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Archives of Business Research – Vol. 12, No. 5

Publication Date: May 25, 2024

DOI:10.14738/abr.125.16956.

Gathitu, C. W., k’Obonyo, P., Machuki, V. N., & Njihia, J. M. (2024). The Joint Effect of Competitive Strategies, Competitive

Advantage, Ethical Values, And Corporate Reputation on Performance of Accredited Universities in Kenya. Archives of Business

Research, 12(5). 01-14.

Services for Science and Education – United Kingdom

The Joint Effect of Competitive Strategies, Competitive Advantage,

Ethical Values, And Corporate Reputation on Performance of

Accredited Universities in Kenya

Cecilia Wacuka Gathitu

Faculty of Business and Management Science, University of Nairobi, Kenya

Peter k’Obonyo

Faculty of Business and Management Science, University of Nairobi, Kenya

Vincent N. Machuki

Faculty of Business and Management Science, University of Nairobi, Kenya

James M. Njihia

Faculty of Business and Management Science, University of Nairobi, Kenya

ABSTRACT

The broad objective of the study was to determine the joint effect of competitive

strategies, competitive advantage, ethical values and corporate reputation on

performance of accredited universities in Kenya. The corresponding null

hypothesis stated that the joint effect of competitive strategies, competitive

advantage, ethical values and corporate reputation on performance of accredited

universities in Kenya is not significantly different from the independent effects of

predictor variables. This study was anchored on Industrial (Economics)

organization theory, Stakeholders’ theory, Resource-based theory and Virtue’s

ethics theory. Descriptive cross-sectional survey was used. The population of the

study comprised 53 accredited universities. To collect data, semi structured

questionnaires were used due to the covid-19 situation while a few were dropped

and picked back. Data analysis used regression models. Findings from the test of

hypotheses showed that the joint effect of competitive strategies, competitive

advantage, ethical values and corporate reputation on performance is significantly

different from the independent effects of predictor variables. The significant

findings implied that the null hypothesis was rejected. The study outcomes

contributed to theory, policy and management practice. The four theories validated

outcomes of the study. Policy makers in the Ministry of higher education,

Commission for University Education and university managers were recommended

to establish a policy framework that observes ethical practices; quality programs

and reliable training and research and adoption of competitive strategies such a

market penetration, strategic alliances, product development focus strategy,

differentiation and cost leadership in that order. A single respondent who was

deemed to introduce bias in choosing suitable responses was said to limit the study.

Questionnaires reduced subjectivism in statement responses. Longitudinal design

for generalizability of results was suggested for future studies.

Keywords: Competitive strategies, competitive advantage, ethical values, corporate

reputation and performance of accredited universities in Kenya.

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Archives of Business Research (ABR) Vol. 12, Issue 5, May-2024

Services for Science and Education – United Kingdom

INTRODUCTION

Universities in Kenya, with the mandate of developing Kenya’s human resource, have recently

received increasing attention due to rising concerns regarding their competitiveness and

sustained performance. These concerns have been triggered by environmental shocks such as

the recent covid-19 pandemic which caused disruptions in the global market, the Russia- Ukraine conflict that affected the country’s dollar liquidity and in turn caused runaway

inflation, global oil price shocks, extreme weather conditions that caused drought in most of the

arid and semi-arid areas of the country, declines in real gross domestic and declining Kenya’s

government’s capacity to fund university education. These issues have raised concerns on

quality and relevance of university education in Kenya. Against this backdrop, this study sort to

test the hypothesis on the joint effect of competitive strategies, competitive advantage, ethical

values and corporate reputation on performance of accredited universities in Kenya. The study

was anchored on four theories: IO (economics) theory, Resource based theory, Stakeholder’s

theory and Virtue ethics theory. A descriptive cross-sectional survey design targeting a

population of 53 accredited universities in Kenya was used. Primary data was collected using

semi-structured questionnaires. The response rate from completed questionnaires was 66.6%.

Data was analysed using multiple regression analysis. Findings of the study stated that, the joint

effect of competitive strategies, competitive advantage, ethical values and corporate reputation

on performance of accredited universities was significantly different than the individual effects

of predictor variables. Thus, all the joint variables were recommended to improve performance.

This study could be replicated in other countries to test for generalization.

