Influence Of Strategy-structure Alignment On Financial Performance Of The Top 100 Small And Medium Entreprises in Kenya

Abstract

Small and Medium Enterprises (SMEs) are businesses in both formal and informal sector employing 1-50 workers. SMEs are very vital to economic growth and development in most countries, developing and developed ones alike. They are also great contributors of employment worldwide. The study was guided by the research objectives: to establish the strategy-structure alignment in the top 100 small and Medium Enterprises in Kenya and to establish the influence of strategy-structure alignment on financial performance of the top 100 SMEs in Kenya.A descriptive survey study was conducted to gain empirical data to help fill the existing gap. The study consisted of 100 Top small and medium sized firms in Kenya. Data was collected through structured questionnaires. Data obtained were edited, coded and analysed using descriptive statistics in the form of frequency, percentages, mean and standard deviation with the aid of statistical package for social sciences (SPSS) version 20 computer software. The inferential relationship was imputed using the Pearson’s regression analysis. The findings showed that strategy-structure alignment among the top 100 SMEs in Kenya was one major factor that determined the firms’ success. Majority of the firms were found to have put adequate measures in place to ensure that the strategies in force is clearly and seamlessly aligned to the structures, and that strategy followed structure; but also structure was flexible enough to follow strategy. This alignment qualified all the studied firms to make it to the top 100.While the study featured on the seven possible changes in an environment, the concept of performance for any business firm can be linked to very many other factors not included in this study. It is recommended that the management of top 100 SMEs continually enhance this alignment to realize further success. Based on the strength of the relationship, the management of the SMEs will have to set up clear policies on the same and communicate to the all the stakeholders on what it entail, what is expected, the potential benefits and challenges