Strategic Agility and Performance of Small and Medium Enterprises in Nairobi Central Business District, Kenya.

Abstract

Globalization has transformed the nature of the competitive platform of in most of the industries progressing from sluggish moving, steady oligopolies to hypercompetitive surroundings. The objective of this study was to determine the relationship between strategic agility and performance of small and medium enterprises in Nairobi Central Business District, Kenya. The study was anchored on the contingency theory, dynamic capability theory and resource based Theory. The study employed a descriptive research design. The researcher used of purposive sampling to achieve high response rates and to enhance sample representation of the population. Stratified random sampling was then used to sample 86 out of 420 SMEs entrepreneurs dealing with consultancy and service industry while 112 sample out of 530 SMEs entrepreneurs dealing with product and goods industry. The data collection instruments comprised of both unstructured and structured questions A Likert-type scale format was used for the structured items. Data was analyzed using descriptive statistics with the assistance of Statistical Package for Social Sciences version 22. The study revealed that human capital had the greatest effect on the on the performance of small and medium enterprises in Kenya; followed by management commitment and support, discontinuous innovation and organization structure in order of reducing effect. All the variables were significant (p<0.05). The study concludes that organization structure affects performance of small and medium enterprises firms in Kenya mainly through business units, coordination between departments, hierarchical arrangement of lines of authority and functional coordination. The study also concludes that discontinuous innovations such as experimentation with new ideas and exploration of new paradigms affect performance of small and medium enterprises in Kenya. The study recommends that the management of small and medium enterprises should put in place cost-effective measures for timely risk identification and effective risk mitigation so as to ensure that their financial performance is not impacted negatively.