INFLUENCE OF INFORMATION TECHNOLOGY CAPABILITIES ON PERFORMANCE OF FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE

Ndungu Samuel Machiri

Jomo Kenyatta University of Agriculture and Technology (JKUAT), Kenya

Prof. Margaret Oloko, PhD

Jomo Kenyatta University of Agriculture and Technology (JKUAT), Kenya

Dr. J. Karanja Ngugi, PhD

Kenyatta University, Kenya

Prof. Rhomanus Odhiambo, PhD

Jomo Kenyatta University of Agriculture and Technology (JKUAT), Kenya

CITATION: Machiri, N. S., Oloko, M., Ngugi, J. K., & Odhiambo, R. (2018). Influence of Information Technology Capabilities on the performance of firms listed at Nairobi Stocks Exchange. International Journal Strategic Management. Vol. 7 (12) pp 1 – 20.

ABSTRACT

The main objective of the study was to establish the influence of Information Technology Capabilities on the performance of firms listed at NSE. Previous studies have demonstrated that the ability of firms to sustain performance, remain competitive and to overcome challenges arising from environmental dynamism, is largely driven by firm level factors and Information Technology is one of these factors. This study sought to fill that scholarly gap existing on the influence of information technology as a firm level factor on performance of listed firms at NSE. The study adopted a descriptive research design and the target population comprised of all actively trading listed firms in the Nairobi Securities Exchange as at December 2017. The main data collection instrument for primary data was a structured questionnaire while a secondary data collection sheet was used to collect publicly available firm performance data. To accommodate economic cycles, the study reviewed firm performance covering a period of 10 years (2007-2017). A pilot study was carried out to test the reliability and validity of the questionnaire. Data analysis was done using descriptive statistics where frequencies, percentages mean and standard deviation were computed based on the research questions. Using SPSS and AMOS (Analysis of Moment Structures), a model was specified to extract the relationship between the independent variables with firm performance. Results of the analysis were presented in tables, charts and graphs. The findings from the study revealed that information technology significantly and positively influenced firm performance. The study further established that through employee training on ICT skills and investing in ICT infrastructure were key aspects in promoting use of ICT which translated to enhanced operation efficiency and performance. The study concluded that ICT was a key aspect in promoting firm performance through enhanced operational effectiveness and cost saving. A recommendation was drawn that modern organizations should adopt ICT by ensuring that their staff are equipped with ICT skills and proper ICT infrastructure put in place.

Key Words: Information Technology, ICT Competencies, Firm performance, Nairobi Stocks Exchange

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