Advanced Manufacturing Technology as a Strategy in Enhancing Performance of Large Manufacturing Companies in Kenya

Abstract

The purpose of this research was to contribute to the extant knowledge on the relationship between AMT, competitive advantage, organizational resources, and performance of large manufacturing companies in Kenya. The study investigated the mediating and moderating roles of competitive advantage and organizational resources on the relationship between AMT and performance of large manufacturing companies in Kenya. A review of conceptual and empirical literature was done and four hypotheses were formulated to aid the research. The positivist research philosophy and descriptive cross-sectional research design was employed. The population of the study was a census of 55 manufacturing companies that apply design technologies, manufacturing technologies and planning technologies in their operation and were members of Kenya Association of Manufacturers as at December 2020. Primary data was collected using a structured self-administering Likert questionnaire anchored on a five-point scale while secondary data was collected online from the company’s annual reports. Descriptive and inferential statistics were used to analyze collected data, while regression analysis was used to test the study hypotheses. Results revealed that AMT statistically predicts performance of large manufacturing companies in Kenya. Results show that competitive advantage statistically predicts performance but partially mediates the relationship between AMT and performance of large manufacturing companies in Kenya. Results also show that although organizational resources statistically predict performance it is not significant on moderating the relationship between AMT and performance of large manufacturing companies in Kenya. Further, the joint effect of AMT, competitive advantage and organizational resources on performance was found to be statistically significant. The study contributes to theory building by demonstrating that AMT is one of the strategies that can be implemented by manufacturing companies to meet their stakeholder needs and improve performance and since resources do not moderate the relationship between AMT and performance, organizations with different resources would observe similar impact on their performance when they apply AMT in their operations. The value of resource-based theory and contingency theory in strategy were confirmed as resources were found to statistically predict performance. Further, the combined effect of AMT, competitive advantage and organizational resources was found to be significant in predicting performance than either of the variables independently, confirming synergy between the variables and their positive impact on performance of large manufacturing companies in Kenya. This study may have been constrained by using one respondent per organization and combining many industries at different levels of AMT adoption. Future researchers could involve more respondents across management hierarchy in each organization involved in a similar study to further validate their findings by focusing on firms at same level of AMT adoption that apply similar technologies in their manufacturing process. The implications of the study include: AMT, competitive advantage and resources have varying effects on performance; AMT can be used as a manufacturing strategy by organizations to improve their performance; and senior Managers need to carefully appraise investments in AMT which on their own do not lead to improved organizational performance as other variables that were not in the current study also affect the relationship between AMT and performance.