Influence of Operational Processes on the Performance of Manufacturing Firms: Empirical Evidence from SMEs in Kenya


  •   Victor K. Kering

  •   James M. Kilika

  •   Jane W. Njuguna


Manufacturing firms in Sub-Saharan Africa are facing both internal and external pressures from intense global competition, turbulent markets, and the increasing sophistication of manufacturing technologies which influences its performance. This increasing rate of change in the sector is compelling firms to pay attention to the operational processes. Due to this reason, the study sought to determine the effect of operational processes on the performance of manufacturing SMEs in, Kenya. The study adopted an explanatory design had a sample size of 136 firms which was drawn using proportionate stratified sampling. Primary data collection involved the use self–administered questionnaires and instrument validation was achieved through the development of constructs from previous studies, scale development, instrument pre-testing and validation. The instrument was subjected to inter-consistency test using the Cronbach's coefficient with a value ≥ 0.70 affirming that the research instrument was reliable. The results show that operational processes cumulatively explain 37% of the variations in firm performance, therefore, the study concluded that the operational processes have a significant and positive effect on firm performance. The study recommends that the management of these firms should attempt to improve on the strategy processes and contents based on models that have been applied successfully in other contextual areas.

Keywords: Manufacturing firms, operational strategy, operational processes, Small and medium enterprises (SMEs), firm performance


Adil, M. S. (2015). Strategic human resource management practices and competitive priorities of the manufacturing performance in Karachi. Global Journal of Flexible Systems Management, 16(1), 37-61.

Akgul, A. K., Gozlu, S. & Tatoglu, E. (2015). Linking operations strategy, environmental dynamism & firm performance, Kybernetes, Emerald, 44(3), 406 – 422.

Andersen, T. J. (2000). Strategic planning, autonomous actions and corporate performance. Long-range planning, 33(2), 184-200.

Amoako-Gyampah, K., & Acquaah, M. (2008). Manufacturing strategy, competitive strategy and firm performance: An empirical study in a developing economy environment. International journal of production economics, Elsevier 111(2), 575-592.

Aosa, E. (2011). Strategic management within Kenya firms. DBA Africa management review, 1(1), 25-36.

Ates, A. & EPSRC (Engineering & Physical Sciences Research Council) Fund. (2008). Strategy process in manufacturing SMEs (Small medium enterprises). PhD thesis, University of Strathclyde.

Avella, L., Fernandez, E., & Vazquez, C. J. (2001). Analysis of manufacturing strategy as an explanatory factor of competitiveness in the large Spanish industrial firm. International Journal of Production Economics, Elsevier, 72(2), 139-157.

Awwad, A., Al Khattab, A., & Anchor, J. R. (2010). Competitive priorities and competitive advantage in Jordanian manufacturing. Working Paper. Emerging Markets Research Group University of Huddersfield, Huddersfield, UK.

Barney, J. B. (2014). How marketing scholars might help address issues in resource-based theory. Journal of the Academy of Marketing Science, 42(1), 24-26.

Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management. Sage, 27(6), 625– 641.

Barlett, J. E., Kotrlik, J. W., & Higgins, C. C. (2001). Organizational research: Determining appropriate sample size in survey research. Information Technology, Learning, and Performance Journal, 19(1), 43.

Bi, R., Davison, R. M., & Smyrnios, K. X. (2015). IT and fast growth small-to-medium enterprise performance: An empirical study in Australia. Australasian Journal of Information Systems, 19, S247-S266.

Bititci, U., Ackermann, F., & Ates, A., & Davies, J., Garengo, P., Gibb, S., MacBryde, J., Mackay, D., Maguire, C., Van Der Meer, R., Shafti, F., Bourne, M. & Firat, S. U. (2011) Managerial processes: business processes that sustain performance. International Journal of Operations & Production Management, 31(8), 851 – 891

Bloom, N., Genakos, C., Sadun, R., & Van Reenen, J. (2012). Management practices across firms and countries. Academy of management perspectives, 26(1), 12-33.

