Effect of Strategic Agility on Performance of Construction Firms in Nairobi

Abstract

There is a growing need for firms to be agile in their activities in order to be able to effectively adapt to an ever turbulent environment. This in turn determines how quickly organizations can recognize opportunities in the midst of crisis and fluidly mobilize their resources to enhance their performance. The objective of the study was to investigate the effect of strategic agility on performance of construction firms in Nairobi. The predictor variables that measured strategic agility include organization, people, technological and planning agilities. The studies were guided by dynamic capability theory and contingency theory.The research employed a descriptive research design with the population of the study being all the Class one construction firms with their offices in Nairobi. In total, the population was the 84 construction firms and a census was conducted. However, nine firms were not considered for the studies since they had been newly registered in that class. Data was collected through the use of a questionnaire. Descriptive and inferential measures of mean, standard deviation and regression equation were employed in the analysis while for presentation, tables were used. The findings reveal that a strong positive correlation exists between strategic agility and the performance of construction firms in Kenya and that the four strategic agility variables investigated explain considerable amount of the construction firms’ performance. The regression coefficient variables suggest that organization agility, people agility and technological agility had a positive and significant effect on performance. However, planning agility was found to have no statistical significance in affecting performance of the construction firms. These findings imply that the performance of the construction firms with high strategic agility will be higher than those with low strategic agility. Thus, managers should consider strategic agility in developing and protecting existing market shares, increasing shareholders value and enhancing firm performance. Construction firms contribute significantly towards improved infrastructure and policies should be created that steer firms to be agile. Since this study investigated only four dimensions, there is a need for further research to determine how other agility variables affect organizational performance.