Agribusiness firm resources and performance : the mediating role of strategic management practices

This study investigates the relationship between firm resources, strategic management practices and firm performance of small agribusiness firms. Looking at level of managerial expertise and access to market information as primary resources, this research presents various arguments about their contribution to firm performance. The objective is to demonstrate the role of strategic management practices in facilitating the effective use of these resources to achieve agribusiness firm performance. Results from a structural equation model using a sample of 229 agribusiness firms from Tanzania indicate that the investigated resources alone do not directly contribute to firm performance unless there is application of strategic management as a potential mediator. Further investigation based on multigroup analysis shows contingency effects in the resources-performance relationship but significant influence of application of strategic management practices on performance across all groups of firms. The results imply that managers ought to identify a fit between their resources and strategic actions in order to enhance firm performance. The study provides manifold managerial implications for small firms that seek to improve firm performance.