms of increased sales and productivity, enhanced quality and market share, reduced turnover, absence and conflict, (Huselid 2015, Martocchio Baldwin 2009, Salas Cannon-Bowers, 2010). In contrast, training has been criticized as faddish, or too expensive (McLinden Casper, 2014), and there is an increasing skepticism about the practice and theoretical underpinning of linking training with organization performance (Alliger, et al. 2009, Wright Geroy, 2011). 2.15 Process Automation and Organization Performance Organizations with high increases in scale and scope of automation have faster productivity growth than other organizations. Moreover, automation improves the efficiency of all stages of the production process by reducing setup time, run time, and inspection time and increasing uptime and quantity produced per worker. The efficiency improvement varies by type of automation. Information integration can improve business process (Bhatt, 2010) and plays a critical role in an organizations. In the manufacturing function, information integration implement through utilizing network and other information technologies (Dan et al., 2015) to share product and process data (Deng et al, 2012 Gao et al., 2012 Cho Seo, 2012) and coordinating process planning and scheduling (Zhang et al, 2013). Process integration mainly includes integration of design, manufacturing and inspection systems (Cho et al, 2012) and integration of production and logistics functions (Chikan, 2011 Gimenez Ventura, 2015). 2.16 Outsourcing and Organization Performance Bolat and Yilmaz (2009) provided a strong support for the impacts of outsourcing on organizational performance. Cooperation with a vendor has led to significant improvement in organizational effectiveness, productivity, profitability, quality, continuous improvement, quality of work life, and social responsibility levels. In todays world of ever increasing competition, organisations are looking for new ways to gain competitive edge and generate value. Lysons and Farrington (2009) recognise competitive edge as a special requirement that enables an organisation to deal with market dynamics and environmental forces better than its competitors. Organisations seek to achieve competitive advantage through outsourcing. Ogolla (2013) noted that outsourcing of functions influences the performance of organizations because it enhances productivity, flexibility, better quality of products, operating cost reduction, technology advancement and customer satisfaction. However, Kamanga and Ismael (2016) noted that organizations should not outsource an activity fully until they have confirmed beyond doubt that the service provider is capable of handling the activity, organization should engage the service provider on the quality standards which are expected before entering into the contract, organizations should select the service provider on the basis of consistent technical and managerial capabilities, service providers should only handle particular risks which even if they occurred would not affect the entire organization performance. 2.17 Community Participation and Organization Performance Stakeholders involvement is paramount in development projects. Even though, minor decisions and emergency situations are generally not appropriate for stakeholder participation, a complex situation with far-reaching impacts warrant stakeholder involvement and when done proactively, rather than in response to a problem, helps to avoid problems in the future (Maina, 2013). The focus of public participation is usually to share information with, and gather input from, members of the public who may have an interest in a project. The Constitution of Kenya 2010 gives citizen the right to take part in activities that have a direct bearing on their lives (Mbaabu, 2012). Njogu (2014) inferred that the high ranking of performance of Podo water project in Kimbu was linked to the high level of Community Participation in the identified parameters. On the other hand, the low ranking of performance of Nyakianda water project was allied to the low level of community participation. 2.18 Critique of the Existing Literature Sheryl and Amy (2012) in their study on Staff Recruitment, Retention, Training Strategies for Community Human Services Organizations found out that recruitment, retention, and training of direct support professionals (DSPs) are among the most challenging issues facing community human services organizations in the United States. Supervisors, managers, and human resources personnel in community human services organizations are always looking for solutions to the challenges of recruitment, retention, and training of their employees. Turnover, high vacancy rates, and poor staff training are costly to organizations, but, more important, these conditions have detrimental outcomes for the people receiving support services from the organizations employees (Larson, Hewitt, Lakin, 2014). However, Richardson (2014) says that the problem is that many cost optimization programmes struggle to deliver or fail to stick. However much you cut the costs, there are some products where the returns still wont be viable, either because customers dont value them or there is always someone else prepared to offer them cheaper the primary focus should be on value potential rather than volume or cost. Lepak and Snell (2008, 2012) HYPERLINK http//209.85.229.132/searchqcachezkdjjyTNAzQJhttps//www.chrs.rutgers.edu/pub_documents/Lepak_4.pdfemploymentflexibilitycd18hlenctclnkglke l 22 suggested that firms might rely on four distinct types of employment arrangements. First, knowledge-based employment refers to an internal employment arrangement in which organizations place an emphasis on developing and cultivating the knowledge, skills, and abilities of