INTERNATIONAL JOURNAL OF ACADEMICS & …...company is not agile and this poses a danger in daily business operations as your competitor smiles (Denning , 2018). According to Chheda

INTERNATIONAL JOURNALS OF ACADEMICS & RESEARCH ISSN: 2617-4138 IJARKE Business & Management Journal DOI: 10.32898/ibmj.01/2.1article36

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421 IJARKE PEER REVIEWED JOURNAL Vol. 2, Issue 1 Aug. – Oct. 2019

Effects of Innovation as a Strategic Business Enabler on the Performance

of Postal Corporation of Kenya

Ann W. Thuo, Kisii University, Kenya

Dr. James Muya, Kisii University, Kenya

Dr. Priscila Omagwa, University of Eldoret, Kenya

1. Introduction

Modern business world is marked majorly by three key ingredients namely rivalry, customer and change, forcing many

organizations to try and find answers for their key issues. In the past century, majority of the organizations adjusted by rebuilding

and re-designing in response to environmental difficulties and changes. But in the present environment, the old methodologies

have lost their value in managing the turbulent changes and they are now supplemented by new strategies to aid survival. Most

organizations mode of best defence nowadays is concentrating in their competitive edge lines.

Modern business operational environment has been categorized by increased business competition and continuous rapid

technological changes (Ndung'u, 2018). Globalization, high turbulence, technological advancement and innovativeness have

phased out many organizations that fail to respond to these changes with urgency to keep a competitive edge. As a result, many

businesses have devised their own strategic agilities to adapt to the ever-changing business environment so as to remain a going

concern. The business agility concept was first developed in the context of agile manufacturing in USA (Gunasekaran et al, 2018).

It was a reactionary to business environmental changes and turning them into opportunities. Continual existence and

achievements of an organization lies on how fast the company strategizes to the turbulent changes in the environment in which it

operates but more precisely, agility means ability to sense, create and adopt quickly to the current environment and with

confidence.

Agility enables organizations to cope with endless change (Subramanian, 2018). It enables organizations to flourish in a world

that is increasingly volatile, uncertain, complex and ambiguous. Business agility according to Hayes (2018) refers to the

outstanding qualities that allow organizations to react faster to changes in the internal and external environment without losing

momentum or vision. Adaptability, flexibility and balance are the key impetus essential to long-term business agility. Creativity

and innovation give the agile enterprise an edge in developing products, services, and solutions for a hypercompetitive

marketplace. The real parameters of business agility are sense, respond and adapt. Eckstein et al. (2015) described business agility

as capability of organizations to quickly and effectively react to moderations by adjusting its initial steady configuration. Business

INTERNATIONAL JOURNALS OF ACADEMICS & RESEARCH (IJARKE Business & Management Journal)

Abstract

The current business environment is vibrant, volatile, turbulent and unpredictable. The success of business in such sporadic

environment is pegged on its adaptability to quickly sense and react to environmental change. As a result, many businesses

have devised their own business strategic agilities to adapt to the ever-changing business environment so as to remain a going

concern. The objective of the study was to establish the effect of innovation as a strategic business enabler on the

performance of Postal Corporation of Kenya. The study was anchored on the Dynamic Capability View (DVC) theory. The

study used a descriptive survey research design. Stratified sampling and simple random sampling techniques were used to

obtain a sample size of 274 from a population of 866 employees at Postal Corporation of Kenya (PCK). Data was collected

using closed-ended questionnaires. Supervisors and research experts were used to ascertain validity of the study instruments.

Split half method was used to calculate Cronbach’s alpha coefficient to determine the reliability of research instruments. The

study used the lower limit of diagnostic rule agreed on Cronbach’s alpha coefficient of 0.7 as suggested by Merriam &

Grenier (2019). Descriptive statistics that included standard deviation, mean and frequencies and percentages were used to

analyze data. Multiple regression analysis was used to test the relationship between the dependent and independent variables

while Pearson correlation was used to show the strength of the relationship between variables. The study found out that use of

business simulation, encouragement of new business strategies as well as new product development innovation positively

affected performance at PCK. The study found out that there was need to improve encouragement of new knowledge ideas

and give priority to innovation. Based on the findings, the study recommended that PCK fully implements the Public Service

Delivery Innovation Strategy, which is part of a broader effort to modernize public services in Kenya.

Key words: Innovation, Performance, Postal Corporation of Kenya


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agility according to Panda & Rath (2018) is deemed to consist of external agilities, that is, customer and partner agility and also

internal agilities, that is, operational agility. The internal events that require operational agility include but not limited to new

strategies, internal IT systems, talent acquisition or mergers and acquisitions.

