DOES INDUSTRY STRUCTURE AFFECT THE RELATIONSHIP BETWEEN FIRM CHARACTERISTICS AND PERFORMANCE OF LAW FIRMS IN KENYA?

Abstract

Explaining and often predicting organizational performance is a primary researchobjective in the field of strategic management that need to be addressed becauseperformance improvement is at the heart of strategic management. The studyargues thatthe role of industry structure in the relationship between firmcharacteristics and performance has not received conclusive empirical backing.The study was contextualized in law firms in Kenya in which these variables havenot been empirically tested. The main objective of this study was to determine theinfluence of industry structure on the relationship between firm characteristicsand performance of law firms in Kenya. To achieve this objective, thecorresponding hypothesis was formulated and tested at 95 percent confidencelevel.The study was guided by resource based theory, the institutional theory andindustrial organizational theory. Through a cross-sectional descriptive survey,data was obtained using a semi-structured questionnaire. The questionnaire wasadministered to a sample of 379 law firms spread across the country out of which356 were filled and returned, representing a response rate of 93.93 percent. Thehypothesis was tested using the hierarchical analysis used to test moderatingeffects. The findings show that industry structure significantlymoderatetherelationship between firm characteristics and performance. Results of industrystructure independently on performancewere also statistically significant. Thestudy contributes to managerial practice and offerdirection for policy makers andthe owners of the law firms in Kenya since managers will use the findings of thisstudy to monitor the crucial performance drivers in their law firms with regard toindustry structure and strategy.The study therefore recommends that futurestudies should consider utilizing multiple methodologies such as applying mixedmethods of research to help identify the key factors of firm strategy andoperationalize their study in a different approach. The aim behind using differentstatistical techniques and /or plural methodologies is to validate and furtherstrengthen the existing research f