Abstract
This study sought to investigate the effect of dynamic capabilities on the performance of selected manufacturing firms in Kenya. It also aimed at examining the moderating effect of firm size on the effect of dynamic capabilities on the performance of manufacturing firms. The study utilized both the descriptive and explanatory research design which was cross-sectional survey in nature. The study population comprised of all the 70 food manufacturing listed in the Kenya Association of Manufacturer’s directory. Self-administered questionnaires were used to collect primary data from 190 respondents. Multiple regression analysis was used to establish the nature and magnitude of the relationships between the independent and dependent variables. The findings indicate that there is a significant positive relationship between dynamic capabilities and performance of food manufacturing firms in Kenya. Firm size was found not to have significant relationship with firm and does not moderate the relationship between dynamic capabilities and performance. The findings supported the theoretical foundation of the dynamic capabilities theory that a firm performance and sustainable competitive advantage depends on its ability to reacting rapidly and flexibly to changing market environments. The study recommends that policy makers should link performance of food manufacturing firms with national goals and in this regard, include acquisition of dynamic capabilities by food manufacturing firms in their policy interventions aimed at increasing food security.
Highlights
1.0 Introduction and Background Following National lockdowns across the globe, businesses in Kenya are coping with lost revenue and disrupted supply chains as factory lockdowns and quarantine measures spread across the globe, restricting movement and commerce
The findings indicated that market orientation and marketing capabilities are complementary assets that directly contribute to firm performance
The results showed that Dynamic capabilities had W= 0.982, P= 0.16, firm size W= 0.990, P=0.208, Firm Performance W=0.995, P=0.288 which was, in all cases greater than 0.025 showing that there is enough evidence to show that the population is normally distributed
Summary
National lockdowns across the globe, businesses in Kenya are coping with lost revenue and disrupted supply chains as factory lockdowns and quarantine measures spread across the globe, restricting movement and commerce. Unemployment is growing, while policymakers are trying to implement fiscal and monetary measures to alleviate the financial burden on citizens and shore up economies under severe strain. There was widespread fear by Investors that the spread of the coronavirus will destroy economic growth and that government action may not be enough to stop the decline. Even before the COVID-19 pandemic, food manufacturing firms in Kenya were already experiencing constraints in their performance resulting in either stagnation or decline all together. Poor Performance in some of these firms has attracted attention due to widespread discontent with frequent food shortages and growing public pressure to satisfy
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