Strategic Management Practices and the Profitability of Micro, Small and Medium Enterprises in a Rapidly Urbanising Kenyan Municipality: Evidence from Kitengela, Kajiado County

Author

Laura Atieno,Prof. Hillary Busolo ,Dr. Caren Jerop


Abstract

 Micro, Small and Medium Enterprises (MSMEs) are central to employment and income generation in Kenya, yet many struggle to remain profitable and a large share close within a few years. This study examined how four strategic management practices—strategic leadership, strategic resource allocation, strategic environmental scanning and strategic stakeholder management—relate to the profitability of MSMEs in Kitengela Municipality, Kajiado County. Anchored on the Resource-Based View and Dynamic Capabilities Theory, the study used a descriptive cross-sectional quantitative design. From a target population of 492 registered MSMEs, a proportionately stratified random sample of 221 enterprises was drawn and structured questionnaires were administered to owners and managers; 183 usable questionnaires were returned (response rate 82.81%). Data were analysed with SPSS version 26 using descriptive statistics, Pearson correlation and multiple linear regression. All four practices correlated positively and significantly with profitability (r = 0.543 to 0.634, p < 0.01). Jointly, they explained 48.7% of the variation in profitability (R² = 0.487, F(4, 178) = 42.2, p < 0.001). Environmental scanning had the largest unique association (β = 0.324), followed by strategic leadership (β = 0.312), resource allocation (β = 0.275) and stakeholder management (β = 0.215), all significant at p < 0.001. The findings suggest that MSME support programmes should treat these practices as a connected set, with particular attention to market information and scanning capability. Because profitability was measured through respondents’ perceptions and the design is cross-sectional, the results indicate association rather than causation.



Keywords

strategic management practices; strategic leadership; environmental scanning; stakeholder management; MSMEs; profitability; Kenya



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