SU+ @ Strathmore University Library Electronic Theses and Dissertations This work is availed for free and open access by Strathmore University Library. It has been accepted for digital distribution by an authorized administrator of SU+ @Strathmore University. For more information, please contact library@strathmore.edu 2025 Influence of strategic agility on competitiveness of petroleum companies in Nairobi County, Kenya. Kiprop, Christa Strathmore Business School Strathmore University Recommended Citation Kiprop, C. (2025). Influence of strategic agility on competitiveness of petroleum companies in Nairobi County, Kenya [Strathmore University]. http://hdl.handle.net/11071/15966 Follow this and additional works at: http://hdl.handle.net/11071/15966 https://su-plus.strathmore.edu/ https://su-plus.strathmore.edu/ http://hdl.handle.net/11071/2474 mailto:library@strathmore.edu http://hdl.handle.net/11071/15966 http://hdl.handle.net/11071/15966 INFLUENCE OF STRATEGIC AGILITY ON COMPETITIVENESS OF PETROLEUM COMPANIES IN NAIROBI COUNTY, KENYA CHRISTA KIPROP 152491 DISSERTATION SUBMITTED IN PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE OF MASTER OF COMMERCE OF STRATHMORE UNIVERSITY STRATHMORE BUSINESS SCHOOL, STRATHMORE UNIVERSITY, NAIROBI, KENYA. MAY 2025 DECLARATION Name of Student: Christa Kiprop Admission No.: 152491 Date: 20/05/2025 Signature Approval The dissertation by Christa Kiprop is reviewed and approved for examination by the following: Name of Supervisor: Professor Joseph Odhiambo Strathmore University Business School Date: 20/05/2025 Signature DEDICATION I wish to dedicate the dissertation presented herein to my dear family for mental and financial support, advice, and genuine corrections. ACKNOWLEDGMENTS This academic endeavor would not succeed without the grace of God. I thank God for keeping me well and allowing me to finish this project on time. I also acknowledge the support of my family. My family granted me both social and emotional support that kept me going. You were an encouragement when things seemed tough, and I will not take that for granted. In addition, I recognize and thank my supervisor, Professor Joseph Odhiambo, for the unwavering help and advice. Your invaluable support gave me the confidence to achieve my best. Finally, I recognize my friends for their support. v ABBREVIATIONS AND ACRONYMS BCM Billion Cubic Meters CEO’s Chief Executive Officers EPRA Energy and Petroleum Regulatory Authority KMO Kaiser-Meyer-Olkin M3 Cubic Meters NACOSTI National Commission for Science, Technology and Innovation SMEs Small and Medium Enterprises US United States RBV Resource-Based View Theory vi TABLE OF CONTENTS DECLARATION............................................................................................................... ii DEDICATION.................................................................................................................. iii ACKNOWLEDGMENTS ............................................................................................... iv ABBREVIATIONS AND ACRONYMS ......................................................................... v LIST OF TABLES ........................................................................................................... xi LIST OF FIGURES ........................................................................................................ xii ABSTRACT .................................................................................................................... xiii CHAPTER ONE ............................................................................................................... 1 INTRODUCTION............................................................................................................. 1 1.1 Background of the Study ............................................................................................ 1 1.1.1 Strategic Agility ................................................................................................... 2 1.1.2 Industry Competitiveness .................................................................................... 5 1.1.3 Petroleum Companies in Kenya .......................................................................... 5 1.2 Statement of the Problem ............................................................................................ 6 1.3 Research Objectives ................................................................................................... 8 1.3.1 General Objective ................................................................................................ 8 1.3.2 Specific Objectives .............................................................................................. 8 1.4 Research Questions ..................................................................................................... 8 1.5 Scope of the Study ...................................................................................................... 9 1.6 Significance of the Study ............................................................................................ 9 1.7 Chapter Summary ..................................................................................................... 10 CHAPTER TWO ............................................................................................................ 11 LITERATURE REVIEW ............................................................................................... 11 vii 2.1 Introduction .............................................................................................................. 11 2.2 The Theoretical Foundation...................................................................................... 11 2.2.1 Evolutionary Theory of the Firm ....................................................................... 12 2.2.2 Dynamic Capabilities Theory ............................................................................ 14 2.3 Empirical Literature .................................................................................................. 16 2.3.1 Leadership Capability on Competitiveness of Petroleum Companies .............. 16 2.3.2 Resource Configuration on the Competitiveness of Petroleum Companies ...... 18 2.3.3 Strategic Sensitivity on the Competitiveness of Petroleum Companies ............ 20 2.3.4 Marketing Orientation on the Competitiveness of Petroleum Companies ........ 22 2.4 Summary of Research Gaps ..................................................................................... 24 2.5 Operationalization of Variables ................................................................................ 28 2.6 Chapter Summary ..................................................................................................... 30 CHAPTER THREE ........................................................................................................ 31 RESEARCH METHODOLOGY .................................................................................. 31 3.1 Introduction .............................................................................................................. 31 3.2 Research Philosophy ................................................................................................. 31 3.3 Research Design ....................................................................................................... 31 3.4 Population and Sampling .......................................................................................... 32 3.4.1 Population .......................................................................................................... 32 3.4.2 Sampling and Sample Size ................................................................................. 32 3.5 Data Collection Methods .......................................................................................... 33 3.6 Data Analysis ............................................................................................................ 33 3.7 Statistical Assumptions ............................................................................................ 34 3.7.1 Multicollinearity Test ........................................................................................ 34 viii 3.7.2 Heteroscedasticity Test ...................................................................................... 34 3.7.3 Normality Test ................................................................................................... 34 3.8 Research Quality....................................................................................................... 34 3.8.1 Reliability .......................................................................................................... 35 3.8.2 Validity .............................................................................................................. 35 3.9 Ethical Considerations .............................................................................................. 36 3.10 Summary of the chapter .......................................................................................... 36 CHAPTER FOUR ........................................................................................................... 37 DATA ANALYSIS AND PRESENTATION ................................................................ 37 4.1 Introduction .............................................................................................................. 37 4.2 Response Rate .......................................................................................................... 37 4.3 Demographic Information ........................................................................................ 37 4.3.1 Length of Service ............................................................................................... 37 4.3.2 Rate of Competitiveness of the Company ......................................................... 38 4.3.3 Gender ............................................................................................................... 38 4.4 Descriptive Statistics ................................................................................................ 39 4.4.1 Leadership Capability ........................................................................................ 39 4.4.2 Resource Configuration ..................................................................................... 40 4.4.3 Strategic Sensitivity ........................................................................................... 41 4.4.4 Marketing Orientation ....................................................................................... 43 4.4.5 Competitiveness of Petroleum Companies ........................................................ 44 4.5 Diagnostic Tests ....................................................................................................... 44 4.5.1 Test for Multicollinearity................................................................................... 45 4.5.2 Normality Tests ................................................................................................. 45 ix 4.5.3 Heteroscedasticity .............................................................................................. 46 4.6 Inferential Analysis................................................................................................... 47 4.6.1 Correlation Analysis .......................................................................................... 47 4.6.2 Regression Analysis .......................................................................................... 48 CHAPTER FIVE ............................................................................................................ 51 DISCUSSION, CONCLUSION AND RECOMMENDATIONS ............................... 51 5.1 Introduction .............................................................................................................. 