Competitive Strategies

Competitive strategies have been described as the deliberate selection of various sets of

activities that would deliver a unique mix of value over competitors or taking offensive or

defensive actions in order to develop a defendable position in an industry to manage

successfully with the Porter’s five competitive forces and thereby yield a superior return on

investment for the company [21]. [22] posited that competitive strategies are engaged by

businesses to achieve or improve competitive advantage and superior performance in their

industry. Consequently, the goal of competitive strategies is to come up with innovative ways

to gain market and industry supremacy by satisfying consumers' needs and preferences and

responding to stakeholders' sensitive needs. Competitive strategies in this study comprised:

Cost-leadership strategy, Differentiation strategy, Focus strategy, Market penetration, Market

production and Product development, and Strategic alliances.

Industrial Organization Theory contends that companies achieve above average performance

based on fit between their strategic approaches and their particular business or industry

structure. In the current study, IO (economics) theory postulated the association between

competitive strategies and performance of accredited universities in Kenya while focusing on

the external environment to determine appropriate strategic approaches that universities

could pursue.

Competitive Advantage

Competitive advantage has been conceptualized variously by different authors in its connection

with performance. [23] posited there were two streams for gaining competitive advantage. The

first stream defined competitive advantage in terms of achieving higher profitability [2; 4; 5]

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Gathitu, C. W., k’Obonyo, P., Machuki, V. N., & Njihia, J. M. (2024). The Joint Effect of Competitive Strategies, Competitive Advantage, Ethical Values,

And Corporate Reputation on Performance of Accredited Universities in Kenya. Archives of Business Research, 12(5). 01-14.

URL: http://doi.org/10.14738/abr.125.16956

while the other stream described competitive advantage in terms of sources such as

differentiation, technologies, capabilities or cost leadership [21;22]. This study conceptualized

competitive advantage as an antecedent to performance, where competitive advantage was

said to stem from a firm’s capability to create superior value for its buyers by offering a much

lower price than competitors or offering superior attributes for a higher price [22]. Porter’s

perspective was referred to as industry structure. Competitive advantage emerged when firms

responded to the structural characteristics of the five forces model by Porter and external

environment [23] to get a defendable position in the market. In this study, competitive

advantage was manifested by the following measures, namely competitive fees, delivery

dependability, innovative programs and timely completion of programs towards achieving

superior profitability. These were adopted from studies by [8; 33].

Ethical Values:

Ethical values have been described as an individual’s or organization’s moral values and

principles [30]. These are also said to be a guide for ethical behavior [32;13]. Ethical values

have also been cited as a valuable intangible asset that causes competitive advantage that can

be used to segregate one firm from others while enhancing performance. This informs why

ethical values has been proposed as a moderating variable in the relationship between

competitive strategies and performance of accredited universities in Kenya. The objective was

anchored on Stakeholder’s theory, under normative approach. It described how businesses

ought to function especially regarding ethical values. Under normative approach, ethical values

take center stage where the expectation is that if managers treat their stakeholders ethically,

then organizations may become a success with their managers committing to apply ethical

values such as responsibility, honesty and fairness [15].

Corporate Reputation:

Corporate reputation is defined as a key intangible asset that has been created on the basis of

collective perception of an organization past activities and expectations concerning future

actions, in view of their efficiency in relation to the main competitors [35]. Corporate reputation

is a multidimensional concept whose definition is drawn from various academic disciplines

such in economics, strategy, marketing, organizational behaviour, sociology, and accountancy.

In this study, corporate reputation is anchored on resource-based theory (RBT) and categorizes

it as an intangible asset, difficult to replicate and generates competitive advantage that also

explains performance heterogeneity and variance [29]. Contrary findings stated that investing

in corporate reputation did not guarantee improved performance. Other authors stated, the

reverse is possible with performance promoting a good reputation [9].

Performance:

Organizational performance is an important measure of an organization’s success. It is the

extent to which an organization’s mission and goals are achieved [32]. The assessment of

organizational performance is an important aspect in strategic management. It enables

executives know how their organization is performing as well us get informed which strategic

changes need to be made. Organizational performance is also said to be multidimensional

concept which explains why there is variation in indicators of performance among different

organizations hence the different performance measures used by different organisations [25].

There are two approaches used to measure performance, namely, financial and non-financial