PHD-Department of Management Science

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Browsing PHD-Department of Management Science by Author "Ndegwa, Purity Wairimu"

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    Resource Isolating Mechanism and Competitive Advantage Among Commercial Banks in Kenya
    (Kenyatta University, 2019-07) Ndegwa, Purity Wairimu
    Commercial banks in Kenya are facing intense rivalry within the industry. For these banks to survive, it is important that they respond to the changes in the external environment. Competitive advantage which has become the core focus of corporate strategy, has increasingly gained much attention in strategic management and is a concept which enables organizations to survive in the long-run. Studies done on competitive advantage show a number of empirical and theoretical gaps as they concentrated on the resources a firm should have to create competitive advantage but lacked explanation on which resource isolating mechanisms a firm should adopt to sustain the competitive advantage. The main purpose of this study was to establish the effect of resource isolating mechanism on competitive advantage among commercial banks in Kenya. The specific objectives in this study were to determine the effect of economic deterrence, identification of rival competitive advantage and exploitation of opportunities on competitive advantage among commercial banks in Kenya. This relationship was mediated by organizational capabilities and moderated by management characteristic and external environment. Descriptive and explanatory research design was employed in the study. The research population was all 40 commercial banks in Kenya. Purposive sampling was used to select a sample of 160 respondents from the key departments of Finance, Sales and Marketing, Strategy and Operations of all the 40 commercial banks’ headquarters in Nairobi. The data collection instrument used was semi-structured questionnaire. The variables characteristics were summarised using descriptive statistics. Hypotheses testing was done to determine the effect of the resource isolating mechanism on competitive advantage. The study found that economic deterrence was not significant and had negative effect on CA, identification of rival competitive advantage was significant and had positive effect on CA and exploitation of opportunities was significant and had positive effect on CA. There exists a significant partial mediation by organizational capabilities on the relationship between resource isolating mechanism and competitive advantage. The moderating effect of management characteristics was significant, whereas external environment was found not to have moderating effect on the relationship between RIM and CA. The study concluded that there exists a positive effect of resource isolating mechanism on competitive advantage. The study contributes to the body of knowledge as well as policy in terms of understanding the effect of resource isolating mechanism on competitive advantage. This study recommends that it is important for the commercial banks management to implement strategies that reflect the changes in the external environment and appropriate allocation of resources. Commercial bank should also effectively position the banks’ products, build strong customer relationships and focus on competitive activities which create and sustain competitive advantage. Further, the researcher recommends a similar study could be conducted to other sectors other than commercial banks for generalization purposes