Dynamic capabilities, strategic orientation and competitive advantage of small and medium-retail ...

182 Pages·2015·0.82 MB·English

Dynamic capabilities, strategic orientation and competitive advantage
of small and medium-retail enterprises in Kenya

Grace Wangari Kiiru

A thesis submitted in partial fulfillment for the degree of Doctor of
Philosophy in Business Administration in the Jomo Kenyatta University of
Agriculture and Technology

2015
DECLARATION
This thesis is my original work and has not been presented for a degree in any other university

Signature: Date:
Grace Wangari Kiiru

This thesis has been submitted for examination with our approval as University Supervisors
Signature: Date:

Dr. Mike A. Iravo
JKUAT, Kenya

Signature: Date:
Dr. Margaret A. Oloko
JKUAT, Kenya

ii
DEDICATION
To Steve, Gloria, Stacy and Elvis

iii
ACKNOWLEDGEMENTS
I am indebted to various persons who have been of great support to me in the process of
coming up with this thesis. First and foremost, I would like to thank the Almighty God for the
gift of life and the precious opportunity He has given me to pursue the Doctor of Philosophy
Degree in Business Administration. I most sincerely acknowledge my supervisors, Dr. Mike
A. Iravo and Dr. Margaret A. Oloko whose numerous constructive criticisms,
recommendations and suggestions were invaluable in shaping and giving direction to this
thesis. I cannot forget to acknowledge Prof. John M. Kihoro who has generously provided
guidance on the statistical bit of this thesis. All provided sufficient guidance throughout the
thesis writing. Further acknowledgements go to Mr. Mukaburo, revenue Accountant at Thika
Sub County who was more than willing to provide all the information I needed regarding the
registered enterprises within Thika Sub County. Mr. Antony D. Bojana deserves gratitude for
editing the final work and Herman Muriu for his diligent support in data collection.
Special thanks go to my dear husband and mentor Dr. Stephen Gitahi who kept me on my toes
to ensured that I made positive progress throughout this programme; our lovely children
Gloria, Stacy and Elvis for their understanding, love and support throughout the study period.
Sincere gratitude is extended to my friends and course mates who helped keep me sane
throughout the thesis writing process, their valuable criticism, comments, support and valued
friendship made this journey far from lonely.

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TABLE OF CONTENTS

DECLARATION----------------------------------------------------------------------------------------- ii
DEDICATION ----------------------------------------------------------------------------------------- iii
ACKNOWLEDGEMENTS --------------------------------------------------------------------------- iv
LIST OF TABLES ------------------------------------------------------------------------------------ viii
LIST OF FIGURES-------------------------------------------------------------------------------------x
LIST OF APPENDICES ------------------------------------------------------------------------------ xi
ACRONYMS------------------------------------------------------------------------------------------- xii
DEFINITION OF TERMS ------------------------------------------------------------------------- xiii
ABSTRACT----- ---------------------------------------------------------------------------------------- xv
CHAPTER ONE ----------------------------------------------------------------------------------------- 1
1.0 INTRODUCTION ------------------------------------------------------------------------------- 1
1.1 Background to the Study ------------------------------------------------------------------------- 1
1.2 Statement of the Problem ---------------------------------------------------------------------- 11
1.3 Objectives ---------------------------------------------------------------------------------------- 13
1.4 Research Hypotheses ---------------------------------------------------------------------------- 14
1.5 Significance of the Study ---------------------------------------------------------------------- 15
1.6 Scope of the Study ------------------------------------------------------------------------------- 16
1.7 Limitations of the Study ------------------------------------------------------------------------ 16