Strategic agility entails fresh business models and brand categories invention instead of readjusting time-worn categories and

products (Barton, 2018). The survival of a firm in the growing competition and volatility of business environment has attracted the

attention of academicians to devise new strategies model to realign strategic fit by devising post-acquisition integration

approaches; developing dynamic capabilities; maintaining high level of organizational flexibility; innovative ways of handling

business change and renewal and creating synthetic abilities (Omondi, 2018). Most companies that thrive well in the competition

focus on customer needs satisfaction (Bailey et al, 2018). To help spur success, highly competitive companies are using current IT

best practices to bring the customer into the core of everything they do. If customers are not at the heart of any company then that

company is not agile and this poses a danger in daily business operations as your competitor smiles (Denning , 2018).

According to Chheda et al, (2017), when agile is done right, teams work within a business model in which the organization

generates value for the organization as well as the customer. Everything starting from work being done, information, and money

moves in an integrated fashion, leading to low or zero marginal costs and massive returns to scale. In order to perform well, an

organization has to identify the key major drivers of the industry and exploit them to the best of their capabilities.

The communication sector in the context of continuous demand for better and faster quality communication services has been

marred with diverse challenges. These have forced the communication sector firms to relentlessly find ways of being agile and

keep up with innovation trend. Sustainability is a sensitive issue for businesses (Hadad, 2015). According to Paunescu (2009), to

secure sustainability within an industry, an organization should monitor its results and processes.

Organizational performance in any industry is deemed vital same way as that of administration as it portrays the results

accomplished by a group of people in an association. Organizational performance is characterized regarding the capacity of an

association to fulfil the sought desires of three principle partners including government, workers and clients. According to Chen

and Chen (2008), organizational performance implies the "change of contributions to yields for accomplishing certain results’’.

Performance educates on the connection amongst negligible and successful cost (economy), in compelling expense and

acknowledged yield (proficiency) and amongst yield and accomplished result (adequacy).

Borade (2008) states that organizational performance includes repeating exercises that build up organizational objectives,

screens the advance towards the objectives and makes conformity to accomplish the objectives all the more adequately and

proficiently. It can hence be contended that organizational performance can be judged regardless of whether an association has

accomplished the goals set before it. He further states that, a measure of organizational performance is a comprehension of the

relationship between financial information sources and yields.

Ongori and Munene (2013) opined that why some firms outperform others and why others fail is of major concern in the

business world. This has triggered several studies on the drivers of firm performance. The key drivers to highly performing

organizations lie in its financial performances exhibited by high returns on revenues. Performance measurement is one of the tools

that aid the firm in monitoring performance (Njihia, Obara & Mauti 2013).

Performance management and improvement is at the heart of strategic management because a lot of strategic thinking is

geared towards defining and measuring performance (Nzuve & Nyaega, 2012). Odhiambo (2009) identified three approaches to

performance in an organization which are; the goal approach which states that an organization pursues definite identifiable goals.

This approach describes performance in terms of the attainment of these goals. The second approach is the systems resource

approach which defines performance as a relationship between an organization and its environment. This concept defines

performance according to an organization’s ability to secure the limited and valued resources in the environment. The third

approach is the process perspective which defines performance in terms of the behaviour of the human resource of an organization

(Waiganjo, Mukulu & Khaniri, 2012).

Postal Corporation of Kenya (PCK) is a government parastatal created by Postal Corporation Act 1998, after the split of KPTC

into three separate entities. The three entities are: Postal Corporation of Kenya (PCK), Telkom Kenya and Communications

Authority of Kenya (CA) to provide postal, telecommunication and industry regulation services respectively. PCK offers postal

services which are courier, mail, post liner, M-post, financial, and agency services in the domestic and international market in

competition with other players in the market (Kairanya, & Bett, 2018). It however retains a monopoly in postal rental boxes and

mails weighing less than three hundred fifty grams in an attempt to help it offer universal postal services and still be commercially

viable. Other players are required by law to charge five times the cost PCK charges to qualify for this class of mail. CA was

mandated to enforce the law but has been unable due to inadequate capacity.

The postal statistics (2003-2007) indicate that PCK operates a network of sixty-one head post offices, four hundred and

eighteen departmental offices and three hundred ninety-two sub post offices. It has 388281 private letter boxes, 1014 private letter


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bags 1134 private letter posting bags 1356 public counter positions, 312 stamp vending machines and 4061 stamp vending

licenses. It has a Board of Directors appointed by the Cabinet Secretary for Information and Communication to oversee the

activities of the organization (Hill, 2014).

Globalization has altered the nature of competition in the industries developing from slothful moving, steady oligopolies to

hypercompetitive surroundings (Batra, Kaushik & Kalia, 2012). Various calling rates, varied innovations and data diversifications

among the mobile telecommunications companies has forced the players in the market to agile in keenness of outclassing its

competitors. Survival of PCK depends on how well it utilizes its available internal resources and invents ways to outsmart her

competitors. However, agility only cannot guarantee the survival of companies rather the improvised ways of various capabilities

and abilities to countertop rivals (Weber & Tarba, 2014). They should apply those agilities that are most appropriate to a given

situation and hence the enablers should be contextualized. There is a good amount of studies on management ways of turbulent

business environment, yet there is scanty literature elucidating organizations ability to build up the coordinated agilities by

focusing on their relative enablers.

