THE INFLUENCE OF FIRM-LEVEL FACTORS ON THE RELATIONSHIP BETWEEN STRATEGIC PLANNING AND PERFORMANCE OF ORGANIZATIONS

Abstract

This study was based on conceptualized relationship between strategic planning (SP),firm-level factors and performance. Some researchers have argued that strategicplanning influences performance positively while others contend that the influence isnegative. Therefore, the past empirical studies have produced many contradictoryfindings and there is a need for further studies to fix this empirical conundrum. Otherresearchers have posited that the central tenet in strategic management is that a matchbetween firm resources and capabilities are critical to performance, and that astrategist’s job is to find or create this match. Hence, there was need for more researchon the moderating influence of firm-level factors on the relationship between strategicplanning and performance. These variables were contextualized in the manufacturingfirms in Kenya. The current study had one objective, to establish the influence of firmlevelfactors on the relationship between strategic planning and performance ofmanufacturing firms in Kenya. A corresponding hypothesis, firm-level factors have amoderated influence on the relationship between strategic planning and performance ofmanufacturing firms in Kenya, was formulated and tested at 95 percent confidence level.Through a cross-sectional descriptive survey, data was obtained using a structuredquestionnaire from 72 manufacturing firms representing 52.17 percent response rate.Data obtained were analyzed using both descriptive and inferential statistics.Hypothesis was tested using both simple and multiple regression analysis. StatisticalPackage for Social Sciences (SPSS) was used to analyze the data. The findingsestablished that firm-level factors had a significant moderating influence on therelationship between strategic planning and performance. The independent influencesof the firm-level factors’ indicators used were all significant. The study suggested thatthe managers of the manufacturing firms in Kenya need to synchronize the strategicplanning and firm-level factors for superior performance. Current study’s findingshave theory, policy, managerial practice and methodological implications. The findingssupport resource based view theory. On policy and managerial practice, manufacturingfirms’ management should be motivated to attract valuable resources anto attract valuable resources and capabilitieswhich are valuable, rare, not easily imitated, and cannot be substituted as they create sustainable competitive advantage hence propel organizations to better performance.The use of regression method in analysis made it very easy to test the hypothesis which  was developed to attain research objective

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