employees over time. As these employees possess specialized skills that are critical, organizations are encouraged to maintain a long-term commitment to their development and provide them with considerable autonomy to use their competencies. Employees in a job-based employment mode are acquired from the labor market to contribute immediately by performing a specific set of tasks. While valued contributors, the requisite skills to perform their jobs are not specific to any particular organization and, consequently, job-based employees are often expected to be productive without additional organization investments. Organizations typically retain job-based employees on a full-time basis but hold them accountable for meeting relatively clear performance objectives for a well-defined range of tasks. On the other hand, according to Guest (2008), the Growth of Employment flexibility Throughout advanced industrial economies Increased hours variability part-time on-call Increased reward variability pay at risk PRP Increased job content flexibility and demand team-working role flexibility end of OCB fuller utilization/less uncommitted time, Increased contract flexibility growth of temporary and fixed-term contracts Static job satisfaction and reducing work-related well-being. 2.19 Summary of the Literature Review Summary of the literature review gives a snapshot of the entire literature review by giving a review of the theoretical literature which includes theories such as resource based theory, agency theory, transaction cost theory, resource dependency theory and stakeholders theory, by linking them to the cost reduction strategies and performance under the study. The conceptual framework focuses on the dependent variable which is the performance and the independent variables which include Planned recruitment and training Process automation Outsourcing and Community participation. Empirical literature identifies recent studies in this thematic area and a critique of the existing literature which departs from the studies in the empirical literature. Thus, the present study purposes to assess the effect of cost reduction strategies on performance in organizations in Kenya. 2.20 Research Gap From the empirical literature, Lau, (2010) empirically examined the Training needs of but failed to capture other important independent variables such as community participation. Similarly, Ndumbi and Okello, (2015) empirically investigated the relationship between Staff Training and level of Compliance to Performance in Kenya. Even though his study revealed that that the workforce was not adequately educated and serious consequences such as breaches of the law could occur, he did not capture important independent variables such as outsourcing and information and communication technology. Further, Makabira and Waiganjo, (2014) empirically explored the relationship between Work Practices and Performance of Corporate Organizations. However, his study failed to capture important independent variable such as training and recruitment. Similarly, Mokogi,et al (2015) empirically examined the relationship between the effects of Procurement Practices on the Performance of Commercial State Owned Enterprises but failed to capture other important independent variables such as staff training, and information and communication technology. The subject of the effect of cost reduction strategies in state corporations in Kenya has not been exhaustively examined. As such, this study proposes to explore further the effect of cost reduction strategies in state corporations in Kenya. CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction This chapter describes the methodology that was used in conducting the study. This includes the research design, target population, sampling design and procedures, sample size, research instruments for data collection, the research process, validity and reliability of the research instruments as well as data processing and analysis techniques. 3.2 Research Design This study adopted descriptive research design. Descriptive design is appropriate because it involves collecting data in order to answer pertinent questions concerning the current status of subjects under study (Mugenda Mugenda, 2003). The research design provides facts and suggestions on major connections between the variables. In addition, the descriptive survey research design is appropriate for this study because it is relatively inexpensive and is useful in describing the characteristics of a large population (Grbich, 2007). 3.3 Target Population A population is the totality of all subjects that conform to a set of specifications comprising the entire group of persons that is of interest to the researcher and whom the research results can be generalized (Polit, 2006). The study focused on 219 employees working at KFS headquarters in the following management levels Top level management who are in salary scale 1 to 4 Middle level management in between salary scale 5 to 9 and Lower level management in salary scale 10 to 14 as distributed in table 3.1. Table 3.1 Target Population StratumTarget populationTop level Management (Salary scale 1-4)15Middle level Management (Salary scale 5-9)46Low level Management (Salary scale 10-14)158Total 219 3.4 Sampling Procedure The staff members were stratified according to their levels of management. This stratum was further divided as per their individual responsibilities in Kenya Forest Service as outlined in KFS career progression. Simple random sampling technique was then used to randomly select the respondents from the levels of management (sampling frame) as shown in table 3.1. This is because random sampling eliminates bias by giving all individuals an equal chance to be chosen thereby eliminating systematic bias. Thus this sampling technique gave all the individuals in the defined sample size an equal chance of being picked as a respondent in the study. 