Dynamic Capabilities and Competitive Advantage of Companies Listed at Nairobi Securities Exchange

Abstract

The purpose of this study was to examine the relationship between dynamic capabilities and competitive advantage of companies listed at Nairobi Securities Exchange. The specific objectives were to establish the influence of dynamic capabilities on competitive advantage of companies listed at Nairobi Securities Exchange. The study applied cross sectional descriptive survey as its research design and all the firms listed at the NSE formed the study population. The study established dynamic capabilities explain 44.8% of variation in competitive advantage. The hypothesis that dynamic capabilities construct has a significant influence on competitive advantage of companies listed at Nairobi Securities Exchange was therefore supported. The study recommends that all listed firms should encourage the development of dynamic capabilities as they are instrumental in combating environmental challenges and consequently ensure the attainment of a competitive advantage. The results contribute to theory development, policy and management practice with regard to the essentiality of dynamic capabilities in the realization of competitive advantage. The limitation of the study is that it used the top management individuals as the target respondents as opposed to including other employees in the organization. Nevertheless, this did not compromise the findings since top managers understand the workings of the firm and are able to discern the various aspects of the operations and strategy. Consequently, the study points out room for more research using a larger population, longitudinal studies and incorporating other companies that are not listed at Nairobi Securities Exchange.