Veronica Mukaiwa Research Project

STRATEGIC MANAGEMENT PRACTICES AND PERFORMANCE OF
FAMILY-OWNED FIRMS IN KITUI COUNTY, KENYA
VERONICA MUKAIWA
A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT

OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION, FACULTY OF
BUSINESS & MANAGEMENT SCIENCES, UNIVERSITY OF NAIROBI
2023
DECLARATION
This research project is my original work and has not been presented for a degree at any other
University.
Signature ……………………. Date…………………………
Veronica Mukaiwa
D61/11713/2018
This research project has been submitted for examination with my approval as University
Supervisor.
Signature ……………………… Date……………………….
PROF. EVANS AOSA
DEPARTMENT OF BUSINESS ADMINISTRATION
SCHOOL OF BUSINESS
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ACKNOWLEDGEMENT
In humility, I genuinely thank the All-Powerful God for providing me with the bravery,
fortitude, wisdom, and health I required to finish my degree.
I want to express my profound gratitude to my previous wonderful supervisor, the late Dr.
Joseph Owino, for his unshakable commitment, unfailing support, and priceless advice, all of
which were crucial to the successful completion of this project. His knowledge and abilities
have made a lasting impression, and I will always appreciate his significant influence on my
growth as a student.
My supervisor, Professor Evans Aosa, has my sincere gratitude for his help and dedication,
which enabled me to complete my thesis successfully.
I want to thank my parents, siblings, and friends for their constant support and well wishes.
I am grateful to the upper management of many family-owned companies for granting me
access to their facilities to conduct my research and share important information.
Finally, I want to thank all of you for enabling me to finish this project. May the All-Powerful
God richly bless every single one of you.
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DEDICATION
In profound appreciation, I extend my heartfelt gratitude to my parents, Anthony Mutwii and
Joyce Mutwii, alongside my siblings, Cecilia and Kelvin. Their unwavering support has been
a pillar of strength, and it is with immense gratitude that I dedicate this project to them. The
constant belief in my potential from each of them has been a guiding light, serving as a
perpetual source of inspiration. I am profoundly thankful for the enduring foundation of love
and strength they have provided throughout this challenging and rewarding journey.
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TABLE OF CONTENTS
DECLARATION......................................................................................................................ii
ACKNOWLEDGEMENT......................................................................................................iii
DEDICATION.........................................................................................................................iv
LIST OF FIGURES..............................................................................................................viii
LIST OF TABLES..................................................................................................................ix
ABBREVIATIONS AND ACRONYMS................................................................................x
ABSTRACT.............................................................................................................................xi
CHAPTER ONE.......................................................................................................................1
INTRODUCTION....................................................................................................................1
1.1 Background of the Study..................................................................................................1

1.1.1 Strategic Management Practices................................................................................2
1.1.2 Organizational Performance......................................................................................4
1.1.3 Family Owned Firms in Kitui County, Kenya...........................................................5
1.2 Research Problem.............................................................................................................6
1.3 Research Objective...........................................................................................................8
1.4 Value of the Study............................................................................................................8

CHAPTER TWO:..................................................................................................................10
LITERATURE REVIEW......................................................................................................10
2.1 Introduction....................................................................................................................10
2.2 Theoretical Foundation of Study....................................................................................10

2.2.1 Resource-Based View (RBV)..................................................................................10
2.2.2 Open Systems Theory..............................................................................................12
2.3 Strategic management practices and performance.........................................................13
2.4 Empirical Review and Knowledge Gaps........................................................................15

CHAPTER THREE...............................................................................................................17
RESEARCH METHODOLOGY.........................................................................................17
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3.1 Introduction....................................................................................................................17
3.2 Research Design.............................................................................................................17
3.3 Population of Study........................................................................................................17
3.4 Sample Design................................................................................................................18
3.5 Data Collection...............................................................................................................18
3.6 Data Analysis..................................................................................................................20

CHAPTER FOUR..................................................................................................................21
DATA ANALYSIS, RESULTS AND DISCUSSION..........................................................21
4.1 Introduction....................................................................................................................21
4.2 Firm Characteristics and Profile of Respondents...........................................................21

4.2.1 Education Level of Respondents.............................................................................21
4.2.2 Respondent Job Position..........................................................................................22
4.2.3 Period of Firm Operation.........................................................................................23
4.2.4 Number of Employees.............................................................................................24
4.2.5 Generation That Runs the Business.........................................................................25
4.2.6 Generation That Owns the Business........................................................................26
4.3 Strategic Management Practices and Organisational Performance of Family-Owned

Firms in Kitui County, Kenya..............................................................................................26
4.4 Discussion of the Findings.............................................................................................44

CHAPTER FIVE....................................................................................................................49
SUMMARY, CONCLUSION, AND RECOMMENDATIONS.........................................49
5.1 Introduction....................................................................................................................49
5.2 Summary of findings......................................................................................................49
5.3 Conclusions....................................................................................................................50
5.4 Recommendations..........................................................................................................51
5.5 Limitations of the study..................................................................................................52
5.6 Suggestions for Further Study........................................................................................52

REFERENCES.......................................................................................................................54
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APPENDIX: Questionnaire...................................................................................................61
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LIST OF FIGURES
Figure 4.1: Respondent’s highest education qualifications
Figure 4.2: Respondent’s Job Position (Capacity of Experience and Knowledge)
Figure 4.3: The effect of organizational skills development practices on performance......30
Figure 4.4: The effect of Organisational Structure practices on performance.
Figure 4.5: The effect of Organisational Systems on performance.
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LIST OF TABLES
Table 4.1: Period of Firm has been in Operation.................................................................23
Table 4.2: Size of Workforce...............................................................................................24
Table 4.3: Runs the Business................................................................................................25
Table 4.4: Owns the Business..............................................................................................26
Table 4.5: Organizational Skills...........................................................................................26
Table 4.6: Organisational Structure Design1
Table 4.7: Organisational Systems5
Table 4.8 Multiple Correlation Analysis Results
Table 4.9 Model Summary1
Table 4.10 Regression Model Fitness Results
Table 4.11 Regression Model Coefficients
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ABBREVIATIONS AND ACRONYMS
FOBs Family Owned Businesses
FOFs Family Owned Firms
GDP Gross Domestic Product
NGOs Non-Governmental Organizations (NGOs)
OST Open systems theory
RBV Resource Based View
SMEs Small and Medium Enterprises
VRIN Valuable, Rare, Inimitable, and Non-Substitutable
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ABSTRACT
Businesses experience multiple opportunities and challenges in an increasingl dynamic i i
environment, thus it is becoming very important for businesses including Family businesses
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to understand their environment and how to adapt as they remain steadfast on their goals, and
objectives. Strategies denote the decisions and actions that firms use to respond to changes in
their environment. Family enterprises are more likely to face unique difficulties, including
resource constraints and family members' meddling. Family-owned businesses may be able to
adjust to the changes while maintaining their momentum toward goals and objectives by
implementing strategic management techniques. The Resource-Based View and Open i i i i
Systems Theory are the study's guiding theories. The study's primary goal is to determine how
i i i i i i i i i
different strategic management approaches affect the performance of family-owned

i i i i i i i
businesses in Kitui County, Kenya. The objectives are to determine how organizational
systems and structure design impact family-owned company performance and how skills
impact family-owned business success in Kitui County, Kenya. Return on Assets is one
metric used to assess how well family-owned businesses perform. The efficacy and protocols
of strategic management are the phenomena under inquiry in this example, and the
descriptive study methodology aids in collecting data and information to characterize the
phenomenon. The study's target audience was family-run businesses in Kitui County, Kenya.
Fifty-two of the sample companies provided semi-structured questionnaires to collect primary i
data. Both inferential and descriptive statistics (such as percentages, frequencies, means,
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averages, and modes) were used to examine the data. The study employed inferential statistics
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and incredible linear regression to determine the significance and correlation between
specific strategic management strategies and the success of family-owned businesses. When
appropriate, charts, tables, graphs, and narratives were used to convey the analysis's findings.
i i i
The findings showed that enhancing organizational systems, structures, and skills is crucial
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for raising performance. The medium- and long-term performance prospects have been
bolstered by FOFs by implementing several strategic management strategies. One suggestion
is to gradually apply strategic management concepts to allow previous accomplishments to
act as a springboard for new endeavors.
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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Family businesses increasingly need to pursue strategic oriented goals to create and sustain
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their competitive advantage (Cassia et al., 2012, Craig et al., 2014, Sharma et al., 1997).
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Organisations operate in dynamic environment and therefore, long term strategic plans and
goals are important in ensuring more consistent and competitiveness amidst changes in their
environment. Strategic management practices such as structure formation, systems, and
organisational skills are aimed at helping the organisation to respond effectively to the i i i
changes in the environment and the set goals. Strategic management practices are providing
i i i i i
ways in which the firm can respond to changes more efficiently and effectively. For example,
adaption of a simple organisational structure can help organisations to reduce complexity and
eventually enhance efficiency and performance. Organisational skills are important in
ensuring that the firm is able to match to emerging needs and improve quality of products and
services.
Strategic management practices aim to align management strategies to maximize value and
ensure long-term sustainability. Because issues constantly arise in the workplace, strategic
management approaches guarantee that long-term fixes are offered. However, goal
prioritization in family firms' strategic decision-making is a complex process that can make it
i i i i i i i i i i
challenging to agree on strategic directions due to the unique relationship that exists between
family, ownership, and business (Chrisman et al., 2013; Habbershon et al., 2003, Kotlar and
i i i i i i i i i i i i i
De Massis, 2013, Memili et al., 2013). Reaching a consensus on strategy can be challenging
i i i i
when many generations are involved in the company's strategic management and governance
i i i i i i i i
processes (Litz and Kleysen, 2001; Salvato, 2004). This results from the generations' varying
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perspectives and interests about the company (Kellermanns et al., 2012). The differences
between old and modern business practices may make intergenerational relationships easier.
The resource-based perspective theory and open systems theory are the foundation for this
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investigation. These ideas clarify how organizations react to environmental changes. Risk
aversion, rigidity, nepotism, internal disputes, organizational laxity, and insufficient decision-
making abilities are the main consequences of family participation that may impact family
i i i i i i i
firms' strategic management practices (Roessl et al., 2010).
Family companies in Kenya may need to help attract people of different generations to
collaborate and participate in board governance and management relationships. This
significantly affects the strategic decisions taken by different ages, especially for companies
that prioritize strategic sustainability and want to pool the knowledge of many generations
(Kumarmanns and Eddleston, 2006; Jaffe and Lane, 2004). It is critical to comprehend the
potential impact on the nature of intergenerational relationships and the creative aspirations
of multigenerational family companies. The comprehension and strategic goals of the various
generations vary. In multigenerational family businesses, strategic objectives should be
aligned to support performance goals through resource mobilization and optimization. This
makes it evident that a company's operations and performance are impacted by its strategic
direction. Families running multigenerational businesses also have distinct objectives. The
newest, best, and most innovative solutions tend to appeal more to younger people. By using
strategic management strategies, companies may offer trustworthy and long-lasting solutions.
Thus, the current study aims to determine how different strategic management techniques
i i i i i
affect the performance of family-owned firms in Kitui County, Kenya.

