EFFECT OF STRATEGIC LEADERSHIP ON ORGANIZATIONAL PERFORMANCE OF FAMILY OWNED BUSINESSES IN NAKURU EAST SUB COUNTY, KENYA

Abstract

Family owned businesses play a crucial role in the economy through employment creation, income generation and also in accumulation of wealth. However, the family owned businesses face performance challenges such as poor employee performance leading to low profit margins or losses, employee payment challenges and marketing challenges. The study seeks to examine the effect of strategic leadership on performance of family owned businesses in Nakuru East Sub County, Kenya. The objectives of the study included; To examine the effect of organizational culture on the performance of family owned businesses in Nakuru East Sub County, Kenya, and To assess the effect of corporate governance on the performance of family owned businesses in Nakuru East Sub County, Kenya. The other objectives were to explore the effect of resources management on the performance of family owned businesses in Nakuru East Sub County, Kenya and to establish the effect of strategic direction on the performance of family owned businesses in Nakuru East Sub County, Kenya. The study used descriptive research design and target businesses owned by families within Nakuru East Sub County. The study targeted the population of 2,600 family businesses operating within Nakuru East Sub County. The study used stratified random sampling to arrive at the sample size desired in the study. The sample size was 96 respondents. The organizational culture had a statistically significant positive correlation with business performance. In respect to the role of organizational culture on the business performance, the achieved regression coefficient was 0.260 indicating that a unit increase in organizational culture would lead to 0.260 increase in business performance with the other variables kept constant. The results were statistically significant at 5% level of significance. In respect to the relationship between corporate governance and business performance, the study found that there was a statistically significant positive correlational relationship between corporate governance and business performance. The study further found that a unit increase in corporate governance would lead to 0.215 increase in business performance with the other variables kept constant. These results were found statistically significant since p value was 0.000 and was less than the 0.05 level of significance. The study thus concluded that there was a statistically significant influence on the performance of family owned businesses in Nakuru East Sub County, Kenya. In respect to the relationship between resources management and business performance, the study found that there was a positive correlational relationship with business performance that was significant in nature. The study further found that a unit increase in resources management would lead to 0.219 increase in business performance with the other variables kept constant. The results were found to be statistically significant. The study thus concluded that resource management had significant influence on the performance of family owned businesses in Nakuru East Sub County, Kenya. The study found that strategic direction and business performance had a positive correlation that was statistically significant in nature. These results were found statistically significant five percent level of significance. The study concluded that there was statistically significant influence of the performance of family owned businesses in Nakuru East Sub County, Kenya. The study recommended that resources management should be emphasized on in order to lead to improved business performance of the family businesses. The study thus recommended that the aspects should be emphasized on by the management.