Response strategies to environmental changes by small and medium sized enterprises in Eastleigh business district, Nairobi county, Kenya

Abstract

At the boundaries between the firm and environment there exist input-output dependencies of the organization. The environment is complex and turbulent and constantly changing and therefore organizations need to adopt response strategies inorder to respond to the opportunities and threats arising from the changing environment. The study was guided by two main objectives: first, to determine the environmental changes faced by small and medium sized enterprises in Eastleigh business district and second, to establish the nature of response strategies employed by small and medium sized enterprises in Eastleigh business district to the changing environment. The study employed cross-sectional survey and data was collected from 76 out of 88 small and medium sized enterprises that were being targeted. The study results showed that the surveyed small and medium sized enterprises faced various challenges from the external environment which included intense competition, political and economic challenges, threat of substitute goods and services among others. The study results also revealed that SMEs had adopted various response strategies to cope with the changes in the environment. Although some of the results were not statistically significant, the study concluded that SMEs adopted a combination of strategies to respond to the changes in the environment. These strategies included low pricing of products and service, good customer care services, offering quality goods and services, speed in delivery of gods and services, focus strategy among others. Overall results of the study supports pertinent theories and similar empirical studies. Following the findings of the study in regards to the two objectives, the researcher has recommended different strategies to be adopted by policy makers, SMEs owners aswell as management practictioners. Policy makers should invest more on research and development when coming up with policies, they should be fully aware of the impact of environment on organizations and these should guide development of policies which should be flexible and aligned with the changing environment. Due to some of the results being statistically not significant as well as limitations of the study, similar studies should be done targeting the same target population and results be compared with those of the current study. It is also suggested that similar studies to be conducted targeting other SMEs across Kenya as well as other organizations in order to validate and/or enhance this study’s findings