3.5 Sample Size This section describes the strategies that were used to identify the main categories of respondents for the study. A sample is part of the target population that has been procedurally selected to represent the population (Oso Onen, 2009). The sample size was drawn from 219 employees working at KFS in the following management levels Top level management, Middle level management and Lower level management which formed the sampling frame by employing stratified sampling technique. According to Mugenda and Mugenda (2008) a sample size of between 10 and 30 is a good representation of the target population. The researcher will use 15 sampling frame from each stratum in the population for adequate analysis. Hence from a total of 219 target population, a sample of 33 respondents out of the target population of 219 was selected. Table 3.2 Sample Size StratumTarget PopulationSample SizeTop Management (salary scale 1-4) 152Middle level Management(salary scale 5-9) 467Lower level Management (salary scale 10-14)15824Total21933 3.6 Data Collection Instruments Data collection instruments refer to tests, questionnaires, interview schedules or guides, rating scales, and survey plans or any other forms, which are used to collect information on identical items from respondents (Roger, 2006). Structured questionnaire containing both open-ended and close-ended questions was used to collect primary data that assisted the researcher to get reliable information by seeking opinion from the respondents. This is because it is cheap since the respondents are not geographically dispersed secondly, the respondents are located in the same organization and adequate time is provided to give well thought answers. 3.7 Pilot Testing To ensure reliability and validity, pilot survey was conducted in Nairobi Conservancy headquarters, Ngong Road since it is one of the conservation areas in Kenya Forest Service. This area has almost similar climatic condition and the individuals interact and share lots of similarity with those in KFS headquarters. The researcher administered the questionnaire to 10 of the projected respondents according to Connelly (2008). The result of the pilot study was discussed between the researcher, respondents and enumerators for correction of ambiguous and wrongly structured questions. This enabled the researcher to develop instruments that would yield valid, relevant and reliable data. 3.8 Validity of the Data Collection Instrument Validity is the accuracy and meaningful of interference which are based on research. In other words, validity is the degree to which results obtained from the analysis of data actually represent the phenomenon under study. Validity therefore, has to do with how accurately the data obtained in the study represent the variable of the study (Mugenda Mugenda, 2008). According to Kasomo (2007) validity refers to the quality that a procedure or an instrument used in the research is accurate, correct, true, and meaningful and right. The content validity was tested in two ways the researcher discussed the research instrument with the supervisor, school of management and colleagues. Secondly, the pilot study was conducted to ensure face and constant validity. 3.9 Reliability of the Data Collection Instrument Reliability of an instrument is the consistency in providing a reliable result (Orodho, 2005). It is a measure of the degree to which a research instrument yields consist results of data after repeated trials. The consistency of the instrument was determined using Test re-test method whereby the questionnaires was given to the respondents to fill in then the answered questions scored manually. Reliability of the instruments was provided through a Cronbach alpha where alpha was defined by Cortina (2008) as a measure of the internal consistency of a test or scale, which is expressed as a number between 0 and 1. He established an alpha value threshold at 0.7 or 70 which is regarded as most reliable. 3.10 Data Collection Procedures Data collection procedure is the process of gathering information from all the available sources using data collection instruments with the aim of using such data in research (Mugenda and Mugenda, 2008). The questionnaires for the study was designed and distributed to the various respondents through hand delivery. They were provided with ample time to critically analyze their responses and deliver genuine information before the questionnaires were collected later on for analysis. This is because it is cheap since the respondents are found within the various departments of the same organization. In addition, the distribution and collection of the questionnaires ride on the already planned KFS events such as during senior management meeting that is normally held twice a month. 3.11 Data Analysis and Presentation Jacqueline and Secret (2013) defines data analysis as the process of making sense of, or giving meaning to, the numbers or words that one has gathered in the data collection phase and put into usable form in the data processing and management stage so that one can answer his research question. The collected data was sorted out to check completeness and clarity on the research instrument and then analyzed quantitatively, Descriptive statistics was employed and data presented in form of frequency tables that facilitated description and explanation of the study. The study used regression analysis, as it is able to relate dependent variable with multiple variables using the following formula ( QUOTE o QUOTE ) Where- y Dependent variable (Firm Performance) X1Independent variable (Planned recruitment and training) X2 Independent variable (Process