Effect of Resource Management on Financial Performance of Soft Drink Manufacturing Firms in Nairobi County, Kenya
Purpose: Soft drink manufacturing companies face persistent challenges such as high operational costs, inaccurate product costing, and inefficiencies in resource allocation, which undermine profitability and competitiveness. This study examines the effect of resource management within the Activity-Based Costing (ABC) framework on the financial performance of soft drink manufacturing firms in Nairobi County, Kenya. Design/Methodology/Approach: The study was grounded in three theoretical perspectives: the resource-based view (RBV), signaling theory, and the balanced scorecard framework. A correlational research design was adopted. The target population comprised of managers from 68 soft drink manufacturing companies in Nairobi County, from which a sample of 128 managers was selected using stratified random sampling. Descriptive statistics, including means, frequencies, standard deviations, and percentages, were used to profile the sample and identify key data patterns. In addition, correlation analysis was employed to determine the strength and direction of associations among the study variables, while multiple regression analysis was used to examine the effect of resource management practices on financial performance. Findings: The findings indicate that traditional costing systems often fail to allocate overhead costs accurately, leading to distorted product costs, misguided pricing decisions, and inefficient resource utilization. The results further suggest that effective resource management practices—such as resource allocation, aggregation, and scheduling—significantly improve financial performance in soft drink manufacturing firms by enhancing cost accuracy, reducing operational inefficiencies, and improving profitability. Despite the growing body of literature on Activity-Based Costing in developed economies, its application and influence on financial performance in Kenyan soft drink manufacturing firms remain relatively underexplored. Practical Implications: The study highlights the importance of strengthening resource management practices within the ABC framework to enhance cost control, improve operational efficiency, and support better managerial decision-making in manufacturing firms. Originality/Value: This study contributes to the limited empirical literature on Activity-Based Costing and resource management in the context of developing economies, particularly within the Kenyan manufacturing sector.