Dynamic Capabilities, Organizational Resilienceand Firm Performance of Manufacturing Firms in Nairobi, Kenya

Abstract

Scholars have long observed that manufacturing firms in Kenya operate in highly competitive environments characterized by limited performance variability, prompting many firms to adopt various survival strategies. Increasingly, the literature highlights dynamic capabilities as critical for sustaining firm performance within the manufacturing sector. However, existing empirical studies on dynamic capabilities have been conducted across diverse industries and methodological contexts, yielding mixed and inconclusive findings. This study sought to examine the moderating effect of organizational resilience on the relationship between dynamic capabilities and firm performance among manufacturing firms in Nairobi County. The study was grounded in Dynamic Capability Theory and the Resource-Based View (RBV). Adopting a quantitative paradigm and an explanatory research design, the study targeted 6,038 manufacturing firms, from which a sample of 375 firms was selected. Primary data were collected using structured questionnaires and analyzed using both descriptive and inferential statistics. Multiple regression and hierarchical regression analyses were employed to test the direct and moderating effects. Key findings revealed that dynamic capabilities (β = .744, p < .001) and organizational resilience (β = .418, p < .001) have significant positive effects on firm performance among manufacturing firms. In addition, organizational resilience positively moderates the relationship between dynamic capabilities and performance (β = .184, p < .05), indicating that firms with higher adaptability and agility gain greater performance benefits from their capabilities. The study concludes that the joint development of dynamic capabilities and organizational resilience is essential for sustained competitiveness. It recommends that manufacturing firms prioritize capability enhancement, resilience-building mechanisms, and continuous technology and skills investment to improve long-term performance.