Strategic Orientation and Performance of Small and Medium Enterprises in Nairobi Central Business District

Abstract

The capacity of a firm to strategically orient its operations in terms of its market, technological changes, to learn and adapt to market changes and the capacity to exercises entrepreneurship is one such posturing that a firm can adopt to improve its performance. The need for a firm to strategically orient its operations in respect to the market it operates, entrepreneurship and technological capacity will guide how an organization responds to the business environment that it operates in. The research objective was to establish the effect of strategic orientation on the performance of small and medium enterprises in Nairobi Central Business district. Towards the realisation of the same, the study adopted a descriptive research design whereby 40 questionnaires were distributed and after the screening process, 30 of them were accepted and analyzed. From the research findings, it was found that entrepreneurial orientations are the strongest variable that affects the performance of the SME. From the regression analysis results, the findings show that strategic orientation practices explains 64% of the SMEs performance and there exist a strong correlation between the dependent and the predictor variables (r=0.8). The study concludes that SMEs can improve their business processes and achieve better effectiveness and efficiency through the employment of appropriate strategic orientation. The study recommends that managers need to focus on dynamic capabilities development that connect different capabilities and orientations that can give customer value that are superior in turn obtaining higher performance.