SECTORAL ANALYSIS OF THE MODERATING EFFECT OF PROCESS INNOVATION ON THE RELATIONSHIP BETWEEN WORKPLACE DIVERSITY PRACTICES AND ORGANIZATIONAL PERFORMANCE OF PUBLICLY QUOTED COMPANIES IN KENYA
Abstract
Purpose of the study: The study examined the sectoral moderating effect of process innovation on the relationship between workplace diversity practices and organizational performance.
Statement of the problem: In Kenya, publicly quoted companies have faced persistent underperformance, with profit warnings issued across NSE-listed sectors between 2020 and 2024.
Research Methodology: A pragmatic philosophical underpinning was adopted, utilizing a convergent parallel mixed-methods design. A census approach covered 56 publicly quoted companies across 11 sectors, with 168 management employees from human resource, finance, and strategy selected for the survey, while interviews were conducted with management employees from human resource in each sector. Pretesting across six companies confirmed reliability (Cronbach’s alpha > 0.7) and construct validity (KMO = 0.542–0.726; Bartlett’s test p < 0.05).
Findings: The study found that workplace diversity practices are widely implemented across sectors of publicly quoted companies in Kenya. Differences in process innovation capabilities across sectors largely explain variations in how effectively these practices translate into organizational performance, leading to rejection of the null hypothesis.
Recommendations: The study recommends that boards of directors and senior management of publicly quoted companies should deliberately institutionalize process innovation as a core organizational capability. The Capital Markets Authority and the Nairobi Securities Exchange should develop sector-specific diversity and innovation policy frameworks. These measures will help sustain organizational performance improvements across Kenya's publicly quoted companies.
Keywords: Process innovation, workplace diversity practices, organizational performance, publicly quoted companies, Nairobi Securities Exchange, Kenya
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