Does the ‘Process’ of Process Capital Matter to Performance? Evidence from Kenyan Commercial Banks

Abstract

Globalization, changing customer expectation and shrinking product life-cycle depict process capital as a source of competitive advantage in modern economies. Consequently, organizations are gradually becoming more process oriented to cope with a dynamic environment. However, the process capital and performance causality is scanty in extant literature. Besides, previous studies overlooked the process aspect of process capital. Thus, the objective of this study was to determine whether the “process” of process capital matters to firm performance. The hypothesis was tested using panel data for the years 2008-2017 extracted from 31 commercial banks in Kenya. The findings showed that process capital had a positive and significant effect on performance (β = 0.275, ρ-value 0.000<0.05). Consistent with the resource based view theory; the study concluded that the process of process capital influences firm performance.