Abstract
Purpose: This study sought to establish the effect of strategic resources on performance of small and medium manufacturing enterprises. Specifically, the study sought to identify how financial resources, human resources, physical resources and intellectual capital affect performance of small and medium manufacturing enterprises in Kenya. Methodology: Positivism research philosophy was utilised. Cross-sectional descriptive survey as well as explanatory study design were used in the study. The target population for the study was 350 Kenyan SMEs in the manufacturing sector. A sample of 183 firms was selected using stratified random sampling. One respondent from each firm was selected being the managing director. Data was collected using a semi-structured questionnaire. Diagnostic tests for multicollinearity and normality were conducted before data analysis. The research questionnaire was tested for content validity and reliability after. Data was analysed using inferential and descriptive statistics. Data collected was analysed using SPSS V23. Finding: The study found that strategic resources have a significant influence on significant influence on performance of manufacturing SMEs in Kenya. Specifically, financial, human and physical resources all positively and significantly influenced the performance of Kenyan SMEs while intellectual resources as no effect on performance. The study therefore concluded that financial resources have a positive and significant influence on performance of manufacturing SMEs in Kenya, human resource was found to be significant in predicting performance. Physical resources have a significant influence on performance of manufacturing SMEs in Kenya while intellectual capital has no significant influence on performance of manufacturing SMEs in Kenya. Study Implication: The study recommended that Management of manufacturing SMEs should ensure that there are enough financial resources to meet their daily transactions and ensure that they are able to acquire the relevant strategic resources for efficient running of their firms; have adequate, committed and well-skilled personnel with the required expertise; should invest significantly in physical resources in order to maximise the performance of these firms; carry our cost benefit analysis before committing their resources to protect their intellectual capital in form of patents. Value of the Study: The study showcases the influence of strategic resources on performance of manufacturing SMEs in Kenya.
Highlights
Overtime, the business environment in which firms operate has significantly changed
To investigate the influence of intellectual capital on performance of small and medium manufacturing enterprises in Kenya; Research Hypotheses The study was guided by the following hypotheses; H01 Financial resources have no significant influence on performance of small and medium manufacturing enterprises in Kenya
4.3 Regression Analysis Results In order to determine the extent to which strategic resources effected the performance of manufacturing SMEs in Kenya, multiple regression analysis was initially conducted on all independent variables
Summary
The business environment in which firms operate has significantly changed. According to Ahmad and Schroeder (2011), changes in the business environment have been observed in the 21st century due to factors such as globalisation, technological growth and changes in customers’ wants and preferences. Organisations strategic resources include all financial, physical, human, intellectual, and other form of assets used by the firm to competitively create, produce, and offer products or services to its clients (Barney, 1991). Physical resources include plant and machinery, manufacturing equipment and company buildings. Zarutskie (2010) opined that physical resources include machines, fixtures and fittings, furniture and materials that provide essential service in the process of manufacturing. Physical resources are among the most significant resources of the organization (Barney, 2014). Human resources include all individuals’ experience, expertise, judgement, risk-taking propensity and wisdom (Sirmon, Hitt, Ireland & Gilbert, 2011)
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