Dynamic Capabilities, Organizational Structure and Performance of Referral Hospitals in Kenya

Abstract

The healthcare sector in Kenya faces challenges such as inadequate financing, limited medical supplies, workforce shortages, low patient satisfaction, and long waiting times, which hinder service delivery and overall productivity. While dynamic capabilities have been linked to organizational performance in private sector firms, their effect in Kenyan referral hospitals remains underexplored. Therefore, this study aimed to evaluate the relationship between dynamic capabilities and the organizational performance of referral hospitals in Kenya. Specifically, it investigated how knowledge management capability, strategic collaboration capability, talent management capability, ICT capability, and organizational structure relate to the performance of referral hospitals in Kenya. The study was anchored on knowledge based theory, systems theory, resource-based view theory, technology acceptance theory and dynamic capability theory. Using descriptive research design and explanatory research design, the study targeted 47 county referral hospitals and 6 national referral hospitals in Kenya. The target population included CEOs/Chief Administrators, Medical/Clinical Services In-Charges, and Nursing In-Charges from both county and national referral hospitals. Due to the manageable size of the target population, a census was conducted, meaning all individuals within the target group were involved in the study. Primary data was gathered through semi-structured questionnaires, and a pilot test was performed to ensure the reliability and validity of the research instrument. Both qualitative and quantitative data was generated in the research. Both descriptive and inferential statistics were used to analyse quantitative data with the help of Statistical Package for Social Sciences (SPSS version 24). Descriptive statistics included frequency distributions, means, standard deviations, and percentages, with findings presented in charts, graphs and tables. Qualitative data were processed through thematic analysis and presented in prose form. The relationships between independent and dependent variables were explored using multivariate regression and correlation analyses. The study found that knowledge management capability, strategic collaboration capability, talent management capability, and ICT capability each had a positive and significant effect on the organizational performance of referral hospitals in Kenya. The study also found that organizational structure had statistically significant moderating effect on the relationship between knowledge management capability, strategic collaboration capability, talent management capability and ICT Capability on the organizational performance of referral hospitals in Kenya. The study recommends several strategies to enhance strategic collaboration in Kenyan referral hospitals, such as establishing clear frameworks for partnerships, improving infrastructure, and offering comprehensive training. To improve talent management, hospitals should enhance compensation packages, invest in development programs, and benchmark against industry standards. In knowledge management, partnering with educational institutions and investing in knowledge-sharing tools is essential. For ICT capability, hospitals should upgrade infrastructure, ensure cybersecurity, and provide continuous training. Lastly, to improve organizational structure, decentralizing decision-making, fostering leadership development, and reducing bureaucracy are key to enhancing hospital performance.