STRATEGIC CAPABILITIES AND PERFORMANCE OF STATE CORPORATIONS IN KENYA
STRATEGIC CAPABILITIES AND PERFORMANCE OF STATE CORPORATIONS IN KENYA
Daniel Sonto Sonkori - Master of Business Administration in Strategic Management, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Dr. Enos Anene (PhD) - Lecturer, School of Business and Economics, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Purpose: State Corporations (SCs) in Kenya play a pivotal role in national development, yet persistent financial losses, operational inefficiencies, and service delivery gaps have undermined their performance and triggered sweeping government restructuring reforms. While strategic capabilities are widely recognized as critical enablers of organizational performance, their combined influence remains underexplored in the context of Kenyan public enterprises, which must balance commercial viability with social mandates. This study examined the influence of strategic capabilities, specifically technological, knowledge management, resource, and risk management capabilities, on the performance of State Corporations in Nairobi City County, Kenya. The study was anchored on Dynamic Capabilities Theory, the Knowledge-Based Theory of the Firm, and Enterprise Risk Management Theory. Methodology: A descriptive cross-sectional research design was adopted, targeting Directors and Managers across functional departments in State Corporations. A sample was drawn through purposive sampling, with data collected via structured questionnaires. A pilot study confirmed the reliability and validity of the research instrument. Data were analyzed using descriptive statistics, Pearson correlation, and multiple regression analysis, following successful diagnostic tests for normality, linearity, multicollinearity, homoscedasticity, and autocorrelation. Findings: The study found that technological capabilities, knowledge management capabilities, resource capabilities, and risk management capabilities all had a positive and statistically significant influence on the organizational performance of state corporations in Kenya, with technological capabilities emerging as the strongest predictor. The four strategic capabilities jointly explained 65.9% of the variation in organizational performance, and the regression model was statistically significant (F = 93.262, p < 0.05), confirming that they are important determinants of organizational performance. Overall, the findings support the view that strengthening technological systems, knowledge management practices, resource utilization, and enterprise risk management can significantly enhance service delivery, operational efficiency, financial performance, and public value creation in state corporations. The study concluded that strategic capabilities play a significant role in enhancing the organizational performance of state corporations in Kenya. Specifically, technological capabilities, knowledge management capabilities, resource capabilities, and risk management capabilities each had a positive and statistically significant influence on organizational performance, with technological capabilities emerging as the strongest predictor. Recommendation: The study recommends that state corporations strengthen technological capabilities by investing in modern ICT infrastructure, digital systems, and continuous staff training to improve operational efficiency and service delivery.