automation) X3 Independent variable (Outsourcing) X4 Independent variable (Community participation) QUOTE Regression coefficient for each independent variable QUOTE Random or stochastic term In addition, frequencies and percentages were used to present qualitative data in form of frequency distribution tables on major research questions to enable easier understanding and interpretation using inferential statistics while open ended questions were analyzed through content qualitative analysis, arranged thematically and presented on narrative form to draw conclusions and recommendations. CHAPTER FOUR RESEARCH FINDINGS AND DISCUSSION 4.1 Introduction The research objective sought to establish the effect of cost reduction strategies on organization performance A case of Kenya Forest Service. This chapter presents the data analysis, presentation, and interpretation of the findings of the study as per the data collected through questionnaires and content analysis. 4.2 Response Rate The first item on this section presented information on the response rate in Table 4.1 per level of management considered in terms of salary scale of Kenya Forest Service. Table 4.1 Response Rate Serial NumberStratumNumber of RespondentsNon RespondentsFrequencyPercentage ()FrequencyPercentage ()1Top Management (Salary Scale 1-4)2100.0000.002Middle level Management (Salary Scale 5-9)7100.0000.003Lower level Management (Salary Scale 10-14)2395.83 14.17Total3296.9713.03 Table 4.1 shows that after administering 33 questionnaires to the respondents, 32 questionnaires were filled and returned for analysis while 1 questionnaire was not returned. This translated to 96.97 response rate and 3.03 non-response rate respectively. 2(100) were from senior management, 7 (100) from middle management and 23(95.83) from lower level management. This was mainly achieved by the researcher handing over the questionnaires of the various management levels to the respective staff members of the departments and sections of the Kenya Forest Service. The commendable response was also realized as a result of the researchers emphasis to the enumerators on maximizing on data collection and making follow ups to ensure that the data collection process was carried out as planned. This response rate is considered adequate, as according to Idrus Newman (2002) a response rate of 50 is good enough in social studies. Therefore for the purpose of analysis, the sample size was taken as 32 (n). 4.3 Level of Education The study sought information about the respondents level of education. The respondents distribution based on their level of education was presented in Table 4.2. Table 4.2 Distribution of Respondents by Level of Education Level of EducationFrequencyPercentageTertiary928.13Undergraduate1856.25Postgraduate515.63TOTAL32100 Table 4.2 shows that the majority of the respondents had higher education with undergraduate education ranking the highest at 18 (56.25), followed by tertiary education at 9 (28.13 ) and those with postgraduate formed 5 (15.63). This implies that KFS staff members are equipped with basic skills and knowledge in cost reduction strategies through higher education and therefore their participation in this study is quite appropriate and relevant to them as this empowers them with knowledge and skills that are tailored towards cost reduction strategies in organization performance. 4.4 Duration in the Kenya Forest Service In order to collect information on the subject under study, it was important to provide some information on the duration in the Kenya Forest Service by the respondents. The findings were presented in Table 4.3. Table 4.3 Distribution of Respondents by their working for Kenya Forest Service Number of YearsFrequencyPercentageBelow 5 years39.385-10 years825.0010-15 years928.1315 and above years1237.50TOTAL32100 Table 4.3 shows that majority of the respondents had worked for Kenya Forest Service for over 15 years at 12(37.5) , followed by between 10 and 15 years at 9 (28.13 ) as well as 5 and 10 years at 8(25.00) while those with below 5 years ranked lowest at 3(9.38). This implies that most of the respondents have more experience in regard to cost reduction strategies on organization performance. 4.6 Organization Performance This section of the study sought information on the firm performance in the application of cost reduction strategies. Asked to rate their responses based on the organization performance, the respondents responded as shown in Table 4.4. Table 4.4 Organization Performance ExtentFrequencyPercentageVery High515.63High1134.38Average1443.75Low26.25Very Low00.00TOTAL32100 Table 4.4 shows that the organization performance is on average at 14(43.75), followed by high performance at 11 (34.38), very high at 5 (15.63) and low at 2 (6.25). None recorded a very low performance. This implies that the cost reduction strategies have not been fully implored to improve the organization performance. 4.7 Satisfaction on Quality of Services Quality is an integral aspect in service delivery. The respondents were asked on their satisfaction to the quality of services offered by Kenya Forest Service. Their response were summarised in table 4.5 Table 4.5 Satisfaction on Quality of Services ExtentFrequencyPercentageVery High412.50High1134.38Average1546.88Low26.25Very Low00.00TOTAL32100 Table 4.5 shows that the level of satisfaction with the quality of services provided by Kenya Forest Service is on average at 15 (46.88), followed by high at 11 (34.38), very high at 4 (12.50) and low at 2 (6.25). None recorded very low as satisfied with the quality of services. This is due to the fact that KFS is in the process of establishing measures to ensure that services are delivered as expected through collaboration with other development partners. 