The moderating influence of industry competition on the relationship between corporate strategy and organizational performance

Abstract

The influence of strategic choice on performance is a subject of debate in strategic management. However, previous studies have yielded inconsistent results. While industrial organization economics theory and the contingency theory emphas ize the role of industry environment in organizational performance, little research attention has been directed towards investigating the indirect influence of the competitive environment on performance. The current study, attempts to highlight the indirect influence of the environment by testing the moderating influence of industry competition on the relationship between corporate strategy and performance. The study adopted the descriptiv e cross sectional survey with data collected from companies listed at the Nairobi Securities Exchange. Structured questionnaire was used and data analyzed through both descriptive and inferential statistics and linear regression. The findings demonstrate t hat industry competition has a significant moderating influence on the relationship between corporate strategy and performance. Drawing from the findings, we conclude that performance of the firm depends on the degree of alignment of corporate strategy to industry competition.