Absorptive capacity as a driver of strategic technological change for sustainable performance in the financial sector: A survey of insurance firms in Kenya

Abstract

The study focused on assessing how the level of adoption of four Absorptive Capacity(AC)  dimensions as a driver of strategic technological change has contributed to sustainable performance of firms operating in the insurance sector  in Kenya. The conceptualization of the study was informed by the postulates of three theoretical frameworks; the Model of Absorptive capacity, Resource Based View( RBV) and Knowledge Based view (KBV)  with four hypotheses testing the effect of each of the four dimensions of AC on sustainable performance of the insurance firms. A descriptive survey design was adopted to obtain data from a target sample of 224 respondents representing heads of units actively involved in roles associated with AC in  56 Insurance firms. The study registered a response rate of 83% with the respondents demonstrating demographic characteristics indicating adequate industry work experience and education levels. The dimensions of Absorptive Capacity aligning to strategy implementation and strategic choice were adopted to a higher extent compared to those aligning to strategic thinking aspects touching on strategy formulation. Though all the four dimensions had a significant positive effect on sustainable performance, those aligning towards strategic choice and implementation had a higher effect on sustainable performance than those aligning towards strategic thinking. The study concluded that the four dimensions of AC are suitable drivers of strategic technological change in the manner in which their attributes  speak to the three strategic management processes of strategic planning(formulation), choice and implementation. The study calls on future research to extend the implications of the findings reported by providing more plausible explanations to the dilemmas revolving around the low adoption of the AC dimensions aligning towards strategic thinking and its subsequent effect on sustainable performance using objective data on the dimensions of AC.

Keywords: {'name': 'Absorptive Capacity; Recognition and Acquisition; Assimilation; Transformation; Exploitation'}

Authors & affiliations

Fiona Awino
Kenyatta University

James M. Kilika
Affiliation not supplied

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