The Influence of Strategic Financial Planning on Organisational Financial Prudence. A Case of ZUPCO

Abstract

The study sought to examine the influence of strategic financial planning on organizational financial prudence at Zimbabwe United Passengers Company (ZUPCO). The study general adopted the budgetary control theory and the financial management further guided the study. The study adopted descriptive survey research design and targeted four Harare ZUPCO Depots at Belvedere, Chitungwiza, Gleneagles, and Willowvale in Zimbabwe. A census of the employees was carried out and from these the 160 management and staffs from the drivers, conductors, mechanics, supervisors, administration staff, fleet and managers as were systematic randomly selected for questionnaires. The study employed semi- structured questionnaires to collect data. The research instrument was pilot tested in order to determine its reliability and validity before it was used to collect data for the final study. The data collected were analysed by the aid of the Statistical Package for Social Sciences (SPSSS, Version 21). Data analysis was both descriptive and inferential. Descriptive analysis constituted finding the percentages, means and standard deviations for data touching on the study variables. On the other hand, inferential analysis was in form of both Pearson Correlation co-efficient and multiple regression analysis. The findings of the study were presented in form of figures, and descriptive and inferential statistical tables. The study indicated that the more ZUPCO enhanced their strategic financial planning approach, the greater the likelihood of moderately increasing their sustainable financial prudence (r= 0.503; p< 0.05). It was intimated that strengthening the internal control system at ZUPCO was likely to result in enhanced revenue section prepare timely reconciliations (r= 0.98; p< 0.05). The study found that the value of R is 0.893, which is interpreted to 89.3% imply influence of strategic goal determination are strongly correlates to the financial prudence of ZUPCO. A predictive model thus developed was Y=-2.368+ 0.091X₁+ 0.364X₂+ 0.778X₃+ 0.230X₄+0.076X₅. The relationship between credit controls and sustainable financial prudence at ZUPCO was found to be positive, strong and significant. In addition, the study found that external borrowings were likely to marginally affect sustainable financial prudence in the aforesaid institutions. Moreover, the study found that the value of R is 0.893, which is interpreted to 89.3% imply influence of strategic goal determination are strongly correlates to the financial prudence of ZUPCO. The value of R square is given as 0.776, this means that 777.6% change in strategic goal determination of ZUPCO is explained by the financial prudence practices that are in place, explained by income generating activities, internal control system, management support, credit controls, and external borrowing. Income generating activities, internal control system, management support, and credit controls were concluded to be essential in enhancing sustainable financial prudence in local public universities. However, external borrowing was inferred to have marginal effect on the sustainable financial prudence in ZUPCO. It is recommended that ZUPCO in Zimbabwe should ensure that they have sound strategic financial plans reporting and financial systems in the income generating activities and a strong internal control system. It is further recommended that ZUPCO their computerized systems for effective financial reporting and for these institutions to have strong credit policies. Lastly, ZUPCO should formulate a policy that can effectively guide them when borrowing particularly externally.