Resource Configurations on Sustainable Competitive Advantage of Food and Beverage Firms in Kenya: A Resource Based View of the Firm

Abstract

The resource based view has gained immense importance in business theorizing and has been widely accepted as a theory. The Kenyan manufacturing sector contributes about 10 percent to the GDP of which agro-processing contributes 3 percent. The sector grows at about 4 percent annually and is set to be one of the main drivers of industrialization and economic growth in the Kenya. The resource based theory of the firm was tested on the food and beverage firms in Kenya on the basis of resource capability configurations that accord firms sustainable competitive advantage. From the 138 food and beverage manufacturing firms registered by the Kenya Association of Manufacturers in 2011, the study targeted 95 firms in and around Nairobi and Mombasa using purposive judgmental sampling. The study was carried out through a standardized questionnaire. The independent variables were mainly constructs of intangible assets like firm knowledge, firms’ information management, strategic planning, organizational structure and organizational culture. Out of the 95 firms surveyed, 32 responded giving 33.7 percent response rate. From the multivariate ordinary least squares regression analysis, the effects of organizational structure (p = 0.04, ?=0.05) were found significant at 95 percent confidence interval indicating the importance of the intangible asset to firms’ sustainable competitive advantage. The findings confirmed the importance of the organizational structure, whose building blocks are individuals in the firm, as a pattern of communication and relations among a group of human beings, including the process of making and implementing decisions as key contributors of firms sustainable competitive advantage in Kenya.

Keywords:Firm resources, Organizational structure, sustainable competitive advantage.