INFLUENCE OF RESOURCE BASED MANAGEMENT ON STRATEGIC RENEWAL OF INSURANCE FIRMS IN KENYA
Abstract
The objective of the study was to determine the effect of resource based management on the strategic renewal of insurance firms in Kenya. Two dimensions of strategic renewal were studied: the insurance firms’ deliberate plans to imitate strategic renewal and strategic renewal by introduction of new products and product rebranding. The target population was operative managers in 53 insurance firms. The sample size was 5 operative managers in 47 insurance firms resulting to a sample size of 235 respondents. The study used simple random sampling in the determination of respondents and used the Cochran’s formula to determine sample size. The Likert scale questionnaire was used to collect data which was analyzed using descriptive and inferential statistics which were spearman’s correlation and linear regression. Results of ANOVA, goodness of fit were used to make findings and conclusions about the study. Kuder-Richardson (KR21) and Cronbach’s alpha was used to measure reliability of the research instrument. The results of regression showed that resource based management had influence on strategic renewal of insurance firms in Kenya. However different facets of strategic renewal are affected differently which may reflect a divergent view on how the model should be employed. A significant influence was reported for impact of resource based management on deliberate plans to initiate renewal and a not statistically significant relationship was reported for impact of resource based management on implementation of strategic renewal by introduction of new products and product rebranding. The study therefore recommended that insurance firms’ managers should endevour to create more sustainable VRIO attributes for their firms. They should also consider renewing their resources alongside using resources for renewal. The study was grounded on the dynamic capabilities theory which explains the link between a firm’s inward resource capabilities its ability to work with those capabilities to initiate strategic renewal.
Key words: Resource Based Management; Resource valuability; Resource rarity; Resource substitutability; Resource dynamism; Strategic Renewal
Full Text:
PDFReferences
Agarwal, R. & Helfat, C. E (2009). Strategic renewal of organizations. Organization Science, 20 (2), 281–293.
Ainuddin, R. A., Beamish, P. W., Hulland, J. S. & Rouse, M. J (2007). Resource attributes and firm performance in international joint ventures. Journal of World Business, 42 (1), 47–60.
Allio, R.J. (2006), “Strategic Thinking: The 10 Big Ideas”, Strategy and Leadership, 34( 4), 4-13.
Ambrosini, V. & Bowman, C (2009). What are dynamic capabilities and are they a useful construct in strategic management? International Journal of Management Reviews, 11 (1), 29–49.
Andersén, J (2010). Resource‐based competitiveness: Managerial implications of the resource‐based view. Strategic Direction, 26 (5), 3–5.
Augier, M. & Teece, D. J (2007). Dynamic capabilities and multinational enterprise: Penrosean insights and omissions. Management International Review, 47 (2), 175–192.
Augier, M. & Teece, D. J (2008). Strategy as evolution with design: The foundations of dynamic capabilities and the role of managers in the economic system. Organization Studies, 29 (8-9), 1187–1208.
Augier, M. & Teece, D. J (2009). Dynamic capabilities and the role of managers in business strategy and economic performance. Organization Science, 20 (2), 410–421.
Baden-Fuller, C. & Volberda, H. W (1997). Strategic renewal. International Studies of Management & Organization, 27 (2), 95–120.
Balasubrahmanyam, S., Kaipa, P. & Akhilesh, K. B (2012). The impact of a firm’s financial flexibility on its strategic renewal: Key concepts with evidential support from businesses across industries. Global Journal of Flexible Systems Management, 13 (3), 165–175.
Balkefors, H., Elin Björklund E., and Carlquist A (2015).The Co-Existence of Strategic Renewal and Strategic Inertia. A Case Study of an Innovative Firm. Ph. D. Jonkoping University, 2015.
Barney, J (1991). Firm resources and sustained competitive advantage. Journal of Management, 17 (1), 99–120.
Barney, J (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27 (6), 625–641.
Barney, J (2002). Strategic management: From informed conversation to academic discipline. Academy of Management Executive, 16 (2), 53–57.
Barr, P. S., Stimpert, J. L. & Huff, A. S (1992). Cognitive change, strategic action, and organizational renewal. Strategic Management Journal, 13 (1), 15–36.
Basile A., & Faraci R (2015) Aligning management model and business model in the management innovation perspective: The role of managerial dynamic capabilities in the organizational change, Journal of Organizational Change Management. 28(1).43-58,
Bogdan, R. C. & Biklen, S. K (1982). Qualitative researchfor education: An introduction to theory and methods. Boston: Allyn and Bacon, Inc.
