Firm level factors, industry environment, competitive strategy and performance of large manufacturing firms in kenya
Kariuki, Paul M
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The general objective of this study was to determine the independent and combined effect of firm level factors on performance of large manufacturing firms in Kenya. The specific objectives of this study were to determine the influence of structure on performance of large manufacturing firms, determine the influence of culture on performance of large manufacturing firms, establish the influence of resources on performance of large manufacturing firms, determine the combined effect of structure, culture and resources on performance of large manufacturing firms and establish the intervening effect of competitive strategy and moderating effect of industry environment on combined effect of structure, culture and resources on performance of large manufacturing firms. The study was a cross sectional survey targeting 102 large manufacturing firms and the response rate was from 94 firms. The data was analyzed using Statistical Package for Social Sciences. Hypotheses were tested and nearly all were rejected apart from two hypotheses. The two hypotheses indicated that organizational structure had no influence on return on assets and that organizational culture did not influence customer perspective. Results indicated that organizational structure, culture and resources had combined effect on organizational performance. Competitive strategy had an intervening effect and industry environment had moderating effect on combined effect of organizational structure, culture and resources on organizational performance. The study established that different measures of performance indicated varying results. The results of the study are important in influencing the government policy. The Ministry of Industrialization and Enterprise Development in liaison with other key ministries and agencies should ensure that there is appropriate legal framework that enhances the industry environment. This is important because with globalization, the industry environment has become more dynamic and turbulent. When the government formulates and implement appropriate policies based on empirical data, the manufacturing firms will have more conducive environment to be competitive locally and globally. Kenya association of manufacturer through the results obtained is able to advise the organization members adequately. The study results indicated the relevance of contingency theory that an organizational performance is dependent to certain independent factors. This implies that the theory is relevant and important in understanding what are the key factors that would be instrumental in making a business competitive. The results indicated that organizational resources influences organizational performance. This support the resource based view of strategy but the dynamic capability theory cannot be overlooked because it emphasizes on the importance of effective use of organizational resources. This study supports organizational behavior theory because organizational structure and organizational culture were found to significantly influence organizational performance. The theory can be used as a foundation to understand why different organizations respond in a particular way to varying factors. The management of large manufacturing firms should carefully make an objective assessment about the appropriateness of the organizational structure, culture and effective utilization of resources. The study was limited in that change in various variables of study was not monitored or observed over time as would be the case with longitudinal studies. The study was restricted by non response from some managers on profit after tax and earnings per share. Further studies can be carried out on organizational structure and return on assets and organizational culture and customer perspective.