2. Statement of the Problem

Stiff competition in the telecommunication sector and the providers of PCK’s substitute products and services both

internationally and locally has rendered PCK’s earlier market dominance in the courier and mail services almost nimble (Mboya,

2018). The major competitors of PCK locally include G4s courier services, different bus SACCOs and freight services, UPS, and

aramex both globally and locally (PCK 2016). The study also confirmed the drop in the market share of PCK estimated at 3% in

courier service and a 60% command in ordinary mail services. CA 2015 report estimates the number of mobile subscribers to have

reached 16 million and a remarkable rise of electronic mail services at 33.3% posing a great danger in the market operations of

PCK.

Figures from the Kenya National Bureau of Statistics’ (KNBS) Economic Survey 2018 show that Posta’s services such as

courier operation, private letter boxes, expedited mail service (EMS), and unregistered and insured items have virtually stagnated

(Business Daily Africa, 2018). The KNBS report shows that the total number of money orders issued by Posta decreased by 18.7

per cent from 870,000 in 2016 to 707,000 in 2017. Back in 2014 money orders issued were Kshs.1.3million and Kshs. 1.2 million

in 2015. In addition, parcels handled dwindled by 15 per cent from 80,000 in 2016 to 68,000 in 2017. Also, international parcels

handled almost halved from 27 million registered in 2016 to 14 million in 2017. In 2013 to 2014 the figures stood at 18 and 22

million respectively. This drop is attributed to rivalry from Posta’s more technologically proficient opponents and internet

affiliated devices. This study therefore, sought to establish the effect of innovation as a strategic business agility enabler employed

by PCK in an attempt to improve and increase her market share hence improve her performance.

3. Objective of the Study

The objective of the study was to establish the effect of innovation on the performance of Postal Corporation of Kenya.

4. Research Hypothesis

H01: There is no statistically significant relationship between innovation as a strategic business enabler and the performance of

Postal Corporation of Kenya

5. Literature Review

5.1 Theoretical Review

5.1.1 Dynamic Capability View Theory

Dynamic Capability View Theory (DCV) according (Kisaka, 2018) was proposed by Pisano & Shuen (1997), on their paper

titled Dynamic Capabilities and Strategic Management. Dynamic Capability View proponents viewed dynamic capability of the

firm as ability of the firm to strategically adapt to firm’s resource base. DCV advocates for exploitation of firms' physical and

intellectual unique resources. The Dynamic Capability View focused on continuous ever-changing while coping with

environmental stimuli. Business agility enabled firms to respond to both threats and opportunities in the market as advocated by

(Penrose, 1995).

According to (Alonzo, et al. 2018), DCV exaimined the ablity of the firm in intergrating, structuring, and reconifiguration of

her external and internal resources into new competencies equivalent to their ever-changing business environment. The

assumption of the theory was that firms with superior dynamic capabilities would outpace their rival firms with lesser dynamic

capabilities. The theory’s main agenda was based on how well a firm can used her dynamic capabilities to create and sustain


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enough performance on top of other firms sensing and creating environmental changes. Capabilities as expounded by DCV

encompassed patterned, high-level, learned and repeated behaviours enabling an organization to perform better than its rivals.

The Dynamic Capability View contradicted the resource-based view theory. RBV proponents were of the opinion that,

acquiring assets and resources that were unique from those of the competitors, could greatly help the organizations in achieving

competitive advantage. The DCV theory advocated for companies to go past assets and resources as much of them could be

emulated by the competitors to peculiar capabilities to enhance sustainable competitiveness (Powell & Dent-Micallef 1997;

Bharadwaj, 2000). The DCV theory arguably opposed the ideology of unique resources in gaining competitive advantage as

suggested by RBV theory unless it was used to do something. Instead, it was of the opinion that organizations should go for those

capabilities that were distinct from competitors in order to counter effectively the competition (Helfat et al. 2009).

Contrary to the RBV theory which focuses more on sustainable competitive advantage, DCV focuses more on the issue of

firm’s survival in the competition. Strategist scholars Gregory Ludwig and Jon Pemberton, in one of a few empirical studies on

the topic, called for clarification of the specific processes of dynamic capability building in particular industries to make the

concept more useful to senior managers who set directions for their firms (Ludwig, 2009).

Dynamic Capability View theory advocates for firms to assimilate, build, and reconfigure internal and external competencies

to address ever-changing environments rapidly. Teece, Pisano &Shuen (1997) suggested that intangible assets like knowledge and

skills of the workforce should be reconfigured into routines to create capabilities responsive to the uncertain and volatile forces of

the business environment. Through the DCV sports light, agility helped to explain how organizations would leverage the internal

resources to acquire necessary competencies in dealing with hypercompetitive flea market (Oudan, 2010). DCV categorized

agility into the capabilities of sensing and responding (Chebii, 2018). Once an opportunity for competitive action is sensed, it is

then responded by mobilizing the firm's current processes.

