Influence of Organization Capabilities on the Performance of Commercial State Corporations in Kenya
Echongu, Agaba Sedrick
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The commercial state corporations in Kenya have faced a turbulent period that has seen previous blue-chip companies such as Mumias Sugar, Kenya Airways, Telkom Kenya, and National Bank falter in terms of their performance. Despite the restructuring of state parastatals and the continuous government bailout, there has been little improvement in the performance of state-owned corporations. The available literature has focussed on their performance from multidimensional constructs. However, there is scanty evidence on how organization capabilities affect the performance of commercial state corporations. The current study sought to establish the effect of innovative capabilities and resource capabilities. The research was anchored on the dynamic capabilities’ theory and the theory of the firm. The research employed a descriptive cross-sectional research design with the unit of analysis being the 50 commercial state corporations in Kenya. The study used a census survey of 150 respondents. Data was collected by the use of semi-structured questionnaires, employing a mix of drop and pick methods as well as google forms to collect the data. The collected research data were analyzed using descriptive, inferential statistics, and correlational statistics. The results were presented using charts and tables. Findings revealed the research was able to obtain a 71% response rate, with 29% of the sample respondents not being able to respond. Correlation tests established there is a positive association between innovative capabilities, resource capabilities and performance of commercial state corporations. The study established that there is a positive and significant effect of organization capabilities on state corporations’ performance in Kenya. Specifically, the study revealed that innovative capabilities, resource capabilities, have a positive and statistically significant influence on the performance of commercial state corporations. The study recommended that organizations would also institute compensations and rewards to encourage innovative ideas from employees in different departments. The study recommended that the management ensures that they have adequate qualified personnel to improve strategy execution within their respective firms. The study also recommends that coordination functions be centralized to ensure timely detection of unexpected events.