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.

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

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