51 5.2 Summary of the study ............................................................................................... 51 5.3 Discussion ................................................................................................................. 53 5.3.1 Leadership Capability and Competitiveness of Petroleum Companies ............. 53 5.3.2 Resource Configuration and Competitiveness of Petroleum Companies .......... 54 5.3.3 Strategic Sensitivity and Competitiveness of Petroleum Companies ................ 55 5.3.4 Marketing Orientation and Competitiveness of Petroleum Companies ............ 57 5.4 Conclusion ................................................................................................................ 58 5.5 Recommendations .................................................................................................... 59 5.6 Study contribution .................................................................................................... 60 5.7 Limitations for the Study .......................................................................................... 61 5.8 Suggestions for Further Studies ................................................................................ 62 REFERENCES ................................................................................................................ 63 APPENDICES ................................................................................................................ 73 Appendix I: Informed Consent ....................................................................................... 73 Appendix II: Questionnaire ............................................................................................. 75 Appendix III: Budget .................................................................................................... 104 Appendix IV: Work Plan .............................................................................................. 105 x Appendix V: List of Registered Oil Companies in Kenya ........................................... 106 Appendix VI: NACOSTI Permit .................................................................................. 109 Appendix VII: Strathmore Ethical Review Approval .................................................. 111 xi LIST OF TABLES Table 2.1: Summary of research Gaps .............................................................................. 24 Table 2.2: Operationalisation of Research Variables ....................................................... 29 Table 3.1: Reliability Test Results .................................................................................... 35 Table 4.1: Response Rate .................................................................................................. 37 Table 4.2: Length of Service ............................................................................................. 38 Table 4.3: Rate of Competitiveness of the Company ....................................................... 38 Table 4.4: Gender.............................................................................................................. 39 Table 4.5: Descriptive Outcomes for Leadership Capability............................................ 39 Table 4.6: Descriptive Outcomes for Resource Configuration ......................................... 40 Table 4.7: Descriptive Results for Strategic Sensitivity ................................................... 41 Table 4.8: Descriptive Outcomes for Marketing Orientation ........................................... 43 Table 4.9: Descriptive Statistics for Competitiveness of Petroleum Companies ............. 44 Table 4.10: Multicollinearity Test Outcomes ................................................................... 45 Table 4.11: Normality Test Results .................................................................................. 45 Table 4.12: Correlation Statistics ...................................................................................... 47 Table 4.13: Model Summary ............................................................................................ 48 Table 4.14: ANOVA ......................................................................................................... 49 Table 4.15: Multiple Regression Coefficients .................................................................. 49 xii LIST OF FIGURES Figure 2.1: Conceptual Framework ................................................................................... 28 Figure 4.1: Heteroscedasticity results ............................................................................... 47 xiii ABSTRACT The petroleum sector plays a critical function in driving global economic transformation, influencing key policy objectives such as decarbonization, inflation control, and improvements in living standards. However, the sector faces mounting challenges due to rapid technological advancements, globalization, shifting customer preferences to other sources of energy, and heightened sustainability expectations. These dynamics necessitate greater innovation and strategic agility among firms to sustain competitiveness. This study investigated the influence strategic agility on the competitiveness of petroleum companies in Kenya. There are many other forms of strategic agility like IT agility, awareness/sensing, decision and implementation, resilience, versatility and transformation. However the study narrowed down to leadership capability, resource configuration, strategic sensitivity and marketing orientation. Specifically, it examined the effect of leadership capability, resource configuration, strategic sensitivity, and market orientation on firm competitiveness. The investigation was based on the dynamic capabilities’ theory and evolutionary theory. A positivism research paradigm and descriptive survey design were employed. The target population comprised 60 registered petroleum companies in Kenya targeting one operations manager, sales manager and one of the pump attendants from each of the petroleum firm hence a census population of 180 employees. A structured questionnaire was adapted in collecting primary data and analysed by use of SPSS version 29 and the result presentation done using tables and charts. Both descriptive and inferential findings were explored. The findings indicated that leadership capability, resource configuration, strategic sensitivity, and market orientation positively and significantly influence competitiveness in the petroleum sector. It was concluded that strategic agility play a fundamental role in influencing competitiveness within the petroleum sector. The investigation recommends for investing in visionary and adaptive leadership, embrace technological advancements and automation, establish robust mechanisms for monitoring industry trends and regulatory changes, and enhance responsiveness to evolving customer needs and sustainability imperatives. These strategies are essential for maintaining competitiveness and ensuring resilience in a rapidly evolving energy landscape. 1 CHAPTER ONE INTRODUCTION 1.1 Background of the Study The energy sector is fundamental to global economic development, influencing key policy goals such as de-carbonization, living standards, and inflation. It is essential for powering industrial processes and heating homes (Liu et al., 2021). The industrialization of modern economies has been fuelled by non-renewable energy sources like coal, natural gas and crude oil (Sofia et al., 2022). However, global issues for example the COVID-19 pandemic and Russia-Ukraine war have disrupted energy markets, affecting the global supply of energy commodities (Allam et al., 2022). No industry can achieve competitiveness without strategic foresight, technological capability, and an agile workforce (Arokodare & Asikhia, 2020). The petroleum sector faces challenges in maintaining competitiveness due to rapidly changing technological environments, innovation, globalization, and evolving customer preferences. Competitiveness involves controlling market share and seizing business opportunities to outperform competitors (Holbeche, 2022). Competitiveness is defined by the capabilities that enable firms to do better in market compared to its peers (Cahyono et al., 2023). To achieve this, firms must consider both their internal capabilities and the operations of their competitors, as well as external resource capabilities that provide a competitive edge (Wu et al., 2023). International competitiveness reflects a ability of a company to generate wealth and value in global markets (Taneja et al., 2016). Strategic agility involves a firm’s preparedness to outperform competitors by attaining market share and also attaining a sustainable competitiveness (Fakunmoju et al., 2020). It is also the ability to detect and quickly adjust to businessal dynamics, ensuring competitiveness by reconfiguring and enhancing capabilities (Arokodare & Asikhia, 2020). The petroleum sector faces competitive disadvantages due to factors like globalization, slow technology adoption, and lack of strategic foresight (Gershman et al., 2 2016). Future preparedness in strategic agility involves leadership capability, resource configuration, strategic sensitivity, and market orientation (Clauss et al., 2019). Leadership capability includes effective communication, strategic forecasting, and human capital development. Strategic sensitivity involves insights, partnerships, and foresight. Market orientation encompasses pricing strategies, marketing planning, and market intelligence (Dirani et al., 2020). The world’s largest energy producers include Russia, the US, and Iran, with natural gas contributing significantly to global energy systems. By 2021, China led in natural gas imports, followed by Germany and other countries (Ahmed et al., 2023). Despite growth in production, Russia's gas industry faces challenges such as resource depletion and aging infrastructure (Shcherbakova et al., 2020). Agility in organizations is key to adopting 4.0 technologies, which allow firms to withstand dynamic business changes (Mrugalska & Ahmed, 2021). Technologies like cloud computing, big data, and smart manufacturing enhance organizational agility. In China, digitization has positively impacted competitiveness and sustainability in the petroleum sector (Ren et al., 2021). This research narrows to strategic agility and competitiveness in the Kenyan petroleum industry, addressing conceptual and contextual gaps. In Nigeria, the petroleum market face numerous challenges including supply disruptions and theft (Gajere et al., 2021). In Kenya, the dynamic global supply chain hampers coordination, affecting competitiveness, especially in the liquefied petroleum gas sector (Hachu & Paul, 2018). 