Strategic business networking on performance of small and medium enterprises in Mombasa County

Abstract

Small and Medium Enterprises (SMEs) play a key role in the economic development of Kenya. In Mombasa County, SMEs contribute significantly to job creation, poverty reduction and the economic vibrancy of the region. However, SMEs face challenges in achieving sustainable growth and maintaining competitive advantage. Strategic networking provides access to critical information, new markets and innovation hence; SMEs can overcome resource limitations, gain credibility and enhance their ability to compete with larger firms. The study seeks to establish the effect of strategic business networking on performance of small and medium enterprises in Mombasa County. The specific objectives of the study are: to establish effects of entrepreneurial networking, social networking, institutional networking and innovative networking on organizational competitive advantage of SMEs in Mombasa County. The study was guided by social network theory, social capital theory, and Survival-based theory. The research employed exploratory research design, a target population of 1994 small and medium enterprises, and a sample of 333 small and medium enterprises was obtained using Yamane's formula. The study relied on primary data that was collected using questionnaires. Data were analysed using descriptive statistics and inferential statistics. The study findings revealed that there was positive linear influence of entrepreneurial networking on performance of small and medium enterprises (β 1 =0.192, p=0.000). Social networking within organization has a positive and significant influence on SMEs performance (β2=0.117, p=0.038). Institutional networking within organization were found to have a positive and significant influence on performance of small and medium enterprises (β3=0.189, p=0.003). Innovative networking within organization were found to have a positive and significant influence on performance of small and medium enterprises (β4=0.248, p=0.000). The study concluded that collaboration with competitors is important for innovation and product development. Social media platforms, websites, emails, and informal meetings play a key role in enhancing performance of SMEs. SMEs interact with various stakeholders, highlighting the dynamic nature of their relationships. Innovative networking promotes product innovation and change management. Diverse networks have a positive impact on performance of SMEs, leading to increased market share and reduced market entry costs. The study recommended the SMEs to foster collaboration with competitors to exchange creative ideas, develop new products, and conduct tests. This can promote creativity and product development within organizations. Actively engage in social media platforms for networking. Utilize websites, email networks, informal meetings and report publications to network with other organizations. These methods of networking are significant for performance of SMEs. Maintain strong networks with suppliers, professional bodies, and institutions that provide training for SMEs. However, there is a need to improve networking with government agencies. Diversify networks to increase market share and reduce market entry costs for new businesses. Utilize network platforms for acquiring new businesses through referrals.