Assessing the Effect of Technological Capabilities on Firm Performance: Case Study of Nzoia Sugar Company

Abstract

The idea of technological capabilities plays a key role in the analysis of organizational processes because it offers a potential solution to the quest for sustained competitive advantage through the realization of organizations objectives. The importance of technological capabilities suggests that the long-term, continuous renewal of the firm rests on both the exploitation of existing capabilities for the furtherance of the institutions objectives. This is mainly achieved by the creation and development of specific organizational capabilities. This study therefore, sought to evaluate the effects of technological capabilities in Nzoia Sugar Company Limited. The study was based on the Resource Based View Theory. A case study and survey designs were employed in this research. The study targeted a total of 1,403 employees comprising of 790 lower level employees, 422 Supervisory level employees, 182 middle level management and nine top level management. Random stratified sampling technique was used to select 210 respondents. Data collection instruments comprised of questionnaires and interview schedules. Validity was determined by content validity and reliability using Cronbach alpha method which had Cronbach Alpha Coefficient of 0.783 which was greater than 0.7. Data was collected and analyzed using descriptive while inferential statistics at 95% confidence level. The results were presented in form of frequency tables and pie charts. It was concluded that an increase in customer service management capability constructs like repeat purchase, confidentially of customer information and different customer needs once enhanced could translate to higher firm performance; attributes of marketing capabilities like employee training on basic marketing skills, e-marketing and marketing intelligence information should be enhanced; internet penetration, automation of processes, use of e-marketing and procurement could lead to improved firm performance and setting targets for the company which are attainable, monitoring and evaluation of all activities would lead to improved firm performance. The findings of this study shall be useful to the policy makers, strategists and the researcher in making informed conclusions and recommendations. The findings shall give guidance to the managers of different departments in coming up with proper policies in management. The stakeholders in management will find the study useful in identifying challenges faced by Firms who do not invest and emphasize on organizational capabilities.

Keywords: Technology, performance, firm, capability, competitive advantage