Influence Of Functional Level Strategies On Performance Of Manufacturing Firms In Kenya

Abstract

Functional level strategies in manufacturing firms are specific plans and actions designed to improve the performance of various functional areas within a manufacturing organization. Functional level strategies are essential in manufacturing firms as they provide a clear direction and focus for the firms. This study sought to determine the effect of functional level strategies on performance of manufacturing firms in Kenya. The specific objectives were to examine the influence of human resource functional level strategy, finance functional level strategy marketing functional level strategy, operations functional level strategy on performance of manufacturing firms in Kenya. The theories informing the study are Porter Generic Theory, Management Theory and Resource-Based View Theory. This study was conducted in Kenya and particularly Nairobi region which has the highest concentration of large manufacturing firms. The population was the 50 large manufacturing firms in Nairobi County. A General manager, HR manager and Finance manager was selected from each of the 50 manufacturing firm and thus a sample size of 150 respondents. Primary data was collected using questionnaire. The data was analyzed using descriptive and inferential statistics. The diagnostics tests included normality test, multicollinearity and heteroscedasticity. The analysis revealed that the human resource functional Level strategy had a positive relationship with performance, with a coefficient of 0.257 (Beta = 0.273) and a significant t-value of 5.742. Similarly, the finance functional Level strategy showed a positive association, with a coefficient of 0.269 (Beta = 0.264) and a high t-value of 6.621. The Marketing functional Level strategy exhibited a strong positive relationship, with a coefficient of 0.392 (Beta = 0.416) and a substantial t-value of 9.309. Lastly, the Operations functional Level strategy contributed positively, with a coefficient of 0.112 (Beta = 0.115) and a statistically significant t value of 3.099. The study concludes that well-defined strategies in human resources, finance, marketing, and operations significantly influence the performance of manufacturing firms in Kenya. Manufacturing firms in Kenya are advised to invest in strategic human resource management practices, aligning with organizational goals and fostering a conducive work environment. Similarly, prioritizing effective financial management, including comprehensive planning, monitoring, and investment alignment, can lead to improved outcomes. Developing and implementing targeted marketing strategies, informed by thorough market research and continuous adaptation, is recommended, as is optimizing operational processes through technology, innovation, and collaboration for enhanced performance.