Relationship Between Family-Owned Firms Operational Strategy on Organizational Performance of Businesses in Nairobi County

Abstract

A family business is a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood or marriage or adoption, who has both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals. It was against this background information the study sought to determine relationship between family owned firm’s operational strategy on organizational performance with special focus on family owned businesses in Nairobi County. The study sought objectives were: to examine the relationship between leadership style and organizational performance of family owned businesses; to investigate the relationship between succession planning and organizational performance of family owned businesses; to assess the relationship between governance structure and organizational performance of family owned businesses; and to determine relationship between family conflicts and organizational performance of family owned businesses. The study employed theory of growth of a firm; leadership theory; succession planning and management theory; and agency theory as study theories. This study used descriptive research design. The target population consisted 1200 employees working for MSFBs family business within the Nairobi County. Stratified sampling technique used to select 92 respondents. Questionnaire was used as the main data collection instrument. The study used the quantitative method of data analysis with the help of inferential and descriptive statistics. The study concluded that family-owned firms operational strategy has an influence on organizational performance of family businesses in Nairobi County. The study recommends that the family business leader should continuously encourage employees to think critically and seek new ways to approach their jobs since it led to an increase in employees’ level of performance, satisfaction, and commitment to the goals of their organization.