Bouranta, N., & Psomas, E. (2017). A comparative analysis of competitive priorities and business performance between manufacturing and service firms. International Journal of Productivity and Performance Management. 66(7),914-931.

Boyer, K. K., & Lewis, M. W. (2002). Competitive priorities: investigating the need for trade‐offs in operations strategy. Production and operations management, 11(1), 9-20.

Buyl, T., Boone, C., & Matthyssens, P. (2011). Upper echelons research and managerial cognition. Strategic Organization, 9(3), 240-246.

Cagliano, R., Acur, N., & Boer, H. (2005). Patterns of change in manufacturing strategy configurations. International Journal of Operations & Production Management.

Cai, S., & Yang, Z. (2014). On the relationship between business environment and competitive priorities: The role of performance frontiers. International Journal of Production Economics, 151, 131-145.

Chakravarty, B. J., & Roderick, E, W. (2002). Strategy process: forming, implementing and changing strategies. Handbook of strategy and management, 182.

Chege, J., Ngui, D., & Kimuyu, P. (2014). Scoping paper on Kenyan manufacturing (No. 2014/136). WIDER Working Paper. 25.

Chi, T., Kilduff, P. P., & Gargeya, V. B. (2009). Alignment between business environment characteristics, competitive priorities, supply chain structures, and firm business performance. International Journal of productivity and performance management. Emerald. 58(7), 645-669.

Demeter, K. (2003). Manufacturing strategy & competitiveness. International Journal of Production Economics, Elsevier, 81–82; 205–213.

Demeter, K., Boer, H., Peng, D. X., Schroeder, R. G., & Shah, R. (2011). Competitive priorities, plant improvement and innovation capabilities, and operational performance. International Journal of Operations & Production Management. 31(5), 484-510.

Dinh, H. T., & Clarke, G. R. (Eds.). (2012). Performance of manufacturing firms in Africa: An empirical analysis. The World Bank.

Dinh, H. T., & Monga, C. (2013). Light manufacturing in Tanzania: A reform agenda for job creation and prosperity. The World Bank.

Dukovska-Popovska, I., & Boer, H. (2008, June). Manufacturing strategy configurations, contingencies and performance. In Proceedings from the 15th International Annual EurOMA Conference (pp. 15-18).

Fafchamps, M., & Quinn, S. (2018). Networks and manufacturing firms in Africa: Results from a randomized field experiment. The World Bank Economic Review, 32(3), 656-675.

Frohlich, M. T., & Dixon, J. R. (2001). A taxonomy of manufacturing strategies revisited. Journal of operations management, 19(5), 541-558.

González‐Benito, J., & Suárez‐González, I. (2010). A study of the role played by manufacturing strategic objectives and capabilities in understanding the relationship between Porter's generic strategies and business performance. British Journal of Management, 21(4), 1027-1043.

Government of Kenya (2012). Draft National Industrialization Policy Framework for Kenya 2012-2030. Ministry of Industrialization and Enterprise Development; Nairobi.

Government of Kenya (2018). Accessed from

Grant, R. M. (1991). The resource-based theory of competitive advantage: implications for strategy formulation. California management review, 33(3), 114-135.

Grant, N., Cadden, T., McIvor, R., & Humphreys, P., (2013). A taxonomy of manufacturing strategies in manufacturing companies in Ireland, Journal of Manufacturing Technology Management, Emerald, 24(4), 488 – 510.

Gunby, N. W. (2009). Firm performance and complementary strategy development Processes, Management Decision. Emerald, 47(5), 806 – 818.

Hayes, R. H., & Wheelwright, S. C. (1984). Restoring our competitive edge: competing through manufacturing (Vol. 8). New York: Wiley.

Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M. A., Singh, H., Teece, D. J., & Winter, S. G. (2007). Dynamic Capabilities: Understanding Strategic Change in Organization. Blackwell Publishing: Malden MA.