i i i i
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1.1.1 Strategic Management Practices
Strategic management practices are the approaches and actions that an organization employs to
i i i i i i i i i i i i
react to future developments in the environment (Henry, 2016). Strategic management
practices refer to the systematic and deliberate actions and methods that organizations use to
develop, implement, and execute their strategic plans. These practices are essential for setting
the direction, making decisions, allocating resources, and achieving long term goals and
objectives. Strategic management ensures that strategies are formulated in alignment with the
vision, mission, environment, and long term objectives.
The firm's goal in implementing strategic management practices is to achieve, sustain, and
improve competitive advantage. Successful strategic management practice necessitates the
allocation of resources that support the firm's strategy, such as financial resources, supportive
and informed human resources, a supportive culture, and technology (Robinson, 2007). The
i i i i i i i
strategic management practices are important for any firm since they help to determine where
an entity is going in the future and how it will get there. The selected Strategic management
practices, that is Structure, Systems and Skills will be measured using various methods
including examination of the organization's reporting relationships, division of
responsibilities, assessment of the processes used for strategic planning, the deployment of
technology and tools, assessments of employee competencies, leadership development
programs, and performance appraisals that evaluate the ability of individuals to contribute to
strategic initiatives. Several studies have been conducted on the topic. Generally, a vast
majority of them show positive effect of strategic management practices on performance.
Kohn (2005) conducted research on the influence of organizational structure on performance,
finding that the degree of centralization in an organization affects its ability to respond to
changes and opportunities. Ansoff, Portner, Radosevich and Avner (1970) examined the
impact of effective strategic systems on performance and concluded that organizations with
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well-structured strategic systems tend to outperform their competitors due to their ability to
adapt and execute strategies efficiently. Smith (2008) conducted a quantitative study on the
effect of strategic management skills on the performance of non-governmental organizations

i i i i i i i i i i i
(NGOs). The results found that NGOs with a highly skilled workforce demonstrated
significantly better performance, as they were better equipped to navigate complex strategic
challenges. Equally, it has been highlighted that good or bad performance relies on largely the
implementation of strategy by an entity (Kennedy, Goolsby & Amould, 2003). Kaplan and
Norton (2005) proposed that a failure in strategy implementation can create a gap or weakness
i i i i i i i i i i i i i i i
between strategy and performance. Most of the existing studies and findings discuss the topic
i i i i
where the focus is on general organizations however the current focus is on family owned
firms. Equally, the studies have not focused the topic on a local context. Therefore, it is
important to expand the knowledge base in terms of finding how strategic management
practices impact the performance of firms and specifically family owned firms in Kitui i i i i i i
County.
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1.1.2 Organizational Performance
Performance denotes the ability and capacity of a firm to realize its goals and objectives and
i i i
elevate outcomes. Kaplan and Norton (2018) defined performance as the efficiency and
efficacy of operations by a management team. Performance measurement has steadily
developed from dominantly financial performance perspective measures such as return on i i i i
assets and return on investment to include non-financial measures such as quality, timely
i i i i i i
delivery, flexibility, and cost reduction. Kaplan and Norton suggested the balanced scorecard
tool for planning strategy and performance management where the main focus is how
objectives are being met. An organization is considered successful if it uses minimum
resources (efficiency) to achieve its goals (effectiveness).
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Isik, Arditi, Dilmen & Birgonul (2015) describes performance as the accomplishments of a
firm based on some criterion. Performance is an output based on some aspects such as
profitability or quantified objectives where failure and success are the two ends of a
performance range (Njanja, 2017). Mukulu and Gachunga (2014) described performance as a
component of an organization's results or output relative to its inputs. Performance is the net
output of value generating activities that an organisation is conducting that support the
creation for improved profitability and a strong balance sheet. Although the definitions
among authors may have variations, there is concurrence that performance concerns the
attainment of superior objectives and outcomes. Several studies have already focussed on key
strategic management elements and effect on performance. In the present study, particular
weight will be assigned on the firms’ ability to apply key strategic elements to adjust business
management with the view to enhance ability to achieve its goals and objectives.
1.1.3 Family Owned Firms in Kitui County, Kenya
As defined by Nordqvist and Melin (2015), a family-owned firm is a business entity in which
many generations of family—whether related via blood, marriage, or adoption—have a say in

