PROCESS INNOVATION AND PERFORMANCE OF NONPROFIT ORGANIZATIONS IN KENYA

Abstract

This study assessed the characteristics of process innovation, and analyzed their effect on firm performance. Process innovation has progressed over the past several decades and from the previous literature review it was confirmed to affect performance positively. Studies done in North America and other countries confirmed the positive relationship between process innovation and performance in humanitarian organizations. However, limited studies had been done in the humanitarian organizations here in Kenya. The study therefore attempted to fill that gap by addressing the following research objective; to determine the effect of process innovation on Organization Performance of humanitarian organizations in Kenya. The study was anchored on three theories; Porters Generic Strategies; Diffusion Theory of Innovation and Schumpeter Theory of Innovation. The study adopted a descriptive cross sectional research design. The target population was the top and middle managers of humanitarian organizations in Kenya which were selected through random sampling. Data was collected through questionnaire and analyzed through SPSS software. The result of the effect of process innovation on organizational performance indicated a strong positive correlation between the variables with a coefficient of correlations (r) of 0.709. The coefficient of determination (R2) was 0.503 which indicated that 50.3% of change in organization performance in the humanitarian organization in Kenyan could be attributed to innovation (P<0.05). The study concluded that process innovation is a good predictor of organization performance and hence recommended that; for the humanitarian organizations in Kenya to achieve enhanced organizational performance, they should come up with process innovation within the organization which should be encouraged and embraced by all so as to achieve increased organizational performance.