Journal of World Economic Research

| Peer-Reviewed |

Role of Knowledge Acquisition on Firm Performance in the Context of Small and Medium Enterprises in Meru County, Kenya

Received: 14 November 2019    Accepted: 30 December 2019    Published: 07 January 2020
Views:       Downloads:

Share This Article

Abstract

Small and Medium Enterprises (SMEs) are touted as the silver bullet in the revival and flourish of any country’s economy. It has the capacity to gainfully engage the highest number of work force. Effective and efficient performance of the sector is critical to economic growth. Large amounts of resources allocated to the sector have borne little fruit with failure reports in the last decade. This paper seeks to establish the influence of knowledge acquisition strategies on the performance of Small and Medium Enterprises (SMEs) within Meru county. The study was based on three theories; The Resource Based View theory of the enterprise (RBV), Organisation Learning (OL) and Knowledge Based View (KBV) theories. The research study employed a descriptive survey research design. The study’s target population was 500 SMEs in Meru County from which a sample of 150 SMEs was selected using stratified random sampling. The SMEs in Meru County constituted the unit of analysis while the managers, proprietors and senior staff constituted the unit of observation. The researcher utilised questionnaires to collect primary data. The data collection instruments were tested for construct, content and face validity. Cronbach Alpha Coefficient was used to test for reliability. Descriptive and inferential data was analysed. Summary measures of the sample which included frequency distribution tables, percentages, standard deviations and mean was generated from the descriptive statistics. Multivariate analysis and inferences made at 95% confidence level included the inferential statistics. Owners of SMEs will find the study’s results effective in enhancing their entity performance as they can make viable business decisions based on acquired knowledge. Academicians, researchers and lay readers with an interest in knowledge acquisition will find the study useful. From the findings, SMEs in Meru County embraced knowledge acquisition strategies and practises to a moderate extent. The study concludes that the knowledge acquisition strategies had a significant positive effect on the performance of SMEs in Meru County. From the study findings, it can be concluded that there is a strong relationship between the study variables as shown by a correlation coefficient of 0.781. The study concludes that the SMEs have enhanced knowledge acquisition through use of capacity development, mentorship programs, modern technology and consultations. It is a recommendation of the study that the SMEs should embrace the trainings and microfinance services offered by Micro-Finance Institutions and other financial sector players to enhance their capacity in knowledge acquisition.

DOI 10.11648/j.jwer.20200901.14
Published in Journal of World Economic Research (Volume 9, Issue 1, June 2020)
Page(s) 27-32
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Small and Medium Enterprises, Knowledge Acquisition, Performance of SMEs

