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Research Paper | Management | Kenya | Volume 3 Issue 8, August 2014

Relational Capital and Business Performance of Pharmaceutical Firms in Kenya

Dr. James Mark Ngari

Abstract: Relational capital is the ability of an organization to interact positively with business community members to motivate the potential for wealth creation by enhancing human and structural capital Relational capital comprises the knowledge embedded in all the relationships an organization develops whether it is with customers, competitors, suppliers, trade associations or government bodies. The purpose of the study was to test the relationship between relational capital as a component of intellectual capital and business performance of the pharmaceutical firms in Kenya. The specific objectives were to determine whether Strategic Alliances, Licensing and Agreements, Customer and Supplier Relations and customer knowledge influence business performance of pharmaceutical firms in Kenya. The study was carried out in Nairobi since most of the pharmaceutical firms were located here apart from a few, which were based outside Nairobi. The research study adapted three research designs namely: Quantitative, explanatory and descriptive research design. The target population constituted 89 pharmaceutical firms and the sample frame was comprised of 31 local pharmaceutical firms licensed by pharmacy and poisons board in 2010-2011 which formed the sample size, thus represented 35 % of the total population. Purposive sampling procedure was used to arrive at 31 pharmaceutical firms while judgmental sampling was used to target the human resource managers. Out of the 31 pharmaceutical firms the response rate was 18 companies. The instrument of data collection was a structured questionnaire with questions anchored on a five (5) point likert type ranking scale which was administered to the respondents. The data processing and analysis was done mainly by the use of logarithmic multiple linear regression analysis. The results and findings of the study indicated that the components of relational capital influenced business performance of pharmaceutical firms in Kenya. The overall model indicated that Customer Suppliers Relations with a P-Value of 0.031and Customer Knowledge with a P-value of 0.070 had positive and significant influence to business performance of pharmaceutical firms in Kenya, while Strategic Alliance Licensing Agreement 0.160 had a positive but insignificant influence on business performance.

Keywords: Customer Suppliers Relations, Customer Knowledge, Strategic Alliance Licensing Agreement, Business Performance, Pharmaceutical Firms

Edition: Volume 3 Issue 8, August 2014,

Pages: 1110 - 1115

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