The Effect of Leadership Style, Shared Values and Resources on Product Innovation among Food and Beverage Manufacturing Firms in Nairobi Metropolitan

Abstract

Differentiation strategy through innovation plays an important role in ensuring survival of a firm by creating competitive advantage over rivals through creation of unique inimitable products, services and processes. However, high failure rate by manufacturing firms in putting out new products implies that achieving optimum innovation performance is not easy. The purpose of the study was to determine how leadership style, shared values and organizational resources affect product innovation among food and beverage manufacturing firms in Nairobi metropolitan. The study was guided by the following research questions: How does leadership style affect product innovation among food and beverage manufacturing firms in Nairobi metropolitan? How does shared values or ‘company culture’ affect product innovation among food and beverage manufacturing firms in Nairobi metropolitan? How do organizational resources affect product innovation among food and beverage manufacturing firms in Nairobi metropolitan? A descriptive research design and a structured questionnaire were used to conduct the research. The population for this study consisted of eighty-six food and beverage (F&B) manufacturing firms within Nairobi metropolitan. The sampling frame for this study was adopted from the official list of registered F&B firms under the Kenya Association of Manufacturers (KAM). Census sampling technique was used to select the respondents for the study, based on the positions held by the participating employees in each organization (i.e., senior level management, mid-level management and supervisory staff). The study sample size was 258 individuals who were employees of the eighty-six (86) F&B firms. Primary data was collected for the study using a self-administered questionnaire to determine the attitudes and opinions of the respondents. Descriptive and inferential statistical techniques were used to analyze the data. Descriptive statistical analysis included measures of central tendency and measures of spread, while inferential statistical analysis included Correlation, One Way Analysis of Variance (ANOVA) and Regression analysis to determine relationships between the variables. Statistical Package for the Social Sciences (SPSS) tool was used to analyze data and the results presented in tables and figures. Findings on the effect of leadership style on product innovation revealed that leadership style had a significant correlation with innovation (r=0.577, p<0.01). Regression analysis showed leadership style was statistically significant in predicting innovation (F (1, 169) = 84.432, p<.05). Further, the study found that leadership style accounts for 33.3% of product innovation among F&B manufacturing firms in Nairobi (R2 = 0.333). Leadership style had a positive coefficient B=0.921 which revealed that increasing leadership style by one unit will increase innovation performance by 92.1%. Findings on the effect of shared values (organizational culture) on product innovation revealed that company culture had a significant correlation with product innovation (r=0.572, p<0.01). The study found that company culture was statistically significant in predicting innovation performance (F (1, 169) = 82.223, p<.000). It accounts for 32.7% of product innovation among F&B manufacturing firms in Nairobi (R2 = 0.327). Company culture had a positive coefficient B=0.644 which revealed that increasing company culture by one unit will increase innovation performance by 64.4%. Lastly, findings on the effect of organizational resources on product innovation showed that organizational resources had a significant correlation with product innovation (r=0.708, p<0.01). Organizational resource was statistically significant in predicting innovation performance (F (1, 169) = 170.223, p<.000). It accounts for 50.2% of innovation among food and beverage manufacturing firms in Nairobi (R2 = 0.502). Organizational resources had a positive coefficient B=1.1 which revealed that increasing organizational resources by one unit will increase product innovation by 110%. The study concluded that leadership style, shared values and organizational resources all have a significant correlation with product innovation among F&B manufacturing firms in Nairobi metropolitan. Leadership styles such as democratic, transformational and transactional leadership encourage innovative thinking. Management formulates innovation strategies and creates a conducive work environment to support and promote innovation. Culture influences behaviors and the way things are done within an organization which can either be a hindrance to or an enabler of innovation. Finally, provision of sufficient resources coupled with efficient management and utilization of those resource results in increased innovation success. The research applied a comprehensive approach to determine the effect of leadership style, shared values and organizational resources on innovation simultaneously, however there is need to adopt a narrower approach to further investigate each of these phenomena. Future research could investigate how firm-based and network-based resources affect product innovation. Further research can also be done on external factors affecting innovation and the moderating factors for both internal and external factors that enhance innovation e.g., through adopting a learning culture. Moreover, the study only covered companies within the Nairobi metropolitan. Therefore, the study further recommends similar studies to be done in other counties outside Nairobi.