Bresser, R. K. F. & Powalla, C (2012). Practical implications of the resource-based view. Zeitschrift für Betriebswirtschaft, 82 (4), 335–359.
Burgelman, R. A (1996). Strategic dissonance. California Management review, 38 (2), 8-28.
Capron, L. & Mitchell, W (2009). Selection capability: How capability gaps and internal social frictions affect internal and external strategic renewal.
Organization Science, 20 (2), 294–312.
Cardeal, N (2012). Valuable, rare, inimitable resources and organization (VRIO).resources or valuable, rare, inimitable resources (VRI).capabilities: What leads to competitive advantage? African Journal of Business Management, 6 (37).
Carpenter, M. A., & Sanders, W. G. (2009). Strategic Management: A Dynamic Perspective: Concepts. Pearson Prentice Hall.
Chakrabarti, A (2014). Organizational adaptation in an economic shock: The role of growth reconfiguration. Strategic Management Journal, 36 (11), 1717–1738.
Chakravarthy, B. & Lorange, P (2008). Driving renewal: The entrepreneur‐manager. Journal of Business Strategy, 29 (2), 14–21.
Chakravarthy, B. S (1984). Strategic self-renewal: A planning framework for today. Academy of Management Review, 9 (3), 536–547.
Chakravarthy, B.S., and Doz, Y. (1992), “Strategy Process Research: Focusing on Corporate Self-Renewal”, Strategic Management Journal, Special Issue - 13, p.5.
Colbert, B. A (2004). The Complex ResourceBased View: Implications for Theory and Practice in Strategic Human ResourceManagement. Academy of Management Review, 29, 341 – 358.
Cooper, D. & Schindler. P (2003). Business ResearchMethods (8th edition). New Delhi: Tata McGraw Hill.
Creswell, J (2009). Research design: Qualitative, quantitative and mixed methods approaches (3rd edition). Thousand Oaks, California: SAGE Publications.
Creswell, J (2012). Qualitative inquiry and researchdesign: Choosing among five approaches (3rd edition). Thousand Oaks, California: SAGE Publications & Paperback.
Das, T. K. & Bing-Sheng, T (2000). A Resource Based Theory of Strategic Alliances. Journal of Management, 26, 31-62
Davenport, T., Leibold, M., Voelpel, S. C. & Davenport, T. H (2006). Strategic management in the innovation economy: Strategic approaches and tools for dynamic innovation capabilities. Germany: Publicis MCD Verlag, Germany.
Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2015). Strategic management: Concepts and cases. Wiley Textbooks.
Flier, B., Bosch, F. & Volberda, H (2003). Co-evolution in Strategic Renewal Behaviour of British, Dutch and French Financial Incumbents: Interaction of Environmental Selection, Institutional Effects and Managerial Intentionality.
Journal of Management Studies, 40 (8), 2163-2187.
Floyd, S. W. & Wooldridge, B (1997). Middle management’s strategic influence and organizational performance. Journal of Management Studies, 34 (3), 465–485.
Fowler Jr, F. J (2013). Survey researchmethods. Sage publications.
Helfat, C. E. & Peteraf, M. A (2014). Managerial cognitive capabilities and the micro foundations of dynamic capabilities. Strategic Management Journal, 36 (6), 831–850.
Helfat, C. E., Finkelstein, S., Mitchell, W., Teece, D., Singh, H., Peteraf, M. & Winter, S. G (2007). Dynamic capabilities: Understanding strategic change in organizations. Malden, MA: Wiley-Blackwell
HuangYi‐Fen (2009). Strategic renewal within an information technology firm. International Journal of Entrepreneurial Behaviour & Research, 15 (5), 436–452.
Huff, J. O., Huff, A. S. & Thomas, H (1992). Strategic renewal and the interaction of cumulative stress and inertia. Strategic Management Journal, 13 (1), 55–75.
Huff, J.O., Huff, A.S. and Thomas, H. (1992), “Strategic Renewal and the Interaction of Cumulative Stress and Inertia, Strategic Management Journal, 13, 55-75.
Junell, J. & Ståhle, P (2011). Measuring organizational renewal capability: Case training service business. Competitiveness Review, 21 (3), 247–268.
Katkalo, V. S., Pitelis, C. N. & Teece, D. J (2010). Introduction: On the nature and scope of dynamic capabilities. Industrial and Corporate Change, 19 (4), 1175–1186.
