INFLUENCE OF STRUCTURAL HOLES ON FINANCIAL PERFORMANCE OF MEDIUM SIZED ENTERPRISES KENYA
Abstract
The purpose of this study was to examine the influence of structural holes on financial performance of medium sized enterprises in Kenya. This is because the Medium sized enterprises play an important economic and social role in many countries. If these firms want to remain competitive and sustainable there is need to understand the influence of entrepreneurial networks on financial performance. A descriptive survey design was adopted. The target population was drawn from 51 medium sized enterprises in Kenya which participated in the top 100 mid-sized ranking for the period 2011 to 2015 by KPMG. Multi stage, systematic and purposive sampling was used to select a sample of 255 which has the data needed in the study. Primary data was collected using questionnaires. Statistical Package for Social Sciences (SPSS) was used in the analysis of data. The study findings indicated that structural holes were a key driver of financial performance of medium sized enterprises in Kenya. This was evidenced by the responses from the respondents who agreed that members of their organization belonged to professional network, by being part of the professional network has improved the organization’s overall performance, their organization used social media personalities/ brand ambassadors to sell their brands to the general public and the internal policies and guidelines of their organization were effectively made clear to all employees. The study concluded that an individual can be constrained in a network if they have too few contacts; has contacts closely connected with one another; or shares information indirectly via a central contact therefore companies that strategically use influencers to bridge structural holes may be able to create brand equity more efficiently. The findings encourage managers to engage in active networking with different actors within and outside of existing networks and especially with those who are relevant to the business in which a manager and a firm operate. The results strongly support the necessity for managers to create new active co-operational relationships.
Key Words: Structural Holes, Financial Performance, Medium Sized Enterprises, Entrepreneurial Networks
Full Text:
PDFReferences
Ayyagari M., Demirguc-Kunt A., & Maksimovic V.(2011). Small vs. young firms across the world : contribution to employment, job creation, and growth. Policy Research Working Paper 5631. The World Bank Development Research Group.
Black, S., MorleyS, & Williiams, A, (2002). A confirmatory factor analysis. Elsevier Pain. 99(2), 289-298.
Booth, N., & Matic, J. A. (2011). Mapping and leveraging influencers in social media to shape corporate brand perceptions. Corporate Communications: An International Journal, 16(3), 184-191.
Brown P.S and Hoyer W.D (1990).Effects of Brand Awareness on Choice for a Common, Repeat-Purchase Product. Journal of Consumer Research 17 (2), 141-148
Burns, A., & Groove, B. (2003). The Practice of Nursing Research: Conduct, critique & utilization.(4th ed.) Philadelphia: W. B. Saunders Company.
Coleman, J.S. (1990). Foundations of social theory. Cambridge, MA: Harvard University Press.
Donckels, R., & Lambrecht, J. (1997). The network position of small businesses: An explanatory model. Journal of Small Business Management 35 (2), 13–25.
Fatima, Ali & Arif (2012).Network classification on the basis of functions they perform and its relationship with internationalization process of SMEs in developing countries. Australian Journal of business and Management Research 1(8)35-53.
Fischer,C.S.,( 1982) To Dwell among Friends: Personal Networks in Town and City, published by University of Chicago Press. Retrieved from https://www.press.uchicago.edu/ucp/books/book/chicago/T/bo5962418.html
Gonzales, N. (2005). Popularity versus respect: school structure, peer groups, and Latino academic achievement. International Journal of Qualitative Studies in Education, 18 (5), 625-642.
Katambo,H.and Okatch ,B.,(2012)Effect of Networking on Performance of Small and Medium Sized Audit Firms in Nairobi. Retrieved from on 10th January 2018 from http://41.89.49.13:8080/xmlui/bitstream/handle/123456789/1193/
Kilduff,M. & Tsai, W. (2003). Social networks and organizations. Thousand Oaks, CA: Sage Publications.
Kothari, C. (2014). Research Methodology: Methods & Techniques. (2nd ed.) New Delhi, New Age International Publishers.
KPMG (2013) Kenya Top 100 2013/14 Winner announced. Retrieved on 10th April, 2016 http://www.kpmg.com/eastafrica/en/issuesandinsights/articlespublications/pages/kenyatop100201314winnerannounced.aspx.
Krackhardt, D. (1999). The ties that torture: Simmelian tie analysis in organizations. Research in the sociology of organizations 16 (1), 183–210).
Luo ,Y.,( 2003) Industrial dynamics and managerial networking in an emerging market: the case of China. Strategic Management Journal 24(13) 1315-1327
Maina.J.N,Marwa.S.M ,Waiguchu.M and Riko G. K (2016) Network Dimensions and Firm Performance among Manufacturing SMEs: Evidence from Kenya. International Journal of Economics, Commerce and Management.U.K 1(3) 738-751.
