Influence of Managing Firm’s Resource Portfolio on Organizational Performance of Pharmaceutical Companies in Kenya

Abstract

Strategic Leadership bridges the gap between strategy and organizational performance; a critical role for the strategic leader is managing the firm’s resource portfolio. Consequently, this study sought to establish the influence of managing a firm’s portfolio on the organizational performance within pharmaceutical companies in Kenya, and the study was grounded on strategic leadership theory. The firm’s resource portfolio was operationalized through 3 resources: human capital, financial capital, and social capital, while organization performance was measured through profitability, customer perspective and learning & growth. The study was anchored on positivism philosophy with a descriptive design approach. A stratified simple sampling was used to target 390 senior managers within three strata, namely, local companies, generic companies, and research and development multinationals, proportionately to achieve a respondent rate of 82%. The results were analysed using descriptive and inferential models. Specifically, the hypothesis was tested through correlation, chi-square, one-way ANOVA, ordinal logistic regression, and parameter estimates. From the study findings, ordinal logistic regression results indicated that a 7.7% variation in organizational performance was explained by resource portfolio, Nagelkerke Pseudo R2 =.077. Ordinal regression parameter estimates showed that resource portfolio significantly predicted organizational performance, β = .304, p ≤ .05), thus rejecting the null hypothesis that managing the firm’s resource portfolio does not significantly influence organizational performance. The study concluded that managing the firm’s resource portfolio significantly influences the organizational performance of pharmaceutical companies in Kenya. This led to the recommendations that leaders of pharmaceutical firms should invest in human capital to acquire suitable skill sets and be deliberate in optimizing social capital to ensure high customer satisfaction. The study also recommends managing the financial resources to exploit competitive advantage as a measure of organizational performance in pharmaceutical companies.