References
[1] Agupusi, P. (2007, July). Small business development and poverty alleviation in Alexandra, South Africa. In second meeting of the Society for the Study of Economic Inequality, East Anglia, Norwich, UK, ECINEQ Society, Berlin, (P.Agupusi@uea.ac.uk) Altenburg, T, and Drachenfels, CV (2008) Creating an enabling environment for private sector development in Sub-Saharan Africa, Universität zu Köln, Luxembourger Str (Vol. 32550939).
[2] Ahwireng-Obeng, F. 2003. Youth economic empowerment in South Africa: Entrepreneurship versus small business policy. In: Proceedings at the 48 the Conference of the International Council for Small Business (ICSB), Dublin, 9-11 June: 1-18.
[3] Ali E. Akgün, Huseyin Ince, Salih Z. Imamoglu, Halit Keskin & İpek Kocoglu (2014) The mediator role of learning capability and business innovativeness between total quality management and financial performance, International Journal of Production Research, 52:3, 888-901, DOI: 10.1080/00207543.2013.843796.
[4] Baker, W. E., & Sinkula, J. M. (1999) The Synergistic Effect of Market Orientation and Learning Orientation on Organizational Performance. Journal of the Academy of Marketing Science, 27 (4), 411-427.
[5] Choe, J. M. (2011). The taxonomy of knowledge management practices in manufacturing firms: Use of target costing and IT infrastructure. African Journal of Business Management, 5(15), 6597.
[6] Choi, B. & Lee, H. (2003), “An empirical investigation of knowledge management styles and their effect on corporate”. Companies Create the Dynamics of Innovation. New York: Oxford University Press.
[7] Daily, B. F. and Huang, S. (2001) Achieving Sustainability through Attention to Human Resource Factors in Environmental Management. International Journal of Operations & Production Management, 21, 1539-1552. http://dx.doi.org/10.1108/01443570110410892.
[8] Daud, S. (2012). Knowledge management processes in SMES and large firms: A comparative evaluation. African Journal of Business Management, 6 (11), 4223.
[9] Gholami, M. H., Asli, M. N., Nazari-Shirkouhi, S., & Noruzy, A. (2013). Investigating the influence of knowledge management practices on organizational performance: an empirical study. Acta Polytechnica Hungarica, 10 (2), 205-216.
[10] Gold A. H, Malhotra A, Segars A. H. (2001). Knowledge management: An organizational capabilities perspective. J. Manage. Inform. Syst, 18 (1): 185-214.
[11] Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic management journal, 17 (S2), 109-122.
[12] Griffin, R. C. (2006). Water Resource Economics. The Analysis of Scarcity, Policies, and Projects. Journal of Economics 91(2):203-207 Available: 10.1007/s00712-006-0251-1.
[13] Jaworski, B J., and Kohli, A K, (2011), Market Orientation: Antecedents and Consequences. Journal of Marketing 57, pp. 53-70.
[14] Kenya National Bureau of Statistics (2018) Kenya Economic Survey of 2018. Government Printers, Nairobi – Kenya. Accessed from: https://africacheck.org/wp-content/uploads/2019/03/Economic-Survey-2018.pdf
[15] Kinyua, M. G (2015). Relationship between Knowledge Management and Performance of Commercial Banks in Kenya. Kenyatta University Press. Available on http://ir-library.ku.ac.ke/handle/123456789/17807
[16] Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization science, 3 (3), 383-397.
[17] Koh, S. C. L., Demirbag, M., Bayraktar, E., Tatoglu, E., & Zaim, S. (2007). The impact of supply chain management practices on performance of SMEs. Industrial Management & Data Systems, 107 (1), 103-124.
[18] Liebeskind J. P (1996) Knowledge, Strategy and the theory of the firm. Strategic Management Journal/Volume 17, Issue S2.
[19] Lukacs, E., (2005). The Economic role of SMEs in World Economy especially in Europe. Journal of European Integration Studies, 4, 1.
[20] Mahapa, M. (2013). Impact of knowledge management practices on organizational performance in the hospitality industry of Zimbabwe. Public Administration Research, 2 (1), 76.
[21] McMahon, R., LeCornu, M., Forsaith, D., & Stanger, A. (1996). The small enterprise financial objective function: An exploratory study. Journal of Small Business Management, 34 (3), 1.
[22] Mead D. and Liedholm C. (1999) Small Enterprises and Economic Development: The Dynamics of micro and Small Enterprises. Routledge Publishers, New York.
[23] Nonaka I. and Takeuchi H. (1995) The Knowledge Creating Company: How Japanese Companies create the dynamics of innovation. Oxford University Press, New York – USA.
[24] Ramanujam V. and Venkatraman N. (1986) Measurement of Business Economic Performance: An Examination of Method Convergence. Journal of Management, Volume: 13 issue: 1, page (s): 109-122.
[25] Van Den Berg, (2004). Interactive information consulting system for South African small businesses: Part 1. South African Journal of Information Management, Volume 6 Number 2.
Author Information
  • School of Business, Kenyatta University, Nairobi, Kenya

  • School of Business, Kenyatta University, Nairobi, Kenya

Cite This Article
  • APA Style

    Cosmus Muriithi Gatuyu, Godfrey Muigai Kinyua. (2020). Role of Knowledge Acquisition on Firm Performance in the Context of Small and Medium Enterprises in Meru County, Kenya. Journal of World Economic Research, 9(1), 27-32. https://doi.org/10.11648/j.jwer.20200901.14

    Copy | Download

    ACS Style

    Cosmus Muriithi Gatuyu; Godfrey Muigai Kinyua. Role of Knowledge Acquisition on Firm Performance in the Context of Small and Medium Enterprises in Meru County, Kenya. J. World Econ. Res. 2020, 9(1), 27-32. doi: 10.11648/j.jwer.20200901.14

    Copy | Download

    AMA Style

    Cosmus Muriithi Gatuyu, Godfrey Muigai Kinyua. Role of Knowledge Acquisition on Firm Performance in the Context of Small and Medium Enterprises in Meru County, Kenya. J World Econ Res. 2020;9(1):27-32. doi: 10.11648/j.jwer.20200901.14

