Strategic management and firm growth: a study of banking, insurance and mobile network service firms in Kenya

Abstract

A critical analysis of research stream on the concepts of strategic management and organizational performance shows that studies on the two concepts are elaborate. However, the two concepts are multidimensional in nature and hence have never had a uniform conception by management researchers across the research stream. Since strategic management is sensitive to context and its indictors are also diverse, conceptual, contextual, and methodological gaps emerge thereby necessitating this study. In an attempt to fill some of the research gaps, this study sought to answer the question: does strategic management affect firm growth among commercial banks, insurance, and mobile network service firms in Kenya? Sales growth, market growth, and profit maximization strategies were tested for their possible effect on firm growth. The theories that underpinned this study are the resource based and stakeholder theories. The study design used was cross-sectional survey while the target population were all registered commercial banks, insurance, and mobile network service firms in Kenya. The sample design was non-probability (purposive) where half the total number of registered banks and insurance firms were sampled based on their relative market share, a census was conducted on the three mobile network service firms Kenya. Data was collected using a likert-scale type of questionnaire while data analysis was done using the SPSS (version 20). The findings were presented following the structure of the questionnaire: the demographics; statements relating to sales growth; statements relating market growth; statements relating to profit maximization; and finally statements relating to firm growth. Results from regression analysis were presented on the relationship between each independent variable and the dependent variable, and the later a joint effect was presented. Various statistics were used including R, R-square, adjusted R-square, and the ANOVA. There was generally evidence of a strong effect of strategic management practices on firm growth of banking, insurance, and mobile network service firms in Kenya from the findings of the study. In this regard, it was established that sales growth, market growth, and profit maximization strategies had significant influence on the growth of banking, insurance, and mobile network service firms in Kenya. A number of recommendations for strategic intervention in line with the study findings were presented. Finally, a few limitations of the study were highlighted as well as the mitigations the researcher used in each case; from the limitations of the study, a few suggestions for further research were highlighted.