Absorptive Capability and Performance of Management Consultancy Firms in Nairobi

Abstract

This research set forth with the objective of evaluation of correlations existing between absorptive capacity and performance of management consulting firms in Nairobi. The absorptive capacity theory, the idea of knowledge formation, and the knowledge-based perspective all provide support to the conceptualisation of the variables in this research. The cross-sectional descriptive research approach was utilised per this examination, the focus was on all management consulting firms in Nairobi City District that provide consulting services, which includes the thematic areas of operational management, financing and accounting, and human resource.The researcher drew a sample of 68 respondents using a mix of probability and non-probability sampling approaches. As a result, questionnaires were sent to these 68 consulting businesses. This study's overall regression findings showed that there was positive substantial association found correlating evidence of a relationship between absorptive capability of a firm and and its performance. Individual absorptive ability indices, such as transformation, assimilation, acquisition and exploitation, all of which revealed positive and statistically significant associations with performance. The association between acquisition and performance was tested and yielded a Beta of.544 (P- value=008). The beta coefficient for the connection between assimilation and performance is.610 (P-value=.025). The beta for transformation and performance is.374 (p-value=0.002), while the beta for exploitation and performance is.235 (p-value=.044). There were recommendations for more study. Future study was suggested by recommending managers to re-calibrate the significance of absorbent capacity indicators.