i i i
how decisions are made. These family members have the power to shape the company's
i i i i i i i i
direction and are prepared to use their influence to pursue unusual objectives. Family-owned
businesses dominate most countries' economies. The Family Firm Institute (2017) reports that
i i i i
family-owned firms comprise two-thirds of all companies worldwide, provide 70–90% of the
world's GDP annually, and employ 50–80% of the workforce in most nations. These
companies greatly enhance the country's economic and social progress by generating income,
jobs, and social economic growth.
Asoko Insights (2021) reports that 645 family-owned enterprises in East Africa generate
revenue ranging from $10 to $100 million annually. Kenya comprises around 75% of these
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businesses; Tanzania, Uganda, and Rwanda comprise the remaining 2%. There are 645
family-owned companies overall. In contrast, over 40,000 acknowledged big and medium-
sized businesses account for 60% of Kenya's GDP (Demirgüç-Kunt & Klapper, 2016). The
majority of these companies are family-owned enterprises that are operating at different
phases of growth. Approximately 490 family-owned firms in the region, working in various
industries, generate over $10 million in revenue annually. Of the 490, 70 companies, or
14.3% of the total, make over $50 million annually, while 22 make over $100 million.
Kenyan family-owned enterprises face several obstacles, such as a deficiency in
professionalism, an incapacity to stay abreast of technological breakthroughs, inadequate
strategic planning, and difficulties incorporating the upcoming family business generation,
known as "the NexGen." If these issues are promptly remedied, the potential for these
businesses to expand and thrive may be unrestricted. Thanks to technological advancements,
family-owned companies can also more effectively handle the difficulties posed by
intergenerational diversity. Thus, this study aims to determine how family-owned companies
manage constant change (both opportunities and challenges) without losing sight of their
performance goals. Since family-owned companies are the backbone of the economy,
i i i i i i i
studying this issue may help one be aware of how firms utilize strategic management
strategies and how they influence their performance.
1.2 Research Problem
Family firms are often perceived as path-dependent, conservative, and reluctant to change
than non-family enterprises. They also need to be more capable of using advanced strategic
management strategies and being innovative. However, family businesses must use strategic
management techniques to maintain their competitive edge and performance throughout time
(Kellermann et al., 2012). Family engagement is recognized to impact ownership,
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management, and governance, affecting how family firms behave strategically (Carnes and
Ireland, 2013; Chrisman et al., 2015a). However, the family-specific antecedents that
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influence innovation inputs, processes, and outcomes still need to be better understood now
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(Carnes and Ireland, 2013; Konig et al., 2013). They are finding the family-specific
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antecedents that influence strategic management practice's methods, materials, and results.
Based on bibliometric analysis, Ratten, Fakhar Manesh, Pellegrini, and Dabic (2021)
determined that the most prolific countries for researching family business dynamics are the
United States and the United Kingdom, followed by European countries. There is a contextual
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vacuum because, whereas Malaysia and Australia represent Oceania and Asia, Kenya and
other emerging African nations have yet to conduct significant research on family business
practices. Regarding management, family ownership of shares and control over the CEO and i i i i
chairperson positions significantly increase R&D spending in family firms listed on public
i i i i
markets in developing nations (Ashwin et al., 2015). This shows that a family with more
influence over the company is more likely to spend on R&D to accelerate the achievement of
the company's objectives since they support and defend the original vision of the business.
Acosta-Prado et al. (2017) found that a sample of family-owned and non-family-owned i i i
biotechnology enterprises differed in their R&D spending, with the former having a higher
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risk aversion. The two opposing viewpoints demonstrate how various ownership levels affect
performance. One study found a correlation between strategic management approaches and
strong family support. At the same time, another finding implies that families use these
tactics more riskily since they fear not succeeding. The contradictory results of these
discoveries indicate a vacuum in the literature, which motivates more academic study on the
topic. Sciascia et al. (2015) observed that second and subsequent-generation family
enterprises innovate less than non-family and founder-owned family firms. However, Ferreira
and Ferreira (2017) do not uncover any evidence to suggest that the existence of many
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generations inside the organization moderates the association between innovation
performance and absorptive ability. In Kenya, family-owned enterprises, tiny and medium-
sized ones, are controlled by family interests (Ngugi, 2013). It might be interesting to see
how family-owned businesses handle the strategic innovation plan in light of the various
interests of family members, given the high risk associated with innovation strategies in
general and research and development in particular. It's possible that family and non-family
members—especially professionals in this field—will view innovation and available strategic
management methods differently.
The study above yielded inconsistent and scant results on the relationship between
profitability and strategic management approaches of family-owned firms. Furthermore, more
study needs to be done to conceptualize the performance and strategic management
techniques of family businesses in Kenya, particularly in Kitui County. It is against this
background therefore, that this study sought to answer the following research question: What
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is the effect of strategic management practices on performance of family owned firms in Kitui
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County, Kenya?
1.3 Research Objective
To establish the influence of strategic management practices and the performance of family-
owned firms in Kitui County, Kenya.
1.4 Value of the Study
By examining the implications of strategic management practices in the Kenyan setting, the
study responds to the request for additional investigations into performance of family owned
enterprises (De Massis et al. 2015a; Duran et al. 2016). Because of the distinctive
characteristics of family business, mainstream literature could benefit from learning from
8
family firm study findings. This will encourage the development and applicability of the
suggestions to research on various family business issues.
The study will also offer management implication for business professionals in terms of
strategic management practices and their impact on performance. The managers within
specific firms will be able to consider findings and recommendations in their own strategic
plans based on their vision, goals, and objectives. The findings will serve as a guide for both
the founder and the successor, encouraging them to be open to development of a strong
culture in strategic management practices. This will also be valuable to emerging and
potential entrepreneurs who can use the findings to inform their decisions in the
entrepreneurial journey.
Practitioners at both macro and micro levels will use study findings to enhance their
knowledge and skills in strategic management practices which they can help in proposing
solutions to family owned businesses. Policy makers at the macro level particularly the trade
and industry departments can use these findings to device policies that guide proper
development of the businesses and their transitions into other forms. It will also help in
formulating regulations to support performance in this segment. Researchers and
academicians in the relevant field can use the study findings as reference for further studies
and this will help in advancement and development of the strategic management theory.
Importantly, the study findings will offer a pool of knowledge to fill void in terms of
innovation. The agency theory addresses how owners of business can delegate resource
management to others particularly to professionals. Positive effect of strategic management
practices on performance would be contribution to the agency theory because of challenges
associated with competing interests between managers and owners of resources. Essentially,
insights will provide reference and guide to Researchers and academicians in strategic
management concept who can leverage it for future studies.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter details the findings of similar studies performed in the past that help to guide this
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study. The theories addressed are; Resource-Based View and Open systems theory.
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2.2 Theoretical Foundation of Study
This study is based on two theories, the open systems theory and resource-based view
theories that inform how organisations respond to changes in their environment.
2.2.1 Resource-Based View (RBV)
The proposed study is supported by the Resource-Based View (RBV), which looks at a firm's
ability to compete effectively using its resources. The RBV was proposed by Penrose in 1959
and later advanced in the 1980s and 1990s through, the RBV of the Firm Wernerfelt (1984),
firm resources and sustained competitiveness (Barney, 1991), and corporation core
competencies (Prahalad and Hamel, 1996). The theory proposes that a firm can achieve
competitiveness by innovatively conveying superior value propositions to its customers. The
existing literature concurs that the Resource-Based View entails a firm’s strategic
identification and deployment of resources to develop a sustainable competitive advantage
(Colbert, 2004). The RBV framework proposes that a firm's competence, in some occasions,
10
can enable them to generate value in terms of new products, better systems, or make
developments in new marketplaces.
The RBV framework can be used by firms to identify, determine, and ascertain their strategic
and competitive advantage. Firms can leverage the unique combination of their skills,
knowledge, assets, Intellectual capital, capabilities, and talents to achieve competitive
advantage. The RBV is premised on the notion that organisations are primarily different
because of the distinctive assets and resources of each organisation. The RBV theory asserts
that, a firm comprises a pool of unique capabilities and resources that are valuable, rare,
inimitable, and non-substitutable (VRIN), which enable them to attain a sustainable
competitive advantage for superior performance (Barney, 1991; Collis and Montgomery,
1997). Organisations use their capabilities to combine resources in a manner that generates
competitive advantage (Amabile et al, 2016). Each firm or organisations harnesses its
resources to develop and cultivate unique competencies to help generate competitive
advantage and ultimately attain better performance (Walsh & Kalika, 2018).
Firms operate with a limited and scarce amount of resource; therefore, they have to find ways
to deploy limited resources effectively to realise their goals and objectives. The RBV theory
is relevant to the study because it proposes how organisations can use their internal resources
to support the implementation of strategies and strategic management practices. Strategic
management practices require resources (particularly internal resources) to be able to achieve
success. An organisation’s unique resources can be leveraged to support the designing,
operationalization, and actualisation of organisational structure, systems, skills, and shared
values.
The performance of family-owned businesses is the dependent variable in the proposed study,
whereas strategic management tactics are the independent factors. Automation,
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diversification, leadership style, talent level, system and structure design, inventions, and
acquisitions are a few strategic tactics. When considered as a whole, the RBV theory is
critical because it illustrates how businesses may use their internal resources—capabilities
and capacity—to further competitive strategies. This study's primary goal is to ascertain how
family-owned businesses in Kitui County, Kenya, function concerning strategic management
techniques within the current environment.
2.2.2 Open Systems Theory
The open systems theory (OST) proposes that the operations of firms or organizations are
impacted or influenced and affected by their environment (Bastedo, 2004). OST is a theory
that is largely categorized within the modern system-based theories for change management.
Organizations are operating in an increasingly dynamic and fast-paced business environment;
hence, there is a need for frameworks that can guide them in this kind of environment. The
business environment comprises other organizations and factors that exert social, political,
and economic forces. All systems are featured by a combination of an assemblage of parts or
components whose relations compel them to be interdependent (Scott & Davis, 2015). Open
systems operate by allowing exchanges of materials, information, and energies among others
with the environment, and enabling adaptations to inflow, and outflows (Scott & Davis,
2015). The exchanges, inflow and outflows, allow growth and renewal of the system.
The changing technologies and markets have influenced the organizational perspective to
shift from closed to open systems (Scott & Davis, 2015). The open system viewpoint of the
firm has enabled businesses to flourish in diverse situations because they can have a better
understanding of the effect of the environment on their business (Alexy et al., 2018). The
environments where the firms operate hugely influence conflict resolution, decision-making,
and resource distribution. The ability of an organization to manage its external environment is
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essential to its success, and therefore, the open system model is imperative to the open system
operation of any organization. The open system model is one of the leading strategies applied
in the analysis of operations, success, and management of the organization (Alexy et al.,
2018).
The relevance of this in the current study is that the theory provides a Figurers for
considering processes such as change, adaptations, and initiatives under strategic
management practices. A family-owned firm or any other firm may be experiencing
numerous challenges and it can use strategic management practices to revitalize itself by
hiring a new CEO who improves how the firm transforms inputs. The open systems theory
equally suggests that all successful firms must attain a balance between their subsystems.
Therefore, in the case of a family-owned firm, the subgroups must maintain a rough state of
balance while adapting to external factors. This means that, the firms need effective strategic
management practices to achieve balance among subgroups and consequently drive toward
goals and objectives. Strategic management practices are influenced by the environment
hence; this theory is important because it can show how family owned firms need to consider
the developments in the environment as they embark on innovation strategies. The open
system is characterized as equifinality, which means family-owned firms can reach their
ultimate goals by use of different paths where one of the plans could be the innovation plans
for its systems, structure, and skills. The strategic management practice may provide the
flexibility and options the firm needs to intervene and respond to internal and external forces.
Firms, including family-owned firms, which largely operate as open systems, are dynamic,
evolving, and adjusting in response to feedback from their environment. All these aspects of
strategic management practice are highlighted in the open system approach hence its
relevance.
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2.3 Strategic management practices and performance
Onyiro Christopher Enyinaya and BC Onuoha (2023) performed a study to decipher the
relationship between SMPs and performance of FOBs in river state, Nigeria. A cross
sectional research design was applied. A total of 72 respondents were involved among top
level management of small FOBs. The dimensions of SMPs in the study were strategy
implementation and control. The hypothesis was tested using spearman rank order correlation
coefficient. The findings revealed that SMPs such as strategy implementation and control
exert significant effect on firm performance especially for FOBs. The recommendations is for
managers and owners of FOB to enhance communication flow for sufficient and timely
information, and more control mechanisms into processes via methods such as participatory
target setting, performance assessment, standard practices, correction measures, and
feedback.
A study by Nurul AZlin Azmi, Nor Balkish Zakaria, Riska Anita (2022) sought to effect of
family ownership and political intervention in earnings management using a panel study in
Malaysia. Family ownership and political intervention create type 1 and 2 agency problems
among shareholders and stakeholders. The study adopted a quantitative method via use of
624 firms for period covering 2013 to 2017. A total of 3,120 firms were involved in the study
and a panel regression analysis applied to answer the research questions. Findings revealed
that the politically linked firms tend to have high prevalence participating in earning
management relative to those not connected. Family businesses have prevalent to participate
in earning management of performance. The implication of findings is the effect of
composition of the board and level of family ownership which can have influence on earning
quality. The findings also reveal the need to ensure initiatives in governance regulation for
political involvement with aim to manage agency problems.
14
Christine Scheef, Thomas Markus Zellweger (2023) examined succession processes in FOFs
in the United States. Succession has a likely impact on the future performance of family
owned businesses. It is important to understand the pace, sequence, and rhythm with which
board chair, CEOs, owner role, and director are transitioned across generations. The study
used inductive and theory creation approach anchored on sequence analysis among 142
public FOFs in the US. The findings revealed five distinct processes of how board chair,
CEOs, owner role, and director are transitioned across time and roles. The transitions vary in
rhythm, pace, and performance consequences. Firms with fast-paced paths and the ones with
slow-paced rhythmic paths outperform the others with irregular rhythms. Early ownership
transition plans generate benefits through performance.
The family's impact on HR management systems produces fundamental traits that might
impact the business's operation. Research by Sánchez-Marín et al. (2019) looked at the
formalization of HR procedures and the impact that family and non-family enterprises had on
the performance of their respective companies. This study examined the formalization and
effectiveness of the three main HR processes across family- and non-family-owned business
environments: hiring, training, and remuneration. The results indicate that a greater degree of
formalization in HR positively affects business success. This suggests that the relationship
between established training techniques and organizational performance is negatively
moderated by family engagement.
Furthermore, the study's findings indicate that, compared to non-family businesses, recruiting
procedures had less of an intervening effect on the relationship between training methods and
firm success in families. The conclusion is that family-run firms and non-family businesses
should formalize their HR policies to minimize family disputes and improve HR abilities. In
the decision, family-owned companies should support the formalization of HR as it will
provide the resources needed to support the organization's long-term and strategic
15
management objectives. This study and most previous studies support the idea that human
resources uniquely deliver the talent, skills, and knowledge that create a competitive
advantage. It is critical to ascertain if the human resource component of family-owned
businesses pertains just to top roles or to all tiers of management, including heads of
functions and their assistants. The current research aims to address this gap in human
resource capabilities.
2.4 Empirical Review and Knowledge Gaps
The gaps in the proposed topic can be viewed from the elements of time, context, and
location. Most of the studies reviewed pertain to foreign locations; hence, there is need to
determine how the topic applies in the local context particularly with reference to Kitui
County. Second, most studies reviewed apply to general firms, but the proposed study seeks
to narrow down to the family-owned firms which will help add to the existing pool of
knowledge on this segment of firms. Additionally, there is mixed findings on the effect of
strategic management practices on performance of FOFs with some revealing moderate to
strong performance with others showing minimal effect, hence, the proposed study seeks to
get clarity on the study findings.
16
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter explained the methodology of the study. The areas of attention included the
study design approach, the targeted population, and the sample design–sampling process and
size, pre-testing research equipment, data collecting instrument and procedure, data analysis
and presentation method, and ethical issues.
3.2 Research Design
This study employed the descriptive design technique. The proposed descriptive study
strategy was appropriate since it delivers adequate findings between variables. The
descriptive design technique allowed the study to determine and explain the features of the
variables of interest. Descriptive design helps to characterize the relevant features of the
aspects of interest from diverse angles (Best & Kahn, 2007). A descriptive research approach
gives adequate flexibility to explore numerous facets of the topic under the proposed
investigation (Kothari, 2004). Descriptive study design is extensively utilized in relevant
studies like Chepngetich, 2022; Kosgey & and Njuguna, 2019 Mutinda & and Mwasiaji,
2018; and Mwai et al., 2018). In the suggested study, a descriptive design technique will help
17
describe the characteristics of the phenomena or study topic, who, what, how, and why. The
design is appropriate in describing the influential relationship among the suggested variables.
Therefore, it will allow the study to identify the influence of strategic management methods
on the performance of family-owned enterprises in Kitui County, Kenya.
3.3 Population of Study
The population of study represents the whole collection of items that share observable
properties and patterns that the researcher desires to deduce certain inferences (Cooper &
Schindler, 2014). In the present proposal, the population of the research comprises family-
owned companies in Kitui County, Kenya. The population statistics were firms reported by
the Kenya National Bureau of Statistics as of 2022. According to a study by Asoko (2020),
there are 645 family-owned firms in East Africa. In Kenya, there are 490 enterprises
producing over $10 million in sales across several industries (Bhana, 2020;
Asokoinsight.com, 2021). Kitui County has a total of 520 family-owned enterprises, which
was the population of this study.
3.4 Sample Design
A decent sample size should represent the population of interest (Singh & Masuku, 2014).
This study was guided by Mugenda's (2003) idea that a 10% sample size is suitable to
represent a small population, while a 30% sample size may successfully represent an
enormous population of goods or individuals. Mugenda and Mugenda (2003) recommend
using 10% when the population items are less than 10,000 and 30% when larger. Kitui
County is projected to be tiny; consequently, a 10% sample size was utilized. This study will
employ a random sampling approach to select the representative sample companies. A
suitable sampling procedure was utilized to choose responders from the various departments
in the organization. Convenient sampling guarantees an equal chance for individual members
18
of the population to be included in the sample, as well as the efficiency and efficacy of the
process (Saunders et al., 2003). Given that the population size is 520, the sample size was 10
percent of 520, resulting in 52 enterprises.
3.5 Data Collection
The study employed primary and secondary data, which was applied to characterize the
strategic strategies used by family-owned enterprises and how they affect performance. The
significant data-gathering tool was semi-structured questionnaires (open-ended and close-
ended questions). Semi-structured surveys offer respondents some flexibility in answering
questions, which will help if respondents demand some flexibility and depend on the various
natures of the intended questions. Questionnaires are typical instruments researchers use to
gather crucial information concerning the study population (Mugenda & Mugenda, 2003).
The surveys efficiently and successfully gathered vast data from the intended population
(Saunders & Townsend, 2018). The questionnaire will have numerous items covering various
research topics, such as the demographic profile of respondents, strategic strategies utilized,
and performance components. The questionnaire was pre-tested using four executive
managers and two academic authorities to confirm its validity. The input obtained was
utilized to make suitable revisions to questions and the design of the questionnaire.
Permission was requested from the institution to permit planned field data collection.
Appointments were established with selected respondents to obtain their agreement, explain
the study's goal, present the data collecting tool, and agree on a suitable time. Semi-structured
questions were delivered to the chosen respondents. Some surveys were dropped to the
selected respondents and collected after a week, while others were delivered over email based
on distance and convenience. Due to the possibility of having a better knowledge of this
study's established strategic management techniques, the respondents were top executives in
19
the family firms. Secondary data collection was mainly through databases and particular
sources, including reports, papers, and journals within the scope and relevance of this study.
The questionnaire administration was accompanied by a consent form and a cover letter to
support authorization for the research endeavor. The material of the permission form was
explained again to the potential responder, highlighting aspects such as rights/terms of
participation and the study's goal. Each 52 families' enterprises will supply at least one
respondent whose data was obtained. The various executives will get web-based surveys. The
researcher will send phone and email reminders to follow up with responders.
3.6 Data Analysis
Data analysis implies examining and researching data to develop findings and deductions
(Van de Vijver & Leung, 2021). Data analysis will involve both inferential and descriptive
statistics, where descriptive statistics include percentages, frequency, mean, average, and
i i i i i i i
mode. Inferential statistics will include linear regression to establish the significance of the
connection between selected strategic management strategies and the performance of family-
owned firms. Statistical Package for Social Sciences (SPSS) Version 21.0 was used to analyze
the
i i data. i The i outcome findings were supplied via figures, tables, and graphs where
appropriate.
The regression model looks like this:
YA=α + β1X1 + β2X2 + β3X3 + ε
YA = Performance
α = the Y intercept when x is zero or the constant
βij = Regression Coefficients
X1 = Organizational Structure
20
X2 = Organizational Systems
X3 = Organizational Skills
ε = the error term
CHAPTER FOUR
DATA ANALYSIS, RESULTS AND DISCUSSION

