Strategy formulation is a fundamental component of strategic management that involves defining an organization’s mission, vision, long-term objectives, and the strategic actions required to achieve desired outcomes ([2]; [12]). Through strategy formulation, organizations assess their internal capabilities and external environments, identify strategic alternatives, and select courses of action that enhance organizational performance and competitiveness ([2]; [12]). In healthcare settings, strategy formulation guides decisions related to service differentiation, resource allocation, human resource management, technology adoption, market expansion, and quality improvement. Hospitals operate in dynamic environments characterized by changing patient expectations, regulatory demands, technological advancements, and financial pressures, making effective strategy formulation essential for sustainable service delivery. Strategic management scholars have further argued that strategy formulation is not solely a rational planning process but also an adaptive and participatory process that accommodates uncertainty and diverse stakeholder interests ([11]). Consequently, hospitals require flexible strategies that align organizational goals with the needs of patients, clinicians, investors, insurers, and regulators ([8]).

The healthcare sector increasingly recognizes strategy formulation as a critical determinant of organizational effectiveness and service quality. According to [14], healthcare organizations that adopt clearly articulated value-based strategies achieve better patient outcomes while simultaneously reducing costs. Similarly, [3] observed that inclusive and evidence-based strategic planning enhances organizational responsiveness, stakeholder satisfaction, and performance. Studies in strategic management have also demonstrated that organizations with coherent and participatory strategy formulation processes tend to exhibit superior operational outcomes compared to those lacking strategic direction ([6]). In hospitals, clearly defined strategic goals support efficient allocation of resources, innovation, and coordinated service delivery, thereby contributing to improved patient experiences and organizational sustainability.

Despite growing evidence linking strategy formulation with organizational performance, the pathways through which strategy formulation influences healthcare service delivery remain insufficiently understood. Operational effectiveness provides a plausible mechanism through which strategic intentions are translated into measurable outcomes. Operational effectiveness refers to an organization’s ability to utilize resources efficiently, optimize processes, improve quality, and continuously innovate in order to deliver value to clients ([13]). In healthcare organizations, operational effectiveness encompasses timely service provision, efficient patient flow, effective workforce management, adoption of technology, and quality improvement initiatives. Hospitals with well-formulated strategies are more likely to develop operational systems that enhance productivity, reduce inefficiencies, and improve patient satisfaction. Thus, operational effectiveness may serve as an important intermediary factor linking strategic management practices to service delivery outcomes.

Empirical evidence from different settings supports the relationship between strategy formulation, operational effectiveness, and organizational performance. [6] reported that participatory and rational strategy formulation processes positively influenced organizational outcomes across public and private organizations. [14] demonstrated that value-based strategic approaches improve quality while reducing healthcare costs. In emerging economies, structured strategic decision-making has been associated with enhanced organizational effectiveness and competitiveness ([7]). Within the African context, healthcare organizations continue to face challenges related to resource constraints, leadership limitations, policy uncertainty, and increasing service demands, all of which require effective strategic planning to improve service outcomes. However, many studies have concentrated on strategic implementation, leadership, or organizational performance without explicitly examining the mechanisms through which strategy formulation influences healthcare service delivery.

In Kenya, previous studies by [10] and [17] have reported that strategic management practices contribute to improved efficiency, service quality, and patient satisfaction within healthcare organizations. Nevertheless, most studies have focused on public hospitals, strategic leadership, or general organizational performance, with limited attention given to private healthcare institutions and the mediating role of operational processes. Private hospitals operate in highly competitive environments and are expected to balance financial sustainability with the provision of high-quality patient-centered services. Understanding how strategy formulation influences service delivery through operational effectiveness is therefore important for both theory and practice. Moreover, empirical evidence examining these relationships within the context of private hospitals in Kenya remains limited.

The existing literature demonstrates a positive association between strategy formulation and organizational outcomes; however, significant conceptual and contextual gaps remain. Specifically, limited empirical evidence exists regarding the mediating role of operational effectiveness in explaining how strategy formulation translates into improved service delivery in private healthcare settings. Most previous studies have emphasized direct relationships between strategic management practices and performance while overlooking the operational mechanisms that drive service outcomes. This gap is particularly evident in private hospitals in Kenya, where strategic and operational dynamics may differ from those of public institutions and other sectors. Therefore, this study examined the mediating effect of operational effectiveness on the relationship between strategy formulation and service delivery among selected private hospitals in Kisumu County, Kenya.

This study adopted an analytical cross-sectional research design to examine the mediating effect of operational effectiveness on the relationship between strategy formulation and service delivery among selected private hospitals in Kisumu County, Kenya.

The study targeted 449 respondents drawn from Aga Khan Hospital Kisumu and Kisumu Specialist Hospital. The respondents comprised 210 hospital staff involved in strategic management and service delivery and 239 caregivers receiving healthcare services from the two hospitals. A multistage sampling procedure was employed in selecting the respondents. The two hospitals were purposively selected because they met the study inclusion criteria. Staff respondents were selected using stratified sampling to ensure adequate representation across relevant functional departments, while caregivers were recruited through consecutive sampling until the required sample size was attained.

