O Wycliffe*, A Beatrice and G Donald
The increasing use of strategic agility has raised expectations for better organizational competitiveness and performance among companies listed on the Nairobi Securities Exchange (NSE). However, many companies listed on the exchange continue to face issues such as falling profitability, low returns on assets and equity, inefficient operations, and limited growth. These problems were linked to increasing operating costs, fluctuating exchange rates, high interest rates, and stronger competition. In response, many firms invested substantially in digital transformation initiatives to enhance competitiveness. Nevertheless, the varying performance outcomes among firms undertaking similar digital transformation initiatives still remains a major concern for the firms. This study sought to investigate the effect of strategic agility on firm the performance of firms listed in the NSE. The study was anchored on Dynamic Capabilities Theory and used a positivist research approach with a correlational design. The focus was on NSE-listed firms, with top management executives serving as key sources of information. Data was gathered using structured electronic questionnaires sent to a systematically selected sample of executives from listed firms. The results showed that strategic agility had a positive and statistically significant effect on firm performance (β=0.567, p<0.001), explaining 32.2% of the variation in firm performance at NSE (R2=0.322). The study recommends that firms should institutionalize strategic agility by strengthening environmental scanning system, enhance strategic planning flexibility, promoting decentralized decision-making and develop organizational structures capable of responding rapidly to environmental challenges
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