Corporate Strategy and Firm Performance: Case for the Multinational Banks in Sub Saharan Africa

Manufacturing firms in Sub-Saharan Africa are not optimally managed which substantially lowers their productivity. The informal approach to human resource management is attributable to poor management practices with a consequent effect on performance. Due to these challenges, this study sought to examine the effect of human resource processes on the performance of manufacturing SMEs in Nairobi City County, Kenya. The study was explanatory and was based on 136 manufacturing SMEs which was drawn using proportionate stratified sampling. Data collection was achieved through the use of a self–administered questionnaire which was subjected to an inter-consistency test using the Cronbach's coefficient, α ≥ 0.70, which indicated that the research instrument was reliable. Descriptive and inferential statistics (at 0.05 significance levels) was used for the analysis of data. Diagnostic tests were conducted before regression analysis with the data was presented in tabular format. The results show that human resource processes cumulatively explain 23% of the variations in firm performance, therefore, the study concludes that the human resource processes have a positive influence on firm performance. The study recommends that manufacturing firms should seek to entrench an HR philosophy with commensurate improvements in the HR practises. The study limitations include a relatively small sample and geographical scope.

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Firm performance under financial constraints: evidence from sub-Saharan African countries

Journal of Innovation and Entrepreneurship ◽

10.1186/s13731-021-00177-1 ◽

2021 ◽

Vol 10 (1) ◽

Author(s):

Lamessa T. Abdisa ◽

Alemu L. Hawitibo

Keyword(s):

Firm Performance ◽

Credit Constraints ◽

Investment Decision ◽

Business Environment ◽

Sub Saharan Africa ◽

African Countries ◽

Heckman Selection Model ◽

Credit Constraint ◽

Sub Saharan ◽

The Impact

AbstractThe business environment in which a firm operates has an important impact on firm performance. This study examined the impact of credit constraint and power outages on the firm’s investment decision using World Bank Enterprise Survey (WBES) data collected from firms operating in 13 sub-Saharan Africa (SSA) countries. The study employed a two-part model and the Heckman selection model to estimate the impact of lack of access to finance and poor power supply on a firm’s decision to invest in self-generation. The result obtained suggest that there is a negative correlation between credit constraint and a firm’s decision to invest in self-generation. This indicates that credit constraint negatively affects a firm’s decision to invest in self-generation and firms that are credit constrained have less incentive to invest in self-generation compared to those that are not credit constrained. To test the robustness of the result obtained, alternative definitions of credit constraints were used. Results from alternative regressions using different definitions of credit constraints show that credit constraint affects a firm’s decision to invest in self-generation but not the volume of investment.

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