Influence of firm level institutions on the relationship between competitive strategy and firm performance of non-timber forest products small and medium enterprises in Kenya
Date
2016Author
Wekesa, Linus
Maalu, Jackson
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Empirical evidence on the influence of firm level institutions on firm performance is inconclusive.
While some studies have advanced the moderation effect, others have renounced it. Thus, this
study performed multiple linear regression analysis to test the moderation effect of firm level
institutions on the relationship between strategy and firm performance. The study was
conducted as a cross-sectional survey covering 314 small and medium enterprises in the nontimber
forest products sub-sector in nine counties of Kenya. The coefficient of determination, Fstatistic,
and t-value were used in presenting fit of the model and the relationship between
variables. It was observed that the resource based and administrative based firm level
institutions significantly influenced the relationship between competitive strategy and
performance of non-timber forest products small and medium enterprises. The conditions for
moderation effect were made demonstrating that causal effect of competitive strategy on firm
performance as moderated by firm level institutions. This demonstrated that improved
performance was visible with only firms that had manifested firm level institutions to implement
competitive strategy. It was concluded that firm level institutions enhance relationship between
competitive strategy and firm performance by defining milieu in which strategy choices are
made and implemented. Thus, firms should enhance their capacities through appropriate staff recruitment policies and development to manifest right firm level institutions. This study enriches
institutional theory by adding some insights that firms require resources and administrative
systems that form internal institutional milieu to drive through strategy choices to achieve
competitiveness and performance.
Citation
Wekesa, Linus, and Jackson Maalu. "INFLUENCE OF FIRM LEVEL INSTITUTIONS ON THE RELATIONSHIP BETWEEN COMPETITIVE STRATEGY AND FIRM PERFORMANCE OF NON-TIMBER FOREST PRODUCTS SMALL AND MEDIUM ENTERPRISES IN KENYA."Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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