4.1 Introduction
This chapter presents the data analysis and discussion of the study. The main study objective
i i
is to establish the effects of selected strategic management practices on performance of

i i i i i
family-owned firms in Kitui County, Kenya. Primary data was drawn using semi-structured
i
questionnaires which were administered through face-to-face interviews, email, and drop and
i i i i i i
pick later methods. The data analysis was done using the various study objectives and
i
findings presented based on various themes and subtitles. Data was analysed using 45
questionnaires which were complete and clear. The findings were presented via tables,
graphs, Figures, and text narrations.
4.2 Firm Characteristics and Profile of Respondents
The researcher analyzed the organisational structure design, organisational systems design,
and skills and the performance of family-owned firms. The analysis was done through
i i i i i
averages/means, tables, frequencies, graphs, and standard deviation.
4.2.1 Education Level of Respondents
The respondents were requested to state their highest level of education qualification and the
i i i
outcomes are as presented in Figure 4.1 below:
21
Education Qualification Attained
13% Higher Diploma
27%
Graduate
Post graduate
60%
Figure 4.1: Respondent’s highest education qualifications
Source: Drawn from field data

The highest education level attained by respondents was categorised into three classifications
as presented in Figure 4.1. The analysis shows that nearly 60% of study respondents had
attained graduate education level; another 27% had attained post graduate level, while 13%
had attained higher diploma qualifications. This result indicates that a significant number of
respondents had achieved the upper tier of education that aligns appropriately with the
capacity to undertake management and business administration responsibilities. The various
levels of education status are an indication that the respondents’ orientations, attitudes, and
experiences are likely to be varied and this was echoed in the diversity of views on the topic.
The strong presence of upper tier of education qualification indicates the commitment to have
leaders and executives who have the appropriate intellectual capability for the firms.
4.2.2 Respondent Job Position
The respondents were requested to state their position in the firms and their answers are
presented in Figure 4.2 below:
22
Job Title
13% 13%
General manager
CEO
CEO/Owner
20% Director
27% Finance Manager
27%
Figure 4.2: Respondent’s Job Position (Capacity of Experience and Knowledge)
Source: Drawn from field data

As per Figure 4.2, CEOs and Owner CEOs constituted the largest proportion of respondents
and this implies that a large proportion of respondents have the requisite knowledgeable,
experience, expectations, and authority to disclose information requested and envisions the
firm’s future endeavour. The analysis reveals that nearly 54% of respondents were CEOs and
Owner CEOs, 20% were directors, while finance managers and general managers comprised
13% for each position. The large proportion of CEOs and Owner CEOs implies that most of
the family-owned businesses in the county are run by owners who were available for the
interviews.
4.2.3 Period of Firm Operation
The respondents were requested to indicate the period the firm has been in existence and their
i i i i i i i
responses are echoed in Table 4.1 below
Table 4.1: Period of Firm has been in Operation
Years in Operation (Years) Frequency Percent (%)
1 to 5 0 0
23
6 to 10 3 20
11 to 15 4 27
16 to 20 3 20
21-25 2 13
26 to 30 1 7
31 to 35 1 7
36 and above 1 7
Total 15 100
Source: Field data (2023).
As per table 4.1, all the firms included had been in operations for over five years and one is
above 36 years, thus, an indication of experience or wealth on various issues pertaining to
their businesses. About 20% had been in operation for 6 to 10 years, while the majority had
of 27% had been in operation for between11and15 years. Fewer firms have been in operation
for more than 21 years (34%) which indicates the death rate of the family owned firms. The
analysis shows that about 20% of firms had been in operation for between 16 and 20 years
which depicts a mix of two generations in the business. Firms learn with age as they interact
with their environment and various stakeholders.
4.2.4 Number of Employees
The respondents were requested to indicate the size of workforce and the responses are
revealed in table 4.2 below
Table 4.2: Size of Workforce
Range Frequency Percentage
10-15 2 13
24
16-20 2 13
21-25 3 20
26-30 3 20
31-35 2 13
36-40 2 13
41-45 1 7
15 100
As depicted in Table 4.2 above, the dominant workforce comprised employees totaling 21-25
and 26-30. All firms had a workforce ranging from10 to 45 which shows that most family
owned firms can be classified under Small and Medium Enterprises (SMEs). The dominant
presence of different sizes of SMEs has likely helped to minimize the skewness of
respondent’s views.
4.2.5 Generation That Runs the Business
The respondents were invited to state the generation that runs the business and their responses
i i i i i i i i
are revealed in table 4.3 below
Table 4.3: Runs the Business
Generation Frequency Percentage

