Thesis:
Effects of restructuring strategies on organizational performance of five-star hotels in Nairobi

Abstract

Restructuring strategies involve corporate actions to modify operations or structure to improve organizational performance when facing economic hardship. This study examines four strategies, franchising, joint ventures, divestment, and spin-offs, and their implications on six five-star hotels in Nairobi, Kenya. Using a mixed-method design, data were collected using structured Likert-scale questionnaires from senior and middle management personnel of Villa Rosa Kempinski, Radisson Blu, Tribe Hotel, The Boma Nairobi, Sankara Nairobi, and Hemingway's Nairobi. Descriptive and inferential analyses, performed using SPSS, used multiple linear regression to test variable associations. Outcomes confirmed all strategies positively influence performance, rejecting null hypotheses. Spin-offs impacted most, establishing operation focus, followed by divestment, eliminating peripheral operations, franchising, leveraging international brand equity, and joint ventures, permitting resource sharing. The combined effect of the strategies contributed significantly to performance improvement, balancing efficiency through spin-offs and divestment and market expansion through franchising and joint ventures and offering an actionable framework for positioning Nairobi’s five-star hotels. The challenges were franchisee-franchisor misalignments, partner conflicting goals, service reduction concerns, and spin-off transition costs. The suggestions are in favor of integrated restructuring plans, performance-based franchise incentives, open joint venture agreements, strategic asset appraisals, and policy measures like de-regulations and tax incentives. These results guide hoteliers, investors, and policymakers on how to enhance industry resilience. This study contributes significantly to the body of knowledge in hospitality management and strategic organizational behavior. Future research must explore non-financial indicators such as employee retention, longitudinal impacts, and three- or four-star hotels to boost generalizability across the hospitality industry in Kenya considering urban-rural contextual variations.

Cite this Publication
Maina, M. W. (2025). Effects of restructuring strategies on organizational performance of five-star hotels in Nairobi. Mount Kenya University. https://erepository.mku.ac.ke/handle/123456789/7533

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Mount Kenya University