Influence of Efficiency-Centred Business Model Innovation on the Performance of Manufacturing Firms in Kenya
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Abstract
The research study examines the influence of efficiency-centred business model innovation on Kenyan manufacturing companies' performance. The key indicators of efficiency-centred business model innovation were transaction efficiency, cost reduction and information sharing, while the key measures of firm performance were returned on assets, sales growth, employees' commitment and environmental stewardship. The study was anchored on transactions cost economics theory. The study adopted the descriptive research design and was grounded on positivist research philosophy that aligns with the study research design whilst adhering to classical scientific methods. A multi-stage sampling method was adopted to collect data from heads of sales department officers in the manufacturing sector. A semi-structured questionnaire was used to collect data. Data was analysed using Statistical Package for the Social Sciences software. The data was analysed using descriptive analysis techniques such as mean, percentages and standard deviation. Inferential analysis was undertaken to determine the relationship between the predictor variable and the criterion variable. The study established that efficiency-centred business model innovation positively and significantly influenced manufacturing firms' performance (R=0.646, p=0.016<0.05). It is recommended that manufacturers should prioritize to optimise their business models' efficiency to achieve superior long-term performance. The study findings inform the extent to which efficiency-centred business model innovation predicts the performance of manufacturing firms. The findings underscore the significant role of efficiency centered business model innovation in enhancing Kenyan manufacturing firms’ performance. The study contributes to the manufacturing sector literature by providing empirical evidence on how managers can embed efficiency-centred business model innovation practices to improve Kenyan manufacturing firms' performance in the highly volatile, uncertain, complex and ambiguous environment.