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

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