Superior Strategy Capabilities and Sustainable Competitive Advantage among Private Hospitals in Kenya

Abstract

The purpose of this study was to determine the influence of superior strategy capabilities on sustainable competitive advantage among private hospitals in Kenya. The specific objectives that guided the study were to establish the influence of superior strategy capabilities that included knowledge management, organizational innovation, social capital integration and organizational agility, on Sustainable Competitive Advantage (SCA) among private hospitals in Kenya. Additionally, the study explored the moderating effect of strategic orientation on the relationship between superior strategy capabilities and SCA among private hospitals in Kenya. The study adopted a positivist research philosophy and a descriptive correlational research design. The target population consisted of 690 managers from the 46 level 5 private hospitals, across Kenya. Stratified simple random sampling technique was used to select a sample size of 253 managers from the population. The study used descriptive and inferential statics for analysing the data. The descriptive statistics used include frequencies, means and standard deviation; whereas, the inferential statistics included exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modelling (SEM). The software that complimented the analysis was Statistical Package for Social Sciences (SPSS) version 26 and Analysis of Moment Structures (AMOS) version 26 respectively. This study adopted a confidence level of 95 per cent. The findings from the study established that knowledge management capabilities accounted for 64 percent of the variance in the sustainable competitive advantage of private hospitals in Kenya (R2= 0.64). Additionally, they further determined that knowledge management capabilities have a significant positive influence on sustainable competitive advantage among private hospitals in Kenya (Beta = 0.801, CR = 7.507, p < 0.05). The study also found that organizational innovation capabilities explained 38 percent of the variance in the sustainable competitive advantage among private hospitals in Kenya (R2 = 0.38). The findings further indicated that organizational innovation capabilities had a positive and significant influence on sustainable competitive advantage among private hospitals in Kenya (Beta = 0.617, CR=3.904, p < 0.05). The study further established that social capital integration capabilities explained 42 percent of the variance in the sustainable competitive advantage of private hospitals in Kenya (R2 = 0.42). In addition, the findings determined that social capital integration capabilities had a significant positive influence on sustainable competitive advantage of private hospitals in Kenya (Beta = 0.651, CR = 4.453, p < 0.05). In regards to organizational agility capabilities, the results revealed that it explained 31 percent of the variance in the sustainable competitive advantage among private hospitals in Kenya (R2 = 0.31). Furthermore, the research found that organizational agility capabilities had a significant positive influence on sustainable competitive advantage among private hospitals in Kenya (Beta = 0.556, CR = 5.158, p < 0.05). The study established that a combination of superior strategic capabilities, strategic orientation and the interaction between these two have a significant positive influence on sustainable competitive advantage and explained 47 percent of the variance in the sustainable competitive advantage among private hospitals in Kenya (R2 = 0.47). Further findings indicated that strategic orientation had a significant moderating influence on the relationship between superior strategic capabilities and sustainable competitive advantage of private hospitals in Kenya (βeta = 0.763, CR = 3.781, p = 0.003). The study concludes that all the four constructs of superior strategy capabilities under study namely, knowledge management capabilities, organizational innovation capabilities, social capital integration capabilities and organizational agility capabilities, are essentially instrumental towards sustaining competitive advantage among private hospitals in Kenya. Further, the study concludes that strategic orientation regulates the relationship between superior strategy capabilities and SCA among private hospitals in Kenya. Based on study findings, the study recommends that top management team in private hospitals in Kenya should continually nurture knowledge management capabilities, and continually support acquisition and development of new resources. The study also recommends that senior management in the private hospitals should create structures that enhance partnership and interaction between employees within and across departments. Additionally, the top management of private hospitals should enhance sensing capabilities, leveraging capabilities and reconfiguration capabilities, as an avenue to effectively, and efficiently respond to the environment. Further, policy maker scan draw insights from the study findings and recommendations on how to enhance the sustainability of an effective and efficient healthcare sector. Finally, the study findings support the views of dynamic capability and other scholars’ findings that SCA is an outcome of an organization capability to create and sustain a superior strategy underpinned by its ability to craft a unique mix of capabilities relative to its competitors.