EFFECT OF STRATEGIC MANAGEMENT PROCESSES ON PERFORMANCE OF DAIRY AGRIBUSINESS SMALL AND MEDIUM ENTERPRISES IN MURANG’A COUNTY, KENYA

Abstract

The performance of small and medium enterprises (SMEs) in Kenya’s dairy agribusiness sector increasingly depends on their ability to apply structured strategic management processes in a dynamic and competitive environment. Although the sector plays a critical role in local economic development, there is limited empirical evidence on how the full cycle of strategic planning, implementation, evaluation, and control collectively shapes firm performance. Guided by the Resource-Based View, which emphasizes internal capabilities, and Contingency Theory, which highlights environmental alignment, this study examined the effect of these four strategic management processes on the performance of dairy agribusiness SMEs in Murang’a County. A descriptive cross-sectional design was used, and data were collected from 143 enterprises through a structured questionnaire. Descriptive statistics, reliability tests, correlations, and regression models were applied to assess the adoption of strategic processes and their effect on performance. Results showed that all four strategic management processes were moderately established, indicating partial institutionalization of structured managerial practices. Regression findings revealed that strategic planning, strategy implementation, strategy evaluation, and strategic control each had a positive, statistically significant effect on performance, with planning and control emerging as stronger predictors. These results demonstrate that improvements in firm performance are linked not to isolated managerial actions but to the integration and consistent application of the strategic management cycle. The study contributes new empirical evidence to the strategic management literature by focusing on dairy agribusiness SMEs in a developing economy context. The findings underscore the need for enterprises to strengthen planning routines, enhance execution capabilities, and adopt systematic evaluation and control mechanisms to improve performance. The study recommends targeted managerial capacity-building and supportive policy interventions to help firms institutionalize these processes. Future research should examine the longitudinal evolution of these practices and investigate potential moderating factors such as technology adoption.