OPERATIONAL INNOVATION PRACTICES EFFECT ON PERFORMANCE OF MANUFACTURING FIRMS: EMPIRICAL EVIDENCE FROM FIRMS IN KENYA
Abstract
The concept of firm performance was premised on operational innovations. The interplay of these
factor's dimensions contributes towards the firm's performance outcome. The factors, which
include innovations in the marketplace, products, processes, and technologies, make up
operational innovation. Thus, achieving ultimate performance requires that the manufacturing
firm remains at the market's competitive edge by applying innovative technology manifested
through markets, processes, and products. This study focused on the performance of Kenyan
manufacturing firms and operational innovational practices relationship. Positivism criteria are
used because it revolves around scientific laws and principles that increase the reliability of the
investigation's findings for generalization. A descriptive research design was adopted, which
entailed collecting data from many firms, and therefore was the best approach to increase the
survey reliability. The number of firms involved in the study was 182, all with active Kenya
Association of Manufacturers (KAM) affiliation. The firms were put into 14 subcategories of
manufacturing based on the product they manufacture. Statistical Package for the Social Sciences
(SPSS) and smart PLS4 tools were used for data analysis. Also, using regression analysis, the
results revealed that operational innovation practices significantly influences manufacturing
firms’ performance in Kenya. While looking at the effects of the dimensions of operational
innovation on firm performance, the results indicated that process innovation had the most
significant impact while technological innovation had the least. The outcome revealed which
operational innovation is significant and should be focused by the operation managers during
product design to gain competitive edge in the industry.
Keywords: Firm Performance, Market Innovation, Operational Innovation, Process Innovation,
Product Innovation.
