Abstract:
Organizational performance is key to the sustainability of a firm. However, pharmaceutical
firms have been experiencing performance issues in the recent past. Thus, the study sought
to examine the moderating effect of competitive strategy on the relationship between strategic
orientation and performance among pharmaceutical manufacturing firms in Kenya. The study
was informed by the resource-based view theory and the dynamic capability theory. The
explanatory research design was utilized in the study. The study targeted employees from the
top and middle level management of 43 Pharmaceutical manufacturing firms in Kenya.
According to HR records, by the end of 2020, there were 168 employees from the top
management and 469 employees from the middle management from the registered
pharmaceutical manufacturing firms in Kenya. The sample size was 246 obtained by using
the Yamane formula. The researcher used a random sampling technique to get the sample
size from each firm. Questionnaires were used as the research instruments. The pilot study
was conducted to examine the validity and reliability of the research instruments. The study
was analyzed using descriptive and inferential statistics. The correlation results showed that
entrepreneurial orientation, learning orientation, technological orientation and customer
orientation are positively and significantly associated with performance. The regression
results showed that entrepreneurial orientation and performance are positively and
significantly related (β=0.162, p=0.001). Learning orientation and performance was found to
be positively and significantly related (β=0.441, p=0.000). Technological orientation and
performance are positively and significantly related (β =0.169, p=0.002). It was established
that customer orientation and performance are positively and significantly related (β=0.241,
p=0.000). The study showed the coefficient of determination (R squared) increased in all six
models (R square in the first model was 0.697 (69.7%), 0.920 (92.0%) in the second model,
0.929 (92.9%) in the third model, 0.931 (93.1%) in the fourth model, 0.937 (93.7%) in the
fifth model and 0.939 (93.9%) in the sixth model. Thus, competitive strategy moderates the
relationship between strategic orientation and the performance of pharmaceutical
manufacturing firms in Kenya. The study concluded that entrepreneurial orientation includes
the firm introducing new products ahead of the competitors, concentrating on the expected
future demand and supply, manipulating the market environment through unique marketing
tactics, minimizing the expected risks and targeting different market segments. The study
further concludes that learning orientation is determined by employees working in unity and
any opinion being taken with much consideration. Similarly, technological orientation and
performance is positively and significantly related. The customer orientation includes the
firm continually monitoring its commitment levels and positioning in serving the needs of its
consumers. Customer orientation is influenced by ensuring the business goals are driven
largely by consumer satisfaction. Competitive strategy moderates the relationship between
strategic orientation and the performance of pharmaceutical manufacturing firms in Kenya.
Thus, the study recommended that every organization should pay attention to customer
orientation, entrepreneurial orientation, learning orientation and technological orientation.
The firms should introduce new products ahead of the competitors, concentrates on the
expected future demand and supply, manipulates the market environment through unique
marketing tactics and minimize the expected risks. The firms need to adopt new modern ways
of marketing and support new ideas of all the employees. Learning in the firms be promoted
and learning opportunities compulsory to all the employees. The organization should provide
customers with unique, different and distinct products from competitors. Moreover, it is
recommended that future studies can be conducted to examine other factors that influence the
performance within the pharmaceutical manufacturing firms other than strategic orientation,
such as capacity building, working environment and leadership styles with a moderating
effect of regulatory framework or firm size.