The relevance of the dynamic capability view theory in the current study was the advocacy of the view in which vision of the

company was in response to turbulent changes in operations. Exploitation of knowledge assets was critical for PCK to build and

exploit valuable knowledge for it to remain agile hence competitive. Firms should endeavour towards building their core

competencies in times of sporadic changes in the market. PCK management must incorporate managerial decisions in resource

allocation for capability development. Dynamic capabilities posed a more practical approach to change management by

emphasizing on firm-specific capabilities.

The failure of RBV theory in addressing competition survival gave rise to DCV concept. The theory advocated that an

organization uses its peculiar resources to acquire capabilities to match with an ever-changing market environment (Hatch,2018).

The dynamic capability theory is relevant to the current study as it explained the role of innovation in ensuring sustained

operational performance resulted from the firm’s aptitude to control and reconfigure its prevailing competencies and resources in

ways that were valuable to the customer but difficult for other competitors to imitate. Dynamic capabilities help firm’s sense

opportunities and then grasp them by successfully reallocating resources, often by adjusting existing competencies or developing

new ones.

5.2 Empirical Literature Review

5.2.1 Effect of Innovation on Organizational Performance

Innovation and creativity enable firms to generate and penetrate the new market opportunities (Loon & Chik, 2019).

Companies should devise new ways of penetrating the new markets, a new paradigm different from the approach of reactionary to

opportunities via identifying and marking those products that satisfies the needs of the customers. To penetrate a new market calls

for more research and development which forms a foundation of agility model (Chaffey & Ellis-Chadwick, 2019). Employees

should up their game via innovation and utilization of technology to identify any gap in the market. According to Foss (2015), a

company that is knowledge-based with full of unique resources can sustain the wave of competition since it will tailor-make their

products to suit and exceed customer needs.

A study by Naidoo (2010) focusing on Chinese manufacturing small and medium enterprises, on the influence of market

innovation to withstand the constraints of agility revealed that market innovation had a positive significance on competitiveness

and sustainability of the firm. Naidoo’s findings were in line with that of Mugo (2015) who focused on Kenyan scenario of wine

industry firms. Mugo’s study revealed that product innovation empowered firms to provide a wide array of products that met the

satisfaction quality using channels that shorten the duration of getting a service or product, market survey, and adoption of product

development that is incentive, radical and offer greater reward hence improved firm’s competitiveness.

Nafula (2017) did a study investigating on the effects of innovation on the firm’s competitiveness in the manufacturing sector

focusing on Small and Medium Enterprises in Nairobi County employing both a descriptive and explanatory research design.

Study findings revealed a strong positive correlation between firm’s product innovation, process innovation, marketing


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innovation, and organizational innovation on the firms' competitiveness. Her findings were in line with that of Njogu (2014) who

looked at the effect of innovation on the financial performance of SMEs in Nairobi County, Kenya where product, process and

marketing innovation all had a positive effect on the financial performance of SMEs in Kenya.

Njeri (2017) did a study on the “Effects of Innovation Strategy on Firm Performance in the Telecomm Industry a case study of

Safaricom Public Limited, Kenya”. The research utilized a descriptive survey research design in the collection of data and

findings revealed a positive and significant correlation between product innovation, process innovation, and market innovation

strategies and performance of the firm. She revealed that innovation strategies adopted by Safaricom Public Limited Company in

Kenya, product innovation had a superior influence on the firm's performance followed by market innovation and lastly process

innovation. These findings were in line with that of Aziz & Samad (2016), whose study focused on Food manufacturing SMEs in

Malaysia.

6. Methods and Materials

6.1 Research Design

Mason (2017) defined research design as the plan, structure and strategy of investigation construed so as to find answers from

the research questions and how it affects the perceived outcome of the study. The research design entails what the researcher will

be doing from writing the proposal and operational implications up to the final analysis of data. Kipkorir (2016) on the other hand

defined a research design as the plan and investigation structure framed so as to outsource and mine data to obtain intended results

from the hypotheses of the study. The study adopted a descriptive survey research design. This is a research design which looks at

the relationship between variables in a natural setting. Descriptive statistics aims to find out what is happening and views

descriptive statistics as indices that describe a given sample and relationship (Bell, 2018). This method was easy to plan and

execute and it enabled gathering of data of a variety of issues related to the subject matter of this study. Moreover, the descriptive

survey research design helped the researcher to collect quantitative data in a cost-effective manner which was analysed using

descriptive and inferential statistics.

6.2 Study Area

Kerlinger and Lee (2003) opined that setting of any study area should be easily accessible to the researcher and should permit

instant understanding with the informants. The study was undertaken at Postal Corporation of Kenya in Nairobi County. Nairobi

County was a suitable study area because it has a high population and most of the competing companies have headquarters in the

same setting as Postal Corporation of Kenya. Additionally, Nairobi County has a population that is well versed with technological

advancement knowledge and product knowledge in the digital era.

