Strategic Alignment, Firm Size and Sustainable Competitive Advantage among Deposit Taking SACCOs in Kenya

Abstract

Sustainable competitive advantage has been a major topic of interest among managers of both commercial and non-commercial organizations globally. As the operating environment becomes competitive, managers faced with dwindling fortunes for their organizations are concerned not only with achieving competitive advantage but also sustaining the same for long term benefit. This is achieved mostly through alignment of firm’s factors both external and internal as well as its strategy. The role of aligning firm’s factors in an organizational context is committed to the liming between a firm internal factors and its competitive strategy. The savings & credit cooperative societies is growing sector in Kenya and has potential for more growth and on the other had the sector has been faced with challenges that threaten their competitiveness and sustainability. Several studies have been conducted addressing various issues in the SACCO sector but empirical evidence is scarce on the relationship among strategic alignment verses SCA, in the industry. The study purpose was to examine extent of relationship among SA verses SCA among DT-SACCOs in Kenya. It was anchored on four theories/models which include resource based view of the firm, value chain analysis, dynamic capability approach and contingency theory. The five specific guiding objectives to this study were to assess relationship among leadership, culture, process, resource alignments and sustainable competitive advantage among deposit taking SACCOs in Kenya. A correlational research design was used where data was collected only once from the respondents by use of questionnaires from chief executive officers of each of the 164 DT-SACCOs involved in this study. Correlation and multi linear regression analysis were respectively applied for establishing the direction, extent and strength of relationship between the variables plus extent of strategic alignment variables on sustainable competitive advantage while standard deviation as well as mean from the collected data was generated using descriptive statistics. Study reported positive relationship that was significant among leadership, culture, process plus resource alignments (Leadership alignment r= 0.262, p=.005; Culture alignment r= 0.594, p=.000; Process alignment r= 0.492, p=.000; and Resource alignment r=0.378, p=. 000.respectively) and sustainable competitive advantage of SACCOs in Kenya respectively. Firm size was found to have a moderating effect on this relationship. It is concluded that leadership alignment, culture alignment, resource alignment and process alignment had positive and significant effect on the sustainable competitive advantage among DT-SACCOs in Kenya. Based on these findings, it is recommended that DT- SACCOs in Kenya should strategically align themselves along the four strategic alignment dimensions (leadership, culture, process and resource) for purpose of gaining and sustaining their CA and remain relevant in meeting the needs of their stakeholders. Further, they should avoid over expanding since too much growth in size can lead to inefficiencies and wastage leading to competitive disadvantage as shown by the moderating effects where the model fit kept decreasing as the size increased