Kozlenkova, I. V., Samaha, S. A. & Palmatirer, R. W (2014). ResourceBased Theory In marketing. Journal of the Academy Of Marketing Science, 42, 1-21.
Mezias, S. J. & Glynn, M. A (1993). The three faces of corporate renewal: Institution, revolution, and evolution. Strategic Management Journal, 14 (2), 77–101.
Nedzinskas, Š., Pundzienė, A., Buožiūtė-Rafanavičienė, S. & Pilkienė, M (2013). The impact of dynamic capabilities on SME performance in a volatile environment as moderated by organizational inertia. Baltic Journal of Management, 8 (4), 376–396.
Ocasio, W., Laamanen, T., & Vaara, E (2018). Communication and attention dynamics: An attention‐based view of strategic change. Strategic Management Journal, 39(1), 155-167.
Pappas, J. M. & Wooldridge, B (2002). Social networks and strategic knowledge: a study of strategic renewal from a mid-level perspective. Academy of Management Proceedings, 2002 (1), F1–F6.
Porter, M.E. (1980), “Competitive Strategy: Techniques for Analyzing Industries and Competitors”, New York: Free Press (Republished with a new introduction, 1998).
Poskela, J. & Martinsuo, M (2009). Management control and strategic renewal in the front end of innovation. Journal of Product Innovation Management, 26 (6), 671–684.
Pryor, M.G., Taneja, S., Toombs, L.A. and Humphreys, J.H. (2010), “Organization Theories: Evolution, Development, and Theoretical Debates”, Southwest Academy of Management Proceedings
Rajes, M., Prof. Lechner, C. & Prof. Floyd, S (2013). A Behavioural Theory of Strategic Renewal: The Impact of Performance Feedback and Organizational Learning on strategic Renewal Actions (Doctor of Philosophy in Management). The University of St. Gallen Germany.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Saleh Al Humaidan & Valerie Sabatier, (2017) Strategic renewal in times of environmental scarcity: The mediating role of technology in business model evolution, Journal of Organizational Change Management, 30(1),106-120,
Salvato, C (2009). Capabilities unveiled: The role of ordinary activities in the evolution of product development processes. Organization Science, 20 (2), 384–409.
Schmitt, A., Raisch, S., & Volberda, H. W (2018). Strategic renewal: past research, theoretical tensions and future challenges. International Journal of Management Reviews, 20(1), 81-98.
Shay, J. P., & Rothaermel, F. T. (1999). Dynamic competitive strategy: Towards a multi-perspective conceptual framework. Long Range Planning, 32(6), 559-572.
Sparrow, O. & Ringland, G (2010). A system for continuous organizational renewal. Strategy & Leadership, 38 (4), 34–41.
Teece, D. J (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable).enterprise performance. Strategic Management Journal, 28 (13), 1319–1350.
Teece, D. J (2012). Dynamic capabilities: Routines versus entrepreneurial action. Journal of Management Studies, 49 (8), 1395–1401.
Teece, D. J., Pisano, G. & Shuen, A (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18 (7), 509–533.
Volberda, H. W. & Lewin, A. Y (2003). Co-evolutionary dynamics within and between firms: From evolution to Co-evolution. Journal of Management Studies, 40 (8), 2111–2136.
Volberda, H. W., Baden-Fuller, C. & Van den Bosch, F. A. J (2001). Mastering strategic renewal. Long Range Planning, 34 (2), 159–178.
Volberda, H.W. & Baden-Fuller, C (2003). Strategic Renewal Processes in Multi-unit firms: Generic Journeys of Change. Oxford: Blackwell
Williams, C., Chen, P. L., & Agarwal, R (2017). Rookies and seasoned recruits: How experience in different levels, firms, and industries shapes strategic renewal in top management. Strategic Management Journal, 38(7), 1391-1415.
Wójcik, P (2015). Exploring links between dynamic capabilities perspective and resource-based view: A literature overview. International Journal of Management and Economics, 45 (1), 87–118.
Worch, H., Kabinga, M., Eberhard, A. & Truffer, B (2012). Strategic renewal and the change of capabilities in utility firms. European Business Review, 24 (5), 444–464.
Wu, L. Y (2010). Applicability of the Resource Based and Dynamic Capabilities View Under Environmental Volatility. Journal of Business Research, 63, 27-31.
Zand, D. E (2009). Strategic renewal: How an organization realigned structure with strategy. Strategy & Leadership, 37 (3), 23–28.
DOI: http://dx.doi.org/10.61426/sjbcm.v5i3.832
Refbacks
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.