Effect of Corporate Strategies on the Performance of Manufacturing Firms in Nairobi City County, Kenya

Abstract

Performance is an important factor in firm strategic analysis since it helps in measurement of the competitive position of an organization within industry. Most theoretical literature in strategic management describes performance as outcome of firm’s strategic objectives, which are developed and executed at the corporate level of management. The acquisition and utilization of strategic resources has been shown in various empirical studies as determinants to maximise performance. However, extant literature on the role of corporate strategies as driver in the utilization of these firm strategic resources towards superior performance has not been adequately examined. This is so especially in the developing economies, notably sub-Saharan Africa. This paper examines the effect of corporate strategies on performance of manufacturing firms in Nairobi City County, Kenya. The corporate strategies under study were market development, product development and diversification. The authors empirically examine the relationship using survey data from 148 manufacturing firms in Nairobi City County, Kenya. The study findings indicate that corporate strategies have a positive and significant impact on a firm’s performance. This study has important implications for managers and policy makers of manufacturing firms on the need of developing and executing corporate strategies within their firms to enhance performance.