The relationship between trade orientation and organizational, performance of food processing firms in the wider Nairobi metropolis, Kenya

Abstract

Trade orientation is important to any organisation as this may be the ingredient missing for internationalisation of a firm. The food processing sector is a very important one for the growth of Kenya’s economy. The sector contributes to about 3.2% of GDP growth and accounts for 41% of total manufacturing sector export. However, the sector faces a number of challenges that hamper the growth of many firms. The objective of this study was to establish the relationship between trade orientation and the performance of food processing firms in Nairobi metropolis. This was a cross sectional survey design. According to a recent mapping exercise of food processing firms in Kenya, there were 619 firms (IDS, 2013). The population of the study was therefore be the 619 food processing firms in Nairobi Metropolis. Using the sample size calculator, 62% confidence level and a confidence interval of ±4, a sample size of 50 firms was selected for the study. Primary data was collected in this study using structured questionnaires prepared based on the objectives of the study and administered using drop and pick later method to the General Managers of the organisations. The study found that product orientation had a negative and significant effect on firm performance (β = -0.761, p = 0.000). The study also found that customer orientation had a positive but non-significant effect on firm performance (β = 0.181, p = 0.612). The study further revealed that competitor orientation had a n Government of Kenya should place an enabling environment to encourage more food processing firms to export their produce more as this is likely to boost their performance and also become a source of foreign exchange earner for the government. The study also recommends that other agricultural processing firms can be better placed to improve their performance by focusing on the inter-functional coordination as a trade orientation.