Innovation Strategy and Firm Performance: A Structural Equation Modelling Approach in Selected Industries in Eldoret Town
Most contemporary firms in the 21st century are navigating through murky and iterative environments and in order for them to realize performance they are required to transform competitive advantage into fast mover advantages. This study therefore was geared towards analyzing innovation strategy and firm performance in selected industries in Eldoret town Kenya. The study was guided by Balance Scorecard Model and it employed explanatory research design. A target population of nine hundred and seventy employees with a sample size of two hundred and eighty respondents was used. Stratified and simple random sampling techniques were used. Data analysis was done using inferential together with descriptive statistics and structural equation modeling (analysis of moment structures) was utilized in testing the hypothesis. Results showed that innovation was a significant predictor of firm performance with (β=0.44, CR=6.606, p<0.001) which indicates that one unit of innovation results to 0.44 unit increment of firm performance. This study contributed to theoretical perspectives by development of an innovation model and measurement scales. It also recommended that for organizations to cope with dynamism they should adopt research and development and be committed towards its investment and adopt appropriate innovations.
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