KNOWLEDGE MANAGEMENT PRACTICES AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NAIROBI CITY COUNTY, KENYA
Pauline Mukami Nyaga - Masters in Business Administration (Strategic Management), Kenyatta University, Kenya
Shadrack Bett - Department of Business Administration, Kenyatta University, Kenya
ABSTRACT
SMEs are an important component of the economy, especially with regard to absorbing a large percentage of the workforce. Good performance of these entities is therefore critical so that they can continue with their economic contribution. However, despite county government efforts of Nairobi and the government of Kenya to promote SME activity, not much progress seems to have been achieved. The general objective of this study was to investigate the influence of knowledge management practices on the performance of small and medium enterprises in Nairobi City County. Specifically, the study seeks to: establish the influence knowledge creation on the performance of small and medium enterprises in Nairobi City County, determine the influence knowledge acquisition on the performance of small and medium enterprises in Nairobi City County, assess the influence of knowledge sharing/transfer on the performance of small and medium enterprises in Nairobi City County and to investigate the influence of knowledge implementation on the performance of small and medium enterprises in Nairobi City County. This study will be guided by Resource based view theory, Organizational learning theory and Knowledge based theory. The study was based on descriptive research design. The target population will be 532 SMEs firms in Nairobi City County. The sample size was 150 SMEs covering different sectors. The study will use questionnaires, containing both open ended and closed ended questions to obtain primary data. The research instrument was pretested with a sample of the respondents. Descriptive statistics including the means and standard deviations will be used to analyze the data and capture the characteristics of the variables under the study. Inferential statistics was used to test the nature and magnitude of the relationship between dependent and independent variables. Simple regression analysis and Pearson’s correlations was computed to determine the nature and the strength of the relationship among the variables. The analyzed data was presented in form of tables and charts. The analyzed data was presented in form of tables and charts. The conclusions of this study were informed by the findings based on each study objective and also findings of other similar studies. The findings of the study revealed that knowledge creation, knowledge acquisition, knowledge sharing and knowledge implementation are positively related with performance of SMEs in Nairobi County. Knowledge creation, knowledge acquisition, knowledge sharing and knowledge implementation were found to be satisfactory variables in explaining performance of SMEs in Nairobi County as supported by coefficient of determination of 51.2%. This shows that knowledge creation, knowledge acquisition, knowledge sharing and knowledge implementation explained 5.2% of the performance of SMEs in Nairobi County. The results of ANOVA showed that the overall model was statistically significant. Further, the results imply that the independent variables are good predictors of performance of SMEs in Nairobi County. This was supported by an F statistic of 49.522. Finally, the overall model indicated that knowledge creation, knowledge acquisition, knowledge sharing and knowledge implementation are positively and significantly related. Based on the findings the study concluded that knowledge creation, knowledge acquisition knowledge sharing and knowledge implementation affects performance of SMEs firms. The study recommends that SMEs in Nairobi County should adopt knowledge management strategy in running their business so that they can gain improved performance, knowledge management strategies to be adopted are: knowledge sharing, knowledge acquisition, knowledge creation and knowledge implementation. The study also recommends that the SMEs firms should invest on highly trained employees.