4.7 Improvement of Services since the Enactment and Implementation of Forest Act 2005 The success of an organisation is determined on whether it is making improvement in the delivery of service or not. The respondents were asked whether the organisation has made improvement so far and their response were as in Table 4.6. Table 4.6 Improvement of Services ExtentFrequencyPercentageStrongly Agree412.50Agree2784.38Neutral13.13Disagree00.00Strongly Disagree00.00TOTAL32100Table 4.6 shows that majority of the respondents agreed that the organization has made improvement since the enactment and implementation of Forest ACT 2005 at 27 (84.38), followed by strongly agreeing at 4 (12.5), and those who are neutral at 1 (3.13). This due to the fact Kenya Forest Service was created by the Forest ACT 2005 and implemented in 2007.This brought most of the stakeholders on board who have seen improvement within the organization. 4.9 Planned Recruitment and Training and Organization Performance This section of the study sought information on the planned recruitment and training on organization performance. Respondents were asked to rate their responses based on the planned recruitment and training on organization performance, the respondents responded as shown in Table 4.7. Table 4.7 Improvement of Services ExtentFrequencyPercentageVery High26.25High515.63Average1753.13Low618.75Very Low26.25TOTAL32100 Table 4.7 shows that majority of the respondents agreed that the planned recruitment and training is on average affecting the performance of an organization at 17 (53.13), followed by low at 6 (18.75), high at 5 (15.63), while very high and very low both had 2 (6.25) This due to the fact Kenya Forest Service planned recruitment and training is not regular but is seasonal due to the fact that majority of the staff are forest rangers who are recruited and taken for training after 5 years. 4.10 Planned Recruitment and Training Improvement on Organization Operations Respondents were asked if planned recruitment and training process has improved work operations in the organization, the response were as in Table 4.8 Table 4.8 Improvement on Organization Operations ResponseFrequencyPercentageYes2887.50No412.50TOTAL32100 Table 4.8 shows that majority of the respondents agreed that the planned recruitment and training has improved the operations of the organization at 28 (87.50), compared to 4 (12.5) who did not agree. 4.11 Planned Recruitment and Training on Reduction of Conflict between Staff and Members of the Public It was important to know if planned recruitment and training has help in reducing conflict between the organization and members of the public. The response was as in Table 4.9 Table 4.9 Reduction of Conflict ResponseFrequencyPercentageYes2990.63No39.38TOTAL32100Table 4.9 shows that planned recruitment and training has helped in reducing conflict between staff of the organization and members of the public at 29 (90.63), compared to 3 (9.38) who felt that it has not reduced conflict between the staff and member of the public when enforcing law. 4.12 Planned Recruitment and Training on Defining Job Holders Position To know if planned recruitment and training defines job holders position exhaustively, the respondents responded as in Table 4.10 Table 4.10 Defining Job Holders Position ResponseFrequencyPercentageYes1753.13No1546.88TOTAL32100Table 4.10 shows that planned recruitment and training has defined every job holders position exhaustively at 17 (53.13), closely followed by 15 (46.88) who felt that it has not defined the job holders position exhaustively. 4.13 Process Automation and Organization Performance This section of the study sought information on process automation and organization performance. Respondents were asked to rate how the process automation has saved in revenue collection in the organization, the respondents responded as shown in Table 4.11. Table 4.11 Revenue Collection ExtentFrequencyPercentageVery Much1237.50Much928.13Moderate928.13Low13.13Very Low13.13TOTAL32100 Table 4.11 shows that process automation has very much saved in revenue collection at 12 (37.5), much and moderate equally at 9 (28.13) while low and very low equally at 1 (3.13) each. This has led to increased revenue collection due bridging the gaps that existed in physical collection and depositing of revenue. 4.14 Process Automation in Communication Communication and automation helps in determining the flow and structure of an organization. It is to this respect that the researcher sought to know the respondents rating of process automation in communication of an organization. Their response was as in Table 4.12 Table 4.12 Process Automation in Communication ExtentFrequencyPercentageVery High412.50High928.13Average1753.13Low13.13Very Low13.13TOTAL32100 Table 4.12 shows that use of automation in Kenya Forest Service in communication is on average at 17 (53.13), followed by high at 9 (28.13), very high at 4(12.50) while low and very low equally stood at 1 (3.13) each. This is due to the fact that Kenya Forest Service is still integrating automation in her processes in various departments and divisions. 4.14 Process Automation in Security Operations Security is an important exercise in Kenya Forest Service operations due to protection of the forest. It was therefore important to sought respondents view on process automation in security operations of the organization. Their response was as in Table 4.13 Table 4.13 Process Automation in Security Operations ExtentFrequencyPercentageVery High412.50High1031.25Average1546.88Low13.13Very Low26.25TOTAL32100 Table 4.13 shows that use of process automation in Kenya Forest Service in security operations is on average at 15 (46.88), followed by high at 10 (31.25), very high at 4(12.50), very low at 2(6.25) and low at 1 (3.13). This is due to the fact that Kenya Forest Service is in the process of integrating automation in security operations that requires a lot of consultations before implementation due the sensitivity of security operations in the organization, nationally, regionally and globally. 