1st 6 40
2nd 5 33
3rd 4 27
15 100
25
Table 4.3 shows that most of the businesses in the study are run or operated by the 1st
generation of family members at 40%. This is followed by 2nd generation at 33% while the
3rd generation runs 27% of the businesses. At 40% is still a substantial proportion for the
founders to be running the business and this also shows a mixed generation of workforce
which may have its own pros and cons. The 1st and 2nd generations runs 73% of the
businesses which show a relatively older generation that run most of the businesses. The
older generation comes with potential benefits such as more experience in the business
environment, more knowledge, and wealth of goodwill.
4.2.6 Generation That Owns the Business
The respondents were requested to indicate the generation that owns the business and the
i i i i i i
responses are revealed in table 4.4 below
Table 4.4: Owns the Business
Generation Frequency Percentage
1st 8 53
2nd 5 33
3rd 2 13
15 100
The data on who owns the businesses provide interesting insights. About 53% of the firms are
owned by the 1st generation or founders. This shows the hesitancy of this generation to
relinquish ownership to later generations. The 3rd generation owns just 13% of the businesses
26
and this is expected because this represents the new businesses whose survival rate is
relatively low.
4.3 Strategic Management Practices and Organisational Performance of Family-Owned
Firms in Kitui County, Kenya
The respondents were required to indicate their views on several questions concerning
Organizational Skills and the responses are organized and analyzed as below.
Table 4.5: Organizational Skills
Organizational Skills SA A N D SD
Total Mean SD
All stakeholders are 4 19 12 8 2 45 3.33 2.97
involved in the decision
making processes
The firm provides 5 18 12 7 3 45 3.33 2.99
adequate financial
resources for skills
development
There is adequate 6 19 13 5 2 45 3.49 3.11
training of staff to meet
skills needs
There are regular 3 21 9 9 3 45 3.27 2.92
updates of its
technology particularly
on skill’s development
The firm conducts 3 16 15 7 3 45 3.27 2.90
27
competitive recruitment
for its staff capacity
There are clear & 6 21 9 6 3 45 3.47 3.12
adequate
communication
channels
The firm develops 3 16 13 7 6 45 3.13 2.83
strategic planning to
prepare for its goals
Overall average 3.33 2.98
Strongly Agree range 0-3
Agree range 0-7
Undecided range 0-3
Disagree range 0-6
Strongly Disagree range 0-2
Standard deviation 2.83 –3.12
Mean range 3.13-3.49
This study sought opinions of respondents on various aspects of organizational skills using a
five point Likert scale measurement. Descriptive statistics analysis was applied to determine
the mean, standard deviation, percentages, and frequency as shown in table 4.5 above. The
results show that a majority agreed (42 percent) that all stakeholders are involved in the
decision making processes while 9 percent strongly agree on this aspect. Another 27 percent
28
were neutral which is substantial and therefore it implies a strong indecision position on this
aspect. About 48 percent of respondents indicated neutral, disagree, and strongly disagree
which may imply that the views on this matter are not skewed strongly to one end. A mean of
3.33 support the finding that the respondents were largely undecided or neutral in this matter.
A majority of 40 percent held an agree position that the firm provides adequate financial
resources for skills development. Another 27 percent held a neutral position on the issue of
adequate financial resources for skills development. A majority of 42 percent agreed that
there is adequate training of staff to meet skills needs for performance while 29 percent held a
neutral position on this theme. About 55 percent of respondents indicated agree or strongly
agree view which shows an overall inclination towards agree on this aspect. However, a
mean of 3.49 support the finding that the respondents were largely neutral in this matter.
A majority of 47 percent indicated agreement with the statement that there are regular
updates of its technology particularly on skill’s development. However, an equal proportion
(47 percent) either was neutral, disagreed, or strongly disagreed with this aspect. This is an
indication that the respondents may not be so sure with the status of this aspect or may also
have a view that their firm is not doing enough to ensure timely regular updates of its
technology. This is supported by a mean of 3.27 which support the finding on neutral position
on this issue. While a majority of 36 percent agree that their firms conducts competitive
recruitment for its staff capacity, a substantial proportion of 33 percent, 16 percent, and 7
percent (56 percent) either were neutral, disagreed, or strongly disagreed. The views may
indicate that the firms are weak in ensuring competitive recruitment for its staff capacity. A
mean score of 3.27 shows an inclination toward a neutral or indifference on the issue of
competitive recruitment.
On whether there are clear and adequate communication channels in their firms, a majority of
47 percent of respondents indicated their concurrence with this statement and this is further
29
supported by a 6 percent indicating strong agreement. Overall, most respondents are
supportive of the statement that there are clear & adequate communication channels. This is
supported by a mean of 3.47 which confirms an agree position on this issue. However, a 20
percent neutral position is an indication of the need by firms to underscore awareness and
effective use of the communication channels. Finally, the question was posed as to whether
their firms develop strategic planning to prepare for their goals. On this, a majority of 36
percent agreed that their firms develop strategic planning to prepare for their goals and this is
supported further by a 7 percent who strongly agree. However, about 57 percent had views
that either was neutral, disagreed, or strongly disagreed. This shows a strong contestation on
whether firms develop strategic planning to prepare for their goals with possibility of weak
practice on this aspect. A mean of 3.13 support the view of neutral inclination on the issue.
The overall mean score for Organizational Skills is 3.33 which show a weak agree position
that Organizational Skills have an impact on the performance of family-owned firms. Under
the objective on Organizational Skills, the results reveal that FOFs involve stakeholders in
decisions, provides adequate financial resources, facilitate adequate training of staff, perform
regular updates of its technology, conducts competitive staff recruitment, and facilitate clear
& adequate communication. The SD values are all above one, which asserts that the
respondent’s views varied widely with the proposed statements. Essentially, a high SD shows
considerable variance in experimental data relative to the mean.
The respondents were probed on their view about the effect of organizational skills
i i i i i i i
development practices on performance of family-owned firms in Kitui County, Kenya and
their responses are analyzed and presented in Figure 4.3 below
30
Skills and Organisational Performance
Positive Neutral Negative
33%
67%
Figure 4.3: The effect of organizational skills development practices on performance.
Source: Derived from field data.
The results in Figure 4.3 indicate that a majority of 67 percent think that organisational skills
development practices have a positive effect on performance. Equally, about 33 percent of
respondents are not sure or are neutral which means they are indifferent or undecided on the
effect of organisational skills development on performance. The result may infer the need to
enhance awareness of organisational skills development practices. Importantly, no respondent
indicated negative effect and this means that there is considerable consensus that
organisational skills development practices is more inclined to impacting performance
positively.
Organisational Structure Design and the responses are organized and analyzed as below.
Table 4.6: Organisational Structure Design
Organisational systems SA A N D SD
Design
Tota Mean SD
31
l
My firm has a well- 6 21 9 6 3 45 3.47 3.09
defined and clear levels
of management
workflows
The number of 5 22 8 5 4 45 3.13 2.78
divisions in the firm are
appropriate for
successful performance
of the firm
The firm has adequate 4 24 8 6 3 45 3.27 2.96
control measure for
effective
implementation of
plans and programs
The firm has a clear 3 24 12 6 0 45 3.53 3.06
position of authority to
support decision
making and
management of
resources
The firm has clear 6 21 9 6 3 45 3.47 3.09
functions to support
specialization of work
32
Overall average 3.37 2.99
The results on organizational structure design reveal several important issues. A majority of
47 percent agree on the statement that their firm has well-defined and clear levels of
management workflows. This is supported further by a strong agree position at 13 percent. A
20 percent disagree and strongly disagree position combined with a 20 percent neutral may
provide a small edge for agree and strongly agree position. A mean of 3.47 indicates a slight
edge in terms of agree position on this issue. The 20 percent neutral views may indicate need
to consider initiatives to enhance understanding and integration of organisational structure
design elements in all workflows activities. Respondents were asked to indicate their views
on whether the number of divisions in their firms was appropriate for successful performance
of the firm. A solid majority of 49 percent agreed to the statement and another 11 percent
supported with a strong agree position. The overall view leans towards concurrence that most
firms have well-defined and clear levels of management workflows. However, a 40 percent
of respondents who do not indicate agree or strongly agree may indicate an inclination
towards a neutral position which is supported by a mean of 3.13. Overall, this necessitates
deliberate initiatives to address challenges in management of workflows.
A majority of about 62 percent either strongly agreed or agreed on the issue of adequacy of
control measure for effective implementation of plans and programmes in their firms. This is
an indication of agree leaning that indeed there is adequate control measure for effective
implementation of plans and programmes. However, 20 percent of respondents need to be
convinced that there is adequate control while 18 percent may require more persuasion on the
33
existence of adequate control measures for effective implementation of plans and
programmes. This near neutral position is supported by a mean of 3.27. The firms need to
enlighten the staff further on the existing control measure and how they contribute to
effective implementation of plans and programmes. About 60 percent of respondents
indicated that their firms have a clear position of authority to support decision making and
management of resources. This is an important matter and the fact that about 40 percent of
respondents disclosed views of either neutral, disagree, or strongly disagree, then the firms
need to consider this aspect as a priority issue in organisational structure design. Overall, a
mean of 3.53 supports an agree position on this issue. Finally, the question of clarity of
functions to support specialization of work was posed to respondents and their responses
indicate that a majority of 60 percent either agree or strongly agreed. The firm’s effort may
need to be directed to the 20 percent of response that indicated indifference or indecision on
whether the firm has clear functions to support specialization of work. This is supported by a
mean 3.47 which indicates a neutral position but with a strong inclination toward agree
position. The overall mean score for organizational structure design is 3.37 which show a
weak agree position that organizational structure design has an impact on the performance of
family-owned firms. Under the objective on Organizational Structure practices, the results
reveal that FOFs have well-defined and clear levels of management, the number of divisions
in the firm are appropriate for successful performance, there is adequate control measure for
effective implementation of plans and programs, the firm has a clear positions of authority to
support decision making and management of resources, and the firm has clear functions to
support specialization. However, there is need for more alertness, integration, and
comprehension on the functions and their contribution to specialization of work. The SD
values are all above one, which asserts that the respondent’s views varied widely with the
34
proposed statements. Essentially, a high SD shows considerable variance in experimental
data relative to the mean.
The respondents were probed on their view about the effect of organ Organisational Structure
practices on performance of family-owned firms in Kitui County, Kenya and their responses
are analyzed and presented in Figure 4.4 below
Structure Practice and Performance