6.3 Target Population

A population is the entire set of elements from which the study will draw the conclusion of the study. A population element is

the individual from which measurement is taken (Cooper and Schindler, 2014). Yang & Miller (2014) defined a population under

study as the units to be studied in terms of time as well as the boundaries of territory. Target population of the study is the sum

total of the elements from which the researcher would make inferences (Kerlinger & Lee 2003). The study targeted a total

population of 866 respondents comprising of senior managers and junior staff from PCK outlets in Nairobi County. The selection

was arrived at based on the directorate report of PCK. This population was characterized by directors and senior managers with

positions in the organizations. The selected population was representative enough to respond to the research objectives. The

research was carried out at Postal Corporation of Kenya Nairobi.

Table 1 Target Population

Categories Population Percentage (%)

Branch Managers

Operations Managers

ICT Managers

Human Resource Officers

Trade Development Reps

Customer Care Staff

16 1.8

14 1.7

20 2.3

16 1.8

395 45.6

405 46.8

TOTAL 866 100

6.4 Sampling Design and Sample Size

Sampling design is a mathematical procedure of obtaining sample units for measurements. Before choosing a suitable

sampling design method, it is vital to have a defined population, study area, sampling unit and sampling objective. A selection of a


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suitable sample design method guarantees that the sample size you invest money and time into collecting supports the informed

inferences the researcher wants to make. The study adopted a multi-stage sampling design beginning with the identification of an

appropriate sample size and followed by the identification of the actual respondents through stratified and proportionate sampling

methods.

Sample size is a small proportion of a study population under study. Slovin’s (2012) formula was used to calculate the sample

size of 274 as shown below:

n = N/ (1+N (e) 2)

n =866 / (1+ (866*(.05*.05))

= 866/3.165=273.62 ~274

Where,

n = Intended sample size,

N = the entire study population

ε = the error limit

N= population size = 866

n= sample size

ε= standard error; acceptable level is 0.05.

The study sample frame was then arrived at through the use of stratified random and proportionate sampling techniques.

Sampling frame is a group of individuals from which a sample is drawn. The population was stratified into six stratus consisting

of branch managers, operations managers, and ICT managers, Human Resource Officers, Trade Development Representatives and

Customer Care Staff. Proportionate apportioning of the sample to the stratus was then calculated using the formula for sample size

as given by Gupta (2011) below:

ni = n (Ni/N)

Where,

ni= sample size from the strata

n = intended overall sample size

Ni = population of the strata

N = entirety or population size

Table 2 Sample Size Distribution

Categories Population Percentage (%) Sample Size

Branch Managers 16 2% 5

Operations Managers 14 2% 4

ICT Managers 20 2% 6

Human Resource Officers 16 2% 5

Trade Development Reps 395 46% 125

Customer Care Staff 405 47% 128

TOTAL 866 100% 274

The study used questionnaires to collect primary data from the respondents. The research used structured questionnaires that

had bio data on the first part. This gathered inclusive information and increased the availability of the information relevant in

mixed methods research (Crouch & Mckenzie, 2006). Questionnaires were structured in a five point Likert scale. This is a tool

used to capture psychometrics. Use of questionnaires allowed the respondents to share experiences that identify their trait and

characteristics openly. Use of this tool also ensured that comprehensive data on the human resource capabilities and work

arrangements in the target organizations are collected.

The questionnaire contained closed ended items. Closed ended items provide data that is easy to compute and analyse

(Kothari, 2004). This method of data collection was used because it allowed respondents time to pass through the questions in a

cognitive manner.

6.5 Reliability and Validity Tests

According to Merriam & Grenier (2019), validity refers to the consistency of study results in line with the actual data obtained

from data analysis of the study findings. They further suggest that validity should provide adequate measure and coverage of the


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questions under study. Validity concept expounds the extent to which the research instruments represent valuable data from the

study. Validity is concerned with whether the findings are really about what they appear to be. Construct validity which refers to

the degree at which inferences can justifiably be arrived at from the operationalization of the study to the theoretical constructs

was used. Supervisors and research experts were also used by the researcher to ascertain the validity of the research instruments.

Reliability refers to the level of external consistency or stability of measuring instruments (Merriam & Grenier 2019). To

achieve better results, a pilot study was conducted at PCK outlets in Kiambu County to test the relevance, comprehension,

meaning and clarity of items in the questionnaire. Cronbach’s alpha coefficient was computed in order to test the internal

consistency of the items listed on the instrument using split half method. The study used the lower limit of diagnostic rule agreed

on Cronbach’s alpha coefficient of 0.7 (Merriam & Grenier, 2019).

