Clan Culture and Firm Performance in Innovation Startups: Evidence from Nairobi City County, Kenya

Eunice Wanjiru Nyaga; Dr. Reuben Kinyuru Njuguna, PhD

Clan Culture and Firm Performance in Innovation Startups: Evidence from Nairobi City County, Kenya

Authors

Eunice Wanjiru Nyaga Postgraduate student, Department of Business Administration, Kenyatta University
Dr. Reuben Kinyuru Njuguna, PhD Lecturer, School of Business, Economics and Tourism, Department of Business Administration, Kenyatta University

Keywords:

Clan culture., startup performance, organizational culture, emerging markets, Kenya, collaboration

Abstract

This study investigates the influence of clan culture on firm performance among innovation startups in Nairobi City County, Kenya. Startups in emerging markets often face institutional voids, limited resources, and high uncertainty, making organizational culture a crucial determinant of survival and growth. Clan culture, characterized by collaboration, teamwork, employee participation, and a family-like atmosphere, is hypothesized to enhance firm performance through collective commitment, improved problem-solving, and knowledge sharing. Data were collected from 145 managers across innovation-driven startups operating in Nairobi. A descriptive research design was employed, and primary data were obtained using structured questionnaires rated on a five-point Likert scale. Firm performance was measured across multiple dimensions, including service quality, resource efficiency, goal achievement, and competitiveness. Reliability and validity tests confirmed measurement robustness, while correlation and multiple regression analyses were used to test the hypothesized relationship. The findings reveal that clan culture significantly and positively influences firm performance (β = 0.324, p = 0.002). The regression model explained 64.6% of the variance in firm performance (R² = 0.646, F (3,141) = 32.847, p < 0.001), indicating strong explanatory power. This study extends Schein’s organizational culture theory into the context of African startup ecosystems and provides empirical evidence that collaborative organizational cultures can generate competitive advantage under resource-constrained conditions. Practically, the results highlight the importance for startup founders and managers to foster team-building, participatory decision-making, and mentorship programs. By embedding clan culture practices, startups can improve operational efficiency and long-term sustainability. The findings offer insights not only for Kenyan startups but also for innovation-driven enterprises across similar emerging market contexts.

Citation: Nyaga, E. W., & Kinyuru, R. (2025). Clan Culture and Firm Performance in Innovation Startups: Evidence from Nairobi City County, Kenya. Academic Journal of Humanities and Social Sciences Research, 2(1). https://doi.org/10.5281/zenodo.17232592

References

AlSaied, M., & McLaughlin, P. (2024). Organizational Culture Enabler and Inhibitor Factors for Ambidextrous Innovation. Administrative Sciences, 14(9), 207–207. https://doi.org/10.3390/admsci14090207

Izah, S. C., Sylva, L., & Hait, M. (2023). Cronbach’s Alpha: A Cornerstone in Ensuring Reliability and Validity in Environmental Health Assessment. ES Energy & Environment, 23(1057), 1–14. https://doi.org/10.30919/esee1057

Joseph, O. O., & Kibera, F. (2019). Organizational Culture and Performance: Evidence from Microfinance Institutions in Kenya. SAGE Open, 9(1), 1–11. Sagepub. https://doi.org/10.1177/2158244019835934

Ju, H., & Kim, Y. (2025). Bridging Diversity and Innovation: The Moderating Role of Cohesive and Hierarchical Organizational Culture. SAGE Open, 15(1). https://doi.org/10.1177/21582440241312481

Ngulo, A. N. (2015). Firm resources, external environment, entrepreneurial strategy and performance of Micro, small and medium furniture sector enterprises in Nairobi city county, Kenya. Uonbi.ac.ke. http://hdl.handle.net/11295/93424

Roundy, P. T., & Evans, R. (2024). Entrepreneurial ecosystems as multiteam systems: Navigating independence and interdependence in the leadership of startup communities. Journal of Business Venturing Insights, 21, e00445. https://doi.org/10.1016/j.jbvi.2023.e00445

Sandberg, B. (2025). Startup Culture as a Masculinity Contest: An Exploratory Study on Prevalence and Gender Dynamics. Social Sciences, 14(7), 438–438. https://doi.org/10.3390/socsci14070438

Sidel, J. L., Bleibaum, R. N., & Tao, K. W. C. (2018). Quantitative Descriptive Analysis. Descriptive Analysis in Sensory Evaluation, 287–318. https://doi.org/10.1002/9781118991657.ch8

Udochukwu, B. A. (2024). Clan Culture and Performance Organization. DiamondBridge Economics and Business Journal, 4(1). https://doi.org/10.60089/dbebj.2024.4.1.2

Wynen, J., Verhoest, K., & Kleizen, B. (2016). More reforms, less innovation? The impact of structural reform histories on innovation-oriented cultures in public organizations. Public Management Review, 19(8), 1142–1164. https://doi.org/10.1080/14719037.2016.1266021

Zhang, J., Wang, Y., Zhao, Y., & Cai, X. (2018). Applications of inferential statistical methods in library and information science. Data and Information Management, 2(2), 103–120. https://doi.org/10.2478/dim-2018-0007

Clan Culture and Firm Performance in Innovation Startups: Evidence from Nairobi City County, Kenya