Influence of Backward Integration Strategy on Organizational Efficiency in the Cement Industry in Kenya
DOI:
https://doi.org/10.17613/6hh5-ew60Keywords:
Backward Integration, Organizational Efficiency, Resource Dependency, Transaction CostAbstract
The study sought to establish the influence backward integration has on organizational efficiency in cement manufacturing companies in Kenya. The study was based on two theories: Resource Dependence Theory (RDT) and Transaction Cost Theory (TCT). Descriptive survey research design was used in this study. The population for this study was the eight cement-manufacturing companies in Kenya. This study adopted the primary method for collecting data through the questionnaire method. The questionnaires were administered using the drop and pick later basis. The study targeted top and middle-level managers from eight cement companies as respondents. From each company, questionnaires were administered to quality control, production, finance, marketing and procurement departments and chief executive officers. The collected data were quantitative and thus were analyzed using descriptive and inferential statistics. The study carried out a regression analysis with the study establishing that the backward integration strategy was highly adopted by cement manufacturing companies. The influence of the backward integration strategy on organizational efficiency was positive and statistically significant. The positive influence implies that improved backward integration leads to improved organizational efficiency of the cement-manufacturing firms. Based on the study findings, the study concluded that the backward integration strategy was highly adopted by cement manufacturing firms in Kenya. The study further concludes that the influence of backward integration strategy on organizational efficiency was statistically significant. Cement manufacturing firms can thus enhance their efficiency through the adoption of a backward integration strategy.
Downloads
References
Backward Integration. (n.d.). Retrieved from Wallstreet Mojo: https://www.wallstreetmojo.com/backward-integration/
Backward Integration. (n.d.). Retrieved from Corporate Finance Institute Website: https://corporatefinanceinstitute.com/resources/knowledge/strategy/backward-integration/
Bennet, T. (2007). The Significance of Employee Voice Mechanisms in the Work Place: Employee Participation in the New Global Economy. Work, Employment and Society Conference 2007 (pp. 12-14). Aberdeen: Sheffield Hallam University.
Billyard, A. P., & Donohue, J. J. (2015). A Practical Organizational Efficiency Measure. Canada: Centre for Operational Research and Analysis.
Cement Production and Consumption. (2018). Retrieved from Kenya National Bureau of Statistics: https://www.knbs.or.ke
Child, J. (1972). Organizational Structure, Environment and Performance: The Role of Strategic Choice. Sociology: 6 (1), 1-22.
Child, J. (1997). Strategic Choice in the Analysis of Action, Structure, Organizations and Environment: Retrospect and Prospect. Organizational Studies: Sage Journals: 18 (1), 43-76.
Coase, R. H. (1937). The Nature of the Firm. Economica 4 (16), 386-405.
Decker, F. (2019, February 4). Examples of Backward Vertical Integration Strategies. Retrieved from https://smallbusiness.chron.com
Drucker, P. F. (2011). Efficiency is Doing the Thing Right. Effectiveness is Doing the Right Thing. Retrieved from Efficiency: Think to Exist Website: http://thinkexist.com
East African Portland Cement Company. (n.d.). Retrieved from East African Portland Cement Company Website: https://www.eastafricanportland.com
Gitonga, A. M. (2011). The Relationship Between Vertical Integration and Performance of Construction Companies in Kenya. Retrieved from UON Digital Repository: University of Nairobi Website: https://www.uonbi.ac.ke
Guguyu, O. (2019). National Cement Jumps up the Ladder with ARM Buyout. Retrieved from A Standard Media Web Site: https://www.standardmedia.co.ke
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource Dependence Theory: A Review. Journal of Management: 35 (6), 1404-1407.
Indeje, D. (2017, September 27). Overview of Kenya's cement Industry now and its Future Growth. Retrieved from Soko Directory Web Site &Dyer & Blair Investment Bank: https://sokodirectory.com
Jurevicus, O. (2013). Vertical Integration. Retrieved from Strategic Management Insight: https://www.strategicmanagementinsight.com
Kenton, W. (2019). Backward Integration. Retrieved from Corporate Finance & Marketing: Mergers & Acquisitions: https://www.investopedia.com
Kenya National Bureau of Statistics. (2019). Retrieved from Global Cement Website: https://www.globalcement.com
Kibet, A. K., Koyier, T., & Wachira, M. (2017). An Evaluation of Strategic Responses to Gain Competitiveness in the Cement Industry: A Case of Selected Manufacturing Firms in Kenya. Journal of Strategic Management 2 (3), 46-67.
Kothari, C. (2004). Research Methodology: Methods and Techniques. New Delhi: New Age International (P) Ltd.
Lon, R. (1994). Process Reengineering: The Key to Achieving Success. Milwaukee: Irwin Professional Publishing.
Maduenyi, M. I. (2017). Backward integration saves Nigeria N240bn annually. Retrieved from Business & Economy Section of Punch Website: https://punchng.com
Mwangi, P. (2017). Kenya's Six Largest Cement Firms. Retrieved from A Construction Kenya Web Site: https://www.constructionkenya.com
Njuguna, V. N., Kwasira, J., & Orwa, G. (2018). Influence of Vertical Integration Strategy on Performance of Non-Financial Manufacturing Firms Listed at the Nairobi Securities Exchange, Kenya. International Journal of Strategic Management, 7 (5), 169-195.
Ohimain, E. I. (2014). The Success of the Backward Integration Policy in the Nigerian Cement Sector. International Journal of Materials Science and Applications: 3 (2), 70-78.
Published
Issue
Section
License
Copyright (c) 2023 Maximillah Nasambu Musungu , Dr. Medina Halako Twalib (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
