HUMAN CAPITAL ORIENTATION AND SUSTAINABILITY OF FAMILY OWNED SMALL ENTERPRISES IN KENYA

Esther Boyani Ogoro

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

Dr. Karanja Patrick Ngugi

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

Prof. Romanus Odhiambo

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

CITATION: Ogoro, B. E., Ngugi, K. P., & Odhiambo, R. (2018). Human Capital Orientation and Sustainability of Family Owned Small Enterprises in Kenya. International Journal of Human Resources and Procurement. Vol. 7 (5) pp 23 – 36.

ABSTRACT

Family owned enterprises form the major part of small and medium enterprises with immense contribution in economic development and growth through provision of employment opportunities and contribution to the country’s annual GDP. Nevertheless, performance and sustainability of these firms has been prone to high range of dynamics and risks ranging from competitions to family wrangles and lack of responsible and appropriate successors. Many of these firms have ended up closing their doors as a result of increased mismanagement as well as succession chaos. These challenges, combined with the normal business environment challenges posse a big threat to the firms’ sustainability. On the other hand, human resource capital orientation which is a key aspect of human resource management has been argued to be the central enabler of firm performance and sustainability. Through well-tailored employee management practices and ensuring that the human capital is well taken care of, competitiveness of a firm is enhanced. However, there has been little research on the relationship between human capital orientation and sustainability of family owned businesses hence the subject of the study hence the purpose of this study. The study adopted descriptive research design which involves both qualitative and quantitative research methodologies. The study targeted family owned small business enterprises in Nairobi County which are approximately 16285. Stratified random sampling was applied to come up with a study sample of 375 respondents. Questionnaires were used to collect data while it was analysed using SPSS software and presented in form of tables, figures and graphs. The study established that human capital orientation was positively and significantly related to the sustainability of family owned enterprises in Kenya. The study concluded that through motivation, promotion and retention of employees, family enterprises were more sustainable. From the findings, it was recommended that family business owners and managers could focus on retaining their employees through motivation and promotion out of which they orient human capital thus ensuring firm sustainability.

Key Words: Human capital orientation, family owned enterprises and firm sustainability

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