Moderating Effect of External Operating Environment on the Relationship Between Corporate Strategies and Performance of Manufacturing Firms in Nairobi City County, Kenya
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Date
2019
Authors
Wanjiru, Alexander Irungu
Muathe, Stephen M. A.
Kinyua-Njuguna, Jane W.
Journal Title
Journal ISSN
Volume Title
Publisher
IISTE
Abstract
Theoretical propositions in strategic management show that the external operating environment of a firm
influences the relationship between other organizational factors and performance. However, most of the arguments
have been directed at firms that exist in the context of developed economies, with little attention to firms in
developing economies such as the ones in Africa. This paper examines the moderating effect of external operating
environment on the relationship between corporate strategies and performance of manufacturing firms in Nairobi
City County, Kenya; which is a developing economy within Sub-Saharan Africa. The authors adopted indicators
of competitive position, consumer behaviour and credit accessibility to measure external operating
environment.Multistage probability sampling technique was used to select study sample out of a target population
of 373 firms located in Nairobi City County where 80% of the country’s manufacturing firms are situated. The
study collected primary data using a semi-structured questionnaire from 148 firms. The data was analysed using
descriptive and inferential statistics for quantitative data and content analysis to analyze qualitative data. The study
findings indicate that external operating environment has a moderating effect on the relationship between corporate
strategies and firm performance. Based on this, the study recommends development of policies and legislative
framework to regulate manufacturing sector’s competition practices, review of fiscal and monetary policies, and
customer awareness programs to address consumer perceptions and attitude towards firms’ products
Description
Research Article