Knowledge transfer, strategy content, external environment and performance of companies listed on the Nairobi securities exchange

Abstract

The generation and transfer of knowledge is vital source of a firm’s competitive advantage. In order to identify business strategies, expand businesses and develop competitive advantage, organizations need to scan the environment and align the managerial processes with the environment. Since companies listed on the Nairobi Securities Exchange ensure optimal performance, they may mobilize organizational change through the deployment of modes of knowledge transfer, translation of strategy, alignment of organization to strategy and scanning the external environment. The study examined the influence of strategy content and external environment on the relationship between knowledge transfer and organizational performance of companies listed on the Nairobi Securities Exchange. Using a structural questionnaire, data on the study variables were obtained from 36 companies listed on the Nairobi Securities Exchange and were analyzed using descriptive and inferential statistics. Overall, the study findings reveal the influence of strategy content and the varying degree of environmental dynamism on the relationship between knowledge transfer and organizational performance. Specifically, knowledge transfer has significant effect on organizational performance. Knowledge transfer has significant effect on strategy content. External environment has no significant moderating influence on the relationship between knowledge transfer and strategy content. Strategy content has significant intervening influence on the relationship between knowledge transfer and organizational performance. The joint effect of knowledge transfer, strategy content and external environment on organizational performance is significantly different from the independent effect of variables. Theoretical implications of the study illustrates full support of the dynamic theory of organizational knowledge creation through socialization, internalization, externalization and combination, industrial organization economics theory through environment-strategy-performance; and partly support of the knowledge based theory through knowledge transfer within the organizations, the contingency theory through environmental dynamism and stakeholders theory through customer, internal business process and learning and growth perspectives. Methodological implication shows the operationalization of knowledge transfer as independent variable, external environment as moderating variable, strategy content as intervening variable and organizational performance as dependent variable. The non-financial and financial indicators of the variables were measured using the likert scale and the ratio scale respectively. Managerial implications illustrate that organizations that embrace the balanced scorecard performance measurement employ the modes of knowledge transfer to develop their strategy content of strategic stances and actions within their industry in dynamic environment. The researcher recommends future research on knowledge retention and other concepts of knowledge management using longitudinal and case studies and specify the absolute number of companies that use the balanced scorecard as a performance measurement tool.