Innovation Orientation and Firm Performance: The Role of Organizational Commitment Among Commercial Banks in Meru County, Kenya

Abstract

An organization with an innovation orientation can create and deploy innovations, providing it an advantage over rivals.The overall goal of the study was to better understand how organizational commitment influences both innovation orientation and commercial banks' performance in Meru County.Specific objectives included determining: the influence of innovation orientation on performance; organizational commitment’s effect on innovation orientation; organizational commitment’s effect on performance; and the mediating effect of organizational commitment between innovation orientation and performance.A cross-sectional descriptive design was used.The findings indicated that innovation orientation had a favorable and substantial influence on firm performance(β=0.59, p<0.05); and organizational commitment had a favorable and substantial influence on firm performance(β=0.189, p<0.05). Further, results showed that when combined, innovation orientation (β=0.589, p<0.05) and organizational commitment (β=0.187, p<0.05) had a favorable and substantial influence on firm performance. However,innovation orientation (p>0.05) had no substantial influence on organizational commitment.The second condition of mediation was violated, and hence the study concluded that organizational commitment did not substantially mediate the connection between innovation orientation and commercial banks’ output. The research recommended the need for bank management to strengthen their innovation orientation programs. The bank management should also strengthen their organizational commitment policy. Further, the bank management should develop programs and systems that can link innovation orientation and organizational commitment. These aspects when properly combined have the potential to enhance overall firm performance. The research makes a significant contribution to policy,practice,and theory in the field of business management