Intervening Effects of Capital Structure on Strategy Implementation and Performance of Energy Sector Institutions in Kenya


  • John Odhiambo Mudany The Management University of Africa, Kenya
  • Nicholas K. Letting The Management University of Africa, Kenya
  • Wainaina Gituro University of Nairobi, Kenya


Capital structure is the most significant discipline of company's operations.  Capital structure decision is a decision is a vital decision with great implication for the firm's sustainability. The capital structure of a firm is very important since it indicates the ability of the firm to meet its obligations and the needs of its stakeholders. Advocates of optimal capital structure argue that judicious combination of debt and equity maximizes the value of a firm. There are dissenting views among scholars on what constitutes optimal capital structure and its effects on a firm's financial performance. Extant literatures have reviewed the relationship between capital structure and the performance of firms, although the ï¬ndings of these studies are inconclusive. This paper was anchored on the expectancy theory and supported by the pecking order theory and resource-based view theory. This paper adopted positivism philosophy. The target population was the 68 institutions under the energy sector. The pilot test was carried out on twenty managers from different departments of the selected firms. The Quantitative data was analysed using Statistical Package for Social Sciences (SPSS version 22). The study results indicated that there was a statistically strong and positive relationship between strategy implementation and organizational performance. The findings indicated that capital structure had a strong and significant relationship with performance of Energy sector institutions. The research findings further showed that the joint influence of strategy implementation and capital structure on performance was higher than their separate effect. The study further concluded that an appropriate capital structure is a critical decision for any business organization.  The study recommends that Energy sector institutions should adopt balanced capital structure strategy that will optimize companys performance and corporate value.

Keywords: Strategy Implementation, Capital Structure & Organizational Performance.

Author Biographies

John Odhiambo Mudany, The Management University of Africa, Kenya

Management and Leadership, School of Management and Leadership, The Management University of Africa, Kenya

Nicholas K. Letting, The Management University of Africa, Kenya

Management and Leadership, School of Management and Leadership, The Management University of Africa, Kenya

Wainaina Gituro, University of Nairobi, Kenya

Management, Department of Business Administration, School of Business, University of Nairobi, Kenya


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How to Cite

Mudany, J. O., Letting, N. K., & Gituro, W. (2020). Intervening Effects of Capital Structure on Strategy Implementation and Performance of Energy Sector Institutions in Kenya. Journal of Finance and Accounting, 4(3), 73–95. Retrieved from




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