Learning Orientation, Firm Innovation, Senior Executive Team Integration and Competitive Advantage of Insurance Companies in Kenya

Abstract

This study aimed to advance knowledge and was based on the premise that learning orientation affected competitive advantage through the moderating effect of senior executive team integration and the mediating effect of firm innovation. The study was anchored on the dynamic capabilities’ theory, knowledge-based theory and the upper echelons theory. The overall objective of the study was to examine the effect of senior executive team integration and firm innovation on the relationship between learning orientation and competitive advantage of insurance companies in Kenya. To achieve this, four specific objectives were developed and four (4) hypotheses formulated and tested. The study employed a positivism research philosophy and a descriptive cross-sectional survey design. The population of study comprised all the 56 insurance companies registered and licensed by Insurance Regulatory Authority. Primary data collected using a self-administered questionnaire, was cleaned and checked for completeness and coded before being analyzed. The data was tested for reliability, validity and sampling adequacy. Descriptive statistics, correlation analysis and regression analysis were used for further analysis. To determine correlation, Pearson’s product–moment correlation coefficient was utilized. Regression analysis was carried out to understand the relationships among the variables. The findings established that learning orientation had a statistically significant effect on competitive advantage of insurance companies in Kenya. The study also revealed that firm innovation had a statistically significant positive mediating effect on the relationship between learning orientation and competitive advantage. However, the independent moderating effect of senior executive team integration on learning orientation and competitive advantage was not statistically significant. Overall, the joint effect of learning orientation, firm innovation and senior executive team integration on competitive advantage was found to be statistically significant. The study concludes that for insurance firms to gain competitive advantage, they need to pay attention to and implement the necessary drivers of competitive advantage which are learning and innovation supported by an integrated senior executive team. The study contributes to knowledge by providing empirical evidence that learning orientation significantly influence competitive advantage. Further, the study established that learning orientation influences competitive advantage directly and indirectly through innovation. The findings of the study contributed to key theoretical frameworks in strategic management. The findings of the study have implications on theory, policy and for management practice. Limitations of the study include the study variables being measured by the subjective perception of the respondents given that self-reported data tend to be more positive and may not always be completely true. Similar studies in future should consider using both questionnaire and interview methods. Further the study used single respondent reports to measure each of the theoretical constructs. An alternative approach would be to use multiple respondents in future studies.