Influence of Knowledge Management Strategy on the Financial Performance of Small and Medium Enterprises in Wajir County, Kenya
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Date
2017-05
Authors
Abdille, Abdirahman Noor
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The general objective of this study was to investigate the influence of knowledge management
strategy on the financial performance of small and medium enterprises in Wajir County.
Specifically, the study sought to: establish the influence knowledge creation on the financial
performance of small and medium enterprises in Wajir County, determine the influence
knowledge acquisition on the financial performance of small and medium enterprises in Wajir
County, assess the influence of knowledge sharing/transfer on the financial performance of small
and medium enterprises in Wajir County and to investigate the influence of knowledge
implementation on the financial performance of small and medium enterprises in Wajir County.
This study was guided by Resource based view theory, Organizationa learning theory and
Knowledge based theory. The target population was 532 SMEs firms in Wajir County. The
sample size was 223 SMEs covering different sectors. The study used questionnaires, containing
both open ended and closed ended questions to obtain primary data. The research instrument
were pretested with a sample of the respondents. The reliability of the instrument was estimated
using Cronbach’s Alpha coefficient. The research instrument was subjected to content validity
test and a pilot test to ensure that the questionnaire was reliable to answer the research questions.
This ensured that all facets under the study were covered. For research data analysis and
presentation, data was collected, edited and coded to ensure consistence. Descriptive statistics
including the means and standard deviations was used to analyze the data and capture the
characteristics of the variables under the study. Inferential statistics was used to test the nature
and magnitude of the relationship between dependent and independent variables. Simple
regression analysis and Pearson’s correlations were computed to determine the nature and the
strength of the relationship among the variables. The analyzed data was presented in form of
tables and charts. The conclusions of this study were informed by the findings based on each
study objective and also findings of other similar studies. Each objective was reviewed and a
conclusion provided which covers both theory and practice. The findings of the study revealed
that knowledge creation, knowledge acquisition, knowledge sharing and knowledge
implementation are positively related with financial performance of SMEs in Wajir County.
Knowledge creation, knowledge acquisition, knowledge sharing and knowledge implementation
were found to be satisfactory variables in explaining financial performance of SMEs in Wajir
County as supported by coefficient of determination of 51.2%. This shows that knowledge
creation, knowledge acquisition, knowledge sharing and knowledge implementation explained
5.2% of the financial performance of SMEs in Wajir County. The results of ANOVA showed
that the overall model was statistically significant. Further, the results imply that the independent
variables are good predictors of financial performance of SMEs in Wajir County. This was
supported by an F statistic of 49.522. Finally, the overall model indicated that knowledge
creation, knowledge acquisition, knowledge sharing and knowledge implementation are
positively and significantly related. Based on the findings the study concluded that knowledge
creation, knowledge acquisition knowledge sharing and knowledge implementation affects
performance of SMEs firms. The study recommends that SMEs in Wajir County should adopt
knowledge management strategy in running their business so that they can gain improved
financial performance, knowledge management strategies to be adopted are: knowledge sharing,
knowledge acquisition, knowledge creation and knowledge implementation. The study also
recommends that the SMEs firms should invest on highly trained employees.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment of the Requirements of the Award of the Degree of Masters in Business Administration of Kenyatta University