Effect of Social Entrepreneurship Factors on Firm Perfomance of Enterprise Based Parastatals in Kenya

Abstract

The essence of this research was to examine the effect of SE factors on the performance of commercially oriented parastatals in Kenya. The study objectives were to: determine whether individual factors have an effect on the performance, establish the effect of organizational factors on the performance, establish the effect of organizational resources on the performance and determine the effect of environmental factors on the performance of enterprise based parastatals in Kenya. The study adopted a survey design with mixed approaches: a systematic integration of quantitative and qualitative methods. The population of the study was 55 enterprise based parastatals with a population of 495 top managers. Using stratified and simple random methods, 270 respondents were randomly selected from amongst the 30 commercially oriented parastatals in Kenya. The respondents comprised of top managers from the 30 parastatals. The questionnaire was used to collect data. Secondary data was collected from financial and audited statements. Coefficients between independent variables (Individual factors, organizational factors, organizational resources and environmental factors) and dependent variable (firm performance) elements obtained from factor analysis were computed to explore possible strengths and direction of relationships. Binary logistic regression analysis was conducted and the results were used to make interpretations and conclusions. The results of findings showed that the correlation results indicated that there was: a positive and significant relationship between individual factors, organizational resources, and organizational factors, environmental factors on the performance of enterprise based parastatals. The study recommended that for the enterprise based parastatals to improve their performance, they should continuously improve personality traits and enhance firm attributes, strategies and firm specific resources. Further recommendations were exploitation of potential of individuals through motivation as well as recognition of personal backgrounds and fostering individual competencies, organizational factors and dynamic capabilities. The study also recommended optimum use of human and physical resources as well as effective and efficient use of financial and experiential resources. Finally, it was also recommended that the enterprises should consider dynamic and hostile aspects of the environment planning and consider heterogeneity and competitive intensity in strategic planning. The implication of the study is that two similar studies can further be undertaken: one measuring the performance of enterprise based parastatals in terms of non-financial performance and the other to investigate the effect of the four independent variables on the performance of non-enterprise based parastatals in Kenya.