v
CHAPTER TWO -------------------------------------------------------------------------------------- 17
2.0 LITERATURE REVIEW ------------------------------------------------------------------- 17
2.1 Introduction --------------------------------------------------------------------------------------- 17
2.2 Theoretical Framework ------------------------------------------------------------------------- 17
2.3 Conceptual Framework ------------------------------------------------------------------------- 41
2.4 Empirical Review Relevant to the Study ----------------------------------------------------- 45
2.5 Critique of Existing Literature Relevant to the Study ------------------------------------- 49
2.6 Research Gaps ----------------------------------------------------------------------------------- 50
2.7 Summary ---------------------------------------------------------------------------------------- 53
CHAPTER THREE ----------------------------------------------------------------------------------- 55
3.0 RESEARCH METHODOLOGY ---------------------------------------------------------- 55
3.1 Introduction -------------------------------------------------------------------------------------- 55
3.2 Research Philosophy --------------------------------------------------------------------------- 55
3.3 Research Design -------------------------------------------------------------------------------- 56
3.4 Target Population ------------------------------------------------------------------------------- 58
3.5 Sampling Frame --------------------------------------------------------------------------------- 59
3.6 Sample and Sampling Technique ------------------------------------------------------------- 59
3.7 Data Collection Instruments ------------------------------------------------------------------- 62
3.8 Data Collection Procedure ---------------------------------------------------------------------- 64
3.9 Pilot Test ---------------------------------------------------------------------------------------- 64
3.10 Data Processing and Analysis ------------------------------------------------------------------ 67
3.11 Operationalization and Measurement of Variables ----------------------------------------- 68
3.12 Model Specification ---------------------------------------------------------------------------- 71
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3.13 Summary ---------------------------------------------------------------------------------------- 73
CHAPTER FOUR -------------------------------------------------------------------------------------- 74
4.0 RESEARCH FINDINGS AND DISCUSSIONS ----------------------------------------- 74
4.1 Introduction -------------------------------------------------------------------------------------- 74
4.2 Background Information ------------------------------------------------------------------------ 74
4.3 Descriptive Analysis of Independent Variables --------------------------------------------- 79
4.4 Inferential Statistics ------------------------------------------------------------------------------ 92
CHAPTER FIVE ------------------------------------------------------------------------------------- 116
5.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ------------------- 116
5.1 Summary of the Findings --------------------------------------------------------------------- 116
5.2 Conclusions ------------------------------------------------------------------------------------- 120
5.3 Recommendations ----------------------------------------------------------------------------- 123
REFERENCES --------------------------------------------------------------------------------------- 128
APPENDICES --------------------------------------------------------------------------------------- 155

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LIST OF TABLES

Table 3.1: Population Frame -------------------------------------------------------------------- 59
Table 3.2: Sampling Distribution ---------------------------------------------------------------- 62
Table 3.3: Reliability Test ------------------------------------------------------------------------- 67
Table 4.1: Retail Enterprises Response Rate -------------------------------------------------- 74
Table 4.2: Size of the Study Sample ------------------------------------------------------------ 75
Table 4.3: 5-Point Likert Scale Responses Categories --------------------------------------- 79
Table 4.4: Sensing capabilities and competitive advantage----------------------------------80
Table 4.5: Seizing capabilities and Competitive Advantage -------------------------------- 83
Table 4.6: Reconfiguration Capabilities and Competitive Advantage --------------------- 85
Table 4.7: Dynamic Capabilities, Strategic orientation and Competitive Advantage---- 87
Table 4.8: Dynamic Capabilities, Customer’s Orientation and Competitive Advantage ---
-------------------------------------------------------------------------------------------88
Table 4.9: Competitive advantage --------------------------------------------------------------- 90
Table 4.10: Aggregated Means and Standard Deviations of the Independent Variables - 92
Table 4.11: Skewness and Kurtosis Scores ------------------------------------------------------ 93
Table 4.12: Correlation of Independent Variables ---------------------------------------------- 94
Table 4.13: Variance Inflation Factor for Independent Variables ---------------------------- 95
Table 4.14: Test of Homogeneity of Variances ------------------------------------------------- 95
Table 4.15: Regression Results on the Relationship between Dynamic Capabilities ----- 97
and Competitive Advantage --------------------------------------------------------- 97
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Table 4.16: Regression Results on the Relationship between sensing capabilities,
competition orientation, customer orientation and Competitive Advantage--
------------------------------------------------------------------------------------------ 101
Table 4.17: Regression Results on the Relationship between seizing capabilities,
competition orientation, customer orientation and Competitive Advantage--
------------------------------------------------------------------------------------------ 104
Table 4.18: Regression results on the Relationship between reconfiguration capabilities,
competition orientation, customer orientation and Competitive Advantage--
------------------------------------------------------------------------------------------ 107
Table 4.19: Regression results on the Relationship between dynamic capabilities,
competition orientation, customer orientation and Competitive Advantage--
------------------------------------------------------------------------------------------ 111

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LIST OF FIGURES

Figure 2.1: Conceptual Framework -------------------------------------------------------------- 42
Figure 4.1: Gender of the SMREs Respondents/Owners ------------------------------------- 75
Figure 4.2: Level of Education -------------------------------------------------------------------- 77
Figure 4.3: Business Age -------------------------------------------------------------------------- 77
Figure 4.4: Business Legal Structure ------------------------------------------------------------ 78

x