Regulatory Environment and Performance of Projects in State-Owned Manufacturing Firms in Kenya

Purpose: The purpose of this study was to investigate the influence of the regulatory environment on performance of projects in state-owned manufacturing firms in Kenya Methodology: The study adopted a pragmatic research philosophy and drew respondents from across twenty state owned manufacturing firms in Kenya. The study engaged respondents from these institutions by employing exploratory cross-sectional methodology and Stratified Random Sampling. Data collection involved semi-structured questionnaires which were done both physically and with the use of online forms. Descriptive analysis of data was conducted using measures of central tendencies and dispersion, development of a relational model between variables employed multiple regression analysis, while validation and reliability were performed using pilot testing, Cronbach’s alpha coefficient analysis and various methods of model diagnostics such as multicollinearity analysis, Analysis of Variance, Goodness of Fit and correlation analysis. Findings: The study established that projects in state owned manufacturing firms generally meet quality and stakeholder expectations but struggle with timelines and cost efficiency. Legal compliance requirements emerged as the strongest positive predictor of project performance while political dynamics had a significant negative impact. High prevalence of compliance requirements, particularly procurement procedures and institutional procedures contribute to accountability, but they can also lead to delays and bureaucracy. State control had relatively low influence on project performance, while Institutional structures and fiscal management framework had relatively moderate negative and positive influence on projects performance respectively. The resultant regression model explained approximately 30% of the variability in project performance Unique Contribution to Theory, Practice and Policy: Compliance requirements often ensure accountability and transparency, yet excessive bureaucracy constrains competitiveness. There is need to improve project performance in state-owned manufacturing enterprises by addressing regulatory inefficiencies, fostering institutional autonomy, mitigating political influences, simplifying regulatory procedures, automating processes, and promoting interorganizational collaboration. Additionally, aligning government programs with long-term institutional strategies and diversifying funding sources are crucial for enhancing financial resilience and ensuring project continuity in these institutions.