Strategic Renewal, Environmental Dynamism and Competitive Financial Performance of Deposit Taking Saccos in Kenya

Abstract

Strategic renewal is a change process adjusting a firm's strategic direction to achieve long-term competitiveness. This process aligns the organization’s internal capabilities with shifts in the external environment, driven by changes in technology, markets, industries, and the economy. The objective of this study was to establish the influence of Strategic Renewal on the competitive financial performance of Deposit Taking Saccos (DTS) in Kenya. The study also sought to determine how environmental dynamism moderates this relationship. Anchored on the ambidexterity theory of leadership for innovation the study was a pragmatic study of 715 Senior Head Office staff and 159 branch managers from 62 DTS from which a sample of 278 participants was derived. A semi-structured questionnaire having both closed and open-ended questions was used to collect primary data from the respondents, while secondary data was obtained from the Sacco Societies Regulatory Authority (SASRA’s) Annual Sacco Supervision Reports for the years 2017- 2021. Data was analyzed using binary logistic regression which revealed that Strategic Renewal was a positive and significant predictor of the probability of competitive financial performance in DTS. It also established that Environmental Dynamism did not have a significant moderating effect on this relationship. The study encourages DTS to continuously redefine their strategic intent, enhance their HR competence, build organization-wide commitment to competitiveness, and establish strategic partnerships with key public and private sector organizations in order to remain competitive. Further, the study strongly recommends that although DTS ought to pay attention to customer tastes and preferences, changes in technology as well as competitor strategies, they should be careful not to deviate from their traditional business model.