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Deployment of Information Technology Capabilities and Competitiveness of Consultancy Firms in Nairobi County, Kenya

Tanui Joel K,

School of Business, Kenyatta University, Nairobi, Kenya


Kilika James M (PhD),

School of Business, Kenyatta University, Nairobi, Kenya


Mugambi George M’Nchebere (PhD),

School of Business & Economics, Moi University, Nairobi, Kenya


CITATION: Tanui., K. J. & Kilika., M. J. & Mugambi., M. G. (2016) . Deployment of Information Technology Capabilities and Competitiveness of Consultancy Firms in Nairobi County, Kenya. International Journal of Arts and Entrepreneurship Vol. 5, (1). Pp 111 - 136.

ABSTRACT

The business environment is never static, but constantly changing according to the influence of global and national competitive forces and other environmental factors. Firms respond to the conditions surrounding them by adjusting their purpose and shape via deployment of appropriate strategic capabilities to subdue the environmental challenges and enhance competitiveness. Increasingly many firms have resorted to heavy investments in IT capabilities, to cope with the changing business environment. However, only some firms receive pay offs while many others do not. This study is of the view that the difference in competitiveness of firms with respect to the heavy IT investments, is in how the individual firms uniquely deploy IT capabilities. However, there is scarcity of information on the deployment of IT capabilities as a source of competitiveness. This study undertook to explore how the deployment of information technology may be used to build competitiveness among consultancy firms Nairobi County, Kenya. This study tested the null hypothesis that IT capabilities have no relationship with firm competitiveness. This study adopted a positivist philosophy approach, cross-sectional explanatory research design and random sampling method in order to obtain the primary data. From the total population of 265 consultancy firms in Nairobi, a target sample of 157 consultancy firms was picked via Microsoft excel generated random numbers. Data collection was done via structured questionnaires, after which multiple regression analyses were used to analyze the data. External validity of the questionnaire was complied with by adequate sample size, which for this study was 157. The reliability of the research instrument was tested via test-retest method on the same pilot sample and the instrument refined to achieve a Cronbach alpha coefficient of 0.855. The study found that IT capabilities positively influence firm competitiveness. Consequently, study recommends that the consultancy firms in Nairobi County should pay more attention to the level of IT capabilities utilized and use more online interaction with customers and suppliers, enhance the level of automation of processes and customer information, in order to enjoy higher level of firm competitiveness in terms of better cost efficiency, more differentiated services and better service quality.

Keu words: firm competitiveness, IT capabilities, strategic capability, dynamic capabilities, resource based view, technological orientation.

 

 

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