Moderating effect of firm age and size on the relationship between sustainable operations management practices and competitive advantage of manufacturing firms in Kenya

Abstract

The Kenyan government has identified manufacturing as one of its big four-agenda for growth and employment creation. However, manufacturing activities consume considerable amounts of resources which are non-renewable and energy intensive, emits toxic wastes leading to negative environmental challenges. Therefore manufacturing firms have to embrace technologies that utilize alternative energy sources and minimize pollution by implementing sustainable operations management practices (SOMPs). SOMPs are environmental initiatives taken to care for the environment, improve life and for economic gains. If appropriately addressed, SOMPs have likelihood of becoming crucial to competitive advantage and a solution to the problems experienced. Sustainable practices implementation requires resources and capability. However, little is known about the moderating effect of firm age and size on the relationship between SOMPs and competitive advantage. For business models to be able to solve real business problems they need tospecify moderating variables. The objective of this paper was to examine the effect of firm age and size on the relationship between SOMPs and competitive advantage. The relationship was grounded on the theory of performance frontiers and open system theory. Cross sectional survey design was used. The population of the study was made up of 903 manufacturing firms and the sample size was 300 which was calculated using Slovin’s formula. Primary data was collected and covariance-based structural equation modeling was used to analyze it. The test for validity and reliability were also conducted. The findings indicated that, firm age had a significant moderating effect on the relationship between SOMPs and firm competitive advantage hence new firms should aim atadopting the practices early enough to ensure that they enjoy the benefits. The findings also indicated that firm size does not moderate the relationship between SOMPs and firm competitive advantage. This highlights the challenges faced by organizations as they grow, such as inflexibility and bureaucratic bottlenecks, which may transform into resistance to change. This study looked at indirect cause hence providing further insights in the area. Researchers as well as specialists are presented with further understanding of reciprocal causal mechanism linking SOMPs and competitive advantage and circumstances shaping that link