Abstract

Several studies have been carried out in the past to find out how strategic planning and competitive advantage are connected and the causes of differences in competitive advantage among firms. Scholars have argued that competitive advantage can emanate from either internal or external sources and is usually in several forms which include; valuable resources, the position held within the industry, position within the marketplace, operating at lower costs than rival firms, differentiation, capabilities and dynamic capabilities. The debate on what causes differences in competitive advantage is still on. This study sought to establish the moderating effect of organizational structure on the relationship between strategic planning and competitive advantage of large manufacturing firms in Kenya. The study was underpinned by the competitive advantage typology of Michael Porter, the resource-based theory, dynamic capabilities theory, and the contingency theory. The study used a positivist research paradigm and a cross-sectional survey design. This was a census study from 124 large manufacturing firms in Kenya and data was collected from 122 of the firms representing a response rate of 98.4%. The findings indicate that overall strategic planning has a statistically significant influence on competitive advantage and that organizational structure partially moderates the relationship between strategic planning and competitive advantage. The study recommended that once the strategy of the firm has been changed, an organization structure that fits the needs of the new strategy should be put in place. This is because in the absence of an organization structure that fits the needs of the firm, it will be difficult for the firm to achieve and sustain a position of competitive advantage.

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