The Moderating Role of External Environment on the Relationship between Resource Isolating Mechanism and Sustainable Competitive Advantage

Abstract

Dynamic changes in the firm’s external environment influence the future direction of the firm. The operations of the firm are affected by the striking advances in globalization such as shifts in technology, stiff competition among business entities and new entrances within an industry. The firms including commercial banks in Kenya should therefore, have the ability to predict future trends in the external environment for survival. The main purpose of this study was to establish the moderating role of external environment on the relationship between resource isolating mechanism and sustain competitive advantage among commercial banks in Kenya. Descriptive and explanatory research design was employed in the study. The research targeted all the 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 forty (40) commercial banks’ headquarters in Nairobi, Kenya. The data collection instrument used was semi-structured questionnaire. The variable characteristics were summarized using descriptive statistics. Agreement to the most frequent responses to the statements on the study variables ranged between moderate and high extent. Based on results of hypotheses testing, external environment have no moderating effect on the relationship between resource isolating mechanism and sustainable competitive advantage.