Mediating effect of transformational leadership style on the relationship between dynamic capabilities and competitive advantage of manufacturing firms in Kenya

Abstract

This study addresses the mediation effect of transformational leadership style on the relationship between dynamic capabilities and competitive advantage of manufacturing firms in Nairobi, Kenya. The study used positivism paradigm, explanatory research design, and quantitative approach on a target population of 795 manufacturing firms located in Nairobi, Kenya. A sample size of 321 firms was selected based on Yamane formula of determination in selecting respondents to be served with the questionnaires. The study employed stratified and simple random sampling technique to constitute the required sample of firms. The results showed that dynamic capabilities positively and significantly affect competitive advantage of manufacturing firms. The results further indicate that transformational leadership style mediates the relationship between dynamic capabilities and competitive advantage. The results provide a channel through which CEOs of manufacturing firms can identify constructs by sensing, seizing and reconfiguring capabilities for competitive advantage. The results will also provide managers and industry practitioners with opportunities to come up with strategies, more emphasis on, and appreciate the role of the leader in the deployment of dynamic capabilities so as to achieve competitive advantage in the ever changing contemporary, volatile operating environment.