4.14 Process Automation and Efficiency Asked if process automation has improved efficiency in the organization, the respondents responded as indicated in Table 4.14 Table 4.14 Process Automation and Efficiency ResponseFrequencyPercentageYes2784.38No515.63TOTAL32100 Table 4.14 shows that majority agreed that process automation has improved efficiency in Kenya Forest Service at 27 (84.38), against 5 (15.63) who said process automation has not improved efficiency in the organization. The process automation has enhanced turn -around time of the services thereby reducing wastage, enhanced ways of making payments minimizing corruption, reduces loss of assets and finance as well instant delivery of services such as online application for forest produce movement permits at border points. 4.15 Outsourcing and Organization Performance This section of the study sought information on outsourcing and organization performance. Asked to rate their responses based on the performance of the organization upon outsourcing services, the respondents responded as shown in Table 4.15. Table 4.15 Outsourcing and Organization Performance ExtentFrequencyPercentageVery High412.50High1237.50Average1650.00Low00.00Very Low00.00TOTAL32100 Table 4.15 shows that the organization performance upon outsourcing is on average at 16 (50.00), high at 12 (37.50) and very high 4 (12.50). This implies that outsourcing is an important aspect in organization performance. 4.15 Capacity Building and Organization Performance Capacity building is important in individual growth that ultimately impact on the organization performance. When asked on this, the respondents responded as in Table 4.16 Table 4.16 Capacity Building and Organization Performance ExtentFrequencyPercentageVery Much1340.63Much1237.50Moderate721.88Low00.00Very Low00.00TOTAL32100 Table 4.16 shows that the respondents concurred that capacity building has improved the organization performance at 13 (40.63), much at 12 (37.50) and moderate at 7 (21.88). This implies that capacity building is an important aspect in organization performance. 4.16 Outsourcing and Skills Development Asked if outsourcing skills have assisted in empowering staff in skills development, the respondents responded as in Table 4.17 Table 4.17 Outsourcing and Skills Development ResponseFrequencyPercentageYes2268.75No1031.25TOTAL32100 Table 4.17 shows that the majority of respondents agreed that outsourcing of skills has assisted in empowering staff in skills development at 22 (68.75), vis a vis 10 (31.25) who had the contrary opinion. This is due to emerging services that need outsourcing and expertise. 4.17 Community Participation and Organization Performance Community participation is important and determines the performance of an organization. Asked on how much community participation has enhanced the performance of Kenya Forest Service, the respondents responded as in Table 4.18 Table 4.18 Community Participation and Organization Performance ExtentFrequencyPercentageVery Much1134.38Much1753.13Moderate412.50Low00.00Very Low00.00TOTAL32100 Table 4.18 shows that the majority of respondents agreed that community participation has much contributed to organization performance at 17 (53.13), followed by very much at 11 (34.38) and moderate at 4 (12.50). This is because community participation is provided for by the Forest ACT 2005 and Forest Management and Conservation ACT 2016 that recognize the community as main stakeholders in forest management, protection and conservation. Most of the activities that has immensely contributed to the organizations performance is through Plantation Establishment and Livelihood Improvement Scheme (PELIS) 4.18 Formulation of Policies and Regulations Policies and regulations guide the operations of an institution which ultimately determine the performance of an organization. The respondents involvement in formulation of policies and regulations was as recorded in Table 4.19 Table 4.19 Involvement in Formulation of Policies and Regulations ResponseFrequencyPercentageYes1959.38No1340.63TOTAL32100 Table 4.19 shows that majority of respondents are involved in formulation of policies and regulations at 19 (59.38) as compared to those who are not involved in the formulation of policies and regulation of the organization at 13 (40.63). This implies inclusive involvement of the consumers of the policies and regulations giving them an opportunity to share their ideas on issues governing the organization. 4.19 Organization Policies on Community Participation Policies govern the operations of an organization. Asked how they would rate Kenya Forest Service Policies in enabling community participation on delivering service to the organization, the respondents responded as in Table 4.20 Table 4.20 Organization Policies on Community Participation ExtentFrequencyPercentageVery High412.50High1443.75Average1340.63Low13.13Very Low00.00TOTAL32100 Table 4.20 shows that majority of respondents noted that Kenya Forest Service policies have highly enabled community participation on delivering of services to the organization at 14 (43.75), average at 13 (40.63) very high 4 (12.50) and low at 1 (3.13). This is because the forest policies outline operation guidelines as well the community user rights as they participate in forestry matters as main stakeholders. CHAPTER FIVE SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 5.1 Introduction This chapter entails a summary of findings from the responses of the questionnaire items by the members of Kenya Forest Service discussion of findings in regard to the literature review and the objectives of the study recommendations based on the outcome of the study suggestions for further studies and contribution of the study to the body of knowledge. 