Structural Ambidexterity and Firm Performance: The Moderating Role of Dynamic Capabilities in Chartered Private Universities in Kenya

Abstract

In the contemporary Kenyan higher education landscape, institutions are increasingly challenged by technological shifts and the implementation of the 2025 New Funding Model. These pressures necessitate a strategic shift toward organizational ambidexterity as the ability to balance operational efficiency with innovative exploration. The study examined the relationship between structural ambidexterity (SA) and institutional performance in chartered private universities in Kenya, while assessing the moderating role of dynamic capabilities (DC). Grounded in the Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT), the research employed a cross-sectional survey design. Data were collected from 195 senior management respondents across 27 chartered private universities. The analysis utilized partial least squares structural equation modeling (PLS-SEM) via Advanced Analysis of Network Composites (ADANCO 2.3.2) software. SA was modeled as a higher-order formative composite, and moderation was tested using the product indicator approach. The results indicated a significant positive relationship between SA and perceived institutional performance (p < 0.001), supporting H1. Moreover, DC significantly moderated the relationship between SA and perceived performance (p < 0.001) of private universities, supporting H2. The moderation effect demonstrated a significant medium effect size (f² = 0.1926), indicating that the interaction term contributed meaningfully to performance over and above the direct effects of the predictor variables. The moderated model explains 29.21% of perceived university performance. It is concluded that, balancing exploration and exploitation, supported by strong DC, appears essential for enhancing performance in Kenyan chartered private universities. Accordingly, university governing boards should strengthen DC among senior management and adopt structural designs that support innovation alongside traditional academic functions, while policymakers create a regulatory environment that promotes institutional agility and diversification.