BUSINESS RESPONSE STRATEGIES AND PERFORMANCE DURING COVID-19 PANDEMIC AMONG MANUFACTURING FIRMS IN KENYA: A CASE STUDY OF EAST AFRICAN BREWERIES LIMITED

Kevin Simiyu Wanjala, Prof. Emmanuel Awuor

Abstract


Modern-day business operations have seen a great deal of interdependence between both profit-oriented and non-profit entities. This fact has been instrumental in how companies and business organizations interact with the environment in which they operate. An organization's capacity to thrive in such an environment will depend on its ability to come up with appropriate strategies. This study sought to assess the effect of business response strategies on performance during the COVID-19 pandemic among manufacturing firms in Kenya using a case study of East African Breweries Limited. More specifically, the study looked at cost rationalization, strategic alliances, diversification strategy, and innovation visa vis the performance of East African Breweries Limited during the COVID-19 pandemic. The main theories guiding the research included the institutional theory, environmental dependency theory, and performance theory. The study adopted a descriptive research design and targeted 1,653 employees working in the East African Breweries Limited to a sample size of 322 respondents.  Primary data collection entailed the use of questionnaires. The researcher used Multiple Regression analyses to test the effect of the relationship between the independent variables and the dependent variable. Tables presented the findings. The study established that strategic alliances (β=0.474) had the highest significant effect on the performance of East African Breweries Limited during the COVID-19 outbreak, followed by cost rationalization (β=0.416), innovation (β=0.209), and lastly diversification strategy (β=0.140). The study concluded that East African Breweries Limited adopted business response strategies during the COVID-19 pandemic, and they significantly influenced its performance. It recommended that to speed up the recovery of the East African Breweries Limited from the COVID-19 epidemic, there is a need for the management to create an environment that supports the formation of more strategic alliances. The finance managers of East African Breweries Limited should explore other possible means of minimizing the costs to enhance performance. The senior management of East African Breweries Limited should create an enabling environment that leverages innovation to improve performance.

Keywords: Cost Rationalization, Strategic Alliances, Diversification, Innovation, Performance 

Full Text:

PDF

References


Atikiya, R. (2017). Effect of Competitive Strategies on the Performance of Manufacturing Firms in Kenya. Researchacies International Journal of Business and Management Studies, 1(1).

Baraza, D. (2017). effects of competitive strategies on the performance of manufacturing firms in Kenya; a case study of East Africa Breweries Limited (Doctoral dissertation).

Bhatia, V., & Sharma, S. (2021). Expense-based performance analysis and resource rationalization: Case of Indian Railways. Socio-Economic Planning Sciences, 76, 100975.

Bonett, D. G., & Wright, T. A. (2015). Cronbach's alpha reliability: Interval estimation, hypothesis testing, and sample size planning. Journal of Organizational Behavior, 36(1), 3-15.

Budiman, I., Tarigan, U. P. P., Mardhatillah, A., Sembiring, A. C., & Teddy, W. (2018). Developing business strategies using SWOT analysis in a color cracker industry. In Journal of Physics: Conference Series (Vol. 1007, pp. 1-7).

Bui, B., & De Villiers, C. (2017). Business strategies and management accounting in response to climate change risk exposure and regulatory uncertainty. The British Accounting Review, 49(1), 4-24.

Cacciolatti, L., Rosli, A., Ruiz-Alba, J. L., & Chang, J. (2020). Strategic alliances and firm performance in startups with a social mission. Journal of Business Research, 106, 106-117.

Cao, Y., Zhao, K., Yang, J., & Xiong, W. (2015). Constructing an integrated strategic performance indicator system for manufacturing companies. International Journal of Production Research, 53(13), 4102-4116.

Chan, A. T., Ngai, E. W., & Moon, K. K. (2017). The effects of strategic and manufacturing flexibilities and supply chain agility on firm performance in the fashion industry. European Journal of Operational Research, 259(2), 486-499.

Christensen, T., Gornitzka, Ã…., & Ramirez, F. O. (2019). Reputation management, social embeddedness, and rationalization of universities. In Universities as agencies (pp. 3-39). Palgrave Macmillan, Cham.

Demil, B., Lecocq, X., Ricart, J. E., & Zott, C. (2015). Introduction to the SEJ special issue on business models: Business models within the domain of strategic entrepreneurship. Strategic Entrepreneurship Journal, 9(1), 1-11.

Ditkaew, K. (2018, August). The effects of cost management quality on the effectiveness of internal control and reliable decision-making: evidence from Thai industrial firms. In Proceedings of the 10th International RAIS Conference on Social Sciences and Humanities (60-69). Scientia Moralitas Research Institute.

Doh, J., Rodrigues, S., Saka-Helmhout, A., & Makhija, M. (2017). International business responses to institutional voids.

Donà , M., Bizzaro, L., Carturan, F., & da Porto, F. (2019). Effects of business recovery strategies on seismic risk and cost-effectiveness of structural retrofitting for business enterprises. Earthquake Spectra, 35(4), 1795-1819.

Fadaei, M., Alizad Abkenari, H., & Sofalchian Farhang, H. (2018). The impact of organizational innovation through innovation capabilities in‎ process and product on the performance of manufacturing firms. Iranian Journal of Optimization, 10(2), 75-80.