5.2 Summary The summary of the findings of the study were based on the four objectives, that is, To evaluate the effect of planned recruitment and training as a cost reduction strategy on the performance of Kenya Forest Service To establish the effect of process automation as a cost reduction strategy on the performance of Kenya Forest Service To examine the effect of outsourcing as a cost reduction strategy on the performance of Kenya Forest Service and To determine the effect of community participation as a cost reduction strategy on the performance of Kenya Forest Service. Results from the study indicated that majority of the Kenya Forest Service staff had attained higher education with undergraduate at 18 (56.25) and had worked for Kenya Forest Service for over 15 years at 12(37.5). Thus, they had experience, skills and knowledge in regard to cost reduction strategies on organization performance. The study showed that planned recruitment and training has enhanced the performance of the organization, improved the operations of the organization, reduced conflict between the staff and members of the public and has defined job holders position in Kenya Forest Service. Flippo, 2012 noted that recruitment is nothing but the process of searching the candidates for employment and then stimulating them for jobs in the organization. As the job market becomes increasingly competitive and the available skills grow more diverse, recruiters need to be more selective in their choices, since poor recruiting decisions can produce long-term negative effects, among them high training and development costs to minimize the incidence of poor performance and high turnover which, in turn, impact staff morale, the production of high quality goods and services and the retention of organizational memory The study established that process automation has enhanced the efficiency of Kenya Forest Service at 27 (84.3), saved revenue collection thereby increasing collection. In addition, the study revealed its average use in community and security operations. This is due to the fact that a lot of consultations and dialogue is required on security matters. Mwangi and Kagiri, 2016, noted that the necessary ICT infrastructure needs to be developed in parallel with the workforce flexibility. The office environment, combined with the ICT infrastructure, provides the platform for the work processes. As employees undertake their activities in new ways, at different times and in a range of locations, the office environment must be adaptable. On outsourcing as a cost reduction strategy, the study revealed it is on average affecting the performance of Kenya Forest Service. However, in terms of capacity building, it has greatly improved the performance through addition of skills and knowledge at 22 (68.75). Ogolla (2013) noted that outsourcing of functions influences the performance of firms because it enhances productivity, flexibility, better quality of products, operating cost reduction, technology advancement and customer satisfaction. Since the enactment of Forest ACT 2005 and Forest Conservation and Management ACT 2016, the study revealed that community participation has improved the performance of Kenya Forest Service at 17 (53.13). Most of the staff also participate in formulation of policies and regulations of Kenya Forest Service. This gives them an opportunity to share the issues and include the community in day to day operations of organization in matters of forestry. The community engagement in activities such as Plantation Establishment and Livelihood Improvement Scheme has provided level ground for forest user rights, reduction in overhead cost through forest patrols by the community scouts and better understanding on the need for forest conservation minimizing forest destruction. These have helped in improving the performance of the organization. 5.3 Conclusions From the findings of the study, it is established that the performance of an organization is affected by various factors to varying degrees. Planned recruitment and training have enhanced the performance of Kenya Forest Service and reduced the conflict between the staff and members of the public. This has necessitated smooth operations of the organization in many cases. Further it has impacted skills and knowledge necessary in day to day operations of the organization. Process automation is key in all departments of an organization. This will realize improved revenue collection, saves time and minimize loss of organizations assets and finance. Further, it readily avails some services which would have been costly to provide or get manually through on-line services. Outsourcing helps in improving organizations performance especially for services or goods that it cannot provide by herself. This helps in improving skills and knowledge of the staff that than can be used for the development and growth of the organization. Finally, the study notes that community participation in organizations operations is important. 