Effects of IT capability on Performance of Manufacturing Firms in Nairobi City County Kenya

Abstract

Although manufacturing firms support economic development, wealth creation and poverty alleviation, a dismal performance has been reported. In Kenya, the share of gross domestic product (GDP) from manufacturing sector has remained below 10 per cent while its growth rate remained at about 5 percent in the last 10 years. This has been attributed to low innovation and technology diffusion. This study examined the effects of IT capability on firm performance. The study was anchored on Resource Based View, and Dynamic Capability Theory. Positivism philosophical approach, descriptive and explanatory research design were adopted. Using stratified and random sampling techniques, a sample of 222 manufacturing firms from Nairobi City County, was obtained. A semi-structured questionnaire was prepared and used for data collection. To ascertain reliability, Cronbach’s alpha coefficient measure of 0.875 was obtained. Research experts confirmed validity of the study instrument. The data was analysed through descriptive statistics to condense the survey data. To test hypotheses, inferential statistics was used. The results showed a positive significant effect of IT infrastructure capability (B=0.247, p=0.005 < 0.05), IT personnel capability (B=0.226, p=0.044 < 0.05), IT management capability (B=0.187, p=0.018 < 0.05) and IT reconfiguration capability (B=0.291, p=0.001 < 0.05) on performance. The study findings also exhibited a 49.2 per cent explanatory power of IT capability on firm performance. Study findings provide a framework for improving firm performance. Subsequently, firm managers should create interventions on IT capability to enhance and sustain superior firm performance.

Influence of asset quality, capital adequacy, loan structure and macro-economic variables on financing of mortgage products by commercial banks in Kenya

“…According to the results, most of the respondents agreed that their bank played an important role in ensuring lenders can obtain the funding they need to offer borrowers mortgages with attractive interest rates. In line with these findings, Gitau (2014) argued that there is a positive linear relationship between interest rate spread and the financial performance of mortgage lending institutions. Also, tier 1 banks have a large interest spread compared to tier 2 and tier 3 banks.…”

“…However, Nyanyuki and Omar (2016) did not treat performance of mortgage lending as an independent variable, but as a dependent variable, hence did not assess how various factors influencing the performance of mortgage lending would influence the supply of mortgage products. On the other hand, there is a positive linear relationship between interest rate spread and financial performance of mortgage lending institutions, according to research results by Gitau (2014). Also, tier 1 banks have large interest spread compared to tier 2 and tier 3 banks.…”

A Study on Assessment of Teaching and Learning Methods for Secondary School Biology Subject Content as an Approach to Addressing Environmental Degradation in Malawi. Case Study of Karonga District

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“…A case study is a narrative account of a series of events or situations that relate to a specific issue that might relate to the lives of the participants (Chakwera, et al 2003). Gitau (2015) recommends Case study method as a strategy of teaching since it involves problem-based learning and promotes the development of analytical skills in learners. This means that a case study in Biology involves students in solving problems that may be similar to those they face in their daily lives.…”

Information Technology Capabilities and Sme Performance in Kenya: A Review of Literature

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