MEDIATING EFFECT OF STRATEGIC MANAGEMENT PRACTICES ON THE RELATIONSHIP BETWEEN CORPORATE GOVERNANCE PRINCIPLES AND PERFORMANCE OF LARGE MANUFACTURING FIRMS IN KENYA
Lucy Kiroga, Prof. Washington Okeyo, Prof. Emmanuel Awuor
School of Management & Leadership, Management University of Africa, P.O Box 29677-00100, Nairobi, Kenya
Abstract
The contribution of Kenya's manufacturing sector to GDP has been constant at 10% on average for more than ten years, according to the KNBS Report of 2015. Manufacturing sectors have continued to face myriad of challenges ranging from disclosure and transparency, corporate transactions and financial performance monitoring. The objective of the study was to establish the mediating effect of strategic management practices on the relationship between corporate governance principles and performance of large manufacturing firms in Kenya.. The study was anchored on the Resource Dependence Theory, Agency Theory and the stakeholder theory. The study target population was the large manufacturing firms. The study adopted mixed research approach. A cross-sectional survey design was adopted. The unit of observation was the top key managers in the key departments (procurement, operations and finance) of the large manufacturing firms. The correlation analysis results established there existed a strong positive significant correlation of r=0.752 and p-value<0.001 between corporate governance principles and strategic management practices and performance of large manufacturing firms in Kenya. The coefficients of corporate governance principles on performance of large manufacturing firms in Kenya when the mediator strategic management practices is controlled to be ß =0.541 and its significant p-value = 0.000 < 0.001. So the relationship between corporate governance principles and performance of large manufacturing firms in Kenya is still significant when the mediator strategic management practices is controlled. The study shows that strategic management practices is a partial mediator in the relationship between corporate governance principles on performance of large manufacturing firms in Kenya. The study recommends enhancement of strategic management development via Offer monetary rewards and assistance to manufacturing companies to encourage their leaders and managers to participate in training and development programs focused on strategic management. Promote the cooperation of academics, industry professionals, and government organizations to create and distribute information and optimal methods in strategic management.
Keywords: Corporate Governance Principles; Strategic Management Practices; Performance; Large Manufacturing Firms; Kenya
Journal Name :
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EPRA International Journal of Economics, Business and Management Studies (EBMS)
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Published on : 2024-10-15
Vol | : | 11 |
Issue | : | 10 |
Month | : | October |
Year | : | 2024 |