Human Resource Management Practices and Sustainability of Family Owned Small Enterprises in Nairobi County, Kenya

Abstract

Family owned enterprises play a key role in economic development through employment creation and availing of products and services to the end users. Some major family owned businesses in Kenya include the Nakumatt Supermarket, Tuskeys Supermarket, Bidco, Chandaria holdings, Brookside diaries among others. The firms have significantly transformed the face of corporate sector with massive expansion across the country and in East Africa. Despite the success that surrounds the family owned businesses, their performance has been at the threat of decline with many of them ending up closing their doors as a result of increased mismanagement as well as succession chaos. These challenges, combined with the normal business environment challenges posse a big threat to the firms’ sustainability. On the other hand, human resource management practices have been argued to be the central enablers of firm performance and sustainability. Through well-tailored employee management practices and ensuring that the human capital is well taken care of, competitiveness of a firm is enhanced. However, there has not been much research on the relationship between human resource management practices and sustainability of family owned small businesses in Kenya hence the subject of the study. The study aimed at finding out the relationship between human resource management practices and sustainability of the family owned small enterprises in Kenya. The study specifically sought to establish the relationship between talent management and sustainability of the family owned businesses, to find out the relationship between training and development and sustainability of Family Enterprises, to determine the relationship between successor engagement and sustainability of Family Enterprises, and to establish the relationship of human capital orientation and sustainability of Family Enterprises. The study adopted several theories so as to bring the research problem into a clear perspective. The theories included the two factor theory of human resources, stakeholder theory, Scharmer’s Theory U, resource based theory, competency models and social learning theory. The theories were presented systematically as per the study variables to bring an outstanding context in the research variables. The study adopted descriptive research design which involved both qualitative and quantitative research methodologies. The design was considered appropriate based on its ability to give more generalized results and enhance the practicability of the variables. The study targeted family owned small business enterprises in Nairobi County which are approximately 23273. Stratified random sampling was applied to come up with a study sample of 377 respondents. Questionnaires were used to collect data from the respondents. The data was analysed using SPSS software version 22 and presented in form of tables, figures and graphs. The study established that human capital orientation, successor engagement, talent management, training and development significantly and positively enhance sustainability of family owned enterprises. The findings from the study will be significant to family business enterprise owners who will use them to run and manage their firms and employees for better performance and sustainability. The government and the policy makers will benefit from the study findings in that they will use the facts presented to formulate rules and regulations that enhance the continuity of family owned businesses. Also, the study findings will be significant to future researchers and scholars who will use them as their source of statistical evidence to lay out arguments as well as identify gaps to be filled.