| dc.description.abstract | The performance of the manufacturing companies over the past few years has been
declining as demonstrated by the decline in sector growth as well as the influence on
the country’s GDP which dropped from 10% in 2014 to 7.6% in 2020. The
manufacturing sector growth dropped from 3.6% in 2018 to 2.5% in 2019 and declined
further to -0.1 per cent in 2020. As a result, Kenya's manufacturing sector is far from
achieving the Big Four Agenda's projection that it will contribute 15% of the country's
GDP by 2022. To address this trend, firms have attempted to incorporate information
and communication technology in manufacturing process to innovate, increase
productivity and improve resource efficiency. Enterprise Resource Planning system
aids firms in effectively and efficiently managing their operations. Enterprise Resource
Planning system integrates business activities that allow for a smooth flow of
information and interaction across all divisions. This study aimed to determine the
impact of enterprise resource planning (ERP) system on how manufacturing firms
tended to perform in Kenya’s Nairobi County. The specific objectives were to
determine the effect of production planning and control module, financial and
accounting module, procurement module and human resource module on the way
manufacturing firms performed. The five-stage growth model and systems theory
formed the basis for the research. The descriptive research design was used. The
population of the study consisted of 533 manufacturing companies in Nairobi County
that were members of the Kenya Association of Manufacturers. Krejcie and Morgan’s
formula was used to obtain a sample size of 223 firms. In the study, stratified random
sampling was used. With the use of Microsoft Excel and SPSS version 25.0, descriptive
and inferential statistics were used to evaluate the data, which was collected using a
structured questionnaire. To examine the association between variables, multiple
regression analysis and correlation analysis were performed and hypothesis was tested
using t-statistic and F- Ratios at 5% significance level. With a regression coefficient of
0.709 and a p-value of 0.000, the study discovered that the production planning and
control module had a favorable and significant impact on firm performance. The effects
of both accounting and financial modules on the performance of a firm were recorded
to be both significant and positive. The statistical values included a regression
coefficient of 0.547 and a p value of 0.000. Additionally, it was established that the
human resource management and procurement modules had respective p-values of
0.000 and 0.000 and positive regression coefficients of 0.565 and 0.622. The study
concluded that the performance of manufacturing firms in Nairobi County was
positively and significantly impacted by the modules for production planning and
control, financial and accounting, procurement, and human resource management.
Moreover, the combined effect of ERP components on the performance of
manufacturing firms was statistically significant (p=0.00<0.05). The interaction
between firm growth and ERP system had p-value of 0.514>0.05 implying that the
relationship between the ERP system and firm performance was not statistically
moderated by firm growth. The study recommends that firms should endeavor to adopt
and use ERP system and adopt appropriate modules to cover key company functions.
In addition, it also recommends that functions to be automated and integrated with ERP
to boost organizational productivity. The study findings would be helpful to those
involved in the manufacturing industry to appreciate how the ERP system affects firm
performance. The research outcomes from the current study can also help future
researchers and academicians by contributing to the existing knowledge gap and also
acting as a reference point and recommendation for their work. | en_US |
