Knowledge Management Strategy and Performance Of Small and Medium Enterprises in Meru County, Kenya

Abstract

Small and Medium Enterprises (SMEs) make up the biggest chunk of any country’s economic block with its capacity to gainfully engage the highest number of workforce. Effective and efficient performance of the economic sectors is critical to economic growth. Sadly, though a lot of resources have been pumped to the sector by the Kenyan government, much is yet to be attained. The sector has been experiencing failure for the last decade. The study looked at how knowledge management strategies influence or affect the output of SMEs with specific emphasis on Meru county. The research in particular examined the influence of the four components of Knowledge Management (KM); creation, acquisition, sharing and application of knowledge on the performance of SMEs in Meru County. In support of the study are the Resource Based View (RBV), Organisation Learning (OL) and the Knowledge Based View (KBV) models. The research employed a descriptive survey technique. The study’s target population was 500 SMEs in Meru County. Using stratified random sampling for representation, a sample of 150 SMEs taking into consideration different sections of the economy was selected. The SMEs in Meru County constituted the unit of analysis while the managers, proprietors and senior staff constituted the unit of observation. The researcher intended to utilise questionnaires to collect primary data. The data collection instruments were tested for construct, content and face validity. Cronbach Alpha Coefficient was utilised as a test for reliability and was crucial in testing the internal consistencies of the data collection instruments. Descriptive and inferential data was analysed. Summary measures of the sample which included frequency distribution tables, percentages, standard deviations and mean was generated from the descriptive statistics. On the other hand, multivariate analysis and inferences made at 95% confidence level included the inferential statistics. A mix of figures and Tables were used to present the quantitative data. Qualitative data after analysis was presented with the use of themes and summary paragraphs as prose. Owners of SMEs will find the study’s results more effective towards enhancing their entity performance. The study’s outcomes will enable the SME owners efficiently make viable decisions on knowledge management to enhance firm performance. In addition, academicians, researchers and lay readers with an interest in knowledge management will find the study useful. From the study findings, the SMEs in Meru County embraced knowledge management strategies and practises to a moderate extent. The study concludes that the knowledge management strategies which include knowledge creation, acquisition, sharing and application had a significant positive effect on the performance of SMEs in Meru County. From the study findings, it can be concluded that there is a strong relationship between the study variables as shown by a correlation coefficient of 0.781. The study further concludes that the SMEs have enhanced knowledge creation, sharing, acquisition and application through use of capacity development, mentorship programs, modern technology and consultations. It is a recommendation of the study that the SMEs should embrace the trainings and microfinance services offered by MFIs and other financial sector players to enhance their capacity.