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Joseph Anunda Kegera Jomo Kenyatta University of Agriculture and Technology College of Human Resource Development Department Commerce and Economic Studies Dear Respondent, REF REQUEST TO FILL QUESTIONNAIRES I am a Jomo Kenyatta University of Agriculture and Technology student undertaking a Masters of Business Administration Strategic Management option. As part of the requirement for the course, I am carrying out a study on Effect of Cost Reduction Strategies on Organization Performance A case of Kenya Forest Service. I believe the study will help in improving KFS performance which will ultimately ensure maximum benefits to the forest adjacent communities and to the general society at large. Despite your busy schedule, I request for your opinions and suggestions in response to questions contained in the questionnaire. These will be of great value and importance to the completion of this study. Kindly note that the information provided will be treated with a lot of confidentiality and will only be used for the purposes of this study. Yours sincerely, Joseph Anunda Kegera APPENDIX II QUESTIONNAIRE This questionnaire is aimed at gathering information on the effect of cost reduction strategies on organization performance in Kenya Forest Service. Your honest and candid response is highly appreciated and will be treated with highest confidence. (Please Tick Appropriately) SECTION A Personal Data 1. What is your level of education Tertiary Undergraduate Post graduate 2. What is your position in the organization Indicate. 3. How many years have you worked for Kenya forest service YearsBelow 5 5-1010-1515 and abovePlease tick SECTION B Organization Performance 4. How would you rate the performance level of the Kenya Forest Service in your area of work ExtentVery HighHigh AverageLow Very LowPlease tick 5. How much would you rate your satisfaction level of quality services delivered in the Kenya Forest Service ExtentVery HighHigh AverageLow Very LowPlease tick 6. Services have improved since the enactment and implementation of Forest Act, 2005. 2016. ExtentStrongly AgreeAgree NeutralDisagree Strongly DisagreePlease tick SECTION C Planned Recruitment and Training, and Organization Performance 7. How would you rate the process of planned recruitment and training in Kenya Forest Service ExtentVery HighHigh AverageLow Very LowPlease tick 8. Has planned recruitment and training process improved the work operations in Kenya Forest Service Yes No 9. Has planned recruitment and training process reduced conflict between KFS and members of the public when enforcing law Yes No 10. Has planned recruitment and training process defined every job holders position exhaustively Yes No SECTION D Process Automation and Organization Performance 11. How much do you think process automation has saved in revenue collection process in Kenya Forest Service ExtentVery MuchMuch ModerateLow Very LowPlease tick 12. How would you rate the influence of process automation when communicating in Kenya Forest Service ExtentVery HighHigh AverageLow Very LowPlease tick 13. How would you rate the impact of process automation when executing security operations in Kenya Forest Service ExtentVery HighHigh AverageLow Very LowPlease tick 14. Has the introduction of process automation in Kenya Forest Service increased the efficiencies of work Yes No SECTION E Outsourcing and Organization Performance 15. How would you rate the performance level of the staff in Kenya Forest Service after outsourcing services ExtentVery HighHigh AverageLow Very LowPlease tick 16. How would you rate the influence of leadership in the performance of Kenya Forest Service under outsourcing process ExtentVery HighHigh AverageLow Very LowPlease tick 17. How much do you think capacity building of KFS managers will influence the Service performance ExtentVery MuchMuch ModerateLow Very LowPlease tick 18. Has the outsourcing of skills in Kenya Forest Service assisted in empowering staff in skills development Yes No SECTION F Community Participation and Organization Performance 19. How much do you think community participation will enhance the performance of Kenya Forest Service ExtentVery MuchMuch ModerateLow Very LowPlease tick 20. Have you ever been involved during the formulation of policies and regulations in Kenya Forest Service Yes No 21. How would you rate the Kenya Forest Service Policies in enabling community participation on delivering services to KFS ExtentVery HighHigh AverageLow Very LowPlease tick 22. Has the community participation with Kenya Forest Service improved the forest protection Please explain. …………………………………………………………………………………………………………………… 23. Has the community participation process increased the quality of services in Kenya Forest Service Please explain. Appendix III (a) Gantt chart showing schedule of project activities ActivityMarch 2016April 2016May 2017June 2017Wk 1Wk 2Wk 3Wk 4Wk1Wk2Wk3Wk4Wk 1Wk 2Wk 3Wk 4Wk 1Wk 2Wk 3Wk 4Identification of research topicSubmission of research topic Discussion of the research topic with the allocated supervisor making necessary correctionsWriting and submission of research proposal upon approval of the research topic by the supervisor Writing research proposal and making necessary corrections guided by the supervisor Appendix III (b) Gantt chart showing schedule of project activities ActivityJuly 2017August 2017September 2017October 2017Wk 1Wk 2Wk 3Wk 4Wk 1Wk 2Wk 3Wk 4Wk 1Wk 2Wk 3Wk 4Wk 1Wk 2Wk 3Wk 4Presentation of the research proposal (proposal defense)Seeking permission from KFS officers (HOC, Nairobi) to collect data Identification of the enumeratorsTraining of the enumeratorsPretesting of the questionnaires, discussions and correctionsActual data collection from the KFS staffData analysisWriting research reportPresentation of the final research reportAppendix IV Research Budget PAGE MERGEFORMAT 45 PAGE MERGEFORMAT 78 Planned Recruitment and Training Operation skills Enforcement techniques Job descriptions and specifications Process Automation Revenue Collection Communication Security operation Organization Performance Efficiency Level of production Staff retention Outsourcing Service provision Leadership Transfer of skills Community Participation Seedlings Production PELIS Forest Protection
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