STRATEGY ORIENTATION AND PERFORMANCE OF MEDIUM MANUFACTURING FIRMS IN KENYA
Anna Wambui Mwaura - Master of Business Administration, University of Nairobi, Kenya
Prof. Peter K' Obonyo - Lecturer, Department of Business Administration, School of Business, University of Nairobi, Kenya
ABSTRACT
The objective of this study was to establish the influence of strategy orientation on performance of medium manufacturing firms in Kenya. To achieve this objective of the study, a descriptive cross-sectional research design was adopted. The target population of the study consisted of all 179 registered medium Manufacturing Firms in Kenya. A Sample of 54 firms was drawn from the population using simple random sampling method. The study used primary data which was collected by a semi-structured questionnaire. The data was collected from sampled managers using a drop and pick- later method. Data was analyzed using descriptive statistics and regression analysis. It found that a unit increase in Market Orientation leads to a 29.6% (B=0.296, t=4.05, 0.001< 0.05) increase in the performance of medium manufacturing firms in Kenya. On the other hand, a unit increase in customer orientation leads to a 24.1% (B=0.241, t=3.35, P< 0.05) increase in the performance of medium manufacturing firms in Kenya and a unit increase in Technology Orientation lead to a 18.8% (B=0.188, t=8.95, P< 0.05) increase in the performance of medium manufacturing firms in Kenya. It further established that medium manufacturing firms make new demands and opportunities. The study also established that firms collect information on each customer’s distribution preferences and further establish a good line of communication with customers. The study established that medium manufacturing firms are proactive in making new demands and opportunities. The firms emphasizes on innovativeness in manufacturing and they are competitive aggressive to achieve entry and improve position. The study also established that firms explore new innovations and carry out Internet marketing of the product. Computer network, hardware and software are up to date and firm improves communications systems regularly. It is further suggested that a similar survey to replicate this study in other sectors of the Kenya economy. The study concludes that medium manufacturing firms make new demands and opportunities. They emphasize innovativeness in manufacturing and are competitively aggressive in such of good market to achieve entry and improve position. A unit increase in Entrepreneurial Orientation leads to an increase in the performance of medium manufacturing firms in Kenya and firm entrepreneurs have freedom of action and independent decision making. Further, the study concludes that a unit increase in Market, customer and Technology Orientation leads to an increase in the performance of medium manufacturing firms in Kenya. Lastly, the study concludes that firms collect information on each customer’s distribution preferences and establish good lines of communication with customers. This study recommends that for medium manufacturing firms in Kenya to be competitive they need to re-evaluate their capabilities. Benchmarking should be used to borrow best practices on the best strategies to cut cost and improve on other capabilities. More funds should be sourced in order to pursue a few or all strategies at the same time thus employing other models of competitive priorities. This could be done by acquiring loans from financial institutions such as banks, joining and benefiting from SACCOs and other micro finance institutions. Further the study recommends the firms should employ new information systems and explore new innovations so as to meet consumer’s expectations and establish good lines of communication with the customers.
