Effect Of Dynamic Capabilities On Financial Performance Of Oil Marketing Firms In Kenya

Abstract

The main objective of this study is to establish the effect of effect of dynamic capabilities on financial performance of the oil marketing firms in Kenya. More specifically, the study seeks to determine the effect of sensing capabilities, seizing capabilities, learning capabilities and reconfiguration capabilities on financial performance of the oil marketing firms in Kenya. The study was guided by the dynamic capability theory, the resource based view and the knowledge based view. Relevant empirical studies are reviewed to inform the conceptual framework of the study. Descriptive survey was undertaken covering quantitative methods. The study targeted 105 oil marketing firms as the unit of analysis and the Human Resource Managers, finance managers, operations manager and corporate affairs managers from each of these firms adding to 440 respondents as the unit of observation. Multi-stage sampling approach was used starting with stratification of the firms before selecting 210 respondents through stratified random sampling technique as the sample size. The study collected primary data supported by the questionnaire and secondary data supported by data collection sheet over a period of 2020-2021. The study tested for content validity with the aid of the supervisor and one expert in the field of strategic management while reliability of the questionnaire was determined through computation of the Cronbach Alpha Coefficient values. The analysis of the gathered information was supported by Statistical Package of Social Sciences tool version 24. The values of means and standard deviations were utilized as the descriptive statistics. Inferential statistics covered correlation and regression analysis. Table and figures helped to present the findings. The study established that sensing capabilities (β=0.009, p<0.05), seizing capability (β=0.005, p<0.05), organizational learning capability (β=0.003, p>0.05) and reconfiguration capabilities (β=0.004, p>0.05) all had significant effect on financial performance. The study concludes that dynamic capabilities are significant predictors of financial performance of oil marketing firms in Kenya. The study recommends that the marketing managers working in the oil marketing firms in Kenya should continuously invest in market research to gather intelligence for improved competitive advantage. The human resource managers working in the oil marketing firms should invest in new methods and systems of creating new knowledge through the recruitment practices.