THE ROLE OF FIRM INNOVATION IN THE RELATIONSHIP BETWEEN LEARNING ORIENTATION AND COMPETITIVE ADVANTAGE OF INSURANCE COMPANIES IN KENYA

Abstract

Faced with a dynamic and complex business environment, and rapidly changing consumers’
preferences, companies need to find new ways of maintaining their competitiveness for survival.
With this in mind, the conceptualization of learning orientation and firm innovation emerge as
critical factors to ensure organizational growth and competitiveness. This study sought to examine
the influence of firm innovation on the relationship between learning orientation and competitive
advantage of insurance companies in Kenya. The population of study comprised all the 56
insurance companies in Kenya. Primary data was collected using a self-administered
questionnaire. The data was tested for reliability, validity and sampling adequacy and analyzed
using linear regression. The study established that learning orientation had a statistically
significant effect on competitive advantage of insurance companies in Kenya. The study also
revealed that firm innovation had a mediating role in the relationship between learning
orientation and competitive advantage. The study concludes that for insurance companies to gain
and sustain competitive advantage, they need to pay attention to and implement the necessary
drivers of competitive advantage which include learning and innovation. Further, the study
established that learning orientation influences competitive advantage indirectly through
innovation. Limitations of the study include the study variables being measured by the subjective
perception of the respondents given that self-reported data tend to be more positive and may not
always be completely true. Future studies can address this limitation by using both questionnaire
and interview methods.
Key Words: Learning orientation, Firm Innovation, Competitive Advantage, Insurance Companies in
Kenya