The Role Of Employee Behaviour And Organizational Structure In The Relationship Between Strategic Planning And Competitive Advantage Of Large Manufacturing Firms In Kenya

Abstract

Several studies have been carried out in the past to find out how strategic planning and competitive advantage are connected and the causes of differences in competitive advantage among firms. Scholars have argued that competitive advantage can emanate from either internal or external sources and is usually in several forms which include; valuable resources, the position held within the industry, position within the marketplace, operating at lower costs than rival firms, differentiation, capabilities and dynamic capabilities. The debate on what causes differences in competitive advantage is still on. This study sought to advance knowledge and was based on the premise that strategic planning influences competitive advantage both directly and also indirectly by way of the intervening influence of employee behaviour and the moderating effect of organizational structure. The overall purpose of the research was to determine whether the association between strategic planning and competitive advantage of large manufacturing organizations is influenced by employee behaviour and organizational structure. Out of this overall purpose, four specific objectives were formulated with corresponding four hypotheses which were tested at 95.0% confidence level. The study was underpinned by the goal-setting theory, the competitive advantage typology/theory, the resource-based theory, dynamic capabilities theory and contingency theory. The study used a positivist research paradigm and a cross-sectional survey design. Data collected from 122 large manufacturing firms was tested using a 5-point Likert-type scale. The data received was analyzed using both descriptive and inferential statistics. Hypotheses were tested using both simple and multivariate regression analysis as well as hierarchical analysis for mediating and moderating effects. The findings indicate that overall strategic planning has a statistically significant influence on competitive advantage and that employee behaviour completely mediates the relationship between strategic planning and competitive advantage. The findings further reveal that organizational structure has a partial moderating effect between strategic planning and competitive advantage and that the joint influence of employee behaviour and organizational structure is different from the influence of individual variables on the relationship between strategic planning and competitive advantage of large manufacturing organizations. In the joint influence, employee behaviour had the highest contribution followed by organizational structure. The results of this research lend support to previous enquiries and seem to support all the theories used to underpin the study. The study has added to knowledge in the field of strategic management by establishing the mediating influence of employee behaviour and the moderating effect of organizational structure. Managers will use the results of this research to monitor the crucial competitive advantage drivers in their firms especially relating to employee behaviour and organizational structure. The thesis suggests comparable studies to be undertaken in other industries, other contexts and even in small to medium manufacturing firms. Besides, longitudinal studies can be carried out in large manufacturing firms so as to authenticate the results obtained from this cross-sectional study. The study has offered direction for policy makers and owners of large manufacturing firms. Finally, areas for further research have been highlighted in terms of context, other variables and performance indicators to be tested.”