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Research Paper | Finance | Kenya | Volume 14 Issue 1, January 2025 | Popularity: 6 / 10

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Impact of Organizational Innovativeness Practices on Performance of Commercial State-Owned Enterprises in Kenya: Insights from a Machine Learning Approach

Bethsy J. Kaino, Dr. Njenga Mburu, David N. Kiragu

Abstract: Commercial state-owned enterprises significantly contribute to global economies by driving economic growth, industrial development, and employment. However, three out of every ten of these commercial SOEs in Kenya report financial losses despite operating in key economic sectors. This study was to examines the effect of organizational innovativeness, guided by innovation diffusion theory. The study applied a post- positivism research philosophy and across section approach to descriptive research design. The sampling frame and unit of analysis was the 41 commercial state-owned enterprises in Kenya. A closed ended questionnaire was used to collect primary data for the predictor and a secondary data collection sheet for the target variable. A pre- test for the questionnaire was carried out using managers of three non-commercial SOEs in Nairobi, Confirmatory Factor Analysis was used to test construct validity. Target variable was tested for normality using Kolmogorov -Smirnov and Wilk- Shapiro test, linearity using correlation coefficient, outliers using violin plot and test of autocorrelation using Durbin Watson-d- statistic. Ordinary Least Squares- simple linear regression was used for inferential analysis after testing the data for Gaussian distribution, linearity and autocorrelation. The study found that 24.6 % of the variations in SOE performance could be explained by organizational innovativeness practices and that there is a statistically significance and positive effect of these practices on SOE performance. Based on this study, a departure from best practices in organizational innovativeness can have a significantly effect on organizational performance if the following areas were improved; commiting of resources for development /provision of new products, reviewing organizational structure to foster creativity within the company,engaging in knowledge exchange programs, supporting recycling and re-use of by products or wastes, deliberately investing in capacity building on culture of innovation to staff. Policies governing these drivers of innovation appeared to lag the impact of organizational innovativeness measures. This study recommends a focussed approach to review of policy/ies driving these practices relative to all others at entity level. Other studies could be carried using different theoretical underpinning beyond those postulated innovation diffusion.

Keywords: Kenya, machine learning, ordinary least squares, organizational innovativeness, performance, state -owned-enterprises

Edition: Volume 14 Issue 1, January 2025

Pages: 594 - 603

DOI: https://www.doi.org/10.21275/SR25106114405

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