Positive Neutral
27%
73%
Figure 4.4: The effect of Organisational Structure practices on performance.
The study results in Figure 4.4 reveal that a majority of respondents at 73 percent consider
that Organisational Structure practices have a positive effect on performance of their firms.
At the same time, nearly 27 percent of study respondents are neutral or not sure of the
statement which means that they cannot clearly discern the effect of Organisational Structure
practices have a positive effect on performance of their firms. This result may underscore the
need for firms to heighten awareness of Organisational Structure practices and how they can
affect performance. Another important result is that no respondent opined negative effect of
Organisational Structure practices on performance; thus, there is a strong concurrence of
favourable effects of Organizational Structure practices on performance.
35
Organisational Systems and the responses are organized and analyzed as below.
Table 4.7: Organisational Systems
Organisational Systems SA A N D SD
Tota Mean SD
My firm has a well- 4 23 10 5 3 45 3.33 2.97
defined and clear
Workflow
arrangements
The firm develops and 6 24 9 3 3 45 3.60 3.22
uses clear work
procedures for
successful
accomplishment of
tasks and performance
success
The firm has adequate 3 22 9 8 3 45 3.27 2.92
processes to support the
effective
implementation of
plans, programmes, and
value creation.
The firm has a clear 6 24 6 6 3 45 3.53 3.18
channel for
36
communication among
various stakeholders
The firm has clear 5 27 10 3 0 45 3.20
feedback mechanisms
3.67
for engagement and
support for work
improvement
3.48 3.10
From table 4.7, a bulk of 51.0 percent of respondents agrees that there firm has well-defined
and clear workflow arrangements. The proportion indicating strongly agrees is 9 percent
which goes further to support the concurrence with the statement. A significant proportion of
20 percent is uncertain or neutral which should be a point of concern to the firms. A mean of
3.33 support an inclination of neutral position on this issue. A majority of respondents at 53
percent agree to the statement that their firm develops and uses clear work procedures for
successful accomplishment of tasks and performance success. Another 13 percent indicate
strongly agree which echoes the overall inclination of the respondent sentiments. A sizeable
proportion of 19 percent is uncertain or neutral which should be a point of concern to the
firms since this may affect efficiency and overall performance. However, a mean of 3.60
support an agree position on this matter. About 49 percent of respondents indicate that their
firms have adequate processes to support the effective implementation of plans, programmes,
and value creation. The respondents who disagreed and strongly disagreed with the statement
37
constituted 25 percent and this is a pointer that the firms have to address effective
implementation of plans through strategies such as better skill training. Overall, a mean of
3.27 support a neutrality view on this issue. Nearly 53 percent and 13 percent of respondents
agreed and strongly agreed that their firms have clear channels for communication among
various stakeholders groups. This reflects a slightly skewed concurrence that their firms have
clear channels for communication among various stakeholders groups since about 33 percent
are either neutral, disagreed and strongly disagreed. Overall, a mean of 3.53 supports a weak
agree position on this issue. Finally, a majority of 60 percent agreed that their firms have
clear feedback mechanisms for engagement and support for work improvement. This is
further supported by an 11 percent of respondents who stated that they strongly agreed. A
mean score of 3.67 shows support for an agree position on this statement. The overall mean
score for organizational systems design is 3.48 which show a weak agree position that
organizational systems design has an impact on the performance of family-owned firms.
Under the objective on Organizational Systems practices, the results reveal that FOFs have
well-defined and clear Workflow, develops and uses clear work procedures for successful
accomplishment of tasks and performance success, have adequate processes to support the
effective implementation of plans, programmes, and value creation, have clear channels for
communication, and have clear feedback mechanisms for engagement and support for work
improvement.
The respondents were probed on their view about the effect of organ organizational Systems
on performance of family-owned firms in Kitui County, Kenya and their responses are
analyzed and presented in Figure 4.5 below
38
Systems and Performance
33%
Positive
Neutral
67%
Figure 4.5: The effect of Organisational Systems on performance.
The study results in Figure 4.5 shows that a substantial majority of respondents at about 67
percent regard their organisational systems as important elements in positively impacting
performance. About 33 percent indicated neutrality which shows they are not sure on whether
organisational systems affect performance. The considerable proportion of respondents
showing neutral position may imply their ignorance in how they can harness or leverage
organisational systems for purposes of enhancing their own performance and that of their
firms. The absence of a no negative response is an indication of consensus that organisational
systems have some form of positive effect on performance.
Inferential Analysis of Strategic Management Practices and Performance of Family-
Owned Firms in Kitui County, Kenya
The inferential analysis applied in this section incorporates correlation and multiple
regression models. These analytical methods provide an opportunity to investigate and
identify any existing relationships between the variable (dependent and independent). A
39
combination of correlation and multiple regressions provide an opportunity to reveal the
associations and effect of the dependent and independent variables.
Correlation Analysis
Pearson correlation analysis was conducted to reveal the direction and strength of association
between the variables. The results are summarized in table 4.8 below.
Table 4.8 Multiple Correlation Analysis Results
Correlations
Y x1 x2 x3
Pearson Correlation 1 .830** .899** .883**
Y Sig. (2-tailed) .000 .000 .000
N 45 45 45 45
Pearson Correlation .830** 1 .849** .742**
x1 Sig. (2-tailed) .000 .000 .000
N 45 45 45 45
Pearson Correlation .899** .849** 1 .882**
x2 Sig. (2-tailed) .000 .000 .000
N 45 45 45 45
Pearson Correlation .883** .742** .882** 1
Sig. (2-tailed) .000 .000 .000

x3
45 45 45 45
N
**. Correlation is significant at the 0.01 level (2-tailed).
The findings in Table 4.8 show that organisational skills exhibited a significant correlation
with Performance (r = 0. 830, p< 0.01). There was also a positive and significant correlation
40
between organisational skills and the other variables. The findings reveal a positive
correlation which is statistically significant, between organisational structure with
Performance (r=-0.899; p< 0.01). Equally, there is a positive and significant correlation
between organisational structure and the other variables. Organizational Systems exhibited a
positive and significant correlation with Performance (r = 0.883, p< 0.01) and also with the
other variables. This means that organizational systems support organisational skills and
organisational structure.
Results for Multiple Regression Analysis on strategic management practices and the
performance of family-owned firms.
A multiple regression analysis was carried out to assess the effect of the independent
variables (strategic management practices) on the dependent variable (performance). The
correlation coefficient (R) and coefficient of determination (R 2) provide a pointer of the
direction and the strength of the relationship between the strategic management practices
(independent) and performance (dependent) variables. The outcomes of the analysis are
summarised in Table 4.9 below.
Table 4.9 Model Summary
Model Summary
Model R R Square Adjusted R Square Std. Error of the
Estimate
1 .929a .862 .852 .47148
41
a. Predictors: (Constant), x3, x1, x2
The summary of the multiple regressions in Table 4.9 above indicate a near perfect fit of the
data in the model. The coefficient of determination (R-square) value was 0.862 showing that
the proposed model explained nearly 86 percent of the variance in the performance
(dependent) variable. This finding implies that the strategic management practices variables
included in the study model substantially explained or predicted the outcome variable. The
value of 1.000 for adjusted R-squared further confirms the model's strong fit. The value of
standard error of the estimate was .47148, thus indicating a considerable average difference
concerning the predicted and observed values.
Regression Model Fitness Test
Model fitness was conducted to establish if the model best fit for the collected data. The
findings are presented in Table 4.10
Table 4.10 Regression Model Fitness Results
ANOVAa
Model Sum of df Mean Square F Sig.
Squares
1 Regression 57.114 3 19.038 85.641 .000b
42
Residual 9.114 41 .222
Total 66.228 44
a. Dependent Variable: Y
b. Predictors: (Constant), x3, x1, x2
Findings captured in Table 4.10 show that the model was a good fit to the data. Essentially,
the regression analysis shows that the regression model explained a significant part of the
variation in the dependent (organisational) variable. Specially, the regression sums of squares
of 66.228 indicate that the regression model described a considerable part of the variation in
the performance. The mean square for the regression model was 19.038. Additionally, the F-
value is 85.641, which indicates a highly significant relationship for the variables. The related
significance level is .000, which underscore the likelihood of attaining such a large F-value
by accident alone was very low. The findings confirm that the regression model is
statistically significant. The analysis shows a significant relationship between the variables,
with the model explaining a substantial part of the total variation.
Regression Model Coefficients
The Regression model’s coefficient result is indicated in table 4.11.
Table 4.11 Regression Model Coefficients
Coefficients
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
43
B Std. Error Beta
(Constant) .427 .245 1.747 .088
x1 .222 .099 .246 2.240 .031

