The Moderating Effect Of Career Development On the relationship between Dynamic Capabilities and Firm Performance among Insurance Firms In Nairobi, Kenya

Abstract

Firm performance is the ability of a firm to maintain a steady growth and high profitability. This study aimed at analyzing the moderating effect of career development on the relationship between dynamic capabilities and firm performance of Insurance firms in Nairobi, Kenya. The specific objectives were; to examine the effect of innovation capability on the performance of Insurance firms; to determine the effect of quality service capability on the performance of Insurance firms; to establish the effect technological knowledge capability on the performance of Insurance firms; to determine the effect of learning culture capability on the performance of Insurance firms; and to evaluate the moderating effect of career development on the relationship between dynamic capability and performance of Insurance firms in Nairobi City. This study was grounded on Resource Based View (RBV) theory, Dynamic Capability theory (DCT), Service Quality model and Social Cognitive Theory (SCT). It adopted explanatory research design and the target population was one hundred and sixty five (165) top management personnel of 55 insurance firms operating in Nairobi. Since the population involved was not so large, census was the best preferred method to have all 165 top managers involved in the study. Data collection was achieved by use of questionnaire with closed ended questions. Data collection was carried out using a drop and pick method. Data analysis involved both descriptive and inferential statistics. The direct results indicated that innovation capability (β=.266, ρ=.00), quality service capability (β=.322, ρ=.00), technical knowledge capability (β=.200, ρ=.01) were positively statistically significant. Learning culture capability however was statistically insignificant hence did not affect firm performance. The predictors explained 53.8% of the variance on firm performance. The interaction between career development and innovation capability (β=1.64, ρ=.050) was statistically significant implying that career development moderates the relationship between innovation capability and firm performance. However, the subsequent models with interaction terms did not significantly improve the model's fit, indicating that the moderating effect of career development was not substantial in explaining the relationship between dynamic capabilities and organizational performance. This study recommended that Insurance firms should prioritize the development of innovation capabilities, quality service capability, and technical knowledge capability within their organizations. The findings should also inform insurance policy as it regards innovation, quality service and technical knowledge capabilities. Furthermore, the study extends literature on dynamic capability, social cognitive and resource-based view theories and recommends further studies in other contexts other than the insurance sector.