MODERATING EFFECT OF FIRM SIZE ON THE RELATIONSHIP BETWEEN MANAGEMENT PARTICIPATION AND FIRM PERFORMANCE

Mohamud Jama Ali, Elegwa Mukulu, John M Kihoro, Joyce D Nzulwa

Abstract


The study aimed to determine the effect of management participation on the performance of manufacturing   firms in a developing country context. The study used descriptive survey approach.  A structured and semi structured questionnaire was administered to 176 manufacturing firms comprising   twelve sub sectors firms in Nairobi and surrounding areas. Out  of  which , 111  usable  questionnaires were  returned,  giving  a response  rate  of  63%  which  is  adequate  for  analysis.  While, Pearson’s product moment correlation coefficient to indicate direction of relationship between the independent, dependent and moderator variables, multiple regression analysis,  was used to explain the nature of relationship between the variables. F-statistic was also used to decide the validity of the model while R-squared was used to help determine the model goodness-of -fit. The findings revealed that performance of manufacturing firms was  significantly related  to  the  nature   and  extent  of  management  participation in  strategic  planning. The study thus  concluded  that management  participation  in strategic  planning  had  significant  effect  on  both  the  financial  and  non- financial  performance  indicators  of    the  manufacturing firms.  Hence  management participation in strategic planning  is  a  significant  factor  among  firm  level  practices  that  enhance overall  firm  performance.   The  study  also  concluded that, while   firm size  is  a predictor in   management  participation and  firm  performance relationship,  it  is  not  moderator  in  the  relationship  between  management  participation  and  firm  performance and  therefore  there  may be  other  moderators  not  dealt  with  in  the  study.

Full Text:

PDF

References


Abdullah, I., Umair, T., Rashid, Y., & Naeem, B. (2013). Developments on Balanced

Scorecard: A Historical Review. World Applied Sciences Journal. 21(1), 134-141.

Abbasi, A., & Malik Q.A. (2015) Firms’ Size Moderating Financial Performance in

Growing Firms: An Empirical Evidence from Pakistan International Journal of Economics and Financial Issues, 2015, 5(2), 334-339.

Al-Dubai, S.A.A, Ku Ismail, K.I., & Amran, N.A.,(2014) Family Involvement in

Ownership, Management, and Firm Performance: Moderating and Direct-Effect Models. Asian Social Science; Vol. 10, (14) 193-205

Al-Shammari, H., & Hussein, R. (2008). Strategic Planning in Emergent Market

Organizations: An Empirical Investigation, International Journal of Commerce and Management, 18(1), 47–59.

Amoako-Gyampah., & Acquah, M. (2008). Manufacturing strategy, Competitive strategy

and Firm Performance: An Empirical Study in a Developing Economy Environment. International Journal of Production Economics, 111,(2) 575-592..

Acquaah, M, &Agyapong, A. (2015) The Relationship between Competitive

Strategy and Firm Performance in Micro and Small Businesses in Ghana: The Moderating Role of Managerial and Marketing Capabilities, Africa Journal of Management, 1(2) 172-193.

Anderson, K.& McAdam, R. (2004) A critique of benchmarking and performance

measurement: lead or lag?, Benchmarking: An International Journal 11(5),465-83.

Aosa, E. (2011). Strategic Management within Kenya Firms . DBA Africa management

review 1 (1),25-36.

Arasa, R., & K'Obonyo, P. (2012). The Relationship between Strategic Planning

and Firm Performance. International Journal of Humanities and Social Science, 2(22), 201-213.

Awino, Z.B., Muturi, J. M., & Oeba, L.K. (2013). Strategic Planning, Planning

Outcomes and Organizational Performance – An Empirical Study of Commercial Banks in Kenya. Research Journal in Organizational Psychology and Educational Studies, 1(5), 266-271.

Balogun, J., & Johnson, G. (2004). Organizational restructuring and middle manager sense

making www.zotero.org/groups/strategy_as_practice/items/SB2VT7JK

retrieved on 08/06/2014 at 12.00 pm

N. Bloom and J. Van Reenen (2010), Why do management practices differ across firms and

countries?, Journal of Economic Perspectives, 24, (1), 203-224.

