The Influence of Strategic Agility on Performance of Real Estate Firms in Nairobi County

Abstract

Strategic agility well-defined as a firm's ability to adapt swiftly to changing market conditions, has emerged as a critical factor influencing organizational performance, particularly in dynamic environments. This study investigates the impact of strategic agility on the performance of real estate firms in Nairobi County, a sector characterized by intense competition, regulatory challenges, and fluctuating market conditions. Guided by the Dynamic Capability and Contingency theories, the research evaluated how agility affected key performance indicators such as profitability, market share, and operational efficiency. Using a descriptive cross-sectional research design, the study employed a census approach to collect data from all 83 real estate firms registered with the Kenya Property Developers Association (KPDA). A structured questionnaire targeting senior managers gathered quantitative insights into agility dimensions and performance metrics. Data analysis incorporated descriptive statistics and regression modeling to determine the relationship between strategic agility and firm performance. . Data were collected from senior managers in 83 real estate firms, with a response rate of 67% deemed sufficient for analysis. The study explored five dimensions of strategic agility: strategic sensitivity, resource fluidity, leadership unity, foresight and anticipation, and speed of strategic innovation. Descriptive and inferential analyses were conducted using SPSS Version 27. Results revealed a statistically significant positive relationship between strategic agility and firm performance, with a Pearson correlation coefficient of 0.567 and an R-squared value of 32.1%. Regression analysis indicated that a unit increase in strategic agility enhances firm performance by 0.560 units. By employing a quantitative approach, data were collected through questionnaires filled by 56 respondents from selected real estate firms. Descriptive statistics indicated that most firms applied Strategic Agility, which positively influenced their performance. The regression analysis revealed that Strategic Agility accounted for 32.1% of the variance in firm performance, with a strong correlation between the independent and dependent variables. The key findings identified critical components of Strategic Agility, strategic direction, human capacity development, strategic design, and strategy control as significant drivers of performance. The study concluded that embracing and tailoring Strategic Agility practices to align with local market dynamics can substantially improve the efficiency and competitiveness of real estate firms. The recommendations included adopting Strategic Agility to improve firm performance, integrating findings into policy making, and exploring technology's role in enhancing Strategic Agility. Future research could investigate differences in Strategic Agility among various firm types and examine the impact of emerging technologies on performance.