EFFECT OF DYNAMIC CAPABILITIES ON PERFORMANCE OF SACCOS IN MANDERA COUNTY, KENYA

Abstract

Dynamic capabilities are the firm's ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments. By developing inspired capabilities that go beyond ordinary strategic capabilities, firms will be in a strong position to achieve a long-lasting competitive advantage. SACCOs play a critical role of savings mobilization for investments as envisioned in the Kenya’s development blueprint, vision 2030. SACCOs have been facing financial challenges leading to closure while others have been put under receivership. The general objective of this study was to determine the effect of dynamic capabilities on performance of SACCOs in Mandera County, Kenya. The specific objectives was to examine the effect of markets technological sensing and effect of innovation and strategic renewal on performance of SACCOs in Mandera County, Kenya. The study was guided by dynamic capabilities theory and diffusion of innovation theory. This study adopted a descriptive research design. The study targeted 39 SACCOs distributed in all constituencies in Mandera. The target included 117 senior management staff of the SACCOs from which 117 senior management staff were subjected to the questionnaires through census. The study used content validity to confirm that the questionnaire would enable the researcher to achieve study objectives. A pilot study was conducted with 10% of the respondents hence 12 management staff in four SACCOs. Reliability was tested using Cronchba Alpha coefficient with a threshold of 0.7. Data was analyzed using descriptive and inferential statistics and presented in Tables. All ethical considerations were strictly adhered to. Findings show that; markets technological sensing has a strong positive significant correlation with performance of SACCOs in Mandera County (r = 0.542, p value =0.000), and innovation and strategic renewal has a strong positive significant correlation with performance of SACCOs in Mandera County (r = 0.842, p value =0.000). The study therefore recommends that; the management should invest in gathering and analyzing market intelligence, and make efforts to ensure that the staff who introduce successful ideas are rewarded.. KEY WORDS: Markets technological sensing, Innovation and strategic renewal , Performance of SACCOs