Table 3 Reliability Analysis

Scale Cronbach's Alpha Number of Items

Innovation 0.705 7

6.6 Data Collection Procedures

An introductory letter for research permit from the School of Business and Economics from Kisii University was submitted to

National Commission for Science, Technology and Innovation (NACOSTI) to obtain a research permit. The permit obtained was

handed to Postal Corporation of Kenya head office secretariat who allowed the researcher to collect data from respective

respondents. The study used a drop and pick method to administer the questionnaires to the respondents. The questionnaires were

physically delivered to the respondents with a letter of introduction attached to each questionnaire explaining the purpose of the

study for ease of reference for each respondent. Respondents were given one week to fill the questionnaire after which the

researcher personally went to pick them.

6.7 Data Analysis and Presentation

Data analysis is the process of obtaining answers to the questions through thorough examination and interpretation of data

collected from the study (Cooper and Schindler, 2014). The study used both descriptive and inferential statistics to analyse data.

The descriptive statistics included standard deviation, mean, frequencies and percentages. Data presentation was displayed using

tables and frequency distribution to bring out a clear picture of the study findings. A simple regression model was used to test the

relationship between the variables while Pearson correlation was used to determine the strength of the relationships. The

regression model that was used was:

Y= βo + β1X1 + ε

Where;

Y= Organizational performance (Dependent Variable)

β0= Constant,

X1= Innovation

7. Data Analysis, Interpretation and Discussion

7.1 Descriptive Analysis

The main objective of the study was to determine the effect of innovation as a strategic business agility enabler on the

performance of Postal Corporation of Kenya. This section gives the descriptive results of the study. The study used descriptive

statistics of mean and standard deviation to summarize the features of the variables investigated. Results are shown in table 4.2

below.

The objective of the study was to establish the effect of innovation on the performance of Postal Corporation of Kenya. The

findings in table 4 indicates that the opinion of the respondents was 7 (3%) strongly disagree, 17 (8%) disagree, 72 (32%) neutral,

106 (47%) agree, 22 (10%) strongly agree that new product development innovation is encouraged. The study found out that, the

opinion of the respondents was 23 (10%) strongly disagree, 15 (7%) disagree, 38 (17%) neutral, 104 (46%) agree, 44 (20%)

strongly agree that their organization uses business simulations. With regard to whether employees are encouraged to experiment

new ideas, the opinion of the respondents was 25 (11%) strongly disagree, 18 (8%) disagree, 42 (19%) neutral, 100 (45%) agree,

39 (17%) strongly agree. Concerning, new knowledge ideas being encouraged the opinion of the respondents was 42 (19%)

strongly disagree, 25 (11%) disagree, 49 (22%) neutral, 67 (30%) agree, 41 (18%) strongly agree. For the statement that

employees are encouraged to come up with new models, the opinion of the respondents was 25 (11%) strongly disagree, 26 (12%)

disagree, 71 (32%) neutral, 78 (35%) agree, 24 (11%) strongly agree. In relation to innovation is given high priority in my

organization, the opinion of the respondents was 10 (5%) strongly disagree, 9 (4%) disagree, 80 (36%) neutral, 97 (43%) agree, 28

(13%) strongly agree.


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Table 4 The Effect of Innovation on the Performance of PCK

Items Mean SD

New product development innovation is encouraged 3.53 0.89

My organization uses business simulations 3.58 1.19

Employees are encouraged to experiment new ideas 3.48 1.22

New business strategies are encouraged 3.19 1.29

New knowledge ideas are encouraged 3.17 1.38

Employees are encouraged to come up with new models 3.22 1.14

Innovation is given high priority in my organization 3.55 0.92

Mean of Means 3.39 1.15

The overall mean for the innovation variable was 3.390 and SD was 1.146. This implies that the most influential factor of

innovation was use of business simulation followed by encouragement of new business strategies as well as new product

development innovation. However, there was need to improve encouragement of new knowledge ideas and giving priority to

innovation. The findings were in line with that of Rojas et al. (2013) innovation and competitiveness in SMEs in Mexico which

revealed a strong significant correlation between innovation and firm competitiveness. The findings were also in line with that of

Mugo (2015) who focused on Kenyan scenario of wine industry firms. Mugo’s study revealed that product innovation empowered

firms to provide a wide array of products that met the satisfaction quality using channels that shorten the duration of getting a

service or product, market survey, and adoption of product development that is incentive, radical and offer greater reward hence

improved firm’s competitiveness.

Table 5 Performance of Postal Corporation of Kenya

Items M SD

There is increased productivity in my organization 3.19 1.40

There is improvement in customer base in PCK 3.41 1.38

There is improvement in quality of services offered at PCK 3.53 1.41

There is improvement in reliability of the firms services 3.35 1.62

There is high employee satisfaction in my organization 3.14 1.58

Market share of the firm has improved immensely 3.21 1.32

There is high growth in revenues of the firm 3.68 1.00

Mean of Means 3.36 1.39

The findings in table 4.3 indicates the results for the statement that there is increased productivity in their organization were;

43 (19.2%) strongly disagree, 8 (3.6%) disagree, 64 (28.6%) neutral, 85 (37.9%) agree, 24 (10.7%) strongly agree. The results for

the statement that there is improvement in customer base in PCK were; 28 (13%) strongly disagree, 11 (4.9%) disagree, 68

(30.4%) neutral, 91 (40.6%) agree, 26 (11.6%) strongly agree. The results for the statement that there is improvement in quality of

services offered at PCK were 34 (15.2%) strongly disagree, 3 (1.3%) disagree, 63 (28.1%) neutral, 84 (37.5%) agree, 40 (17.9%)

strongly agree.