1.1.1 Strategic Agility This is a fuzzy term and has been differently defined and operationalized by various scholars. In a study on strategic agility in global businesses, Shams et al. (2021) operationalized strategic agility using agile and sustainable production, supply chain agility and IT agility whereas Lyn Chan and Muthuveloo (2021) viewed it in terms of technologies, organizational capabilities and people. More the less, several scholars have 3 conceptualized strategic agility as leadership unity, resource fluidity and strategic sensitivity (Ivory and Brooks, 2018; Reed, 2021; Joshi, 2023; Clauss et al. 2019; de Diego Ruiz et al., 2023; Liang et al., 2018). Based on the definition and conceptualization of strategic agility, its usage and application depend on the contextual factors. Strategic agility entails the future preparedness of the firm and the major indicators of performing better than its competitors by attaining a bigger market share and hence a sustained competitiveness. (Fakunmoju et al., 2020). Strategic agility can also be seen as an enterprise to sense the dynamic fast-paced business environment changes and to respond swiftly to the changes by maintaining competitiveness and capturing the opportunities in the market through reconfiguring, mobilizing, enhancing, combining and building its capabilities leading to enhanced sustainability (Arokodare & Asikhia, 2020). It can also be defined to comprise three interrelated capabilities including operational, partnering and customer agility (Lengnick-Hall & Beck, 2016). The future preparedness of a firm could take the form of leadership capability, resource configuration, strategic sensitivity and market orientation (Clauss et al., 2019). Leadership capability entails effective communication, strategic forecasting as well as human capital development. Strategic sensitivity may involve partnerships among companies, strategic insights and strategic foresight. Market orientation on the other hand entails the pricing strategies of the firms, marketing planning as well as the market intelligence for expansion. Resource configuration includes human and financial resources, firm specific resources as well as information technology resources (Dirani et al., 2020). The management of the unforeseen changes and risks that could be faced by entities can be done through building strategic agility. It enables the firms to make utilization of the strategies with the goal of being flexible and responsive to the needs of the customers (Muchoki, 2022). The entities that have proven responsive to the unpredictable, diverse and changing needs of the clients on the front end while at the same time minimizing the supply disruption risks at the back end can be considered strategically agile. The strategic agility can be seen as proficiency of change management, which is a capability that allows the effective application of knowledge within organizations (Ahmed & Huma, 4 2021). Different scholars have measured the concept of strategic agility differently. The concepts share common items through with some concepts being different. According to the scholars, strategic agility entail IT agility/technological agility (Lyn Chan & Muthuveloo, 2021; Lengnick-Hall & Beck, 2016; Shams et al., 2021; Vrontis et al., 2023), supply chain agility (Shams et al., 2021), sustainable production (Shams et al., 2021), organizational capabilities (Lyn Chan & Muthuveloo, 2021), people (Lyn Chan & Muthuveloo, 2021), effective resource deployment/dynamic capability and adaptability to change (Joshi, 2023; Weber & Tarba, 2014; Lengnick-Hall & Beck, 2016; Vrontis et al., 2023), strategic sensitivity (Clauss et al., 2019; de Diego Ruiz et al., 2023; Joshi, 2023; Ivory & Brooks, 2018; Reed, 2021; Vrontis et al., 2023), leadership unity (Clauss et al., 2019; de Diego Ruiz et al., 2023; Joshi, 2023; Ivory & Brooks, 2018; Reed, 2021; Weber & Tarba, 2014), and resource fluidity/configuration (Clauss et al., 2019; de Diego Ruiz et al., 2023; Joshi, 2023; Ivory & Brooks, 2018; Reed, 2021). In addition, according to Palanisamy et al. (2022) strategic agility comprises awareness/sensing, decision and implementation while Prange and Hennig (2019) conceptualized strategic agility as resilience, versatility and transformation. Sampath and Krishnamoorthy (2017) studying at exploring the strategic agility constructed conceptualized it into resource reconfigurability, transformational leadership, learning, entrepreneurial market and strategic orientation. Focusing on Finnish public service sector, Liang et al. (2018) indicated that assessing public service organizations based on their leadership unity, resource fluidity and strategic sensitivity may affect their effectiveness in building strategic agility by adopting an approach of innovation that is user- driven. Commitment, competence, communications and climate as key items of strategic agility. In this study, leadership capability, resource configuration/ resource fluidity, strategic sensitivity and marketing orientation was adapted in the context of petroleum industry. 5 1.1.2 Industry Competitiveness Competitiveness entails capabilities that facilitate business enterprises to perform better compared to peers in the market (Cahyono et al., 2023). Competitiveness is viewed as a way of controlling the market share as well as seizing the available business opportunities leading to better performance than competitors (Holbeche, 2022). In ensuring that competitiveness is achieved, any business enterprise ought to consider the operations of its competitors and further its internal capabilities together. It involves putting into consideration the external resource capabilities as well as its resource endowments, which form a source of competitiveness to the organistion. The country or an entity’s’ ability to be competitive and make more wealth and value compared to the performance of its competitors is determined by international competitiveness. This is because the international markets provide a level environment for market competition (Taneja et al., 2016). In ensuring that competitiveness is achieved, any business enterprise ought to consider the operations of its competitors and further its internal capabilities together. It involves putting into consideration the external resource capabilities as well as its resource endowments, which form a source of competitiveness. The country or an entity’s ability to be competitive and make more wealth and value compared to the performance of its competitors is determined by international competitiveness. This is because the international markets provide a level environment for market competition (Taneja et al., 2016). Competitiveness entails the enduring and implicitly static favorable market position cleverly established because of assembling the right capabilities and competencies for making or delivering an offering that is better than the competition (Kamau et al., 2016). The firm’s performance is also intertwined amongst other activities of governments, partners, suppliers, its competitors, customers as well as its activities (Wuim-Pam, 2014). Competitiveness of the companies could be measured in terms of the market share of a particular company, product portfolio as well as the sales revenues or profitability (Akben-Selcuk, 2016). 1.1.3 Petroleum Companies in Kenya Kenya was initially poised to benefit greatly from the discovery of petroleum by Tullow 6 Oil, a development that was expected to elevate Kenya’s status on the global map. The prospect of these resources attracted interest from various global companies seeking to explore the potential of the reserves. However, the discovery came with several challenges, including environmental concerns, corruption, a weak revenue collection system, political activism, and a lack of capacity, among others. The oil discovery in Kenya faces significant hurdles such as inadequate technical capacity, limited bargaining power with foreign governments, political instability, lack of accountability and transparency, ineffective revenue management, and a fragile institutional framework (Kigwiru, 2020). Currently, 547 petroleum companies are licensed to operate in Kenya (Energy and Petroleum Regulatory Authority, 2024), with the study focusing on a sample of 60 licensed petroleum companies operating Nairobi City County. The Kenyan oil industry is dominated by foreign entities such as Rubis Energies, Shell, and Total. Rubis Energies has expanded its market share to 20.1% following its acquisition of Gulf Energy and Kenol Kobil, which held a 14.8% market share. Total ranks second with a 13.2% market share, bolstered by the 2017 acquisition of Gulf African Petroleum Corporation and its organic growth. Vivo Energy, which operates Shell-branded outlets, holds a 12.5% market share, while Ola Energy commands 5.4%, and the National Oil Corporation has a 4.4% market share. The Energy Regulatory Commission reviews oil prices in Kenya monthly (Energy and Petroleum Regulatory Authority, 2024). 1.2 Statement of the Problem Given the energy sector is a fundamental pillar of global economic development, as it directly affects policy goals such as de-carbonization, living standards and inflation as it is crucial for powering industrial processes as well as heating the people’s homes (Gajdzik et al., 2024). The industrialization of the modern industrialized economies has been aided by the development of the non-renewable sources of energy including natural gas, crude oil, and coal. Various business enterprises compete with the aim of enhancing their profitability, improving the satisfaction of customers, improved standards of living as well as social development in the long term (Adiguzel, 2020). Competitiveness therefore entails capabilities that facilitate business enterprises to perform better than their competitors 7 (Cahyono et al., 2023). Strategic agility entails the future preparedness of the firm and the major indicators of performing better than its competitors by attaining a bigger market share and hence a competitiveness (Fakunmoju et al., 2020). Petroleum industry firms have a competitive disadvantage because of the factors including globalization, innovation, creativity, changing preferences of customers, slow agility uptake to the technological development challenges, strategic foresight measures and poor adoption of information technology capabilities. This has affected the aggregate performance of the petroleum industry (Arokodare et al., 2019). The dynamic global supply chain has affected the effective coordination of the system because one member cannot compete as independent members in the supply chain, but rather as a group (Osei & Asante-Darko, 2023). The petroleum industry in Kenya comes with several challenges including inadequate capacity, political adequacy, low bargaining power with foreign countries, lack of accountability and transparency in the sector, weak revenue management and weak institutional framework (Kigwiru, 2020). Thus, the study at hand sought to determine strategic agility on the competitiveness of petroleum companies in Kenya. Studies including Shcherbakova et al. (2020); Gajere et al. (2021); Abdow (2019) have been conducted globally, regionally and locally that have presented knowdge gaps that the this investigation sought to adress. In Russia, an investigation by Shcherbakova et al. (2020) indicates the need for maintaining competitiveness in petroleum companies as it determines success, nature and scope of the activities of the entity and the chances of getting into new markets. The study, however, focused on high financial stability and strategic position as the key aspects of strategic agility using a dynamic method. However, the study at hand focuses on leadership capability, resource configuration, strategic sensitivity as well as marketing orientation. The study thus presented contextual, conceptual and methodological gaps as the Russian and Kenyan contexts with regards the petroleum firms may not be the same. An investigation by Gajere et al. (2021) noted that the petroleum market in Nigeria has been faced with shortcomings in the recent past including unreliable gas supply, fire outbreak, inadequate pipeline infrastructure, fuel pricing, kidnapping, pollution, crude oil theft, pipeline vandalism and oil spills in Niger Delta as well as strategic drifting. The study however focused on strategic resilience, 8 organizational flexibility and managerial culture. However, the study at hand focuses on leadership capability, resource configuration, strategic sensitivity as well as marketing orientation. The study also presented conceptual and contextual gaps. A study by Abdow (2019) in Kenya indicated that corporate communication, strategic forecasting, development of human capital and strategic controls significantly influenced strategic leadership on organizational change. The investigation at hand focuses on leadership capability, resource configuration, strategic sensitivity as well as marketing orientation. A conceptual gap was evident in the investigation as this research narrowed on the competitiveness of the petroleum companies in Kenya. 