Effect of Innovation on Performance of Agricultural Firms Listed at the Nairobi Securities Exchange

Abstract

The main objective of the study was to explore the effect of innovations on performance of agricultural firms listed at the Nairobi Securities Exchange. The specific objectives of the study were to determine the level of innovations adoption among agricultural firms listed at the Nairobi Securities Exchange and to establish the effect of innovations on performance of agricultural firms listed at the Nairobi Securities Exchange. This study was based on three theories. These are; the resource based view theory of the firm, the diffusion of innovation theory and the technology acceptance model. This research employed qualitative research design and specifically the survey method. Primary data was used in the study. The primary data was collected by use of an interview guide. The qualitative analysis was done using content analysis. Content analysis was used to evaluate the response, draw conclusions and to derive recommendations. The study concluded that there exist a positive relationship between technological capability and firm growth. Emphasis to technological change has been given as a component for the technological capability. Skills, knowledge and experience are required to operate existing systems and to generate technical change from the technological capability. Effective interaction, coordination, and collective action are based on existing capabilities, appropriate incentives, and the empowerment of individuals; thus they rely on voluntary action. Better-connected actors with stronger innovation capabilities help to solve coordination problems among potential partners, build trust for collaboration, build up innovation capabilities, and develop a better understanding of the needs and capabilities among listed agricultural firms. The study also concluded that agricultural firms listed at the Nairobi Securities Exchange have an established intranet and extranet to pass information between and among various department and functional units. The study established that some of agricultural firms listed at the Nairobi Securities Exchange did not have human resource management system. There is a link between human resource management system and competitive advantage in any firm through its role in shaping the skills and motivation of employees. The study recommends that agricultural listed firms should develop products to meet market demand; improve the quality and added value of the agricultural products; Agricultural listed firms should enhance the technological innovation capability and financial strength of agricultural listed firms. This study recommends more funding to digital tools and services departments since they support business operations, from electronic commerce, to firm communications and to internal business systems. This study also recommends integration of key government entities through technology adoption.