Hung, S. C., Hung, S. W., & Lin, M. J. J. (2015). Are alliances a panacea for SMEs? The achievement of competitive priorities and firm performance. Total Quality Management & Business Excellence, 26(1-2), 190-202.

Jagoda, K., & Kiridena, S. (2015). Operations strategy processes and performance: Insights from the contract apparel manufacturing industry. Emerald, 26(2), 261 – 279.

Jitpaiboon, T., Gu, Q., & Truong, D. (2016). Evolution of competitive priorities towards performance improvement: a meta-analysis. International Journal of Production Research, 54(24), 7400-7420.

Kathuria, R., Partovi, F. Y., & Greenhaus, J. H. (2010). Leadership practices, competitive priorities, and manufacturing group performance. International Journal of Operations & Production Management.

Koufteros, X. A., Vonderembse, M. A., & Doll, W. J. (2002). Examining the competitive capabilities of manufacturing firms. Structural equation modelling, Routledge, 9(2), 256-282.

KAM (2018). Manufacturing priority agenda 2018; sparking Kenya's industrial transformation for job creation. Accessed from

Kim, G., Shin, B., Kim, K. K., & Lee, H. G. (2011). IT capabilities, process-oriented dynamic capabilities, and firm financial performance. Journal of the association for information systems, 12(7), 1.

KNBS (2020) Economic survey 2020. Accessed from

Kerpedzhiev, G., Lehnert, M., & Röglinger, M. (2016). The future of business process management in the future of work. In Proceedings of the 24th European Conference on Information Systems. AIS, Tel Aviv.

Kiridena, S., Jagoda, K. & Lin, H. (2013). Operations strategy processes: how significant are they?. Managing on the Edge: 27th ANZAM Conference (pp. 1-19). Hobart, Australia: Australia & New Zealand Academy of Management.

Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and-development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1-11.

Löfving, M., Säfsten, K., & Winroth, M. (2014). Manufacturing strategy frameworks suitable for firms. Journal of Manufacturing Technology Management, 25(1), 7-26.

McGahan, A. M., & Porter, M. E. (2005). Comment on ‘Industry, corporate and business‐segment effects and business performance: a non‐parametric approach by Ruefli and Wiggins. Strategic Management Journal, 26(9), 873-880.

McKelvie, A., & Davidsson, P. (2009). From resource base to dynamic capabilities: an investigation of new firms. British Journal of Management, 20, S63-S80.

McKenzie, D., & Woodruff, C. (2015). Business practices in small firms in developing countries. The World Bank.

Mills, J., Platts, K., & Gregory, M. (1995). A framework for the design of manufacturing strategy processes. International Journal of Operations & Production Management, 15(4), 17-49.

Miller, J. G., & Roth, A. V. (1994). A taxonomy of manufacturing strategies. Management Science, INFORMS, 40(3), 285-304.

Narayanan, V.K., Zane, L. J., & Kemmerer, B. (2011). The Cognitive Perspective in Strategy: An Integrative Review, Journal of Management, Sage, 37(1) 305-351.

O’Regan, N., & Ghobadian, A. (2002). Formal strategic planning. Business Process Management Journal. Emerald, 8(5), 416-429.

Panagiotou, G. (2006). Managerial cognitions of competitive environments: a strategic group analysis, Management Research News, Emerald, 29(7) 439 – 456.

Penrose, E. T. (1959). The Theory of the Growth of the Firm. Oxford university press. Oxford.

Peng, D. X., Schroeder, R. G., & Shah, R. (2008). Linking routines to operations capabilities: A new perspective. Journal of operations management, 26(6), 730-748.

Peteraf, M. A. (1993). The cornerstones of competitive advantage: a resource‐based view. Strategic management journal, 14(3), 179-191.

Phusavat, K., & Kanchana, R. (2007). Competitive priorities of manufacturing firms in Thailand, Industrial Management & Data Systems, Emerald, 107(7), 979 – 996.

Porter, M. E. (1985). Value chain. The Value Chain and Competitive advantage: creating and sustaining superior performance.

