Operational and Financial Capabilities and Performance of Selected Manufacturing Small and Medium Enterprises in Nairobi City County, Kenya

Major manufacturers in Kenya have suffered from recession and decreasing income over the previous five years as a result of the unstable business climate. It is projected that in East Africa, large industrial enterprises have lost seventy percent of their market share, mainly due to high operating costs. Therefore, the study explored the effect of strategic operational and financial capabilities on the performance of selected small and medium in size manufacturing companies in Kenya's Nairobi County. It was anchored on the innovation capacity maturity model, the resource-based theory and the dynamic efficiency theories. A descriptive and explanatory study design was used. The target population was selected manufacturing companies in the Nairobi city County. Utilizing a semi-structured questionnaire, primary data was gathered. A target population of two thousand one hundred and seventy-one (2,171) managers of key departments in twelve (12) manufacturing sub-sectors was utilized. Three hundred and thirty-eight (338) managers were drawn from the population to make up the sample size following the stratified sampling procedure. To ensure that errors from the questionnaire are identified and addressed, a pilot study involving thirty-seven (34) respondents that is, 10% of the sample size was undertaken. This was to make certain that the instrument was valid and reliable. More so, Construct and content validity tests were used to evaluate the validity, and Cronbach's alpha value, which has a 0.7 correlation coefficient, was utilized to evaluate reliability. The quantitative data was examined using descriptive statistics, which were then displayed in tables and figures. Furthermore, the research employed inferential statistics, specifically multiple regression assessment examined the independent factors effect on the explained factor. All ethical standards were duly observed. Findings displayed that operations capabilities positively predicted SME performance in an insignificant way; and financial capabilities significantly had a positive affect on SME performance. Based on this outcome, the survey suggests that the managers in SMEs should prioritize understanding and meeting customer needs effectively. Key Words : Operational, Financial Capabilities, Performance CITATION: Awuor, O. L., & Makhamara, F., H. (2024). Operational and financial capabilities and performance of selected manufacturing small and medium enterprises in Nairobi City County, Kenya. The Strategic Journal of Business & Change Management, 11 (2), 222 – 247. http://dx.doi.org/10.61426/sjbcm.v11i2.2905