Additionally, the results for the statement that there is improvement in reliability of the firms services were 41(18.3%) strongly

disagree, 3 (1.3%) disagree, 54 (24.1%) neutral, 83 (37.1%) agree, 43 (19.2%) strongly agree. The results for the statement that

there is high employee satisfaction in their organization were 50 (22.3%) strongly disagree, 12 (5.4%) disagree, 20 (8.9%) neutral,

113 (50.4%) agree, 29 (12.9%) strongly agree. The results for the statement that market share of the firm has improved immensely

were 29 (12.9%) strongly disagree, 17 (7.6%) disagree, 77 (34.4%) neutral, 76 (33.9%) agree, 25 (11.2%) strongly agree. Finally,

the results for the statement that there is high growth in revenues of the firm were 15 (6.7%) strongly disagree, 15 (6.7%) disagree,

39 (17.4%) neutral, 133 (59.4%) agree, 22 (9.8%) strongly agree.

The overall mean for performance variable was 3.358 and SD was 1.387. Based on these findings, it is clear that the

dimensions of performance of Postal Corporation of Kenya that have been highly influenced by business strategic agility enablers

were; revenues and employee satisfaction. Likewise, Tseng & Lin (2011) on their study in China opined that the main objective of

an agile enterprise is to generate a larger value both externally to the customers, but also internally to the employees, where the

main benefits are attributed towards rapidly responding to changes in the business environment.

7.2 Inferential Analysis


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Inferential analysis is the process of describing data so as to come up with results that are conclusive. The key aim of

inferential analysis is to test hypothesis by making inferences from a given set of data to a condition that is more general.

7.2.1 Correlation Analysis

The Pearson’s Correlation was constructed for the relationship between the study variables. The correlation result on the

relationship between business strategic agility enablers and performance of Postal Corporation of Kenya as indicated in the table

below. There are three possible results of a correlational study: a positive correlation, a negative correlation, and no correlation.

The correlation coefficient is a measure of correlation strength and can range from –1.00 to +1.00.

Table 6 Correlation Analysis

Innovation Organization

Performance

Innovation

Pearson

Correlation 1

Sig. (2-tailed)

N 224

Organization

Performance

Pearson

Correlation .611

** 1

Sig. (2-tailed) .000 .

.000

N 224 224

**. Correlation is significant at the 0.01 level (2-tailed).

The results indicated by table 4.4 show a positive and significant correlation between innovation (r= .611, p-value below .01

while at 5% the p-value was less than 0.05) and performance of PCK

7.2.2 Regression Analysis

The dependent variable of the study was performance of Postal Corporation of Kenya, while the independent variables were:

Innovation, information technology integration, human resource capability and management commitment & support. The results

from the regression analysis are discussed next.

Table 7 Regression Results of Innovation

Model Unstandardized Coefficients Standardize

d Coefficients

t Sig. Collinearity Statistics

B Std.

Error

Beta Tolerance VIF

1 (Constant) 1.478 .165 8.931 .000

Innovation .567 .049 .611 11.502 .000 1.000 1.000

R .611

R Square .373

Adjusted R

squared .371

F 49.428

Dependent Variable: OP

The standardized coefficients assess the contribution of the independent variable towards the prediction of the dependent

variable. Table 4.5 results showed that innovation had a coefficient estimate which was significant based on ß = 0.567 (p-value

0.000, which is less than α = 0.05), hence reject hypothesis one and conclude that there was statistically significant relationship

between innovation and the performance of Postal Corporation of Kenya. Moreover, the effect of innovation is shown by the t test

value = 11.502 which implies that the effect of innovation surpasses the error by 11. Further, innovation explains 37.3 percent

variation of performance of Postal Corporation of Kenya. The results of the coefficient of determination are also statistically

significant as shown by F ratio = 49.428 with P value 0.000 < 0.05 (level of sig.). The findings concur with those by Njogu (2014)

who looked at the effect of innovation on the financial performance of SMEs in Nairobi County, Kenya where product, process

and marketing innovation all had a positive effect on the financial performance of SMEs in Kenya.

7.3 Testing the Hypothesis


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The study applied the ANOVA model to test the hypotheses so as to determine the outcomes that would provide guidance on

whether to accept or reject the null hypothesis.

H01: There is no statistically significant relationship between innovation and the performance of Postal Corporation of Kenya.

