Firm-level Strategy, Capabilities, Organizational Culture and Performance of Food and Beverage Manufacturing Companies in Kenya

Abstract

The study analyzed the relationships of firm-level strategy, capabilities, culture and organizational performance. Firm-level strategy has been argued to positively stimulate production. Earlier perspectives of corporate governance have endeavored to scrutinize the direction of causation of capabilities and corporate culture on firm-level and performance interactions with varied results. The main objective was to establish the effect of firm-level strategy, capabilities and organizational culture on performance of food and beverage manufacturing companies in Kenya. The specific objectives of the study were to establish the influence of firm-level strategy on performance; to determine the effect of capabilities on the relationship between firm-level strategy and performance; to explore the effect of corporate culture on the relationship between firm-level strategy and performance and to establish the joint effect of firm-level strategy, capabilities and organizational culture on performance. A cross-sectional survey of one hundred and twenty-five food and beverage manufacturing companies provided data through a structured questionnaire. The research hypotheses were verified using regression analysis. The study showed that the guidance of firm-level strategy to financial success was not substantial. Firm-level strategy on non-financial pointers of internal business processes and learning and growth were statistically substantial while customer focus was insignificant. The results established that overall firm-level strategy has a partial effect on organizational performance. Results of the autonomous influence of firm capabilities of human capital, research and development, information technology and marketing revealed statistical importance on the connections. The result validates the theories of the resource-based view, dynamic capabilities theory and stakeholder theory. The research’s findings contributes to knowledge in the specialty of corporate governance by establishing a notable impact of capabilities and culture on the firm-level strategy and performance relationship. Managers in the sector will use the results to monitor the crucial productivity drivers, that is, firm-level strategy, capabilities and culture. The study offers direction for policy makers and proprietors of food and beverage manufacturing enterprises. Areas for further research and other additional concepts to be tested have been mentioned in context.