Role of Dynamic Capabilities in the Performance of Manufacturing Firms in Nairobi County, Kenya

Abstract

The advent of globalization has brought with it drastic changes to the operating landscape for firms in the manufacturing sector. The need for transformational changes so as sustain competitive advantage has been on the rise. Firms are expected to continuously re-engineer their business models and operations to catch up with the turbulent environment. Previous studies have investigated the contribution of manufacturing firms in economic growth. Some have concentrated on the preferred approaches that countries should take, whether protectionism or free market. However, empirical studies investigating direct impact of dynamic capabilities on manufacturing firms' performance have been minimal. The general objective of the study was to examine the influence of the three dimensions of dynamic capabilities (sensing capabilities, seizing capabilities and reconfiguration capabilities) on firm performance. The study was grounded on the Resource-Based View theory. An explanatory research design was used for the cross-sectional survey. Primary data was obtained from 271 out of 369 firms sampled from a population of 1,496 manufacturing firms in Nairobi County, Kenya, using a structured questionnaire instrument through drop and pick. The questionnaire was completed by the firms' CEOs. Reliability and validity tests were carried out on the research instruments and study measures. Hypotheses were tested using regression analysis results, namely: -sensing capabilities (B=0.215, P<0.01), seizing capabilities (B=0.194, P<0.01) and reconfiguration capabilities (B=0.182, P<0.001). These three variables combined, contributed 25.9% (R 2 =0.259) of the variance in firm performance. The study concluded that deployment of dynamic capabilities has significant influence on firm performance.

Rural Tourism Sustainable Business Performance: Dynamic Capability Perspective

“…Thus these results are supported by a significance value for the dynamic capability dimension sensing (DCS) variable of 0.019 <0.05, this indicates that there is an effect of dynamic capability sensing dimension (DCS) with sustainable tourism performance (SP). The results of this study support previous studies that have been conducted which provide the same research results as research by [16], [17], [25] who say that the dynamic capability of the sensing dimension has an influence on tourism performance. Sustainable (SP)  The dynamic capability dimension seizing (DCSZ) variable has an effect on sustainable tourism performance (SP), the test results show that the coefficient of direct influence of dynamic capability dimension seizing (DCSZ) on sustainable tourism performance (SP) is 0.416, meaning the dynamic capability variable The seizing dimension (DCSZ) has a positive relationship with the variable on sustainable tourism performance (SP), this result provides information that the better the dynamic capability of the seizing dimension (DCSZ), as it can quickly relate to new knowledge from outside, new information can be used for management.…”

“…Research by [17] shows that sensing capabilities, seizing capabilities, and reconfiguration capabilities affect the performance of manufacturing companies in Kenya. However, other studies show different results such as research by [18] dynamic integration capability has no effect on performance, dynamic learning capability has no effect on performance and dynamic reconfiguration capability has no effect on performance.…”

The Sustainable Development Practices Role and Transformational Leadership: Interaction and Impact on the Financial Performance

“…Similarly, Engelen et al (2015) (Mansouri, 2016). Similar findings have also been reported in a study conducted by Nyachanchu et al (2017), when they conducted a study on 271 manufacturing facilities.…”

Role of Agribusiness in the Development of Robust Manufacturing Sub-Sector

“…Key respondents used in the study were chief executive officers (CEOs). Regression analysis conducted by Nyachanchu et al (2017) revealed, collectively, dynamic capabilities account for about 25.9% of variation in the performance of manufacturing companies in Kenya. However, each of the three dimensions (reconfiguration: B=0.182, p<0.001; sensing: B=0.215, p<0.01; and seizing: B=0.194, p<0.01) showed significant relationship with the performance of manufacturing firms.…”