1.3 Research Objectives 1.3.1 General Objective The general objective was to explore the effect of strategic agility on competitiveness of petroleum companies in Kenya. 1.3.2 Specific Objectives The specific objectives determined, i. The effect of leadership capability on competitiveness of petroleum companies in Nairobi. ii. The effect of resource configuration on competitiveness of petroleum companies in Nairobi. iii. The effect of strategic sensitivity on competitiveness of petroleum companies in Nairobi. iv. The effect of marketing orientation on competitiveness of petroleum companies in Nairobi. 1.4 Research Questions i. How does leadership capability affect the competitiveness of petroleum companies 9 in Nairobi? ii. How does resource configuration affect the competitiveness of petroleum companies in Nairobi? iii. What is the effect of strategic sensitivity on the competitiveness of petroleum companies in Nairobi? iv. What is the effect of marketing orientation on the competitiveness of petroleum companies in Nairobi? 1.5 Scope of the Study There are many aspects of strategic agility as defined by scholars. However, this study narrowed to the effect of leadership capability, resource configuration, strategic sensitivity and marketing orientation on petroleum firms’ competitiveness. The research study was carried out with specific attention on petroleum companies’ competitiveness in Nairobi County. Specifically, the investigation focused on profitability and sales revenue, the number of customers as well as the product portfolio of the firms under study. In terms of theoretical scope, the study was guided by dynamic capability theory and evolutionary theory. There are 547 licensed petroleum companies operating in Kenya (Energy and Petroleum Regulatory Authority, 2023) forming population scope. The study thus sought the responses of the selected staff working at the petroleum companies including the operations manager, sales manager and a pump attendant. A descriptive research design guided the investigation and was undertaken in December 2024. 1.6 Significance of the Study The has considerable significance for different stakeholders, including future scholars, policymakers, and industry practitioners within the petroleum sector. To future scholars, the results enrich the current body of knowledge on strategic agility and competitiveness, particularly within the context of emerging markets such as Kenya. It provides a foundation for future academic inquiries by highlighting key dimensions of strategic agility—such as leadership capability, resource configuration, strategic 10 sensitivity, and market orientation—and their role in enhancing competitiveness. For policymakers, especially those involved in regulating the energy and petroleum sector, this investigation offers valuable lessons into the dynamic challenges facing petroleum companies and the strategic competencies necessary for long-term competitiveness. Understanding the impact of strategic agility can guide the formulation of supportive policies and regulatory frameworks that foster innovation, sustainability, and resilience in the energy sector. It also informs national development plans that align with global shifts toward decarbonization and energy security. For petroleum companies operating in Nairobi County and beyond, the investigation provides actionable insights into how firms can attain competitive edge in a rapidly evolving business environment. By identifying key agility drivers—such as adaptable leadership, effective resource utilization, and sensitivity to market trends, industry players can realign their strategic priorities to remain competitive, responsive, and resilient. The study’s recommendations can also support capacity building, investment planning, and strategic decision-making within the sector. 1.7 Chapter Summary The chapter discussed the research background and problem statement that necessitated the study. Additionally, it outlined the objectives of the study, presenting the general, specific objectives and research questions. Further, study scope and the research’s significance to practice, policy and research was outlined. The chapter ended with chapter summary. 11 CHAPTER TWO LITERATURE REVIEW 2.1 Introduction The chapter outlines the literature review on strategic agility and competitiveness of petroleum entities in Nairobi County. Review of literature both empirical and theoretical reviews as well as outlining research gaps and conceptual framework. It ends with chapter summary. 2.2 The Theoretical Foundation The dynamic capability theory and evolutionary theory guided the investigation. The two theories collectively provides a robust foundation for comprehending how firms operating in volatile and rapidly changing environments, such as the petroleum industry, can sustain competitiveness through strategic agility. The Dynamic Capabilities Theory (Teece et al., 1997) serves as the primary anchoring theory in this research. It emphasizes the firm’s capability to purposefully build, integrate, and reconfigure external and internal resources to match with the raid changes in the business environment. This theory moves beyond the static view of strategic resources by focusing on how organizations can dynamically adapt their resource base through innovation, strategic decision-making, and continuous transformation (Bleady et al., 2018). The relevance of this theory to the petroleum sector in Kenya lies in its call for firms to be flexible, innovative, and responsive to shifts in regulatory frameworks, technological developments, and customer expectations. Complementing this, the Evolutionary Theory of the firm provides a comprehensive perspective on organizational development. Rooted in the works of Nelson and Winter (1982) and further expanded by scholars like Argote (2012), this theory views firms as evolving entities that learn and adapt over time. It posits that organizational routines, capabilities, and strategies emerge through cumulative learning and innovation processes. From this perspective, strategic agility is not only about to respond to business related change but also about embedding adaptive learning mechanisms within the organization’s 12 structure and culture. Although each theory emphasizes different mechanisms—Dynamic Capabilities Theory focusing on purposeful reconfiguration and Evolutionary Theory emphasizing path- dependent learning and adaptation—they converge on the central idea that firms must continuously evolve to survive and succeed in dynamic environments. Together, these theories support the study's focus on strategic agility as a multifaceted capability involving leadership capability, resource configuration, strategic foresight, and market responsiveness. These theoretical lenses have been widely applied in strategic management research. Notable contributions include works by Arokodare et al. (2019), Wang et al. (2015), Lewandowska and Mikuła (2020), and Kraaijenbrink et al. (2010), who have demonstrated how organizations that embed dynamic capabilities and adaptive learning mechanisms are better positioned to navigate uncertainty and achieve sustained competitiveness. 2.2.1 Evolutionary Theory of the Firm The theory was first suggested by Coase (1937) and later proposed by Nelson and Winter (1982) and postulates that a firm during its tenure accumulates substantial knowledge as it builds its portfolio of a set of skills that are unique that are utilized in its operations. Wright (2007) indicates that the set of unique skills and capabilities inherent within the firm gives it a comparative advantage and enhances its sustainability and adaptability in the dynamic environment. Thus, overtime, organizations tend to develop more skill and capabilities that that are suitable to the changing environments hence become agile (Hölzl, 2005). This is an evolutionary path that the firm follows involving the firm as a knowledge processor (Holsapple & Li, 2008). According to the theory, the evolutionary approach explains the behavior of firms in adapting to dynamic market conditions through the interaction between natural selection and innovation (Lo, 2004). The Evolutionary Theory of the Firm suggests that firms transform across time via the knowledge accumulation and the development of routines and capabilities. It iterates the 13 significance of organizational learning, innovation, and flexibility in achieving long-term competitiveness (Teece, 2017). The theory is significant to the assessment because it highlights the role of leadership in facilitating organizational learning and adaptation to changing market conditions. Effective leaders can promote a learning culture within the company, encouraging experimentation, knowledge sharing, and responsiveness to environmental changes (Sonmez Cakir & Adiguzel, 2020). The theory also underscores the dynamic nature of resource management and the necessity for firms to evolve and adapt over time. Strategic sensitivity aligns with the evolutionary perspective, which views firms as adaptive systems that continuously scan their environment for signals of change. Firms possessing better levels of strategic sensitivity are better prepared to learn from their environment and adapt their strategies to remain competitive. Marketing orientation aligns with an evolutionary perspective, which emphasizes the importance of firms' responsiveness to changes in customer preferences and market dynamics (Silva et al., 2017). Firms that are market-oriented are more likely to adapt these strategies and offerings in line with changing customer needs, promoting their competitiveness over time. Additionally, Evolutionary Theory of the Firm highlights the significance of leadership in facilitating organizational learning and adaptation to changing market conditions. Effective leaders can promote a learning culture within the company, encouraging experimentation, knowledge sharing, and responsiveness to environmental changes. In terms of resource configuration, Evolutionary Theory of the Firm is crucial. Resource configuration can be viewed as an evolutionary process, where firms continuously adjust and refine their resource portfolios in response to environmental changes. This theory underscores the dynamic features of resource management and the need for firms to evolve and adapt over time. Evolutionary Theory of the Firm is also pertinent in understanding strategic sensitivity. Strategic sensitivity aligns with the evolutionary perspective, which views firms as adaptive systems that continuously scan their environment for signals of change. Firms possessing better levels of strategic sensitivity are well placed to learn from their environment and adapt their strategies to remain competitive. 14 Finally, marketing orientation aligns with the evolutionary perspective, which emphasizes the importance of firms' responsiveness to changes in customer preferences and market dynamics. Firms that are market- oriented are more likely to integrate these strategies while aligning with evolving customer needs, promoting their competitiveness over time. Research drawing on Evolutionary Theory often explores how firms evolve and adapt over time to remain competitive in dynamic environments. For instance, a study by Lewandowska and Mikuła (2020) investigated the emergence of organizational capabilities and agility while focusing at Polish manufacturing sector. The researchers examined how firms' strategic responses to environmental changes and market dynamics contributed to their agility and competitiveness. The theory is relevant to the investigation as underscores that over time, firms evolve through knowledge accumulation as well as through development of capabilities and routines to adapt to the dynamic business environments. The theory recognizes the role of organizational learning, flexibility, innovation and leadership in promoting sustainable long-term competitiveness of the organization and adaptation to the dynamics in the business environment. The theory thus informs the four constructs of strategic agility including leadership capability, resource configuration, strategic sensitivity as well as marketing orientation. 