Influence of Relational Capability on the Performance of Small and Medium-Sized Manufacturing Enterprises in Nairobi City County, Kenya
DOI:
https://doi.org/10.70619/vol5iss1pp1-18Keywords:
Small and medium-sized manufacturing, enterprises, Relational Capability, PerformanceAbstract
Small and medium-sized manufacturing enterprises (SMEs) play a pivotal role in driving economic growth and fulfilling developmental goals. This study aims to investigate the impact of relational capability on the performance of small manufacturing enterprises within Nairobi City County. Additionally, it explores the moderating role of environmental dynamism on the relationship between technological entrepreneurship and the performance of SMEs in this region of Kenya. The target population for this research comprised 425 SMEs registered with the Kenya Association of Manufacturers in Nairobi City County as of December 31, 2022. A sample size of 135 SMEs was determined using the Nasiurma (2000) model, with a focus on business owners and managers. To ensure representative sampling, the study utilized a proportionate stratified random sampling technique. A pilot study was conducted to evaluate the research instrument's reliability and validity; internal consistency was measured using Cronbach’s coefficient alpha, and expert consultations enhanced the questionnaire's content and face validity. Data analysis and interpretation were carried out using the Statistical Package for Social Sciences (SPSS) version 26. The analysis included multiple linear regression to assess the relationship between independent and dependent variables, alongside an F-test to evaluate the overall significance of the research model and its components. The findings indicated a significant relationship between relational capability (X4) and the performance of SMEs, supported by regression model results (F (1, 118) = 84.885, p-value = 0.000), which confirmed that relational capability is a valid predictor within the model. Consequently, this study concludes that relational capability substantially influences the performance of small and medium-sized manufacturing enterprises in Nairobi City County, Kenya.In light of these findings, the research recommends that the Micro and Small Enterprises Authority, as the regulatory body for SMEs, develop a legal and regulatory framework that recognizes and supports these enterprises. This framework should facilitate easier licensing, supervision, and the adoption of standardized processes and procedures drawn from sector-wide guidelines. Furthermore, preferential treatment should be afforded to SMEs to promote their growth and enable their transition to more established manufacturing entities, a mandate that aligns with the objectives of the Kenya Association of Manufacturers Lastly, it is recommended that SMEs prioritize the establishment of robust customer relationships through effective customer relationship management to ensure long-term business
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