EVALUATING TECHNOLOGY CAPABILITY IN STRATEGY IMPLEMENTATION AND FIRM PERFORMANCE OF THE FURNITURE MANUFACTURING SECTOR IN KENYA.

The object of the study is the performance of the furniture manufacturing sector in Kenya. The paper utilized descriptive and explanatory research design. The study targeted a population of 686 managerial staff and 195 CEOs in the furniture manufacturing sector. Structured questionnaires were distributed to the senior managers and a factor analysis was used to reduce the number of variables and establish the underlying constructs while analysis of moments of structures was applied to develop the theory. Technology capability was found to explain 49 % of the variance in the firm performance. The fit indices suggested that the data was an adequate fit of the hypothesized model relating to technology capability and firm performance NFI = 0.604, RFI = 0.501, IFI = 0.639, TLI = 0.539 and CFI = 0.634 with a p-value>0.05. In addition, the study found out that technology capability and firm performance had a positive and statistically significant contribution at 0.05 level of significance. This was depicted by the significance of the standardized regression coefficient of technology capability hypothesized path (β = 0.878, S.E. = 0.75, C.R. = 11.743, and p-value<0.05). The findings also revealed that the size and age of the firm do not moderate technology capability in strategy implementation on firm performance. This was depicted by the significance of the standardized regression coefficient of firm size and firm age hypothesized path (β = –0.171, S.E. = 2.015, C.R. = –0.085 and p-value>0.05). Therefore, the alternative hypothesis that size and age have a negative moderating contribution on firm performance was rejected at 0.05 level of significance. To enhance a firm’s performance in terms of profitability and growth, it is crucial to manage and sustain technology capabilities through an effective strategy implementation process. The study not only adds value to the existing body of knowledge in strategic management practice but points out that when implementing strategy, CEOs and senior managers should consider technology capability factors to improve the firm performance. [ABSTRACT FROM AUTHOR]