Primary data were collected using a structured questionnaire comprising four sections: respondents’ demographic characteristics, strategy formulation, operational effectiveness, and service delivery. All items were measured using a five-point Likert scale ranging from 1 (Strongly Disagree) to 5 (Strongly Agree). Strategy formulation was operationalized using five indicators: clarity of long-term organizational goals, alignment of strategic plans with the hospital’s mission and vision, transparency and inclusiveness of strategic decision-making processes, involvement of key stakeholders in strategy formulation, and adequacy of resource allocation to support strategic priorities. Operational effectiveness was assessed using indicators of staff competence, service innovation, efficiency in resource utilization, effectiveness of strategy implementation, and sustainability of competitive advantage. Service delivery was measured using indicators of patient satisfaction, timeliness of service delivery, quality of healthcare services, staff responsiveness, and patient retention.

Data were analyzed using IBM SPSS Statistics version 30. Descriptive statistics, including frequencies, percentages, means, and standard deviations, were used to summarize the study variables. Inferential statistics comprised simple linear regression to determine the effect of strategy formulation on service delivery, multiple regression to assess the contribution of operational effectiveness, and mediation analysis using Hayes PROCESS Macro with 5000 bootstrap samples to establish the indirect effect of operational effectiveness on the relationship between strategy formulation and service delivery. Statistical significance was determined at the 5% level (p < 0.05).

Ethical approval was obtained from the National Commission for Science, Technology and Innovation (NACOSTI) (Reference No. 210432; License No. NACOSTI/P/25/417038). Permission to conduct the study was also obtained from the management of Aga Khan Hospital Kisumu and Kisumu Specialist Hospital before commencement of data collection. Participation was voluntary, informed consent was obtained from all respondents, and confidentiality and anonymity were maintained throughout the study.

Descriptive statistics were computed to summarize respondents’ perceptions of strategy formulation practices in the two selected private hospitals. Responses were obtained from 449 participants using a five-point Likert scale ranging from 1 (Strongly Disagree) to 5 (Strongly Agree), and the findings are presented in Table 1.

Table 1. Descriptive statistics for strategy formulation variables (N = 449).

Note. Responses were measured on a 5-point Likert scale ranging from 1 = Strongly Disagree to 5 = Strongly Agree. M = Mean; SD = Standard Deviation.

The present study examined respondents’ perceptions of strategy formulation practices among selected private hospitals in Kisumu County, Kenya. Overall, the findings indicate that respondents perceived strategy formulation to be well established within the participating hospitals, as reflected by consistently high mean scores across all the measured indicators. These findings suggest that strategy formulation is embedded in the hospitals’ management practices and plays a central role in guiding organizational direction and strategic decision-making.

Among the strategy formulation indicators, alignment of strategic plans with the hospitals’ mission and vision recorded the highest mean score (M = 4.19, SD = 0.97), followed closely by the presence of clear long-term organizational goals (M = 4.16, SD = 0.92). These results demonstrate that the hospitals possess a strong strategic orientation characterized by clearly articulated organizational priorities and strategic direction. According to [4], effective strategy formulation requires organizations to establish clear objectives and align strategic plans with their mission and vision to facilitate coordinated decision-making and sustainable organizational performance. In healthcare organizations, such strategic alignment is particularly important because hospitals must simultaneously achieve clinical excellence, financial sustainability, and patient-centered service delivery.

Although respondents expressed positive perceptions regarding the inclusiveness of strategy formulation, relatively lower mean scores were reported for transparency in strategic decision-making (M = 3.94, SD = 1.04) and stakeholder involvement (M = 3.96, SD = 0.96). These findings imply that while strategic priorities are generally well defined, opportunities remain to strengthen participatory approaches during strategy formulation. Inclusive decision-making promotes organizational commitment, improves communication, and enhances successful implementation of strategic initiatives. Similar observations have been reported by [1], who noted that strategic decision-making in healthcare organizations is frequently concentrated at senior management levels to maintain efficiency and regulatory compliance, thereby limiting broader stakeholder participation.

The study further established that respondents perceived resource allocation to be adequate in supporting strategic objectives (M = 4.03, SD = 0.90). This finding suggests that the participating hospitals possess the managerial capacity to translate strategic priorities into operational activities through effective allocation of financial, human, and technological resources. [3] emphasized that resource allocation serves as a critical link between strategy formulation and implementation because organizational strategies can only achieve intended outcomes when sufficient resources are committed to their execution.

The observed standard deviations, ranging from 0.90 to 1.04, indicate moderate variation in respondents’ perceptions of strategy formulation practices. These differences may reflect variations in organizational roles, departmental responsibilities, or levels of involvement in strategic planning processes. Nevertheless, the consistently high mean scores across all indicators demonstrate that strategy formulation is well institutionalized within the participating private hospitals. Overall, these findings suggest that the hospitals have established clear strategic goals, aligned their strategic plans with organizational missions, involved stakeholders to a reasonable extent, and allocated resources to support strategic priorities. Collectively, these practices provide a strong strategic foundation that is likely to enhance operational effectiveness and improve service delivery, consistent with strategic management principles emphasizing the importance of coherent strategy formulation for organizational performance ([4]; [3]).

