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Abstract:
The purpose of this study was to investigate the legal framework and its effect on the performance of medium scale manufacturing enterprises in Kenya. Descriptive research design was adopted in obtaining data from 56 Chief Executive Officers, General Managers or equivalent senior management staff of sampled enterprises with an employment level of between fifty-one (51) and two hundred persons (200). Mean responses received in a Likert scale of 1 - 5 for each of the tested item was calculated by summing up all the codes from all the 56 respondents. The study established that manufacturing enterprises face challenges brought about by a complicated regulatory regime, unfriendly customs and trade regulations, tight monetary and credit policies, corruption and excessive tax regimes, workforce and labour regulations, thus impacting negatively on their performance. The study concluded that governmental policies are important in providing an environment that is conducive to business development. Policy initiatives should therefore be directed at removing bottlenecks, lowering and reforming the tax systems, creation of flexible customs and port regulations, embraced information technology to reduce bureaucracy and increase transparency while maintaining transparency and accountability among public officials in charge of SMEs regulation. The government should also support infrastructure development to facilitate raw material sourcing, bulking, collection and cold storage, timely transport, upgrading access roads, etc. The study's findings is important in designing and operationalizing mechanisms to level the playing field to enhance competitiveness of manufacturing enterprises towards achievement of Kenya's big four agenda and vision 2030.
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