Bourne, M. (2008). Performance measurement: learning from the past and projecting the

Future , Measuring Business Excellence, 12 ,(4), 67 – 72

Bryson, J.M. (2004) Strategic Planning for Public and Nonprofit Organizations: A

Guide to Strengthening and Sustaining Organizational Achievement, 3rd Edition. San Francisco, CA: Jossey-Bass

www.ajbms.org

Dimba, B., &K’Obonyo, P. (2009). The Effect of Strategic Human Resource Management

Practices on Performance of Manufacturing Multinational Companies in Kenya: Moderating Role of Employee Cultural Orientations and Mediating Role of Employee Motivation. Proceedings of the International Conference on Human Capital Management in University of Nairobi, July, 22 – 24.

Elbanna, S. & Naguib, R. (2009). How much does performance matter in strategic

decision making, International Journal of Productivity and Performance Management, 58(5),437-459

Elbanna, S. (2009). Determinants of strategic planning effectiveness: extension of

earlier Work, Journal of Strategy and Management, 2 (2), 175 – 187

Freeman, E.B. (1989). Effectiveness of strategic planning: a multidimensional view.

Academy of Management Best Papers Proceedings, Washington DC, 12-16.

Bourne, M., Kennerley, M. and Franco-Santos, M. (2005), Managing Through

Measures: a Study of Impact on Performance, Journal of Manufacturing Technology Management, 16,(4), 373-395.

Friebel.G., & SchweigerH., (2012) Management quality, firm performance and market

pressure in Russia. European Bank of Reconstruction and Development , Working Paper No. 144

Haron, M,. and ArulChellakumar, J. A. (2012). Efficiency Performance of Manufacturing

Companies in Kenya: Evaluation and Policies International Journal of Management and Business Research., 2 (3), 233- 242.

Huysentruyt, M., Stephan, U.,& Vujić, S.(2015) CEO’s Values, Management Style and

Firm Performance: Evidence from Social Enterprise in Europe March, http://www.seforis.eu/en/conference/berkeley-paris-organizational-economics-workshop

Ikävalko, H. & Aaltonen, P. (2001). Middle Managers’ Role in Strategy

Implementation – Middle Managers View. Ph.D Thesis. Helsinki University of Technology Industrial Engineering and Management. Helsinki. Finland.

Ittner, C. D., & D.F.Larcker (1998a). Are nonfinancial measures leading indicators of

financial performance? An analysis of customer satisfaction. Journal of Accounting

Research, 36 (Supplement), 1-35.

Ittner, C and Larcker, D. (2003). Coming Up Short on Nonfinancial Performance

Measurement, Harvard Business Review, 81(11), 88-96.

Kagioglou, M., Cooper, R.,& Aouad, G. (2001). Performance management in

construction: a conceptual framework. Construction Management & Economics, 19(1), 85-95.

KAM (2013). Kenya Manufacturers and Exporters Directory 2013. Nairobi: Ad-Afric

Kaplan, S.R. (2001). Strategic Performance Measurement and Management in Non-Profit

Organizations. Non-Profit Management and Leadership, 11(3), 353-370.

Kaplan, R. Norton, D., &Barrows, E. (2008). Developing the Strategy: Vision, Values

Gaps, and Analysis. Boston: Harvard Business School Press.

Kargar, J., & Parnell, J. A. (1996). Strategic planning emphasis and planning

satisfaction in small firms: an empirical investigation. Journal of Business Strategies, 13(1), 42-64.

Ketokivi, M., & Castaner, X. (2004) . Strategic planning as an integrative device.

Administrative Science Quarterly, 49(3), 337-65.

Ketokivi, M., Schroeder, R., & Turkulainen, V. (2006). Organizational

Differentiation and Integration: A New Look at an Old Theory Working Paper No 2006/2 Espoo, Finland.

Kiganane, L.N.(2013) The Perceived effect of Mobile Phones Services on performance

of manufacturing firms in Thika Town. Unpublished Ph.D thesis, Juja: .JKUAT.

McLarney, C.(2001) Strategic Planning-Effectiveness–Environment Linkage: A Case

Study. Management Decision, 39, (10), 809-817.

Namada, J.M., Aosa, E., Awino, Z., &Wainaina, G. (2014). Management Participation and

Firm Performance. American Journal of Industrial and Business Management, 4, 113-122.

Gavrea, C., Ilieş, L., Stegerean, R., (2011) Determinants of Organizational Performance:

The Case of Romania Management & Marketing Challenges for the Knowledge Society (2011) 6, (2), 285-300.

