Strategic Management Approaches and Implementation of Circular Economy among Small and Medium Size Manufacturers in Kenya: Case of Africa Collect Textiles

Abstract

Circular economy (CE) has emerged as a transformative model in addressing the negative impacts of linear production and consumption, especially among small and medium-sized enterprises (SMEs). Despite this relevance, most SMEs in Kenya continue to struggle with embedding circular economy principles in their business models, leading to suboptimal waste management, missed opportunities in remanufacturing, and reduced competitiveness. As such, the purpose of this study was to evaluate the effect of strategic management approaches on implementation of circular economy among Small and Medium Size Manufacturers in Kenya. The specific objectives of the study were; to examine the effect of strategic direction on the implementation of circular economy in Africa Collect Textiles, to assess the effect of resource allocation on the implementation of circular economy in Africa Collect Textiles, to establish the effect of capability development on the implementation of circular economy in Africa Collect Textiles, and to evaluate the moderating effect of organizational factors on the relationship between strategic management approaches and the implementation of circular economy in Africa Collect Textiles. The study was anchored on the Resource-Based View (RBV), Strategic Choice Theory, Diffusion of Innovations Theory and Institutional Theory. This study employed a cross-sectional-explanatory research design. The study target population included 65 senior, mid, and entry-level managers at Africa Collect Textiles Ltd. The research used primary data, collected using a structured questionnaire. To ensure reliability and validity, a pretest was conducted on 10 senior and mid-level managers at Sunflag Textile & Knitwear Mills. Descriptive analysis indicated strong agreement across constructs, with mean scores ranging between 4.18 and 4.30 and standard deviations between 0.97 and 1.10, reflecting consistent alignment of CE practices with strategic and operational frameworks. Correlation analysis revealed significant positive relationships among all constructs (r= 0.54-0.78, p<0.05). Regression analysis demonstrated that strategic direction (R² = 0.312, p < 0.05), resource allocation (R²=0.205, p <0.05), and capability development (R²=0.299, p<0.05) significantly predicted CE implementation. The moderating role of organizational factors was partial: while they improved explanatory power (R² = 0.394), the interaction effect was marginally significant (β=0.187, p=0.090). The study concludes that strategic direction, resource allocation, and capability development are critical drivers of CE implementation, while organizational factors act as enabling but not uniformly moderating influences. Beyond its academic contribution, the study aligns with global and national development priorities. At the global level, it advances the United Nations Sustainable Development Goals (SDG 9, SDG 12, and SDG 13). At the national level, it supports Kenya Vision 2030 by promoting sustainable industrialization. The findings provide actionable insights for policymakers, practitioners, and manufacturing SMEs to embed CE practices in strategic, financial, and capability-building frameworks for long-term sustainability.