This study concludes that strategy formulation is a significant driver of service delivery among selected private hospitals in Kisumu County, Kenya. The findings demonstrate that hospitals with clearly defined long-term goals, strategic alignment with their mission and vision, participatory decision-making processes, stakeholder involvement, and effective resource allocation achieve higher levels of service delivery. The study further establishes that operational effectiveness significantly and partially mediates the relationship between strategy formulation and service delivery, indicating that the positive influence of strategy formulation is realized both directly and indirectly through improved operational processes. Consequently, effective strategy formulation, supported by strong operational effectiveness, enhances the capacity of private hospitals to deliver timely, high-quality, responsive, and patient-centered healthcare services, thereby improving overall organizational performance and competitiveness.

This study has several limitations that should be considered when interpreting the findings. First, the use of a cross-sectional research design limits the ability to establish causal relationships among strategy formulation, operational effectiveness, and service delivery because data were collected at a single point in time. Second, the study relied on self-reported responses from hospital staff and caregivers, which may have been influenced by social desirability and respondent perception biases. Third, the study was conducted in only two private hospitals in Kisumu County, which may limit the generalizability of the findings to other healthcare institutions, particularly public hospitals or private hospitals operating in different geographical and organizational contexts. Despite these limitations, the study provides valuable empirical evidence on the mechanisms through which strategy formulation influences service delivery in private healthcare settings.

This study contributes to strategic management and healthcare management literature by providing empirical evidence that operational effectiveness partially mediates the relationship between strategy formulation and service delivery in private hospitals. The findings extend the application of Dynamic Capability Theory by demonstrating that the benefits of strategy formulation are realized not only through direct strategic actions but also through the enhancement of operational capabilities. From a practical perspective, the study provides hospital managers and policymakers with evidence that effective strategy formulation should be complemented by strong operational systems, efficient resource utilization, continuous process improvement, and stakeholder engagement to achieve superior service delivery. The study also contributes to the limited body of evidence on strategic management practices within private healthcare institutions in Kenya, thereby providing a foundation for future research and policy development.

Based on the findings of this study, private hospital management will be encouraged to strengthen strategy formulation processes by ensuring that long-term strategic goals are clearly defined, aligned with the hospital’s mission and vision, and developed through inclusive stakeholder participation. Hospital administrators will need to invest in initiatives that enhance operational effectiveness, including continuous staff capacity building, process optimization, efficient resource allocation, service innovation, and robust performance monitoring systems, to maximize the benefits of strategic planning on service delivery. Policymakers and healthcare regulators will be encouraged to support the adoption of evidence-based strategic management practices that strengthen operational performance across private healthcare institutions. Future researchers will be encouraged to undertake longitudinal and multi-center studies involving both private and public hospitals to establish causal relationships and examine additional organizational factors that may influence the relationship between strategy formulation, operational effectiveness, and service delivery.

The authors sincerely acknowledge the management, staff, and caregivers of Aga Khan Hospital Kisumu and Kisumu Specialist Hospital for their cooperation and willingness to participate in this study. The authors are also grateful to the research assistants for their commitment during data collection and to all individuals who provided valuable technical and administrative support throughout the research process. Their contributions greatly facilitated the successful completion of this study.

Rodgers Norman Demba: Conceptualization, methodology, formal analysis, investigation, data curation, software, validation, visualization, writing original draft preparation, and project administration.

Fronica Monari: Conceptualization, methodology, supervision, validation, writing review and editing, and overall oversight of the research process.

Arvinilucy Onditi: Methodology, supervision, validation, writing review and editing, interpretation of findings, and critical revision of the manuscript for important intellectual content.

All authors read and approved the final version of the manuscript and agree to be accountable for all aspects of the work.

Ethical approval for this study was obtained from the National Commission for Science, Technology and Innovation (NACOSTI), Kenya (Reference No. 210432; License No. NACOSTI/P/25/417038). Administrative permission to conduct the study was also obtained from the management of Aga Khan Hospital Kisumu and Kisumu Specialist Hospital before commencement of data collection. The study was conducted in accordance with the ethical principles outlined in the Declaration of Helsinki. Participation was voluntary, and written informed consent was obtained from all respondents before data collection. Participants were informed of the purpose of the study, their right to decline participation or withdraw from the study at any stage without any consequences, and the measures taken to ensure confidentiality and anonymity. No personally identifiable information was collected, and all data were securely stored and used solely for research purposes.

Written informed consent was obtained from all participants prior to their enrollment in the study. Before data collection, the purpose of the study, study procedures, potential risks and benefits, confidentiality measures, and the voluntary nature of participation were clearly explained to all respondents. Participants were informed of their right to decline participation or withdraw from the study at any stage without penalty or loss of any benefits to which they were entitled. Only respondents who voluntarily provided written informed consent were included in the study.

The data supporting the findings of this study are available from the corresponding author upon reasonable request.