    Copy | Download

  • @article{10.11648/j.jwer.20200901.14,
      author = {Cosmus Muriithi Gatuyu and Godfrey Muigai Kinyua},
      title = {Role of Knowledge Acquisition on Firm Performance in the Context of Small and Medium Enterprises in Meru County, Kenya},
      journal = {Journal of World Economic Research},
      volume = {9},
      number = {1},
      pages = {27-32},
      doi = {10.11648/j.jwer.20200901.14},
      url = {https://doi.org/10.11648/j.jwer.20200901.14},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.jwer.20200901.14},
      abstract = {Small and Medium Enterprises (SMEs) are touted as the silver bullet in the revival and flourish of any country’s economy. It has the capacity to gainfully engage the highest number of work force. Effective and efficient performance of the sector is critical to economic growth. Large amounts of resources allocated to the sector have borne little fruit with failure reports in the last decade. This paper seeks to establish the influence of knowledge acquisition strategies on the performance of Small and Medium Enterprises (SMEs) within Meru county. The study was based on three theories; The Resource Based View theory of the enterprise (RBV), Organisation Learning (OL) and Knowledge Based View (KBV) theories. The research study employed a descriptive survey research design. The study’s target population was 500 SMEs in Meru County from which a sample of 150 SMEs was selected using stratified random sampling. The SMEs in Meru County constituted the unit of analysis while the managers, proprietors and senior staff constituted the unit of observation. The researcher utilised questionnaires to collect primary data. The data collection instruments were tested for construct, content and face validity. Cronbach Alpha Coefficient was used to test for reliability. Descriptive and inferential data was analysed. Summary measures of the sample which included frequency distribution tables, percentages, standard deviations and mean was generated from the descriptive statistics. Multivariate analysis and inferences made at 95% confidence level included the inferential statistics. Owners of SMEs will find the study’s results effective in enhancing their entity performance as they can make viable business decisions based on acquired knowledge. Academicians, researchers and lay readers with an interest in knowledge acquisition will find the study useful. From the findings, SMEs in Meru County embraced knowledge acquisition strategies and practises to a moderate extent. The study concludes that the knowledge acquisition strategies had a significant positive effect on the performance of SMEs in Meru County. From the study findings, it can be concluded that there is a strong relationship between the study variables as shown by a correlation coefficient of 0.781. The study concludes that the SMEs have enhanced knowledge acquisition through use of capacity development, mentorship programs, modern technology and consultations. It is a recommendation of the study that the SMEs should embrace the trainings and microfinance services offered by Micro-Finance Institutions and other financial sector players to enhance their capacity in knowledge acquisition.},
     year = {2020}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Role of Knowledge Acquisition on Firm Performance in the Context of Small and Medium Enterprises in Meru County, Kenya
    AU  - Cosmus Muriithi Gatuyu
    AU  - Godfrey Muigai Kinyua
    Y1  - 2020/01/07
    PY  - 2020
    N1  - https://doi.org/10.11648/j.jwer.20200901.14
    DO  - 10.11648/j.jwer.20200901.14
    T2  - Journal of World Economic Research
    JF  - Journal of World Economic Research
    JO  - Journal of World Economic Research
    SP  - 27
    EP  - 32
    PB  - Science Publishing Group
    SN  - 2328-7748
    UR  - https://doi.org/10.11648/j.jwer.20200901.14
    AB  - Small and Medium Enterprises (SMEs) are touted as the silver bullet in the revival and flourish of any country’s economy. It has the capacity to gainfully engage the highest number of work force. Effective and efficient performance of the sector is critical to economic growth. Large amounts of resources allocated to the sector have borne little fruit with failure reports in the last decade. This paper seeks to establish the influence of knowledge acquisition strategies on the performance of Small and Medium Enterprises (SMEs) within Meru county. The study was based on three theories; The Resource Based View theory of the enterprise (RBV), Organisation Learning (OL) and Knowledge Based View (KBV) theories. The research study employed a descriptive survey research design. The study’s target population was 500 SMEs in Meru County from which a sample of 150 SMEs was selected using stratified random sampling. The SMEs in Meru County constituted the unit of analysis while the managers, proprietors and senior staff constituted the unit of observation. The researcher utilised questionnaires to collect primary data. The data collection instruments were tested for construct, content and face validity. Cronbach Alpha Coefficient was used to test for reliability. Descriptive and inferential data was analysed. Summary measures of the sample which included frequency distribution tables, percentages, standard deviations and mean was generated from the descriptive statistics. Multivariate analysis and inferences made at 95% confidence level included the inferential statistics. Owners of SMEs will find the study’s results effective in enhancing their entity performance as they can make viable business decisions based on acquired knowledge. Academicians, researchers and lay readers with an interest in knowledge acquisition will find the study useful. From the findings, SMEs in Meru County embraced knowledge acquisition strategies and practises to a moderate extent. The study concludes that the knowledge acquisition strategies had a significant positive effect on the performance of SMEs in Meru County. From the study findings, it can be concluded that there is a strong relationship between the study variables as shown by a correlation coefficient of 0.781. The study concludes that the SMEs have enhanced knowledge acquisition through use of capacity development, mentorship programs, modern technology and consultations. It is a recommendation of the study that the SMEs should embrace the trainings and microfinance services offered by Micro-Finance Institutions and other financial sector players to enhance their capacity in knowledge acquisition.
    VL  - 9
    IS  - 1
    ER  - 

    Copy | Download

  • Sections