Influence of business strategies and information systems on the performance of top 100 SMEs in Kenya
Muema, Mark M.
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SMEs have defined the economies life line in Kenya, since they contribute massively in the country‟s GDP. The survival and existence of SMEs is largely contributed by the decisions made by the owners or managers in charge. This study aimed at investigating the influence of business strategies and information systems which have been largely perceived and praised to be vital ingredients of the performance of SMEs in Kenya. Business manager/owners are creating more complex business solutions only to later realise the importance of information systems in solving major issues. Further to this, majority of SMEs in Kenya are struggling during startup periods and keeping up the ever rising pressure from similar firms. Most of them either operate on low profits; change business lines merge with others or finally close down. The literature review expounded on business strategies, information systems represented by independent variables; performance of SMEs represented by dependent variables in comparison to the Porter's Theory of Competitive Advantage and the Technology Adoption Model respectively. SMEs play a vital role in development of the Kenyan economy. Little has been done to establish the real business value that both business strategies and information systems add to most businesses. The researcher embarked on a survey whose data was used to assess the performance of SMEs by adopting various business strategies and information systems. The research of the study targeted the KPMG Top 100 mid-sized companies in Kenya in the year 2015 and adopted descriptive survey method. The preferred sample size of the study was the (Top 100) SMEs in Kenya. The desired sample size was derived using Mugenda and Mugenda (2003) recommendation. The primary source of data was collected via questionnaires; the study applied quantitative techniques for data analysis and presented it in form of tables. The study‟s outcomes revealed that there was a positive correlation between business strategies, information systems and performance of the Top 100 SMEs in Kenya. It revealed that SMEs adopted various business strategies and information systems dependent on the type of the business and industry circumstances. The study concluded that indeed business strategies and information systems influenced a positive performance of the top 100 SMEs in Kenya. The study also suggested further research to be done on influence of business strategy and information systems on other SMEs performance in other institutions in order to get an overall and more substantive and comprehensive conclusion. The researcher therefore recommends that SMEs need to adopt business strategies and information systems otherwise the cost of not responding could be costly leading to reduced or no performance and thereby giving their competitors the opportunity to out muscle them in the market which could eventually lead to termination of their businesses.
University of Nairobi
A research project submitted in partial fulfilment of the requirement for award of the degree of master of business administration of the University of Nairobi.
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