Table 4.6: Analysis of Variance

Innovation Sum of Squares df Mean Square F Sig.

Between Groups 40.106 4 10.027 49.428 .000

Within Groups 44.425 219 .203

Total 84.531 223

The p value for innovation factors variable has a p value of 0.000 which is less than 0.05 (α =0.05) implying the study rejects

the null hypothesis in support of the alternative hypothesis. Moreover, the F critical at 5% level of significance was 49.428 since F

calculated is greater than the F critical (value = 2.39). The study therefore concludes that innovation factor is statistically

significant in explaining performance of Postal Corporation of Kenya. The findings concur with those by Njogu (2014) who

looked at the effect of innovation on the financial performance of SMEs in Nairobi County, Kenya where product, process and

marketing innovation all had a positive effect on the financial performance of SMEs in Kenya.

8. Summary of Findings, Conclusions and Recommendations

The section presents the summary of the findings, conclusion on the findings and lastly the recommendations of the study. The

chapter also points out the areas that need to be addressed further by other researchers

8.1 Summary of the Findings

The objective the study was to establish the effect of innovation on the performance of Postal Corporation of Kenya. A field

survey study was conducted in 41 branches of the Postal Corporation of Kenya in Nairobi County by administering the

questionnaire to the targeted respondents. 224 questionnaires were filled and returned then analyzed by use of descriptive statistics

and a simple linear regression analysis.

The study found out that that the opinion of the respondents was 7 (3%) strongly disagree, 17 (8%) disagree, 72 (32%) neutral,

106 (47%) agree, 22 (10%) strongly agree that new product development innovation is encouraged. The study found out that, the

opinion of the respondents was 23 (10%) strongly disagree, 15 (7%) disagree, 38 (17%) neutral, 104 (46%) agree, 44 (20%)

strongly agree that their organization uses business simulations. With regard to whether employees are encouraged to experiment

new ideas, the opinion of the respondents was 25 (11%) strongly disagree, 18 (8%) disagree, 42 (19%) neutral, 100 (45%) agree,

39 (17%) strongly agree. Concerning, new knowledge ideas being encouraged the opinion of the respondents was 42 (19%)

strongly disagree, 25 (11%) disagree, 49 (22%) neutral, 67 (30%) agree, 41 (18%) strongly agree. For the statement that

employees are encouraged to come up with new models, the opinion of the respondents was 25 (11%) strongly disagree, 26 (12%)

disagree, 71 (32%) neutral, 78 (35%) agree, 24 (11%) strongly agree. In relation to innovation is given high priority in my

organization, the opinion of the respondents was 10 (5%) strongly disagree, 9 (4%) disagree, 80 (36%) neutral, 97 (43%) agree, 28

(13%) strongly agree. The overall mean for the innovation variable was 3.390 and SD was 1.146.

Moreover, innovation had a coefficient estimate which was significant based on ß = 0.567 (p-value 0.000, which is less than α

= 0.05), hence reject hypothesis one and conclude that there was statistically significant relationship between innovation and the

performance of Postal Corporation of Kenya. Moreover, the effect of innovation is shown by the t test value = 11.502 which

implies that the effect of innovation surpasses the error by 11. Further innovation explains 37.3 percent variation of performance

of Postal Corporation of Kenya (R2 = 0.366). The results of the coefficient of determination are also statistically significant as

shown by F ratio = 49.428 with P value 0.000 < 0.05 (level of sig.).

8.2 Conclusion

The study concluded that use of business simulation, encouragement of new business strategies as well as new product

development innovation positively affected performance at PCK. This is because most of the respondents strongly agreed with

statements related to the above findings. However, there was need to improve on encouragement of new knowledge ideas and

giving priority to innovation so as to enhance performance.

8.3 Recommendations

The study found out that there was need to improve encouragement of new knowledge ideas and give priority to innovation.

To this end, the study recommends that PCK fully implements the Public Service Delivery Innovation Strategy, which is part of a

broader effort to modernize public services in Kenya. It demonstrates the priority Government has placed on the role of


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innovation. The Strategy seeks to harness and mainstream public service delivery innovation across the public service to deliver

effective, equitable and quality services for the achievement of sustainable development.

The study did not cover other important sectors of the economy like agriculture, tourism, banking, small and medium

microenterprises among others. The study therefore recommends the following studies to be done in order to exhaustively explore

the agility driver’s influence in every aspect of the economy.

Influence of Innovation, Information Technology Integration, Human Resource Capability, and Management Commitment &

Support independently on the performance of telecommunication companies in Kenya. Since there was 28.5% error term on the

study, the study recommends that other business agility drivers not covered by the study should be considered in other similar

studies so as to explore more on the agility drivers influence on organizational performance.

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Documents

INTERNATIONAL JOURNAL OF ACADEMICS & …...company is not agile and this poses a danger in daily business operations as your competitor smiles (Denning , 2018). According to Chheda