The Performance of Iso Certified Firms in Kenya With Reference to Organizational Resources, Values System, and Management Capabilities

Abstract

The study aimed at establishing the relationship between organisational resources and performance; the intervening/mediating effect of management capabilities on the relationship between organisational resources and performance; the moderating effect of values system (values and principles of governance) on the relationship between organisational resources and performance; and the joint effect of organisational resources, management capabilities and values system on performance in International Organisation for Standardization (ISO) certified firms in Kenya. The study was mainly based on Total Quality Management (TQM) theory. The study was guided by the philosophy of positivism. A cross-sectional research design was adopted targeting the population of all 1,060 ISO certified firms accredited in Kenya from which a sample size of 282 firms was drawn and the response rate was 90 percent. Primary data was collected by use of a questionnaire. Secondary data was obtained from financial statements of 27 organizations which were randomly selected from the sample size. Data was analyzed by descriptive and inferential statistics. Multiple regression models were used to estimate the effect of organisational resources, values system and management capabilities on the performance of ISO certified organizations including tests of the hypotheses. The findings revealed that there was a statistically significant relationship between organisational resources and performance and that organisational resources had a negative influence on performance ; there was a partial intervening effect of management capabilities on the relationship between organisational resources and performance with a positive effect on that relationship; there was moderation effect of values system on the relationship between organisational resources and performance with a positive effect on that relationship; and there was a statistically significant joint effect of organisational resources, management capabilities and values system on performance . The results of this study add to existing knowledge in the area of organisational resources and performance by showing that the relationship between organisational resources and performance of ISO certified firms is not direct but rather is intervened and moderated by management capabilities and values system respectively and therefore would guide these firms in decision making. This study contributes to the principles and tools of TQM which help in ensuring that management of ISO certified firms perform with minimum organisational resources and as shown by the positive Fulmer H score. Due to the linkage established between the Constitution of Kenya (CoK) and TQM theory, this theory is applied in materializing the values and principles contained in article 10 of the constitution and therefore the management should be guided by CoK and TQM theory. The study, therefore recommends among others that the management of ISO certified firms should develop management capabilities including train their staff in managerial skills and sensitize on organizational values system in order to improve performance of their organizations.