Gachigo, S. M., Kahuthia, J., & Muraguri, C. (2019). Exploration innovative strategy and performance of the telecommunication industry in Kenya: A case of Safaricom Plc in Nairobi Metropolis. International Academic Journal of Human Resource and Business Administration, 3(6), 299-319.

Kanini, S., Patrick, K., & Muhanji, S. (2019). Product Diversification and the Financial Performance of Manufacturing Companies in Kenya. IOSR Journal of Economics and Finance (IOSR-JEF), 10(6), 43-50.

Karakaş, A., Öz, Y., & Yıldız, M. R. (2017). The effect of innovation activities on organizational performance: research on hotel businesses.

Kiende, C. K., Mukulu, E., & Odhiambo, R. (2019). Influence of Organization Innovation on the Performance of Small and Medium Women-Owned Enterprises in Kenya. Journal of Entrepreneurship & Project Management, 3(1), 33-49.

Kipchumba, K. N. (2018). Strategic Responses to Changes in The External Environment and Organizational Performance Of Commercial State Corporations In Kenya.

Kliuchnikova, O. V., & Pobegaylov, O. A. (2016). Rationalization of strategic management principles as a tool to improve construction company services. Procedia Engineering, 150, 2168-2172.

Le Roy, F., & Czakon, W. (2016). Managing coopetition: the missing link between strategy and performance. Industrial Marketing Management, 53(1), 3-6.

Lin, C., & Chang, C. C. (2015). The effect of technological diversification on organizational performance: An empirical study of S&P 500 manufacturing firms. Technological Forecasting and Social Change, 90, 575-586.

Mehmood, R., Hunjra, A. I., & Chani, M. I. (2019). The impact of corporate diversification and financial structure on firm performance: evidence from South Asian countries. Journal of Risk and Financial Management, 12(1), 49.

Mohamud, A. A. (2018). Strategic Responses and Performance in Postal Corporation of Kenya in Mandera County, Kenya (Doctoral dissertation, Kenyatta University).

Mong'are, A. (2016). Strategic Alliances and Performance of Information Communication Technology Companies in Kenya (Doctoral dissertation, University of Nairobi).

Mponda, J. M., & Biwot, G. K. (2015). The effects of deployment practices on employee performance among the public banking institutions in Kenya: a survey of post bank coast region. International journal of scientific and research publications, 5(9), 1-13.

Muchangi, M. W. (2019). Influence Of Strategic Alliances On Performance Of Kenya Women Microfinance Bank Limited (Doctoral dissertation, University of Nairobi).

Muteshi, D. C., & Awino, Z. B. (2018). Strategic alliances and performance of food and beverage manufacturing companies in Kenya. DBA Africa Management Review, 8(1).

Ndambuki, A., Bowen, M., & Karau, J. (2017). The effects of business strategies on growth of market share in the telecommunications industry in Kenya: a case study of Telkom Kenya. European Journal of Business and Strategic Management, 2(4), 16-32.

Ndung’u, C. M., Otieno, W., & Rotich, G. (2016). Competitive business strategies on financial performance of commercial banks in Kenya: Case study of Equity Bank Limited. International Academic Journal of Economics and Finance, 2(1), 41-58.

Ndungu, J. G., & Muturi, W. (2019). Effect of Diversification on Financial Performance of Commercial Banks in Kenya. International Journal of Current Aspects, 3(5), 267-285.

Otini, R., (14 March 2020). “NSE suspends trading as coronavirus fears wipe out Sh240 billion,†Available at https://www.standardmedia.co.ke/business/article/2001364144/nse-suspends-trading-as-coronavirus-fears-wipe-out-sh240-billion 18 Due to investors moving into the fixed income market to avoid uncertainty. (n.d.).

Pan, S. Y., Du, M. A., Huang, I. T., Liu, I. H., Chang, E. E., & Chiang, P. C. (2015). Strategies on implementation of waste-to-energy (WTE) supply chain for circular economy system: a review. Journal of Cleaner Production, 108, 409-421.

Prajogo, D. I. (2016). The strategic fit between innovation strategies and business environment in delivering business performance. International journal of production Economics, 171, 241-249.

Ricciardi, F., Zardini, A., & Rossignoli, C. (2016). Organizational dynamism and adaptive business model innovation: The triple paradox configuration. Journal of Business Research, 69(11), 5487-5493.

Saebi, T., & Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), 201-213.

Schneider, A., Wickert, C., & Marti, E. (2017). Reducing complexity by creating complexity: A systems theory perspective on how organizations respond to their environments. Journal of Management Studies, 54(2), 182-208.

Williams, C. C., & Shahid, M. S. (2016). Informal entrepreneurship and institutional theory: Explaining the varying degrees of (in) formalization of entrepreneurs in Pakistan. Entrepreneurship & Regional Development, 28(1-2), 1-25.

Yang, J., Lai, K. H., Wang, J., Rauniar, R., & Xie, H. (2015). Strategic alliance formation and the effects on the performance of manufacturing enterprises from supply chain perspective. International Journal of Production Research, 53(13), 3856-3870.

Yuliansyah, Y., Gurd, B., & Mohamed, N. (2017). The significant of business strategy in improving organizational performance. Humanomics.

Zhao, E. Y., Fisher, G., Lounsbury, M., & Miller, D. (2017). Optimal distinctiveness: Broadening the interface between institutional theory and strategic management. Strategic Management Journal, 38(1), 93-113.


Refbacks

  • There are currently no refbacks.