1
x2 .326 .155 .327 2.095 .042
x3 .397 .118 .413 3.360 .002
a. Dependent Variable: Y
The findings in Table 4.11 show that coefficient for organisational skills practices was
(β1=0.222, p=0. 031), which suggests that a unit increase in organisational skills practices
was linked with a .222 increase in performance. Similarly, organisational structure has a
coefficient of (β2=0.326, p=0. 042), which indicates a positive effect on the performance. A
unit increase in organisational systems is associated with a. 326 increases in the performance.
The coefficient for organisational systems was (β 3=0. 397, p=0. 002), signifying those
organisational systems had a positive effect on the performance. A unit increase in
organisational systems is associated with a .397 increase in the performance. These
regression coefficients provide valuable insights into the directions and magnitudes of the
relationships between the variables. The p-values for all regression coefficients reveal that
every independent variable had a statistically significant effect on the performance,
emphasizing their prominence in describing the variation in the results.
4.5 Discussion of the Findings
The results on strategic management practices and performance variables sustainability reveal
several important insights. Family-owned firms in Kitui County have implemented strategic
management practices in line with the entrenchment of the strategic management concept.
This aligns with Kellermans et al. (2012) which shows that strategic management practices
44
are undoubtedly essential for family firms to renew their competitive advantage and sustain
performance over the long term. This however contrasts Ngugi (2013) study whose founding
show that a large proportion of family-owned businesses are managed according to the
guidance of family interests. The results show that Family-owned firms in Kitui County use
various types of strategic management practices including organisational structure design,
organisational systems design, and organisational skills. Results on organization
characteristics the family-owned businesses in Kitui have continued to employ and engage
employees with high knowledge and skills to manage their operations. The relatively long
period of operation for most of the firms in the sample shows the prospects of improving
organisational skills since firms learn more with more time in operations. The relatively large
number of employees in the firms indicates the diversity of skills and the enhanced capacity
to leverage them for synergy and performance. A significant proportion of firms are run by
the1st or 2nd generation which shows the accumulation of skills for these firms, which
enhance their prospect for enhancing performance.
Family-owned firms in Kitui County have enhanced their efforts in improving organisational
skills. This has been done through methods such as involving most stakeholders in the
decision-making processes, providing adequate financial resources for skills development,
providing adequate training of staff to meet skills needs, facilitating regular updates and
upgrade of technology particularly on skill’s development, and enhancing communication
channels. However, the respondents lack substantive clarity on their firms’ approach toward
conducting competitive recruitment for its staff, and developing strategic planning.
According to Sánchez-Marín et al (2019), FOFs play a more intervening role of hiring
practices and training practices which influence business performance. The finding indicates
need for FOFs to formalize HR practices to avoid family distractions and focus on
professional approach to enhance HR capacity. Overall, the results indicate that
45
organisational skills development practices have a positive effect on performance. Salvato
(2004) observed that the participation of diverse stakeholders including multigenerational
workforce in decision making process may be challenging due to different skills levels, goal
prioritization differences, orientation, and diversity of interests and orientation. According to
Sakamoto (2019), providing adequate financial resources for training and skills development
enhances capacity of firms to develop skills and knowledge base. Authors Akter, Wamba,
Gunasekaran, Dubey, & Childe (2016), observed that regular updates and upgrade of
technology is important in skill’s development and efficiency/effectiveness in operations.
This agrees with Smith (2008) study findings that NGOs with a highly skilled workforce
demonstrated significantly better performance, as they were better equipped to navigate
complex strategic challenges. Communication channels are important in sharing skills,
addressing disputes, and skills development (Carr & Kaynak, 2017). Roessl et al. (2010)
pointed out several challenges to FOFs including risk aversion, rigid processes, conflicts
between family members, nepotism, weak decision making capacity, and organizational.
Robinson (2007) observes that strategic management practice necessitates the allocation of
resources that support the firm's strategy, including a supportive culture, adequate financial
resources, advanced technology, and supportive and informed HR. Lawrence (2020) study
found that organisational skills development practices have a positive effect on performance.
According to Rehman, Mohamed, & Ayoup, (2019), organisational structure plays an
important role in influencing a firm’s performance due to factors such as resource allocation,
workflow, and communication which are supported by organisational structure. Family
owned firms in Kitui County have enhanced their efforts in improving organisational
structure. The results have revealed this because of methods such as existence of well-defined
and clear levels of management and workflows, applying the appropriate number of divisions
in the firms, provision of adequate control measure for effective implementation of plans and
46
programmes, having clear positions of authority to support decision making and management
of resources, and having clear functions to support specialisation of work. Kennedy et al
(2003) study underscored the need to have an effective approach in implementation of
strategy. This is supported by Kaplan and Norton (2005) who noted that a failure in strategy
implementation can create a weakness between strategy and performance. According to
Zheng, Yang, and McLean, (2020), firms that improve their organisational structure tend to
align resources and capacity more efficiently and effectively which lead to better
performance. The clarity in the levels of management and workflows tends to enhance
efficiency and performance. The appropriate number of divisions in the firms and the
provision of adequate control measure for effective implementation of plans and
programmes, and provision of adequate financial resources for skills development tend to
have positive influence on performance (Helmold & Samara, 2019). Clear positions of
authority and leadership tend to support decision making and management of resources, and
this ultimately leads to better performance. According to Kohn (2005) the degree of
centralization in an organization structure affects its ability to respond to changes and
opportunities and consequently the performance.
Family owned firms in Kitui County have enhanced their efforts in improving organisational
systems. The results have revealed this because of methods such as well-defined and clear
Workflow arrangements, clear work procedures, and adequate processes to support the
effective implementation of plans, programmes, having clear channels for communication,
and having clear feedback mechanisms for engagement. The existence of well-defined and
clear Workflow arrangements, and work procedures tend to help in task accomplishment and
ultimately performance improvement (Rajagopal, and Davila, 2020). Adequate processes to
support the effective implementation of plans, and programmes help to enhance efficiency
and effectiveness in resource usage and ultimately in performance (Rajagopal, and Davila,
47
2020). Clear communication channels among various stakeholder’s groups and proper
feedback mechanisms for engagement helps in work support, innovation, and work
improvement. A study by Onyiro et al (2023), underscores the importance of organisational
systems on performance of SMEs. Accordingly, enhancing communication flow and more
control mechanisms- standard practices, participatory target setting, correction measures, and
performance assessment practices- can help to enhance the organisational systems.
The inferential analysis shows that firms apply strategic management practices to achieve
better performance. This agrees with researchers Cassia et al. (2012) and Craig et al. (2014)
observations that family businesses increasingly need to pursue strategic oriented goals to
create and sustain their competitive advantage. Ansoff et al (1970) study found that firms
with effective and well-structured strategic systems tend to outperform their competitors due
to their ability to adapt and execute strategies efficiently. Different generations in the
management interactions and board pose contestation in strategic direction due to diversity of
knowledge bases of various generations, aspirations, and overall strategic orientation (Nurul
et al, 2022). Chrisman et al. (2015a) observed that family involvement in ownership,
management, and governance affects family firm strategic behavior Therefore, the
multigenerational context can have effect on the performance of Family owned firms
(Chrisman et al., 2015a). The study has revealed the importance of strategic management
practices in achieving performance and this is supported by Kellermanns et al. (2012) study
which noted that strategic management practices are essential for FOFs to enhance their
competitive advantage and sustain performance over the long term.
48
CHAPTER FIVE
SUMMARY, CONCLUSION, AND RECOMMENDATIONS

