Influence of Digital Transformation Strategies on Performance Among Paint Manufacturers in Kenya

Abstract

Digital transformation has been one of the most pervasive areas of concern for business leaders in the last decade. No organization or sector has been immune to the impact of digital transformation and consequently digital transformation has become a strategic priority as organizational leaders have set out to seize and harness it as a competitive advantage. Digital transformation in organization has been driven by advancements in technology like the universal reach and use of mobile telephony, cloud computing, advanced data analytics, artificial intelligence, blockchain technology and robotics. However digital transformation is not merely about technology but must be accompanied by a change of mind set, organizational practices and must be embedded in the overall organizational strategy in order to yield sustained improved performance of the organization. This study was anchored on the Diffusion of Innovations Theory and supported by Kotter’s Theory on Change Management and Contingency Theory. The paint manufacturing industry has continued to experience growth for the last ten years attracting new entrants increasing the intensity of competition in this sector. The number of paint manufacturers in the country has increased significantly from ten players in 2005 to over seventy industry players in 2020. The major competitive strategy priorities pursued by paint industry players are cost reduction, quality, speed and innovation. The need to compete effectively coupled together with evolving consumer tastes and preferences, requirement to produce and distribute thousands of pigment colours and the high level of fragmentation in the paint distribution network have triggered digital transformation among paint manufacturers. Empirical review carried out revealed that while several studies have been undertaken to study the influence of digital transformation on performance of organizations in the country, none had been carried out in the manufacturing sector. The study undertook to investigate the extent of digital intensity and leadership transformation intensity among paint manufacturers and the influence this has had on their performance. This study employed a cross-sectional survey targeting all the 40 paint manufacturers identified in Nairobi County and its immediate environs. A questionnaire was utilized to gather primary data from employees of paint manufacturers and the data was then analysed using descriptive statistical techniques. The research established that digital intensity and leadership transformation intensity have a strong correlation with performance of paint manufacturers in Kenya and that 43.2% of the performance could be attributed to these two factors. The research study concluded that organizational change that is driven by the top leadership and is based on technological changes has a greater influence on the performance of paint manufacturers than simply deploying various digital technologies without an overarching and cohesive vision and leadership. The study recommended that paint manufacturers must continue to pursue strategic organizational changes and develop organizational capabilities in order to fully derive the benefits of the digital initiatives that have been put in place as this was established in the study to have more influence on the performance of paint manufacturers. The study is expected to be of immense value to industry practitioners undertaking digital transformation in their organizations. This study will provide insight for policy makers on the digital transformation strategies implemented effectively among paints manufacturers and provide guidance in formulation and implementation of policies that enable and support the manufacturing sector in the country. This research study recommends that case studies be carried out on some of the key paint manufacturers in the country to provide more detailed and elaborate information on their specific approaches to digital transformation and their effectiveness in producing the desired outcome.