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Strategic Resources, A Driver of Performance in Small and Medium Manufacturing Enterprises in Kenya

Author

Listed:
  • Muturi Moses Murimi

    (Department of Business and Economics, Daystar University, Kenya)

  • Beatrice Elesani Ombaka

    (Department of Human Resource Development, Karatina University, Kenya)

  • Joseph Muchiri

    (Business & Economics Department - Karatina University, Kenya)

Abstract

Purpose: This study sought to establish the effect of strategic resources on performance of small and medium manufacturing enterprises. Specifically, the study sought to identify how financial resources, human resources, physical resources and intellectual capital affect performance of small and medium manufacturing enterprises in Kenya. Methodology: Positivism research philosophy was utilised. Cross-sectional descriptive survey as well as explanatory study design were used in the study. The target population for the study was 350 Kenyan SMEs in the manufacturing sector. A sample of 183 firms was selected using stratified random sampling. One respondent from each firm was selected being the managing director. Data was collected using a semi-structured questionnaire. Diagnostic tests for multicollinearity and normality were conducted before data analysis. The research questionnaire was tested for content validity and reliability after. Data was analysed using inferential and descriptive statistics. Data collected was analysed using SPSS V23. Finding: The study found that strategic resources have a significant influence on significant influence on performance of manufacturing SMEs in Kenya. Specifically, financial, human and physical resources all positively and significantly influenced the performance of Kenyan SMEs while intellectual resources as no effect on performance. The study therefore concluded that financial resources have a positive and significant influence on performance of manufacturing SMEs in Kenya, human resource was found to be significant in predicting performance. Physical resources have a significant influence on performance of manufacturing SMEs in Kenya while intellectual capital has no significant influence on performance of manufacturing SMEs in Kenya. Study Implication: The study recommended that Management of manufacturing SMEs should ensure that there are enough financial resources to meet their daily transactions and ensure that they are able to acquire the relevant strategic resources for efficient running of their firms; have adequate, committed and well-skilled personnel with the required expertise; should invest significantly in physical resources in order to maximise the performance of these firms; carry our cost benefit analysis before committing their resources to protect their intellectual capital in form of patents. Value of the Study: The study showcases the influence of strategic resources on performance of manufacturing SMEs in Kenya.

Suggested Citation

  • Muturi Moses Murimi & Beatrice Elesani Ombaka & Joseph Muchiri, 2021. "Strategic Resources, A Driver of Performance in Small and Medium Manufacturing Enterprises in Kenya," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 14(2), pages 43-57, September.
    • Handle: RePEc:tei:journl:v:14:y:2021:i:2:p:43-57
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    References listed on IDEAS

    as
    1. Ali, Jabir, 2016. "Performance of small and medium-sized food and agribusiness enterprises: evidence from Indian firms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(4), September.
    2. Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 914-940, October.
    3. Zarutskie, Rebecca, 2010. "The role of top management team human capital in venture capital markets: Evidence from first-time funds," Journal of Business Venturing, Elsevier, vol. 25(1), pages 155-172, January.
    4. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Baraka ISRAEL, 2022. "Enhancing Customer Retention in Manufacturing SMEs through Supply Chain Innovative Practices," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 10(3), pages 272-286, September.

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    More about this item

    Keywords

    Strategic Resources; Firm Performance; Resource Based View; Balanced Score Card Model; Small and Medium Manufacturing Enterprises;
    All these keywords.

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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