Effect of Strategic Management Practices on Growth of Small and Medium Enterprises in Kitui South Sub County

Abstract

Small and medium enterprises (SME) play a very important role in our day to day lives; they drive a countries economy, shape the world’s economy and as a result make life easier, as a matter of fact flourishing organizations show how well a developing nation is doing. The purpose of this study was to uncover the effects of strategic management Practices on growth of Small and medium enterprises in Kitui south sub county. The study assessed the effect of corporate governance, strategic planning, corporate social responsibility and innovation and technology on growth of Small and medium enterprises in Kitui south sub county. The study is grounded on agency theory, resource-based theory, stakeholder theory and innovation diffusion theory. The study adopted a descriptive research design. The target population was owners and employees of Small and medium enterprises operating in Kitui south sub county. The sample frame for the study was drawn from Small and medium enterprises operating within Kitui south which are 418 registered SME’s. From this a sample size of 83SME’s was chosen using simple random sampling technique. To facilitate the process of data collection, questionnaires which contain structured and opened ended questions, were issued to the respondents and informal interviews was also conducted so as to ensure data accuracy. The data collected was then analyzed using descriptive and inferential statistics with Statistical Package for Social science (SPSS) and Microsoft Excel as tools of analysis. The data analysis involved tables, charts, frequency distribution charts, percentages, regression analysis and standard deviations and the data was presented inform of tables and figures. The study findings revealed that, all the four elements of strategic management practices considered in the study that is; Innovation and Technology (IT), Strategic Planning (SP), Corporate Governance (CG), Corporate Social Responsibilities (CSR), explain about 47.6% of the growth of small and medium enterprises in Kitui South Sub County, as represented by the Adjusted R Square coefficient of multiple determinant = 0.476. The study further found that innovation and technology had the greatest influence on growth of SME’s in Kitui county, it iterates that corporate governance has a positive influence on and that there is a strong relationship between corporate social responsibility and growth of SME’s. Based on the results of the study, it is recommended that SME owners should consider having a well written down strategy for their SME to grow and their CSR activities to be enhanced in order to have a positive influence on the growth of the SME and business. This study recommends that further research be carried out targeting the small owner-managed companies as well as other organizations in Kenya to enable generalization of findings.