Ocasio, W., & Joseph, J., (2008) Rise and Fall - or Transformation? The Evolution

of Strategic Planning at the General Electric Company, 1940 – 2006. Long Range Planning , 41, 248-272. http://www.elsevier.com/locate/lrp

Ogbeide, G.A. & Harrington, J.R. (2011). The Relationship among Participative

Management Styles, Strategy Implementation and Performance in Service Industry. International Journal of Hospitality Management, 23(6), 719-738.

Pekuri, A., Haapasalo, H., & Herrala , M.,(2011) Productivity and Performance

Management – Managerial Practices in the Construction Industry : International Journal of Performance Measurement, Vol. 1, 39-58.

Pervan, M. & Višić, J.(2012) Influence of Firm Size on its Business Success. Croatian

Operational Research Review (CRORR), 3, 213-223.

Philip, P. A. &Moutinho, L. (2000) Strategic Planning Index: A Tool for Measuring

Planning Effectiveness. Journal of Travel Research, 38(4),369-379. http://jtr.sagepub.com/cgi/content/refs/38/4/369

Phillip, P. A & Moutinho. L . (2002). The impact of strategic planning on the

competitiveness, , performance and effectiveness of bank branches : A neutral networks analysis. International Journal of Bank Marketing, 20(3),102-110

Ramanujam, V., & Venkatraman, N. (1987). Planning system characteristics and planning

effectiveness. Strategic Management Journal, 8(5), 453-468.

Ridwan, M.S., & Marti, J. (2012). The Study on

Strategic Planning and Organizational

Performance in the Regional Government Owned Banks in Indonesia. International Journal of Humanities and Applied Sciences (IJHAS),1(3),98-102.

Ruekert, R.W. & Walker, O.C. (1987)

Interactions Between Marketing and R&D

Departments in Implementing Different Business Strategies. Strategic Management Journal, 8, (3), 233–248.

Streib, G., & Poister, T. H. (2002). The use of strategic planning in municipal governments

in the Municipal Year Book. Washington, DC: International City/County Management Association, 18—25.

Suklev, B., & Debarliev, S. (2012). Strategic planning effectiveness; Comparative

analysis of the Macedonian context. Economic and Business Review. 14( 1),63–93.

Tzempelikos, N. (2015) Top management commitment and involvement and their

link to key account management effectiveness, Journal of Business & Industrial Marketing, 30,(1),32 - 44 Permanent link to this document: http://dx.doi.org/10.1108/JBIM-12-2012-0238

Waiganjo. E.W. (2013). Effects of Competitive Strategies on the relationship between HRM and firm performance. Unpublished Ph.D Thesis , JKUAT, Juja.

Waiganjo, E.W., Mukulu, E., & Kahiri, J. (2012).

Relationship between Strategic Human Resource Management and Firm Performance of Kenya’s Corporate Organizations International Journal of Humanities and Social Science, 2(10), 62-70.

World Bank. (2014) Kenya economic update :

anchoring high growth-can manufacturing contribute more?. Kenya Economic Update; Edition No. 11. Washington, DC ; World Bank Group.




DOI: http://dx.doi.org/10.61426/sjbcm.v3i3.292

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

PAST ISSUES:
20242023202220212020201920182017201620152014
Vol 11, No 2 [2024]Vol 10, No 4 [2023]Vol 9, No 4 [2022]Vol 8, No 4 [2021]Vol 7, No 4 [2020]Vol 6, No 4 [2019]Vol 5, No 4 [2018]Vol 4, No 4 [2017]Vol 3, No 4 [2016]Vol 2, No 2 [2015]Vol 1, No 2 [2014]
 Vol 11, No 1 [2024] Vol 10, No 3 [2023] Vol 9, No 3 [2022]Vol 8, No 3 [2021]Vol 7, No 3 [2020]Vol 6, No 3 [2019]Vol 5, No 3 [2019]Vol 4, No 3 [2017]Vol 3, No 3 [2016]Vol 2, No 1 [2015]Vol 1, No 1 [2014]
  Vol 10, No 2 [2023] Vol 9, No 2 [2022]Vol 8, No 2 [2021]Vol 7, No 2 [2020]Vol 6, No 2 [2019]Vol 5, No 2 [2018]Vol 4, No 2 [2017]Vol 3, No 2 [2016]  
  Vol 10, No 1 [2023] Vol 9, No 1 [2022]  Vol 8, No 1 [2021]Vol 7, No 1 [2020]Vol 6, No 1 [2019]Vol 5, No 1 [2018]Vol 4, No 1 [2017]Vol 3, No 1 [2016]   


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.