5.1 Introduction
This chapter provides a summary of findings, conclusions, and appropriate recommendations.
5.2 Summary of findings
The main objective of this study was to evaluate the effect of the strategic management
practices on the performance of family-owned firms in Kitui County, Kenya.
The results revealed that, the family-owned firms in Kitui County use several strategic
management practices based on their specific goals, needs and expectations. The firms
leverage Firm characteristics such as education qualifications, organisational skills capacity,
learning curve, a large and synergetic workforce, cross generational experience, and
49
ownership stability to enhance efficiency, effectiveness, and performance. One of the core
practices is development and application of organisational skills. FOFs use and engage
stakeholder groups, facilitate adequate training of staff, support skills development using
regular update of technology, and provide adequate communication channels to support
performance. However, the firms need to exert more efforts in provision of adequate financial
resources, development of strategic planning to prepare for its goals, and conduct competitive
recruitment for its staff to enhance its performance capacity.
The other core practice is the development of organisational structure design. FOFs in Kitui
County apply several practices including well-defined and clear levels of management, clear
workflows, clear positions of authority, and clear functions to support specialisation of work.
However, improvements in control measures, and appropriate number of divisions in firms
can help enhance the capacity of organisational structure and improve overall performance.
The other core practice is the development of organisational systems. FOFs in Kitui County
apply several specific practices including development and uses of clear work procedures,
clear channels for communication among various stakeholder groups, and clear feedback
mechanisms for engagement and support for work improvement. These practices strongly
support the strategic management of the FOFs. Equally, more attention is needed in
provision of adequate processes to support the effective implementation of plans,
programmes, and defining and clarifying workflow arrangements. An important observation
from the study results is the considerable proportion of neutral views about various factors.
This could imply that a considerable number of employees may not have clear view of
expectations from their firms and may also lack the confidence to discern the developments
in their firms. This may also imply inadequacy in standards for practices and procedures.
Overall, the strategic management practices encompassing organisational skills,
organisational structure, and organisational systems have a considerable effect on
50
performance of FOFs. The specific practices have different effects on the performance and
this is further influenced by other factors.
5.3 Conclusions
The study has found out that developments in organisational skills, organisational structure,
and organisational systems are at the core of propelling performance. FOFs have continued to
apply diverse strategic management practices to support the medium and long term
performance prospects. Firms have pursued strategic management practices initiatives on the
basis of their goals, objectives, and environmental variables. Both soft and hard factors have
a considerable effect on the decisions and actions taken by firms including being proactive in
addressing strategic management practices. FOFs in the county are using multiple strategies
and initiatives to better performance. Strategic management practices need to be introduced
and integrated into practice in a progressive way where current successes can be leveraged
for further initiatives. The benefits generated from Strategic management practices can be
leveraged for improvement in value creation and overall performance. Strategic management
practices metrics and measurements can be used to assess effectiveness of various practices,
initiatives, and programs. Indeed, Strategic management practices have effect on image,
goodwill, reputation, efficiency, quality, and productivity of FOFs.
5.4 Recommendations
The study findings have largely revealed a positive effect of Strategic management practices
on performance among FOFs in Kitui County, Kenya. FOFs embrace Strategic management
practices because of the potential benefits that may accrue from the practices and to help
them respond to challenges that accrue from these forms of businesses. This study has proved
that Strategic management practices continue to impact the firms positively which should be
upheld. FOFs in Kitui County, Kenya, need to continue embracing Strategic management
51
practices and customise or tailor them to meet their specific goals/needs and align with the
changes in the environment. All regulators including government should continue
formulating policies that require FOFs to embrace Strategic management practices to enhance
prospects of enhancing performance for the firms and country at large. Equally, the firms
should accelerate progress on initiatives to enlighten the various stakeholder of the
expectations based on mission and goals. FOFs should apply diverse Strategic management
practices to be able to leverage the potential synergies that are generated from such
approaches. FOFs have achieved several milestones in terms of Strategic management
practices but it is important to continue benchmarking with firms in other counties and
industries. FOFs are expected to encounter challenges in implementation of Strategic
management practices; hence, the firms should have contingency strategic plans to in
readiness to address any developments in the environment.
Strategic management is a long-term agenda and thus, the firms must continue entrenching
these practices into their corporate plans. It is important for the firms to develop and adapt
appropriate metrics and measurements for strategic management practices to ensure proper
tracking of progress and determine appropriate actions. Challenges in implementing strategic
management practices are inevitable and thus, the firms should constantly introduce proactive
measures to mitigate or avert the challenges. FOFs in Kitui County should continue building
capacity for strategic management practices, adapt developing and emerging strategic
management practices, undertake benchmarking, and orient stakeholders toward strategic
management practices. FOFs must align with intergenerational workplace environment by
facilitating proper integration in work teams, proper training, and proper work plans and
career paths.
52
5.5 Limitations of the study
The researcher experienced difficulties in securing interviews for the survey where several
adjustments had to be made to align with the respondents busy and changing schedules.
Patience was essential and polite reminders were sent to respondents underscoring the
importance of meeting academic timelines. There was challenge in terms of difficulties to
access information and data on strategic management practices due to the sensitive nature of
the same (proprietary and confidential). However, the respondents were constantly reassured
of the commitment to uphold confidentiality of the process.
5.6 Suggestions for Further Study
The scope for current study is confined to strategic management practices and performance of
FOFs; hence, the results cannot be generalized to other forms of firms. Conducting other
studies to address other fields may provide more accurate results for them. This will enable
the researchers and other stakeholders to compare and ultimately improve understanding on
how strategic management practices can be used to enhance performance. Further studies can
be done across different industries and segments to help understand the diversity of
application and help build knowledge pool on strategic management practices.
53
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APPENDIX: Questionnaire
Kindly answer the following questions as honestly and accurately as possible. The
information given was treated with a lot of confidentiality. Please do not write your name
anywhere on this questionnaire. You are encouraged to give your honest opinion.
SECTION A: ORGANIZATION CHARACTERISTICS

1. How long has your business been operating in Kenya?
0 – 10 Years [ ] 11 - 20 Years [ ]
21 - 30 Years [ ] Above 30 Years [ ]
2. How many employees does your business have?

0 – 50 Employees [ ] 51 – 100 Employees [ ]
101 – 150 Employees [ ] 151 – 200 Employees [ ]
Over 200 Employees [ ]
3. Which generation runs the business?

1st Generation [ ] 2nd Generation [ ]
3rd Generation [ ] 4th Generation [ ]
5th Generation [ ]
4. Which generation owns the business?

1st Generation [ ] 2nd Generation [ ]
3rd Generation [ ] 4th Generation [ ]
5th Generation [ ]
61
SECTION B: ORGANIZATIONAL SKILLS
To what extent has your firm implemented the following aspects of Organisational Skills?
Please indicate the extent to which you agree with each of the statement with regard to your
firm. Use a scale of 1-5 where; 1= No Extent, 2 Little Extent, 3=Moderately Extent, 4= Great
Extent, 5= Very Great Extent.
Respondents Rating
Organisational Skills
1 2 3 4 5
5. All stakeholders are involved in the decision making

processes.
6. The firm provides adequate financial resources for

skills development
7. The firm provides adequate training and

development of staff to meet skills needs for
performance.
8. The firm perform regular updates of its technology
particularly on skill’s development technology
9. The firm conducts competitive recruitment process
for its staff including management personnel to
boost its skills capacity
10. The firm has clear and adequate communication

channels to support the needs of diverse stakeholders
11 The firm develops strategic planning to prepare for
its medium and long-term goals
12. In your view, what is the effect of organisational skills development practices on
performance of family-owned firms in Kitui County, Kenya? (Positive/Negative/Neutral)
…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………………………………
SECTION C: ORGANISATIONAL STRUCTURE
To what extent do you agree with following statement as measures of Organisational

Structure? : Use a scale of 1-5 where; 1= No Extent, 2 Little Extent, 3=Moderately Extent, 4=
Great Extent, 5= Very Great Extent.
62
Respondents Rating
Organisational Structure
1 2 3 4 5
13. My firm has a well-defined and clear levels of

management workflows
14 The number of divisions in the firm are appropriate

for successful performance of the firm
15. The firm has adequate control measure for effective

implementation of plans and programmes.
16. The firm has a clear positions of authority to support

decision making and management of resources
17. The firm has clear functions to support specialisation

of work
18. In your view, what is the effect of Organisational Structure practice on performance of
family-owned firms in Kitui County, Kenya? (Positive/Negative/Neutral)
…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………………………………
SECTION D: ORGANISATIONAL SYTEMS
To what extent do you agree with following statement as measures of Organisational

Systems? : Use a scale of 1-5 where; 1= No Extent, 2 Little Extent, 3=Moderately Extent, 4=
Great Extent, 5= Very Great Extent.
Respondents Rating
Organisational Systems
1 2 3 4 5
18. My firm has a well-defined and clear Workflow

arrangements
19. The firm develops and uses clear work procedures

for successful accomplishment of tasks and
63
performance success
20. The firm has adequate processes to support the

effective implementation of plans, programmes, and
value creation.
21. The firm has a clear channels for communication

among various stakeholders
22. The firm has clear feedback mechanisms for

engagement and support for work improvement
22. In your view, what is the effect of Organisational System practice on performance of
family-owned firms in Kitui County, Kenya? (Positive/Negative/Neutral)
…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………………………………
SECTION E: PERFORMANCE
Performance of Family-Owned firms

Period
Indicators FY 2022 FY 2021 FY 2020 FY 2019 FY 2018
Asset Base
Customer
Base/Numbers
Number of
Branches
Net Profit
Return on
Assets
64
23. In your view, what is the effect of the strategic management practices on the performance
of family-owned firms in Kitui County, Kenya? (Positive/Negative/Neutral).
…………………………………………………………………………………………………
…………………………………………………………………………………………………
……………..
65

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STRATEGIC MANAGEMENT PRACTICES AND PERFORMANCE OF

FAMILY-OWNED FIRMS IN KITUI COUNTY, KENYA

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT

Signature ……………………. Date…………………………

Signature ……………………… Date……………………….

PROF. EVANS AOSA

DEPARTMENT OF BUSINESS ADMINISTRATION

fortitude, wisdom, and health I required to finish my degree.

which enabled me to complete my thesis successfully.

I am grateful to the upper management of many family-owned companies for granting me

access to their facilities to conduct my research and share important information.

God richly bless every single one of you.

ABBREVIATIONS AND ACRONYMS................................................................................x

1.1 Background of the Study..................................................................................................1

1.1.2 Organizational Performance......................................................................................4

1.1.3 Family Owned Firms in Kitui County, Kenya...........................................................5

1.2 Research Problem.............................................................................................................6

1.3 Research Objective...........................................................................................................8

1.4 Value of the Study............................................................................................................8

2.2 Theoretical Foundation of Study....................................................................................10

2.2.2 Open Systems Theory..............................................................................................12

2.3 Strategic management practices and performance.........................................................13

2.4 Empirical Review and Knowledge Gaps........................................................................15

3.2 Research Design.............................................................................................................17

3.3 Population of Study........................................................................................................17

3.4 Sample Design................................................................................................................18

3.5 Data Collection...............................................................................................................18

3.6 Data Analysis..................................................................................................................20

DATA ANALYSIS, RESULTS AND DISCUSSION..........................................................21

4.2 Firm Characteristics and Profile of Respondents...........................................................21

4.2.2 Respondent Job Position..........................................................................................22

4.2.3 Period of Firm Operation.........................................................................................23

4.2.4 Number of Employees.............................................................................................24

4.2.5 Generation That Runs the Business.........................................................................25

4.2.6 Generation That Owns the Business........................................................................26

4.3 Strategic Management Practices and Organisational Performance of Family-Owned

4.4 Discussion of the Findings.............................................................................................44

SUMMARY, CONCLUSION, AND RECOMMENDATIONS.........................................49

5.2 Summary of findings......................................................................................................49

5.5 Limitations of the study..................................................................................................52

5.6 Suggestions for Further Study........................................................................................52

Figure 4.2: Respondent’s Job Position (Capacity of Experience and Knowledge)

Figure 4.3: The effect of organizational skills development practices on performance......30

Figure 4.4: The effect of Organisational Structure practices on performance.

Figure 4.5: The effect of Organisational Systems on performance.

Table 4.2: Size of Workforce...............................................................................................24

Table 4.3: Runs the Business................................................................................................25

Table 4.4: Owns the Business..............................................................................................26

Table 4.5: Organizational Skills...........................................................................................26

Table 4.6: Organisational Structure Design1

Table 4.7: Organisational Systems5

Table 4.8 Multiple Correlation Analysis Results

Table 4.9 Model Summary1

Table 4.10 Regression Model Fitness Results

Table 4.11 Regression Model Coefficients

FOFs Family Owned Firms

GDP Gross Domestic Product

NGOs Non-Governmental Organizations (NGOs)