Influence of Knowledge Acquisition on Organizational Performance Based on Return on Equity and Return on Assets of State Owned Commercial Enterprises in Kenya

Abstract

Purpose of this study was to analyze the influence of knowledge acquisition on organizational performance based on return on equity and return on assets of state owned commercial enterprises in Kenya. This study was based on explanatory and descriptive research designs since they were more appropriate to test the hypotheses. The target population comprised of 275 members of top management team of 55 commercial state-owned enterprises in Kenya, as at 31^st October 2016. The study utilized simple random sampling to select a sample of 268 members of top management team in the 55 commercial state-owned enterprises. Response rate of 71% was obtained and analytical tests conducted were Pearson correlation coefficients, One Way ANOVA, and Multiple linear regression. The correlation coefficients for return on equity was (r = -0.052, p = 0.481) and return on asset was (r = 0.075, p = 0.309) on knowledge acquisition respectively. Result for One-Way ANOVA on two segments of state owned commercial enterprises was, F (14, 173) = 3.104, p=0.000. The regression coefficients on return on equity were: unmoderated model; β= -0.957, t (-1.392), p>0.05 and moderated model; β= -4.957, t (-2.567), p<0.05 respectively. While the regression coefficients on return on assets were: unmoderated model; β=0.0002, t (-0.001), p=0.999 and moderated models; β= -0.088, t (-0.118), p=0.906 respectively. The study concludes there is significant influence of knowledge acquisition and organizational performance based on return on equity of state owned commercial enterprises but there is no significant influence of knowledge acquisition on organizational performance based on return on assets of state owned commercial enterprises in Kenya.

Keywords: Knowledge acquisition, Return on Assets (ROA), Return on Equity (ROE)

DOI: 10.7176/EJBM/11-3-01