AUTONOMY AND PERFORMANCE OF STAR RATED HOTELS IN NORTH RIFT REGION, KENYA: MODERATING ROLE OF DYNAMIC CAPABILITIES

Abstract

Global competition poses a challenge to hoteliers forcing them to reposition themselves strategically through entrepreneurial orientation to improve their performance. In Kenya, the performance of hotels continues to worsen courtesy of the poor entrepreneurial orientation (EO) to survive hostile political, social, economic and institutional environment. However, most studies on Dynamic capabilities (DCs) and autonomy have been conducted in developed countries. In this regard, this study was designed to assess the effect of autonomy on performance of star rated hotels in North Rift Region, Kenya: moderating role of dynamic capabilities. The study was grounded on stakeholders’ theory. The study adopted explanatory research design based on samples drawn from across the star rated hotels in North Rift Region. The target population was 575 administrative and service employees of star rated hotels . Stratified and simple random sampling technique was adopted besides using Taro Yamane (1967) formula to calculate the sample size of 278 respondents from the target population. Data was collected by use of self-administered structured questionnaire and was analysed by use of both descriptive and inferential statistics using SPSS version 25. The findings showed that autonomy explained a variation of performance of star rated hotels. After the inclusion of dynamic capabilities as a moderator, findings from hierarchical regression analysis showed that there is an increase in variation of performance of star rated hotels as explained by autonomy . The study concludes that dynamic capabilities significantly moderate the effect of autonomy on performance of star rated hotels. This implies that by implementing autonomy alongside DC basing on the stakeholders’ theory, the star rated hotels stands to improve on their performance. Therefore, star rated hotels to analyse their strategic orientation and pay more attention in addressing autonomy besides dynamic capabilities for purposes of increasing their performance. This will give the internal stakeholders a greater sense of ownership and control over business operations as a source of opportunities, innovations and competitive advantage . The findings of this study are likely to help the management of star rated hotels and other stakeholders to strengthen autonomy and DC to remain competitive for maximal performance for economic development and realization of Vision 2030. Key: Autonomy , Business Performance and Dynamic Capabilities CITATION : Bii J., Akuku, C., & Kimutai, G. (2023). Autonomy and performance of star rated hotels in north rift region, Kenya: Moderating role of dynamic capabilities. The Strategic Journal of Business & Change Management, 10 (3), 183 – 197.