INFLUENCE OF DYNAMIC CAPABILITIES ON PERFORMANCE OF COMMERCIAL BANKS IN KENYA
Abstract
Dynamic capabilities are vital for a business enterprise to earn sustained competitive advantage and ensure superior firm performance. These are the unique capabilities that are of value to customers, rare and which competitors find difficult to imitate. The general objective of the study was to establish the influence of DC on performance of commercial banks in Kenya. The theoretical foundation of this study was dynamic capability’s theory, resource-based theory, knowledge-based theory and organizational learning theory. Descriptive cross-sectional survey was used. Targeted population was 40 banks having a population of 422 employees at management level. The study applied the use of Fisher, Laing and Stoeckel formula in determining the sample size of 202 respondents. The study selected the sample to be used in the study using Stratified random sampling. Data collection was done with the use of questionnaires. Descriptive statistics were analysed quantitative data using SPSS (version, 23). The results were presented using percentages SD, means and frequencies. In order to establish how the response and the predictor variables relate, the study used multiple regression analysis i.e. the influence of dynamic capabilities on performance of commercial banks in Kenya. Correlation analysis was used in establishing the relationship between response and predictor variables. The study found that Innovations capability; technical knowledge capability; quality service capability and learning culture capability significantly and positively relate with performance of commercial banks in Kenya. The study recommended that Management of banking institutions increase their innovativeness and proactively think regarding strategic management and ensure that their strategies are effective and differentiated. Banks’ management should ensure that it has the ability of creating new knowledge since it will enable them to attain competitive advantage. The bank should also create an environment that encourages knowledge sharing which will lead to creation of knowledge. In order for the banks to ensure they offer their clients quality services, it’s the responsibility of the bank’s management to conduct in-depth research and establish what their customers consider to be quality service.
Key Words; Dynamic capabilities, Innovations capability, Learning culture capability, Performance, Quality service capability, Technical knowledge capability
CITATION: Gicheru, J., & Kariuki, P. (2019). Influence of dynamic capabilities on performance of commercial banks in Kenya. The Strategic Journal of Business & Change Management, 6 (2), 1732 –1745.
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DOI: http://dx.doi.org/10.61426/sjbcm.v6i2.1216
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