Influence of Environmental Scanning on the Performance of Small and Medium Manufacturing Enterprises in Kenya

Abstract

This paper addresses the Influence of Environmental Scanning on the Performance of Small and Medium Manufacturing Enterprises in Kenya. Methodically, the study was guided by the positivism research philosophy. The study applied cross-sectional descriptive research design since data collection in this study was carried out in a structured inexpensive and minimal time-consuming manner, assisting in answering the when, who, where, what and how questions and also determine whether a relationship exists between the dependent and independent variables. The population of the study targeted was 622 manufacturing SMEs registered under the Kenya Association of Manufacturers (KAM) membership, based in Kenya. This study adopted stratified random sampling technique to select 243 managers for the study. Primary data was collected using a structured questionnaire that was designed based on the research objectives. Both descriptive and inferential analyses were employed for analysis. Regression analysis found that environmental scanning significantly predicts performance of Small and Medium Manufacturing Enterprises in Kenya, R2 = .398, F (1,194) = 63.840, p = .000 < .05. Hence, the null hypothesis of the study was rejected and the study concluded that environmental scanning significantly influences performance of Small and Medium Manufacturing Enterprises in Kenya. The managers and owners of the SMEs should develop an awareness of their industry and competitors, and consequently scan the environment regularly. In addition, the government should work together with manufacturing SME firms in creating and providing conducive business environments that aid sustainable organizational growth resulting in better business performance.