Marsden, P.V., (1987). Core discussion networks of Americans. American Sociological Review 52(1 ),122–131.
Mulatu, F. (2014). Networking and business performance of medium sized enterprises in Addis Ababa. Retrieved on 23rd April , 2017 from http://etd.aau.edu.et/bitstream.
Mugenda, O.M., & Mugenda A. G. (2003). Quantitative and Qualitative Approaches (2nd ed.). Nairobi: Acts Press.
Mungania, A. K., Gakure R.W., & Karanja, K (2017). Effects of Outsourcing as a Business Linkage on the Growth of Dairy Enterprises: A Survey of Dairy Enterprises in Mount Kenya Region. International Journal of Economics, Commerce and Management.5 (5) 445-473.
Mwirigi, F. M. (2012). Role of Supply Chain Relationships in the Growth of Small Firms in Kenya. PhD published thesis retrieved on 5th May, 2016 from http://ir.jkuat.ac.ke/bitstream
Ntiamoah, E. B, Li, D. & Kwamega M. (2016). Impact of Government and Other Institutions’ Support on Performance of Small and Medium Enterprises in the Agribusiness Sector in Ghana. American Journal of Industrial and Business Management. Retrieved on 9th February, 2017 from http://www.scirp.org/journal/ajibm.
Ngugi,P.K. (2012) Challenges hindering sustainability of small and medium enterprises after exit of the founders in Kenya .International Journal of Business and Social Research.2(-6),109-124.
Njuguna, J, I. (2009). Strategic Positioning For Sustainable Competitive Advantage: of Kenya. KCA Journal of Business Management: 2 (1), 32-43.Retrieved on 14th January,2017, from http://www.ajol.info/index.php/kjbm/article/view/44409.
Obura,J.M., Abeko .E.O, and Obere. A, (2010 ) Networks, Micro Small Enterprises (mse’s) and Performance: The Case of Kenya Journal of Developmental EntrepreneurshipÓWorld Scientific Publishing Company. Retrieved fromhttp://41.89.101.166:8080/xmlui/bitstream/handle/123456789/2233/bere.pdf
Oh, H., Chung, M.-H. & Labianca, G. (2004), “Group social capital and group effectiveness: the role of informal socializing ties”,Academy of Management Journal, 47 ( 6 ), 860-875.
Peprah.J (2010 ) Sustainable entrepreneurship: The role of networking .Retrieved on 3rd February 2017 from https://www.uclan.ac.uk/research/explore/.../igfd_sustainable_entrepreneurship
Rahn, M. (2010). Factor analysis: A short introduction on dropping unimportant variables from your analysis. The Analysis Factor: Making Statistics Make Sense Relations, 7 (23),39-58.
Republic of Kenya. (2011). Economic Survey. Nairobi: Government Printer.
Sekaran, U. (2003). Reseacrh Methods for Business: A Skill Building Approach, (5thed.), New Delhi: John Wiley & Sons.
Setyawati, S., Mohd, S., Mohd, N.,& Saud, M.(2011). Effects of learning, networking and innovation adoption on successful entrepreneurs in Central Java, Indonesia. International Journal of Business and Social Science, 2 (5),149-156.
Shi, Z., Huaxia, R. and Andrew, B. W. (2014). Content Sharing in a Social Broadcasting Environment: Evidence from Twitter, MIS Quarterly, 38 (1), 123-142.
Sherif, M. (1961). Group Conflict and Cooperation: Their Social Psychology. London: Routledge and Kegan Paul.
Stam W. (2010). Industry event participation and network brokerage among entrepreneurial ventures. Journal of Management Studies, 47(4), 625-653.
Subramani, M. R., & Rajagopalan, B. (2003). Knowledge-sharing and influence in online social networks via viral marketing. Communications of the ACM, 46(12), 300-307.
Teng, C. (2007). Corporate entrepreneurship activities through strategic alliances: a resource based approach toward competitive advantages. Journal of Management Studies, 44(1),119-142.
Thrikawala, S. (2011). Impact of Strategic Networks for the Success of SMEs in Sri Lanka (May 1, 2011). World Journal of Social Sciences,1(2),108 -119, Retrieved on 15th January ,2015 from http://ssrn.com/abstract=2333280.
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.
Zaheer, A., & Bell, G. G. (2005). Benefiting from network position: firm capabilities, structural holes, and performance. Strategic Management Journal, 26(9), 809-825.
Zikmund, W. G. (2010). Business Research Methods (7th.ed.).Cincinnati, OH: Thompson South Western.
DOI: http://dx.doi.org/10.61426/sjbcm.v5i4.871
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.