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European Journal of Management and Marketing Studies ISSN: 2501 - 9988 ISSN-L: 2501 - 9988 Available on-line at: http://www.oapub.org/soc doi: 10.5281/zenodo.998597 Volume 2 │ Issue 2 │ 2017 ASSESSING THE EFFECT OF TECHNOLOGICAL CAPABILITIES ON FIRM PERFORMANCE: CASE STUDY OF NZOIA SUGAR COMPANY Kennedy Ntabo Otisoi Dr., Lecturer, School of Business and Management Science Department of Business Management University of Eldoret, Kenya Abstract: The idea of technological capabilities plays a key role in the analysis of organizational processes because it offers a potential solution to the quest for sustained competitive advantage through the realization of organizations objectives. The importance of technological capabilities suggests that the long-term, continuous renewal of the firm rests on both the exploitation of existing capabilities for the furtherance of the institutions objectives. This is mainly achieved by the creation and development of specific organizational capabilities. This study therefore, sought to evaluate the effects of technological capabilities in Nzoia Sugar Company Limited. The study was based on the Resource Based View Theory. A case study and survey designs were employed in this research. The study targeted a total of 1,403 employees comprising of 790 lower level employees, 422 Supervisory level employees, 182 middle level management and nine top level management. Random stratified sampling technique was used to select 210 respondents. Data collection instruments comprised of questionnaires and interview schedules. Validity was determined by content validity and reliability using Cronbach alpha method which had Cronbach Alpha Coefficient of 0.783 which was greater than 0.7. Data was collected and analyzed using descriptive while inferential statistics at 95% confidence level. The results were presented in form of frequency tables and pie charts. It was concluded that an increase in customer service management capability constructs like repeat purchase, confidentially of customer information and different customer needs once enhanced could translate to higher firm performance; attributes of marketing capabilities like employee training on basic marketing skills, emarketing and marketing intelligence information should be enhanced; internet Copyright © The Author(s). All Rights Reserved. © 2015 – 2017 Open Access Publishing Group 191 Kennedy Ntabo Otiso ASSESSING THE EFFECT OF TECHNOLOGICAL CAPABILITIES ON FIRM PERFORMANCE: CASE STUDY OF NZOIA SUGAR COMPANY penetration, automation of processes, use of e-marketing and procurement could lead to improved firm performance and setting targets for the company which are attainable, monitoring and evaluation of all activities would lead to improved firm performance. The findings of this study shall be useful to the policy makers, strategists and the researcher in making informed conclusions and recommendations. The findings shall give guidance to the managers of different departments in coming up with proper policies in management. The stakeholders in management will find the study useful in identifying challenges faced by Firms who do not invest and emphasize on organizational capabilities. Keywords: technology, performance, firm, capability, competitive advantage 1. Introduction Customer Service management is widely regarded as one of the most important sources of sustainable competitive advantage in an increasingly changing environment, because it leads to product and process improvements, makes continuous advances that helps firms to survive, allows firms to grow more quickly, be more efficient and ultimately be more profitable than non-innovators (Thierren et al., 2011). Customer Service managements is a complex process related to changes in productive functions and processes with whereby firms seeks to acquire and built upon their distinctive technological competence, understood as a set of resources a firm possesses and the way in which these are transformed by innovative capabilities. Innovation at a firm level refers to a firm’s receptivity and propensity to adopt new ideas that lead to development and launch of new products (Rubara, 2012). Sharma and Lacey 2004, argues that innovative new products when first introduced in the market faces limited direct competition, and as a result allow firms to enjoy high profits over time. These high profits are likely to erode due to immigration and competition, but firms that continue introducing innovative new products may be able to achieve high profitability for a sustained period. The ultimate reason for firms to engage in Customer Service management is to improve firm performance and success. Cahill, Rich and Cozzarin (2016) assert that a number of Customer Service management achieved by firms had a positive effect on their operating profit margin. Adoption of new technology such as IT is an enabler of process innovations from the perspective of the adopter in the implementation succeeds, the routines are changed and the new system is actually utilized. Newly adopted technology can also act as an enabler of product or service innovations from the perspective of the adopter .If it is European Journal of Management and Marketing Studies - Volume 2 │ Issue 2 │ 2017 192 Kennedy Ntabo Otiso ASSESSING THE EFFECT OF TECHNOLOGICAL CAPABILITIES ON FIRM PERFORMANCE: CASE STUDY OF NZOIA SUGAR COMPANY successfully used to offer a new service or to deliver products to consumers in a way that is new to the enterprise, for example a company that adopts and implements new online shop software usually changes the routine of how incoming orders are processed. Researchers also believe that superior technological capability can increase efficiency and higher differentiation through improved process and product innovations (Wang et al. 2006). Organizations with remarkable technological competencies are able to produce higher differentiation through innovative products in response to rapid changes in the market needs since they can secure efficiency benefits by pioneering innovation activities. Therefore, firms are able to create greater value than their competitors which allows them to achieve an above-average return on investment (Latip, 2012) Omondi (2016) investigated aligning technical capability with IFMIS and supply chain measures in the Kenyan public sector. For viewing / downloading the full article, please access the following link: https://oapub.org/soc/index.php/EJMMS/article/view/206 European Journal of Management and Marketing Studies - Volume 2 │ Issue 2 │ 2017 193