Protogerou, A., Caloghirou, Y., & Lioukas, S. (2011). Dynamic capabilities and their indirect impact on firm performance. Industrial and Corporate Change, 21(3), 615-647.

Pun, K. F. (2004). A conceptual synergy model of strategy formulation for manufacturing. International Journal of Operations & Production Management. Emerald, 24(9) 903 – 928.

Qiang, C. F. H. Y. M. (2012). Relationship between Competitive Priorities and Performance Based on OEM Model [J]. Chinese Journal of Management, 1.

Rusjan, B. (2000). Manufacturing Competitive Priorities & Weaknesses of Slovenian Companies: An Empirical Investigation. Journal for East European Management Studies, Rainer Hampp Verlag, 5(1), 6-27.

Rytter, N. G., Boer, H., & Koch, C. (2007). Conceptualizing operations strategy processes. International Journal of Operations & Production Management, Emerald. 27(10), 1093-1114.

Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students, 5thEd Prentice Hall, New York.

Sarmiento, R., Shukla, V., & Izar-Landeta, J. M. (2013). Performance improvements seen through the lens of strategic trade-offs. International Journal of Production Research, 51(15), 4682-4694.

Schou, S., & Cardoso, J. (2014). How many manufacturing firms are there in Mozambique? (No. 2014/084). WIDER Working Paper.

Shee, H. K., Foley, P., & Van Gramberg, B. (2008). The relationship between operations capability and firm competitiveness. International Journal of Global Business and Competitiveness, 3(1), 19-30.

Singh, M., Basak, P., & Singh, R. (2013). Manufacturing strategy issues in selected Indian manufacturing industry. Management Science Letters, 3(3), 731-742.

Singh, H., & Mahmood, R. (2014). Manufacturing strategy and export performance of small and medium enterprises in Malaysia: moderating role of external environment. International Journal of Business and Commerce, 3(5), 37-52.

Sun, H., & Hong, C. (2002). The alignment between manufacturing and business strategies: its influence on business performance. Technovation, 22(11), 699-705.

Swamidass, P. M., & Newell, W. T. (1987). Manufacturing strategy, environmental uncertainty and performance: a path analytic model. Management Science, 33(4), 509-524.

Tell, J. (2012). Managerial strategies in small, fast-growing manufacturing firms, Journal of Management Development, Emerald, 31(7), 700 – 710.

Tegarden, L. F., Sarason, Y., & Banbury, C. (2003). Linking Strategy Processes to Performance Outcomes in Dynamic Environments: The Need to Target Multiple Bull's Eyes. Journal of Managerial Issues, Pittsburgh State University 15(2), 133-153.

Verreynne, M. L., & Meyer, D. (2008). Strategizing to improve entrepreneurial orientation: the case of small firms.

Verreynne, M. L., & Meyer, D. (2010). Small business strategy and the industry life cycle. Small Business Economics, Springer, 35(4), 399-416.

Xiaosong, P. D., Schroeder, R. G., & Shah, R. (2011). Competitive priorities, plant improvement and innovation capabilities, and operational performance: A test of two forms of fit. International Journal of Operations & Production Management, 31(5), 484-510.

Ward, P. T., & Duray, R. (2000) Manufacturing strategy in context: environment, competitive strategy and manufacturing strategy. Journal of operations management, Elsevier, 18(2), 123-138.

Weiss, J. A., & Jalilian, H. (2016). Manufacturing as an engine of growth. In: Weiss J and Tribe M (Eds.) Routledge Handbook of Industry and Development. London: Routledge. 26-37.

Were, A. (2016). Manufacturing in Kenya: Features, challenges and opportunities. International Journal of Science, Management and Engineering, 4(6), 15-26.


Download data is not yet available.


How to Cite
Kering, V. K., Kilika, J. M., & Njuguna, J. W. (2020). Influence of Operational Processes on the Performance of Manufacturing Firms: Empirical Evidence from SMEs in Kenya. European Journal of Business and Management Research, 5(6).