THE JOINT INFLUENCE OF DYNAMIC CAPABILITIES, STRATEGIC ORIENTATION AND FIRM INNOVATION ON COMPETITIVE ADVANTAGE OF COMPANIES LISTED AT NAIROBI SECURITIES EXCHANGE

  • Patricia Chemutai
  • Kennedy Ogollah
  • Zachary Awino
  • Joseph Owino

Abstract

Despite competitive advantage being identified as an important concept in management, exclusive
factors as well as definitive ways of attaining it remain unclear. Recent studies show that dynamic
capabilities, strategic orientation as well as firm innovation enable a firm to create economic value from
its efficient operations and thereby realize a competitive advantage. The purpose of this study was to
examine the joint effect of dynamic capabilities, strategic orientation and firm innovation on
competitive advantage of companies listed at Nairobi Securities Exchange. The study used cross
sectional descriptive survey as its research design and all the sixty-three firms listed at the
Nairobi Securities Exchange formed the study population. In order to ascertain the joint
influence, the hypothesis was tested using multiple regression analysis. The study established
that dynamic capabilities, strategic orientation and firm innovation jointly and significantly
influence competitive advantage of companies listed at Nairobi Securities Exchange. The study
recommends that the listed firms should not only develop dynamic capabilities, embrace
strategic orientation but also invest in firm innovation in order to attain a competitive
advantage. The results contribute to theory development, policy and management practice from
the importance of dynamic capabilities, strategic orientation and firm innovation in achieving
competitive advantage. The limitation of the study is that it focused only on companies listed at
Nairobi Securities Exchange and they include few companies from various sectors of the
Kenyan economy. Some sectors are robust with many companies but few have decided to be
publicly listed. The study encourages further research, especially conducting longitudinal
studies of the aforementioned variables while expanding the population to include companies
that are not listed at Nairobi Securities Exchange.
Key Words: Dynamic Capabilities, Strategic Orientation, Competitive Advantage, Firm Innovation,
Sensing, Seizing, Integration, Nairobi Securities Exchange

Published
2022-10-19