2.2.2 Dynamic Capabilities Theory The Dynamic Capabilities Theory was started by Teece et al. (1997) to offer a more dynamic approach to achieving competitiveness, building on earlier resource-based frameworks. This theory focuses on how firms reconfigure, deploy, and integrate their resources in response to dynamic market conditions. Unlike static theories, which emphasize possessing valuable resources, this theory underscores the significance of adapting and aligning a firm’s resource base to maintain competitiveness over time (Teece, 2014). Dynamic capabilities is the ability of an entity to sense threats and opportunities in the market, seize them, and reconfigure its resources accordingly (Teece, 2007). Wang et al. 15 (2015) argue that firms with stronger dynamic capabilities perform better, as they are more adept at adapting to market shifts. As per the theory, firms must maintain organizational agility to remain competitiveness in the dynamic environments. Leadership plays an important role in driving organizational change. Effective leaders guide firms through adaptation by promoting culture of innovation, flexibility, and continuous improvement (Lopez-Cabrales et al., 2017). Resource reconfiguration is key to ensuring firms remain agile and aligned with market opportunities, a process that maintains operational efficiency while responding to external pressures. The theory is highly important to this study, particularly in areas such as leadership capability, resource configuration, strategic sensitivity, and marketing orientation. In terms of leadership capability, the theory highlights how leaders must foster organizational agility, ensuring that firms can adapt these strategies and resources to shifting market conditions. In resource configuration, the theory emphasizes the capability of an entity to continuously adapt its resources to dynamic market changes. This aligns with the study's focus on managing a firm’s resources to sustain competitiveness over peers in the market. Strategic sensitivity is another key aspect of the theory, emphasizing the ability to respond and sense to environmental changes. Firms with high strategic sensitivity can anticipate market shifts, allowing them to adjust their strategies and maintain a competitive edge. Additionally, marketing orientation aligns with the theory by focusing on understanding and meeting customer needs while staying ahead of market trends. Firms with strong capabilities in marketing can innovate, build better customer relationships, and refine their offerings to maintain long-term competitiveness. Several studies have applied Dynamic Capabilities Theory to examine how firms develop and deploy resources to adapt to dynamic environments. For example, Wang et al. (2015) explored how dynamic capabilities enhanced organizational agility in China’s manufacturing industry. Their findings revealed that firms capable of reconfiguring their 16 resources in response to technological and market shifts were better able to maintain competitiveness. 2.3 Empirical Literature The section presents a synthesis of researches conducted in relation to strategic agility and petroleum companies’ competitiveness. The section also identifies the gaps existing from past studies and the empirical work that the investigation sought to fill. 2.3.1 Leadership Capability on Competitiveness of Petroleum Companies The dominant theory for this research question would likely be Dynamic Capabilities Theory. This theory puts emphasis on the role of leadership in driving changes in organizations, adaptation, and competitiveness. Leaders with strong capabilities in strategic agility, decision-making, and innovation can effectively steer the company towards competitiveness by encouraging a norm of responsiveness and continuous improvement of the dynamics in the market. There is research that has been carried out to demonstrate the link between leadership and competitiveness of various organizations. A study by Abdow (2019) in the Kenyan petroleum sector on strategic leadership on organizational change. A descriptive research design was employed with a target population including 234 participants including 187 directors and 47 CEOs. Utilizing a questionnaire, primary data was collected. Basing on the results, corporate communication, strategic forecasting, development of human capital and strategic controls significantly influenced strategic leadership on organizational change. Another empirical investigation was conducted by Arami (2016) focusing on the leadership of the projects on the Kuwait petroleum industry. The results indicated that status, group oriented and value-based leadership styles as well as face saving are emphasized in the Middle East. However, global studies often value a set of isolated features of effective leaders and fail to consider situational effects. Project managers exhibited some differences in their leadership styles in comparison to countries in the west. The study, nonetheless, 17 presented methodological, contextual and conceptual gaps as the study largely relied on interviews in its investigation. Thomas (2020) did an investigation about style of leadership and employee performance in the petroleum sector. The outcomes pointed out of effective leadership motivates its staff towards the direction of the organization’s vision. Thus, to address the objective of the organization as well as achieving its sustainability in the petroleum business, the role of leaders is critical. In the long term, the democratic style of leadership is efficient while in the short term, autocratic style of leadership is effective. Gajere and Nimfa, (2021) undertook a study on strategic drift and the culture of organizations in Nigeria petroleum companies. A survey research design with the utilization of primary data. As per the outcomes, managerial culture, the flexibility of organizations and strategic resilience significantly and positively related with the culture of Nigerian petroleum organizations. Even though the investigation centered strategic agility of the petroleum companies, the research was done based on the Nigerian context whereas this research at hand was done based on the Kenyan context. Zulkifli (2022) did carry out research on critical review, the framework of strategic agility on the Indonesian petroleum sector competitive dynamics. From the outcomes, the companies under review ought to be agile considering the dynamic nature of the business in the sector to enhance their performance. Thus, these companies must influence their operational performance by integrating and combining dynamic capability variables including absorptive capacity, competency, culture and leadership to remain competitive. Through unity in leadership, commitments and collective efforts towards taking actions in response to emerging threats/opportunities would be effective. Onyango (2017) in a study on how focus strategies, differentiation and cost leadership influences the competitiveness of firms at BOC Kenya limited utilized Survey research design was adopted. The outcomes pointed out that focus strategies, differentiation and cost leadership positively and significantly related with competitiveness of the firms. Thus, a combination of all three brings forth a higher competitive edge. The study however presented contextual and gap as the investigation was conducted focusing on the petroleum companies in Indonesia. 18 2.3.2 Resource Configuration on the Competitiveness of Petroleum Companies With regards to the role of resource configuration on the competitiveness of the petroleum firms in Kenya, the dominant theory for this research question Dynamic Capabilities Theory. This theory puts emphasis on the role of resource configuration in driving changes in organizations, adaptation, and competitiveness. Leaders with strong capabilities in strategic agility, decision-making, and innovation can effectively steer the company towards competitiveness by integrating resources well while encouraging a norm of responsiveness and continuous improvement of the dynamics in the market. There are studies that have been carried out demonstrate the link between resource configuration and competitiveness of various organizations. Among such studies include a study by Al-Frijawy and Militaru (2018) on how human resource management influence oil companies’ competitiveness in Iraq. From the results, there should be participation of human resource management in implementation and establishment of the strategies of the company in achieving competitiveness. This includes offering services to customers that are superior to those of the competitors in terms of pricing and quality. This can be achieved by employing qualified labor, enhancing service quality, productivity and considering market changes. In a study on management of strategic resources in projects in petroleum sector, Al-Hanshi et al. (2022), the attributes of resources including organizational support and value influenced innovative environment and dynamic capabilities and related positively with the competitiveness. However, the attributes including inimitability and rareness exhibited less evolution. The proper alignment of human resources, financial and facility resources drive competitiveness in a firm. The study, however, presented methodological and contextual gaps, as the investigation at hand largely depended on quantitative data. The research presented a contextual gap, as the current investigation was undertaken in Iraq. Van Alstine et al. (2014) did an investigation on the dynamics of the governance of resources, focusing on the challenge of ‘new oil’ in Uganda using an inductive and qualitative approach. From the outcomes, four gaps were notable including weak local 19 government capacity, industry driven interaction at the local level, the deliberate centralization of oil governance, limited civil society access to communities and lack of agreement among the civil society organizations. Corporate social responsibility activities and resource governance issues particularly those related to transparency do not go well with the development trajectory. The study, however, presented methodological and contextual gaps, as the current investigation largely depended on quantitative data. Santana- Sarmiento et al. (2019) in a study focusing at wind energy in Tenerife and Gran Canaria pointed out that the complementary resource endowment in the wind power in Island of Gran Canaria, is better while the value of its basic resources is low. Gran Canaria outperforms Tenerife in terms of capabilities due to proximity, innovation and demand. There is more robust institutional and governmental support in Tenerife. For the wind energy sector competitiveness to be possible, resource capabilities as critical strategic endowment to use. The study however presented methodological and contextual and contextual gaps. Menhat (2015) conducted research on resources-based view perspectives the system of measuring performance of petroleum supply chain. The outcomes argued that the system of measuring performance complies with three basic characteristics of RBV is proposed in order to be competitive. The characteristics should be inimitable, nontransferable and valuable. These basic features are necessary for the performance of the entities to sustain their sustainability. The results are also backed by the findings of Maina (2022) focusing on the Kenyan Insurance firms on strategic agility and competitiveness employing cross- sectional research design. The target population was 58 insurance entities operating in Kenya. From the outcomes, the practices of strategic agility contributed positively towards enhancing the competitiveness of the entities under review. The focus of the research was on strategic agility of the insurance firms in Kenya whereas the current research is focused on strategic agility of petroleum entities in Nairobi County, hence presenting a contextual gap. Finally, a study by Menhat (2015) employed resource based view theory while this study employed dynamic capability theory bring about theoretical gap. Dynamic capability theory emphasizes about resource reconfiguration to align with organization objectives, 20 which is not done by resource based view theory. 