Entrepreneur Characteristics, Competitive Strategy, Firm Level Institutions and Performance of Small and Medium Enterprises of Non-timber Forest Products in Kenya
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Date
2015-11Author
Wekesa, Linus C
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Evidence is emerging that the dominant link between entrepreneur characteristics and firm
performance is influenced by several other factors. There are indications of a link between
entrepreneur characteristics, competitive strategy and firm level institutions to create and
enhance competitive advantage and overall firm performance. However, available empirical
evidence supporting such multi-dimensional interaction is minimal and inconclusive since most
studies have concentrated on the individual and isolated effects of various factors on firm
performance. Based on the gaps and unresolved issues in previous studies, this study addressed
the main question: what is the influence of competitive strategy and firm level institutions on the
relationship between entrepreneur characteristics and performance? Hinged on the institutional
theory, resource based view and theories relating to entrepreneur characteristics, the study
addressed the key question by targeting firms in the non-timber forest products sub-sector that
have often received less focus by studies aimed at establishing performance determinants. The
study was conducted as a cross-sectional survey covering 314 small and medium enterprises in
nine counties, Kenya. The Pearson correlation coefficients, coefficient of determination, F
statistic, and the t-value and their significance levels were used in presenting the fit of the models
and the relationships between variables. It was observed that firm performance was significantly
affected by entrepreneur characteristics of age, managerial skills, industry experience and social
skills. In addition, there was significant link of entrepreneur characteristics of age, gender,
education, managerial skills, and social skills with competitive strategy. On the other hand, the
three competitive strategy drivers of uniqueness, focus and cost exhibited significant relationship
with firm performance. There was a significant moderating effect of firm level institutions in the
relationship between competitive strategy and firm performance. Equally, there was partial
mediating effect by competitive strategy of the relationship between entrepreneur characteristics
and performance. All the null hypotheses were rejected and the objectives achieved. It was thus
concluded that a multi-dimensional link existed with entrepreneur characteristics, competitive
strategy, firm level institutions and firm performance as the linkages. The relationship between
entrepreneur characteristics and firm performance depended on competitive strategy and firm
level institutions indicating that firms require resources, appropriate strategy choices and firm
level institutional framework, and owners/managers with appropriate personal characteristics to
enhance their competitiveness and performance. This study conceptualized with mediating and
moderating effects on the relationship between entrepreneur characteristics and performance
shade light on the theoretical argument that entrepreneurial dynamics are shaped by resources as
well as institutional systems and structures put in place at firm level. It was necessary, therefore,
that firms match their strategic decisions with characteristics of owners/managers, and the
internal institutional framework to enhance their competitiveness and performance. The
observation that firms run by relatively young and skilled entrepreneurs had high levels of
application of competitive strategy and better performance calls for policy measures to
encourage the many well trained but unemployed young people to engage in businesses. Equally,
training programmes including incubation to equip the practitioners with necessary theoretical
and practical capacities to enhance application of competitive strategy, and manifestation of firm
level institutions were necessary.
Publisher
University of Nairobi