Dynamic Capabilities and Performance: The Mediating Role of Firm Competence

This study aimed at determining the mediating effect of firm competence on the relationship between dynamic capabilities and performance. The study was founded on positivism philosophy and adopted an explanatory and exploratory research design. The population of the study comprised of 70 food manufacturing firms in, Kenya. Stratified random sampling method was used to identify a sample of 295 respondents. A semi-structured self-administered questionnaire was used to collect primary data. Prior to data collection, a pilot study was conducted to ensure reliability of the questionnaire. The reported findings were obtained from 190 respondents who were senior managers in the respondent firms responsible for finance, human resources, operations marketing and corporate relations. Measures of central tendency including the mean and standard deviation were used to summarize the variable characteristics Data was analyzed using descriptive statistics. Multiple regression analysis was used to test the study hypotheses. The findings of the study showed that dynamic capabilities have a significant direct effect on performance and that the effect of dynamic capabilities on performance is partially mediated by firm competence. The findings also showed that firm competence has a direct and significant effect on performance also that dynamic capabilities can partially mediate the effect of firm competence on firm performance.