Organizational resources, corporate governance structures and performance of Kenyan state corporations

Abstract

The study conceptualized a relationship between organizational resources, corporate governance structures and performance. Organizational resources have been posited to influence performance however; this position has been largely tautological with need for more empirical grounding. Although implied, the role of corporate governance structures in the relationship between resources and performance has been largely lacking. The study was contextualized in Kenyan state corporations in which these variables have strongly manifested in extant literature. The study‟s main objective was to establish the influence of corporate governance structures on the relationship between organizational resources and performance of Kenyan state corporations. Specific objectives were to; establish the influence of organizational resources on performance of Kenyan state corporations, determine the influence of corporate governance structures on the relationship between organizational resources and performance of Kenyan state corporations and finally, determine the joint influence of organizational resources and corporate governance structures on performance of Kenyan state corporations. The objectives had corresponding hypotheses which were stated and tested at 95 percent confidence level. Through a cross-sectional descriptive survey, data was obtained using a semi-structured questionnaire. The questionnaire was administered through a drop and pick method to a sample of 95 Kenyan state corporations out of which 63 filled and returned the questionnaires. This was a response rate of 66.31 percent. Through multivariate and hierarchical regression analyses, findings indicate a statistically significant relationship between aggregated organizational resources and performance. However, the organizational resources could only explain 8.3 percent of performance of Kenyan state corporations. Results of the independent effect of disaggregated organizational resources indicate statistically significant effect of tangible, human and intangible resources on performance. Statistically not significant results were reported for the effect of organizational capabilities on performance. The moderating role of ownership and board structures yielded to marginal enhancement of the explanatory power (10% and 10.7% respectively), although the moderation was not statistically significant. Further, the moderating role of composite of corporate governances was found to be not statistically significant. The findings provide empirical strength to Resource Based Theory by supporting the postulation that resources possessed by an organization yields to firm performance. The study further provides a theoretical linkage of the resource based theories and corporate governance anchoring theories. The study has offered direction for day-to-day managerial practice as well as policy at both organizational and government levels. Managerial practitioners may consider strengthening resource integration, renewal as well as recombination for stellar performance. At policy level the bureaucratic inertia prevalent in the governance of Kenyan state corporations requires a relook to limit on its negative influence on the relationship between resources and performance. Out of the limitations of the study, areas for further research have been pointed out. For instance, a qualitative research with more variables than those in this study could be considered for future research