Organizational ambidexterity, dynamic capabilities, learning orientation and firm performance: The Case of Supermarkets in Nairobi County, Kenya

Abstract

In Kenya, the issues of poor performance are prominent among supermarkets. Over the years, supermarkets have sought to employ multiple strategies for serving diverse categories of consumers. However, it is interesting that despite the rise in comprehension and execution of competitive techniques, supermarkets in Kenya have experienced poor performance and eventually closure. The main objective of this study was to investigate the relationship between organizational ambidexterity, dynamic capacity, learning orientation, and firm performance in Kenyan supermarkets. The specific objectives of the study were to determine the effect of organizational ambidexterity on firm performance of supermarkets, to determine the mediating role of dynamic capabilities in the relationship between organization ambidexterity and firm performance in supermarkets, and to evaluate the moderating role of learning orientation in that relationship. Theories relevant to the study are; resource-based view theory, balance scorecard theory and knowledge-based. A positivist philosophical perspective and an explanatory research design were used in the study. Six hundred managers of supermarket in Nairobi County, Kenya were the focus of the research. 234 supermarkets were selected using simple random sampling. Questionnaire was a tool for data collection. Factor analysis was used to test content validity. Data analysis included both descriptive and inferential statistics. The study employed multiple regression and hierarchical regression analysis to test the moderation and mediation. Results showed a significant effect of firm size (β=0.350, p<0.05) as a control variable. On direct effects, organization ambidexterity (β=0.483, p<0.05) and dynamic capability (β=0.154, p<0.05). There was also a significant moderation of learning orientation (β=0.084, p<0.05). Dynamic capability mediated the relationship between organizational ambidexterity and firm performance (β=.160, bootstrap lower limit =0.0247 and bootstrap upper limit =0.3156. Supermarkets need to create new opportunities and re-configure existing resources to achieve flexibility in a dynamic environment. Furthermore, organizational ambidexterity contributes to firm performance by leveraging existing knowledge and providing firms with innovative solutions. Consequently, organizational ambidexterity allows the company to build a variety of learning capacities that can increase its value. The study concluded that firm performance could be enhanced by adopting organization ambidexterity and dynamic capability. The results also accord with knowledge-based theory, balance scorecard theory, and resource-based theory. The study recommends that managers and supervisor of supermarkets should embrace organization ambidexterity and dynamic capability to increase on their firm performance. Future studies may employ a longitudinal strategy to explore how organizational ambidexterity improves performance because the study was cross-sectional. Other research may use structural equation model to explore the latent relationship among other variables.

In Kenya, the issues of poor performance are prominent among supermarkets. Over the years, supermarkets have sought to employ multiple strategies for serving diverse categories of consumers. However, it is interesting that despite the rise in comprehension and execution of competitive techniques, supermarkets in Kenya have experienced poor performance and eventually closure. The main objective of this study was to investigate the relationship between organizational ambidexterity, dynamic capacity, learning orientation, and firm performance in Kenyan supermarkets. The specific objectives of the study were to determine the effect of organizational ambidexterity on firm performance of supermarkets, to determine the mediating role of dynamic capabilities in the relationship between organization ambidexterity and firm performance in supermarkets, and to evaluate the moderating role of learning orientation in that relationship. Theories relevant to the study are; resource-based view theory, balance scorecard theory and knowledge-based. A positivist philosophical perspective and an explanatory research design were used in the study. Six hundred managers of supermarket in Nairobi County, Kenya were the focus of the research. 234 supermarkets were selected using simple random sampling. Questionnaire was a tool for data collection. Factor analysis was used to test content validity. Data analysis included both descriptive and inferential statistics. The study employed multiple regression and hierarchical regression analysis to test the moderation and mediation. Results showed a significant effect of firm size (β=0.350, p<0.05) as a control variable. On direct effects, organization ambidexterity (β=0.483, p<0.05) and dynamic capability (β=0.154, p<0.05). There was also a significant moderation of learning orientation (β=0.084, p<0.05). Dynamic capability mediated the relationship between organizational ambidexterity and firm performance (β=.160, bootstrap lower limit =0.0247 and bootstrap upper limit =0.3156. Supermarkets need to create new opportunities and re-configure existing resources to achieve flexibility in a dynamic environment. Furthermore, organizational ambidexterity contributes to firm performance by leveraging existing knowledge and providing firms with innovative solutions. Consequently, organizational ambidexterity allows the company to build a variety of learning capacities that can increase its value. The study concluded that firm performance could be enhanced by adopting organization ambidexterity and dynamic capability. The results also accord with knowledge-based theory, balance scorecard theory, and resource-based theory. The study recommends that managers and supervisor of supermarkets should embrace organization ambidexterity and dynamic capability to increase on their firm performance. Future studies may employ a longitudinal strategy to explore how organizational ambidexterity improves performance because the study was cross-sectional. Other research may use structural equation model to explore the latent relationship among other variables.