Corporate Entrepreneurship Strategy and Competitive Financial Performance of Deposit Taking Saccos in Kenya

Abstract

Achieving superior performance is the primary objective of every organization. This pursuit of excellence is central to management practices, driving organizations to seek diverse opportunities for improvement. Corporate Entrepreneurship is the practice by which established organizations decide to pursue competitive advantage through sustainable innovation and entrepreneurial behavior. Its key parameters are strategic renewal, strategic organizational architecture and corporate venturing. The objective of this study was to establish the influence of strategic renewal, strategic organiational architecture as well as corporate venturing on the competitive financial performance of Deposit Taking Saccos in Kenya. The study also sought to ascertain how environmental dynamism moderates the relationship between Corporate Entrepreneurship Strategy and competitive financial performance. The study anchored largely on the ambidexterity theory of leadership for innovation but was also supported by stakeholder theory, achievement motivation theory of entrepreneurship, the theory of systematic innovation, and Dynamic Capabilities Theory. The study used the positivist philosophy, hence using quantitative research methods. The study applied a blend of multistage sampling, purposive sampling as well as stratified sampling methods having been a survey of Deposit Taking Saccos operating in more than one county in Kenya by the year 2022. The unit of analysis was 63 out of a total 175 licensed Deposit Taking Saccos were operating in more than one county Deposit Taking Saccos and the unit of observation was 715 Senior Head office staff and 159 branch managers, a total population of 915. A sample size of 278 participants was derived from Yamane’s formula for sample size determination. A structured questionnaire was used to collect primary data from the respondents, and secondary data from the Sacco Societies Regulatory Authority (Sasra’s) Annual Sacco supervision reports 2017-2021. A pilot study was conducted in two Deposit Taking Saccos, namely: Kenya Achievas Deposit Taking Saccos in Kisii County and Vision Afrika Deposit Taking Saccos in Nakuru County yielding a Cronbach’s alpha coefficient of 0.917, that was very high and greater than the 0.7 threshold. The validity of the instruments was done by Lawshe’s Content analysis method using five Subject Matter Experts and a Content Validity Ratio of more than 95%, hence accepted. Data was analyzed using inferential and descriptive statistics, with the hypotheses being tested using binary logistic regression at a confidence level of 95%, (α=0.05). The study found that Strategic Renewal, Strategic Organizational Architecture, and Corporate Venturing were positive and significant predictors of the probability of competitive financial performance in Deposit Taking Saccos. Environmental Dynamism did not have a significant moderating effect in the relationship between these variables. Overall, Corporate Entrepreneurship Strategy was a positive and significant predictor of competitive financial performance of Deposit Taking Saccos in Kenya. Further, the moderating effect of Environmental Dynamism in this association was not significant. The study recommends that Deposit Taking Saccos should apply strategic renewal initiatives; emphasize on building strategic organizational architecture, and pursue Corporate Venturing in their quest for competitive financial performance. Further, as Deposit Taking Saccos pay vi vii attention to customer tastes and preferences, changes in technology and competitor strategies they should be careful not to deviate from their traditional cooperative business model as enshrined in the Cooperative Principles and advocated for by the ambidexterity theory of leadership for innovation. These findings inform the Sacco industry on how best to implement the Corporate Entrepreneurship strategy in the quest for competitive financial performance.