2.3.3 Strategic Sensitivity on the Competitiveness of Petroleum Companies The dominant theory for this research question could be a combination of Dynamic Capabilities Theory and Evolutionary Theory of the Firm. Both theories emphasize the importance of responsiveness of the entities to dynamics in their environment and their ability to adapt and evolve over time. Strategic sensitivity involves the ability of the firm to anticipate and adjust to dynamics in the external environment, aligning closely with the core concepts of these theories. There are research that have been done to demonstrate the link between resource configuration and competitiveness of various organizations. Among such studies, include a research by Fakunmoju et al. (2020) on the moderating role of strategic foresight and information technology capability and on the association between strategic agility and competitiveness of petroleum marketing entities. A survey research design was employed with 515 management teams of the marketing firms under review making up the target population. The results indicated that strategic foresight and information technology capability exhibited strong moderating effect on the association between strategic agility and competitiveness in the petroleum-marketing firms. Hamed (2023) further investigated how strategic sensitivity influences car and equipment manufacturing companies’ sustainable competitiveness. Data collection was done by employing an analytical approach from a sample of 195 participants. From the outcomes, a significant positive and association was exhibited between sustainable competitiveness and strategic sensitivity. From the results, the strategic insight indicator portrayed greatly influenced sustained competitiveness followed by strategic foresight. However, there is a conceptual gap as the study viewed strategic foresight as a moderator, but previous studies have regarded it as one of the antecedents of strategic agility. In in Uyo, Akwa Ibom State, Nigeria, Ekanem et al. (2023) did a study in 11 selected deposit- taking banks on strategic sensitivity and competitiveness of the bank utilizing survey research design. The respondents included the staff of the selected banks. From the 21 outcomes, the strategic sensitivity and the competitiveness of the selected banks are positively related. In addition, the performance of the banks with low strategic sensitivity was lower compared to the performance of the banks with higher strategic sensitivity. Thus, it is necessary for the organizations to improve on their state as a way of enhancing their commitment towards strategic sensitivity. According to the author, mapping and responding rapidly to the market is key to attaining strategic agility and is vital for more expansion and understanding customer needs. A similar study was conducted In Nigeria by Adim and Maclayton (2021) focusing strategic sensitivity and responsiveness of the firms dealing in fast moving consumer goods. The investigation used a target population of 9 firms employing cross-sectional survey design. From the outcomes, the strategic sensitivity and the responsiveness of the companies are positively related. Strategic insight and strategic foresight correlated significantly and positively with the corporate responsiveness of the companies under review. These studies exhibited conceptual, contextual and methodological gaps. A study was conducted by Majimbo and Namusonge (2020) on strategic innovation and ‘Nairobi County marketing entities ‘performance using a target population of 94 registered entities and a descriptive research design. From the outcomes, product innovation, market innovation and organizational innovation exhibited a positive relationship with performance. Thus, the study concluded of a positive strong influence of strategic innovation on the performance of oil marketing entities. This study presented contextual and conceptual gaps. Focusing on Vivo energy, Nderitu and Njuguna (2017) did carry out a study on how the expansion of retail network influences competitiveness of oil-marketing firms. A descriptive research design was adopted with a target population of 110 staff providing services at the headquarters of Vivo energy. From the results, the expansion of retail networks positively and significantly influences the competitiveness of Vivo energy. Mwachia et al. (2023) further carried out research on the impact of dimensions of organizational agility on Kenyan coast counties’ hotel industry performance. The study employed descriptive research design in providing a description of the key characteristics 22 of the sample population with the intent of establishing relations among the key variables of the investigation. The research results pointed out a positive strong correlation between Online Business and performance of hotel industry in Kenyan coast counties, indicating that there was a significant positive influence of online business on the performance of the hotel industry in coast region. The study was centered on organizational agility dimensions of the hotel industry in coastal counties of Kenya whereas the study at hand is focused on strategic agility of Petroleum companies in Nairobi County, hence presenting a contextual gap. 2.3.4 Marketing Orientation on the Competitiveness of Petroleum Companies The evolutionary theory of the firm postulates that a firm during its tenure accumulates substantial knowledge as it builds its portfolio of a set of skills that are unique that are utilized in its operations. The set of unique skills and capabilities inherent within the firm gives it a comparative advantage and enhances its sustainability and adaptability in the dynamic environment. Thus, overtime, organizations tend to develop more skill and capabilities that that are suitable to the changing environments hence become agile. There are studies that have been carried out to demonstrate the link between resource configuration and competitiveness of various organizations. Among such studies, include a study by Alao et al. (2020) on the moderating effect of resource capabilities on the association between strategic marketing and the Nigerian petroleum products entities’ competitiveness using a target population of 1568 managers and a cross-sectional research design. The outcomes pointed out that strategic marketing and competitiveness have positive and significant relationship while no significant moderating role of resource capability on the association between strategic marketing and competitiveness. Further, Oyakhire and Akpan (2021) did an investigation in Nigeria focusing on the competitive strategies and petroleum companies’ performance. A panel research design was utilized. From the outcomes, the petroleum business is highly competitive and turbulent and thus the need for these firms to be competitive by providing superior services to its customers. They should also learn to adapt to dynamic environment utilizing competitive strategies to enhance their performance. The outcomes demonstrate that competitive strategy and 23 organizational performance are positively and significantly related. The studies, however, presented contextual, methodological and conceptual gaps. Employing resource-based view, Fakhreddin and Foroudi (2022) investigated the impact of market orientation on the performance of new products through product launch quality. Market orientation was operationalized using market intelligence gathering, dissemination and responsiveness to market analysis. Structural equation modeling was utilized in the analysis of data. Furthermore, the performance of new products is significantly influenced by market orientation. In Russia, Ekaterina and Dornberger (2014) in Tatarstan knowledge- intensive companies investigated how market orientation is influenced by business performance. From the results, responsiveness, intelligence dissemination and intelligence generation were utilized in measuring market orientation. High-tech companies working in sectors such as engineering, biotechnology and chemical industries were sampled. In knowledge-intensive industries, the performance of non- financial and financial businesses is positively influenced by market orientation. Namagembe (2022) conducted a research on marketing strategy, capability and orientation of petroleum firms. From the results, marketing strategy, marketing capability and marketing orientation had an influence on marketing strategy. The capability of a firm to market had an influence on the strategy employed by the firms in Marketing. Furthermore, a partial mediation effect of marketing capability of the firm on the association between marketing orientation and marketing strategy was observed. Adefulu et al. (2020) in a study in Nigeria on how competitiveness of selected companies dealing in petroleum products marketing is influenced by innovation culture and strategic marketing. The results indicated that strategic marketing dimensions including marketing decision, marketing analysis, marketing planning and marketing orientation positively and significantly related to competitiveness and innovation culture of the selected petroleum products marketing entities. The studies, however, presented contextual, methodological and conceptual gaps. An investigation was carried out by Mansouri et al. (2022) on the mediating influence of market orientation between internal marketing and entrepreneurial orientation by focusing at private sports clubs. A descriptive-correlational study was used. From the outcomes, the 24 entrepreneurial orientation of the employees positively related to internal marketing. The results further pointed out a positive mediating role of market orientation in the association between entrepreneurial orientation and internal marketing. Ogolla et al. (2017) did carry out an investigation on the association between strategic agility and the performance of organizations. The target population included senior staffs and the top managers of Kenyan state corporations. From the outcomes, strategic agility and the performance of organizations positively and significantly related. Individual strategic agility components are positively related to organizational performance. The components include organizational position, work experience and age significantly related to strategic agility. Gender and educational level had no significant relationship. The studies, however, presented contextual and conceptual gaps. 2.4 Summary of Research Gaps Numerous researches have been done around the area of study. However, out of these studies, there were notable study gaps that the current investigation addressed. Table 2.1: Summary of research Gaps Author Topic Results Research Gap Focus of the Study Abdow (2019) Strategic leadership on organizational change in Kenya Corporate communication, human capital development, strategic direction, controls and forecasting significantly influenced strategic leadership on organizational change A conceptual gap as it dwells on strategic leadership and organizational change The current investigation focuses on the effect of leadership capabilities, resource