Core competences and firm performance of star rated hotels in Nairobi City County, Kenya
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Date
2025-11
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Kenyatta University
Abstract
The hotel industry in developing world has been promoting economic growth and providing jobs. In the Kenyan context, there has been great variation in firm performance of hotels with some closing down. Although core competences have received attention equally in scholarly work and in practice, its effect on star rated hotels remains uncertain. Consequently, this study aimed to investigate the effects of core competences on fim performance of star rated hotels. Specifically, this study investigated the effects of managerial competence, customer focus competence and emotional intelligence competence on the firm performance of star rated hotels in Nairobi City County. The study assessed the moderating effect of environmental turbulence and examined the mediating effect of innovation capability on the relationship between core competences and firm performance. Underpinning theory of study independent and dependent variables was resource-based view theory and balanced scorecard model. While mediating and moderating variables were underpinned on dynamic capability theory, and contingency theory. Moreover, the study utilized proportionate stratified sampling and simple random to select the respondent of the study. The target population was 112 star rated hotels in Nairobi City County and sample sizes of 217 managers were interviewed for the study. The response rate was 78.6% which was found to be suitable for the research. This study employed a semi-structured questionnaire to collect primary data. The study utilized positivism philosophy, and the research design implemented was descriptive and explanatory research design. Descriptive statistics used mean, standard deviation to explain data characteristics and inferential statistics used regression analysisis in testing the effects of variables on firm’s performance. Qualitative data was analyzed using themes being presented in narrative form. Descriptive and inferential statics were done with significance level of confidence at p≤ 0.05, (95%). Findings established that managerial competence; customer focus competence and emotional intelligence competence significantly affected the performance of star rated hotels in Nairobi City County. The study revealed that environmental turbulence had significant moderating effect on firm performance, moreover there was a significant partial mediating effect of innovation capability on firm performance. The study recommended that the hotels should continuously build on their core competences through trainings of their employees using seminars, workshops, on job training and refresher courses for improved performance. The study concludes that emotional intelligence competence had the highest significant effect. In relation to customer focus competence, the study recommended that hotels should adopt activities related to customer focus, providing excellent services, addressing customers complaints and responding to customers feedback and developing customer services strategy. Star rated hotels should improve on develompement of exciting new products and services and invests in entering new markets. Study recomends that star rated hotels to develop a proactive strategy in dealing with environmental turbulence. Study acclaims that in persuit of knowledge enquiries be done in service sector for instance, banking in order to authenticate the influence of core competences on firm performance.
Description
A thesis submitted to the school of business, economics and tourism in partial fulfillment of the requirements for the award of the degree of doctor of philosophy in business administration (strategic management) school of business Kenyatta University, November 2024
Dr. Godfrey Kinyua
Dr. Paul Waithaka