The Mediating Influence of Employee Behaviour on the Relationship Between Strategic Planning and Competitive Advantage of Large Manufacturing Firms in Kenya

Abstract

Several studies have been carried out in the past to find out how strategic planning and competitive advantage are connected and the causes of differences in competitive advantage among firms. Scholars have argued that competitive advantage can emanate from either internal or external sources and is usually in several forms which include; valuable resources, the position held within the industry, position within the marketplace, operating at lower costs than rival firms, differentiation, capabilities and dynamic capabilities. The debate on what causes differences in competitive advantage is still on. This study sought to establish the mediating influence of employee behaviour on the relationship between strategic planning and competitive advantage of large manufacturing firms in Kenya. The study was underpinned by the competitive advantage typology of Michael Porter, the resource-based theory, dynamic capabilities theory, and goal-setting theory. The study used a positivist research paradigm and a cross-sectional survey design. This was a census study from 124 large manufacturing firms in Kenya. Out of the 124 firms, data on strategic planning, employee behaviour and competitive advantage was collected from 122 of the firms representing a response rate of 98.4%. The data was interpreted using a 5-point Likert type questionnaire. The data received was analysed using both descriptive and inferential statistics. Reliability tests returned an average Cronbach Alpha Value for the three variables that is strategic planning, employee behaviour and competitive advantage, of 0.86. Hypotheses were tested using both simple and multivariate regression analysis as well as hierarchical analysis for mediation. The findings indicate that overall strategic planning has a statistically significant influence on competitive advantage and that employee behaviour mediates completely the relationship between strategic planning and competitive advantage (R²=0.751, p-value<0.05). The study concluded that the relationship between strategic planning and competitive advantage is completely mediated by employee behaviour. The study further recommended that employees’ behaviour should be strategically aligned to the goals and objectives set in the strategic plan and that they should be committed fully to the ideals of the firm in order for the firm to attain and sustain its competitive advantage position.

Keywords: strategic planning, competitive advantage employee behaviour, lower costs, differentiation, capabilities, dynamic capabilities

DOI: 10.7176/EJBM/11-8-01

Publication date:March 31^st 2019