configuration, strategic sensitivity and marketing orientation on the competitiveness of petroleum companies in Kenya 25 Thomas (2020) Style of leadership and petroleum sector employee performance Autocratic leadership style is quite effective in the short term while in the for all times, democratic leadership style is useful A conceptual gap as it dwells on style of Leadership and employee performance The current study seeks to relate leadership capabilities and competitiveness of the petroleum firms in Kenya Al-Frijawy and Militaru (2018) Human resource management influence oil companies’ competitivenes s in Iraq There should be participation of human resource management in implementation and establishment of the strategies of the company in achieving competitiveness Focused on the nexus between HRM on the competitiveness of oil companies in Iraq hence presenting contextual and conceptual gaps. The context of Iraq and that of Kenya may not be the same The current investigation focuses on the nexus between resource configuration and competitiveness of petroleum companies in Kenya Al-Hanshi et al. (2022) Management of strategic resources in projects in petroleum industry The attributes of resources including organizational support and value influenced innovative environment and dynamic Capabilities and related positively with the competitiveness. However, the attributes including inimitability and rareness exhibited less evolution. Focused on strategic resource management in petroleum industry projects hence outlining both contextual and conceptual gaps The current research focuses on resources configuration and competitiveness of petroleum entities in Kenya 26 Ekanem et al. (2023) Strategic sensitivity and competitivenes s of selected DT banks in Uyo, Akwa Ibom state Strategic sensitivity and competitiveness of firms related significantly. The study was conducted in Nigeria focusing on selected deposit money banks presenting conceptual and contextual gaps The current investigation focused on petroleum firms in Nairobi, Kenya Adim and Maclayton (2021) Strategic sensitivity and responsiveness of the companies dealing in fast moving consumer goods The strategic sensitivity and the responsiveness of the companies positively related. Strategic insight and strategic foresight correlated significantly and positively with the corporate responsiveness of the companies under review The study was conducted in Nigeria focusing on fast moving consumer goods companies presenting conceptual and contextual gaps The current research was carried out in Kenya with a focus on petroleum entities Alao et al. (2020) Moderating role of resource capabilities o n the n e x u s between competitivenes s and strategic marketing of selected Nigerian petroleum firms A significant positive association between strategic marketing and competitiveness and no significant moderating role of resource capability on the nexus between strategic marketing and competitiveness A research design used was cross-sectional survey presenting conceptual and contextual gaps Descriptive survey design was adopted 27 Namagembe , S. (2022) Marketing strategy, capability and orientation of oil and gas firms Marketing strategy, marketing capability and marketing orientation had an influence on marketing strategy. The capability of a firm to market had an influence on the strategy employed by the firms in Marketing. A partial mediation effect of marketing capability of the firm on the association between marketing orientation and marketing strategy was observed The investigation failed to interrogate the impact of leadership capability, resource configuration and strategic sensitivity to petroleum companies presenting contextual and conceptual gaps The current Research dwells on the effect of leadership capabilities, resource configuration, strategic sensitivity and marketing orientation on the competitiveness of petroleum entities in Kenya Source: Researcher, 2025 2.5 Conceptual Framework A conceptual framework outlines the association between variables in a research. In this investigation, the independent variables were leadership capability, resource configuration, strategic sensitivity and marketing orientation and the dependent variable was the competitiveness of petroleum firms, as depicted in Figure 2.1. 28 Figure 2.1: Conceptual Framework Independent Variables (Strategic Agility) Dependent Variable Source: Researcher, 2025 Adapted from dynamic capability theory by Teece et al. (1997) and evolutionary theory by Coase (1937) 2.5 Operationalization of Variables Strategic agility aspects namely leadership capabilities, resource configuration, strategic sensitivity and marketing orientation could have an effect on the competitiveness of petroleum firms in Kenya. The current investigation seeks to study this effect. Competitiveness of Petroleum Companies • Profitability and sales revenue • Number of Customers • Product portfolio Marketing Orientation • Pricing strategy • Marketing planning • Market intelligence for expansion Strategic Sensitivity • Strategic foresight • Partnerships • Strategic insight Resource Configuration • Financial resources • Human resources • Facility resources • IT resources Leadership Capability • Effective communication • Strategic forecasting • Human capital development 29 Table 2.2: Operationalisation of Research Variables Variable Measures Scale Author Leadership Capability • Effective communication • Strategic forecasting • Human capital development 5-Point Likert Scale Abdow (2019), Thomas (2020) and Zulkifli (2022) Resource configuration • Human resources • Financial resources • Infrastructural/facility resources • IT resources 5-Point Likert Scale Al-Frijawy and Militaru (2018), Al-Hanshi et al. (2022) and Santana- Sarmiento et al. (2019) Strategic sensitivity • Strategic foresight • Partnerships • Strategic insight 5-Point Likert Scale Fakunmoju et al. (2020), Hamed (2023), Adim and Maclayton (2021) Market Orientation • Pricing strategy • Marketing planning • Market intelligence for expansion • Product differentiation 5-Point Likert Scale Alao et al. (2020), Adefulu et al. (2020) and Fakhreddin and Foroudi (2022), Ekaterina and Dornberger (2014); Porter (2011) Competitive ness of petroleum companies • Profitability and sales revenue • Number of Customers • Product portfolio 5-Point Likert Scale Cahyono et al. (2023), Arokodare and Asikhia (2020), Holbeche (2022) Source: Researcher, 2025 30 2.6 Chapter Summary The chapter presents literature review covering both empirical and theoretical literature review. The theories guiding the study included evolution theory of the firm and dynamic capabilities theory. Furthermore, an empirical literature review was undertaken according to the objectives of the study that is on leadership capability, resource configuration, strategic sensitivity and marketing orientation. It also outlines the conceptual framework, operationalization of variables, and research gaps. 31 CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction The chapter presents the methods adopted to guide this research on strategic agility and competitiveness of petroleum companies in Nairobi County, Kenya. The methods covered include research philosophy, data collections techniques, research design, research procedures, sampling design, population, research procedures, how data analysis was done and the ethical issues to be observed during the investigation. 3.2 Research Philosophy This entails the beliefs guiding the methods of collection, analysis and usage of data. The philosophy provides a guide for the discoveries in science through their principles and assumptions (Sliirima, 2020). The quality of research findings and whether the findings identify gaps and support scientific research in generating sound evidence is illuminated by understanding the specific assumptions of paradigm. The investigation utilized a positivist research philosophy. Positivism research philosophy believes that only valid knowledge comes from measurable and observable phenomena. Thus, according to positivism research philosophy, reality is objective and can be understood via scientific methods (Park et al., 2020). The philosophy uses large samples to test hypothesis scientifically and only relying on empirically verifiable information. The philosophy rests on the reason and measurement that the revelation of knowledge is from a measurable and neutral observation reaction, action or activity. Thus, the philosophy premises on the need of following certain scientific approach to address research questions. 3.3 Research Design A research design is plan that the researcher adopted while undertaking a research. It outlines the framework of methods and techniques that have been adapted by other scholars providing answers to the research questions in a manner that is logical. Thus, it entails a plan that directs the overall research procedure (Salter, 2023). The study at hand used a descriptive cross-sectional survey design in answering research questions. In cross- 32 sectional research design, the variables are observed without being influenced. Descriptive cross-sectional studies characterize the prevalence of one or multiple attributes in a specified population (Wang & Cheng, 2020). This is because the investigation sought to investigate the association between strategic agility and competitiveness of the petroleum companies. The design is focused on collecting information about prevailing situations or conditions for the purposes of analysis and interpretation. 3.4 Population and Sampling 3.4.1 Population The target population involved the 60 registered petroleum companies in Nairobi City County, licensed and registered by EPRA as of December 2024 (List in Appendix IV). The study contacted three respondents from each of the 60 petroleum entities in Nairobi. The respondents included the operations manager, sales manager and one of the pump attendants. The personnel are involved in the strategic operations, leadership, resource mobilization and marketing in the petroleum companies. Thus, they have important information about strategic agility and its imapct on the competitiveness of petroleum companies. 3.4.2 Sampling and Sample Size The investigation undertook a census study of the 180 respondents (60*3) who were contacted to take part in the study. Census is appropriate for small sample sizes. According to Israel (2013), census is done for sample sizes less than 200 observation. Thus, the study contacted the operations manager, sales manager and one of the pump attendants in the 60 licensed petroleum companies operating in the 17 subcounty within Nairobi County. The investigation used simple random sampling to select the petroleum firms as the unit of analysis. The study randomly picked one station for each of 60 licensed petroleum entities operating in Nairobi County. However, purposive sampling was employed in selecting operations and sales managers in each of the petroleum entities to participate in the investigation as unit of observation. 33 3.5 Data Collection Methods The investigation used primary data that was gathered by employing a structured questionnaire that contained a set of structured questions that are meant to collect the data that is meaningful to the study (Burns & Burns, 2008). The questionnaire comprised of closed-ended questions presented in a Likert Scale ranging from point 1 to 5 where point 1 represents strongly disagree, 2 for disagree, 3 for neutral, 4 for agree and 5 for strongly agree. The researcher hired and trained two research assistants on the ethics and code of conduct during the investigation and who helped in administering the questionnaires to the respondents. Prior to the administration of the structured questionnaires, the management of the petroleum companies were adequately informed of the intention of research and intention of collecting data from these companies and data privacy issues to be observed. The questionnaires were then distributed to the sales and operations managers and one pump attendant from each of the 60 petroleum companies under study by issuing the questionnaires and giving the respondents ample time to fill before collected later. 