Effect of Organizational Learning in Achieving Competitive Advantage of State Corporations in Kenya

Abstract

African governments have mandated state corporations as vehicles that drive economic growth and offer efficient and effective public services. The business environment within which these corporations are expected to deliver services to the public has drastically changed over the past decade. Customer demands have increased, and state corporations risk losing the main market base, stakeholder confidence and the resultant profits. State corporations have, therefore, adopted various strategies to survive and thrive in the future with the aim of challenging for the lion’s share of profits, market and stakeholder confidence, as they strive to acquire and sustain a competitive advantage. Most authors opine that organizational learning is an essential strategy for state corporations to gain and maintain a competitive edge, and most governments agree with this proposition. Despite the theoretical underpinning that organizational learning is positively associated with competitive advantage, little evidence and tools exists for state corporations and chief to forge learning organizations. This study examined the role of organizational learning in achieving competitive advantage of state corporations in Kenya. The study focused on learning culture, learning processes, leadership practices and systems thinking as well as their role in achieving competitive advantage. Furthermore, the study examined the mediating role of rate of learning in the relationship between the independent variables and competitive advantage. The study employed a cross-sectional and correlational research design, utilizing both quantitative and qualitative approaches. A total of 198 staff from 35 state corporations, comprising senior managers, middle level managers and subordinate staff, responded to the semi-structured questionnaire. Additionally, in-depth interviews were done with 16 employees from eight purposively selected state corporations. Regression analysis using SPSS version 22, and structural equation modeling using Amos version 21, were used to make inference on the associations between dependent, mediating and independent variables. Qualitative data was analyzed using ATLAS.ti, and presented using text, summary tables, and wordclouds. Simple linear and multiple linear regression revealed that each independent variable was positively, and significantly, associated with competitive advantage. Rate of learning partially mediated the relationship between learning

process and competitive advantage, as well as between systems thinking and competitive advantage. The study also found that in line with theory, majority of state corporations performed better in single loop learning than in double loop learning. The study recommends that organizations could consider implementing strategies that increase the rate of learning within the organizations by focusing on concrete learning processes and systems thinking practices. Both formal and informal learning processes that maximize on utilization-focused knowledge acquisition, and sharing approach, are encouraged. To promote the use of learning processes, organizations need to establish an enabling learning environment by promoting and nurturing a culture that is flexible, that encourages innovation and resources learning opportunities. Managers need to design, institute and resource intentional mechanisms that encourage staff to pause and reflect on their actions when they have succeeded or failed at their work endeavors. To ensure staff are fully engaged in the learning process, organizations need to invest in building capacity of new and existing employees and partners to encourage reflective practices within the organization. More research is required to critically examine the role of leadership, particularly in state corporations, by examining different leadership types, how they impact the rate of learning, and their effectiveness in reinforcing learning within state corporations.