3.6 Data Analysis Quantitative data analysis was effected because the questionnaires had closed ended questions. After receiving filled out questionnaires, the researcher conducted data cleaning to check for completeness of the questionnaires. Data entry was then done on an MS excel prior uploading the data on excel sheet to SPSS software for coding and analysis. The data analysis results were presented as inferential and descriptive statistics. The inferential statistics entail correlation and regression statistics. The descriptive statistics on the other hand entailed frequencies, means, percentages and standard deviations. Regression analysis was conducted using multiple regression models to explore the influence of leadership capability, resource configuration, strategic sensitivity and marketing orientation on the competitiveness of the petroleum companies in Nairobi County, Kenya. The multiple regression model provided below was used. The model that was estimated that was resourceful in answering research questions was: Where, 34 Y is competitiveness of the petroleum companies, β0, β1, β2, β3, β4 are constant terms, X1 stands for leadership Capability, X2 stands for resource configuration, X3 stands for strategic sensitivity and X4 stands for marketing orientation while e stands for the error term. 3.7 Statistical Assumptions A number of statistical tests were conducted to verify the validity of the OLS multiple regression analysis. They include Multicollinearity, Heteroscedasticity and Normality test. 3.7.1 Multicollinearity Test Variance Inflation Factor (VIF) was employed to check multicollinearity between study variables (Vörösmarty & Dobos, 2020. A VIF value below 5 was deemed acceptable, suggesting that there is no severe multicollinearity present (Shrestha, 2021). 3.7.2 Heteroscedasticity Test A scatter plot of the residuals helped identify heteroscedasticity. If the residuals display a random distribution around the mean, homoscedasticity can be assumed; otherwise, the presence of heteroscedasticity may indicate a violation of regression assumptions (Rosopa et al, 2013). Advanced methods like the Brant test may also be used to check for violations of the homoscedasticity assumption in OLS multiple regression models. 3.7.3 Normality Test Kolmogorov Smirnov test was employed in testing for normality (Drezner et al., 2010). The tested null hypothesis was that error terms in the data collected follows normal distribution. A computed p- value>0.05, the study fails to reject the null hypnosis. However, if the p- value<0.05, the null hypothesis is rejected and data errors does not follows normal distribution (Kwak, 2023). 3.8 Research Quality To enhance the quality of research, the investigation conducted reliability and validity of the data collection instrument. A pilot study was done on 10% of the sample size (18 respondents) participated to test the research instruments for validity and reliability. 35 3.8.1 Reliability The reliability test is significant because the results determine whether the questionnaire/instrument is able to gather data, that when analyzed can give meaning and reliable conclusions (Joppe, 2010). Thus, carrying out the test is essential before the actual data collection exercise is conducted. The study adopted Cronbach’s Alpha method with values >0.7 implying that the data collection instrument is reliable. If the Cronbach’s Alpha values are <0.7, then the outcomes imply that instrument is not reliable and the statements should either be omitted or improved (Daud et al., 2018). Table 3.1: Reliability Test Results Variable Cronbach's Alpha Leadership Capability 0.874 Resource Configuration 0.984 Strategic Sensitivity 0.870 Marketing Orientation 0.768 Competitiveness of Petroleum Companies 0.779 It can be observed that the Cronbach’s Alpha values for all the variables were >0.7 implying that the questionnaire was reliable and thus reliable to be used in the main data collection exercise. 3.8.2 Validity The test for validity is used in assessing whether the questionnaire can adequately measure what it is intended to measure of if the data collection instrument can adequately achieve the objective of the investigation (Joppe, 2010). Content and construct validity were measured in the study. For content validity, the input of the other experts and supervisors were sought to improve the contents instrument of data collection. For construct validity, the researcher conducted Kaiser–Meyer–Olkin (KMO) tests. 36 3.9 Ethical Considerations A letter introducing the researcher was sought by the researcher from Strathmore University Institutional Review Board for approval to collect data from the petroleum companies in Nairobi County, referenced SU-ISERC2275/24. A research permit from NACOSTI, reference number 382651. Before collecting data, the researcher ensured the respondents on the intention of the research and the confidentiality of the information from them. Thus, consent was sought from all the participants, and they were informed that their participation in the investigation was not mandatory. However, they were encouraged to participate. 3.10 Summary of the chapter The chapter outlined the methods used during the investigation including research philosophy, the target population encompassing the target population, sampling and sample size, the data gathering instrument, research design, data analysis, research quality as well as the ethical considerations. 37 CHAPTER FOUR DATA ANALYSIS AND PRESENTATION 4.1 Introduction The chapter presents how data was analysed and presented. In this investigation, primary data was collected by use of a structured questionnaire. The investigation purposely sought to explore how strategic agility affects the competitiveness of petroleum firms. In particular, the investigation sought to establish how leadership capability, resource configuration, strategic sensitivity and marketing orientation affect competitiveness of petroleum firms. 4.2 Response Rate The sample size for the study was 180 respondents comprising operations manager, sales manager and one of the pump attendants in each of the petroleum firms in Nairobi County. Thus, 180 questionnaires were administered to the participants. However, 133 questionnaires were duly filled and received back and hence a response rate of 73.9% which sufficient for research studies. A response rate of approximately 60% according to Fincham (2008) is sufficient for a research study. Table 4.1: Response Rate 4.3 Demographic Information This relates the characteristics pertaining to the respondents in the investigation. The investigation sought to analyze the demographic information of the participants including the length of time the respondents in the firms under study in years, their gender as well as the competitiveness of the firms under review. 4.3.1 Length of Service The investigation was intended to explore the number of years the respondents had been 38 serving in the firms under review as at the time of research. Table 4.2: Length of Service Years Frequency Percent Below 5 46 34.6 5 - 10 34 25.6 11 - 15 24 18 15 years and above 29 21.8 Total 133 100 From the results, 34.6% of the participants had been working in their respective companies for 5 years and below, 25.6% for between 5 to 10 years, 21.8% for 15 years and above and finally 18% for between 11 and 15 years. These outcomes give the implication that majority of the respondents had been working in the firms under investigation and hence were likely to be knowledgeable on the strategic agility practices adopted by the firm to enhance its competitiveness. 4.3.2 Rate of Competitiveness of the Company The investigation sought to explore the competitiveness of the companies under review. Table 4.3: Rate of Competitiveness of the Company Frequency Percent Low 15 11.3 Moderate 68 51.1 High 50 37.6 Total 133 100 From the outcomes, 51.1% of the participants indicated that the Petroleum companies they were working in were moderately competitive, 37.6% indicated that their companies were highly competitive with 11.3% indicating that the competitiveness of their companies was low. The outcomes indicated that more than 80% of the firms under study were at least moderately competitive. 4.3.3 Gender Table 4.4 presents the analysis outcomes of the gender of participants in the study. 39 Table 4.4: Gender Frequency Percent Male 87 65.4 Female 46 34.6 Total 133 100 From the outcomes, majority of those who took part in the investigation were male (65.4%) while 34.6% were female. This points out that majority of the management as well as the pump attendants in the Petroleum companies in Nairobi City County were male. The outcomes indicate that at least a third of the respondents were female implying the firms under study had likely achieved the two-third gender rule. 4.4 Descriptive Statistics The outcomes in the form of mean, SD and percentages. Primary data was used and questionnaires were to collect the data. A Likert scale of 1 to 5 was used in the measurement of the responses with the value of 5 representing strongly agree, 4 for agree, 3 neutral, 2 for disagree and 1 representing strongly disagree. Thus, a mean of 5 indicates that the average responses were strongly in disagree, 2 for disagreement, 3 for neutral, 4 for agreement and a mean of 5 implying that the responses were strongly in tandem. 4.4.1 Leadership Capability Table 4.5 presents summarized responses on the questions relating to leadership capability. Table 4.5: Descriptive Outcomes for Leadership Capability M S Dev Effective communication is essential in ensuring the competitiveness of petroleum companies 3.88 1.16 Consultative leadership is key in ensuring petroleum firms’ competitiveness 3.91 1.20 Providing for human capital development is a competitiveness for petroleum firms 3.97 1.19 Developing regular strategic forecasts is essential in ensuring competitiveness of petroleum entities 3.94 1.12 Timely implementation of strategic plans helps in ensuring competitiveness of petroleum entities 3.92 1.13 40 Providing staff welfare goes a long way in ensuring competitiveness of petroleum firms 3.86 1.13 Developing online presence is critical in ensuring competitiveness of petroleum entities 3.89 1.11 Aggregate Mean and SD 3.95 1.15 The statement on whether effective communication is essential in ensuring competitiveness of petroleum companies had a line mean and SD of the statement were 3.88 and 1.16 implying the responses were on average in concurrence. The question, consultative leadership is key in ensuring competitiveness of petroleum entities had an SD and a mean of 3.91 and 1.2 respectively. Furthermore, with a mean of 3.97 and SD of 1.19 the participants indicated that providing human capital development is a competitiveness for petroleum companies. Developing regular strategic forecasts is essential in ensuring competitiveness of petroleum entities received a mean of 3.94 and an SD of 1.12. Furthermore, the participants were in tandem with a mean of 3.92 and an SD of 1.13 that timely implementation of strategic plans helps in ensuring competitiveness of petroleum companies. Providing staff welfare goes a long way in ensuring competitiveness of petroleum firms received a mean of 3.86 and SD of 1.13. Finally, the question, developing online presence is critical in ensuring competitiveness of petroleum entities recorded a mean of 3.89 and an SD of 1.11. The aggregate mean and SD for the questions on leadership capability were 3.95 and 1.15 in that order meaning that the respondents were in tandem largely with the questions on leadership capability. 4.4.2 Resource Config