The Mediating Effect of Organizational Capabilities and High-Performance Work System on the Relationship between Transformational Leadership Style and Competitive Advantage of Selected Manufacturing Firms in Kenya

Abstract

The aim of this research was to examine the mediation effect of Organizational Capabilities and High-Performance Work System on the relationship between Transformational Leadership and Kenya's selected manufacturing firms' competitive advantage. Data from 400 senior management staff of sampled firms with an employment level of between fifty-one (51) and five hundred persons (500) were collected using a descriptive research design. By adding together all of the codes from all 400 respondents, the mean responses on a Likert scale ranging from 1 to 5 for each of the tested items were determined.

The researcher equated the firms' competitive advantage with a reality phenomenon that prevails in Kenya, particularly in the manufacturing sector. Hence, in the spirit of accuracy, the researcher examined its prevalence and predicators by reviewing relevant empirical literature that concerned theories. It is from this that a conceptual framework was constructed with a set of variables: Transformational Leadership (TL) as an independent Variable (IV), Organizational Capabilities (OCs) as the first mediator (M1), High-Performance Work System (HPWS) as the second mediator (M2) and Competitive Advantage (CA) as the dependent Variable (DV).

According to the study's findings, manufacturing companies face difficulties in gaining a competitive advantage. As a result, managers should develop a high-performance work system that can influence the firms' organizational capabilities and help them attain a competitive advantage.

The study's findings add to the body of knowledge regarding Human Resource Practices, specifically HPWS and extend the literature on the relationship between Transformational Leadership, Organizational Capabilities, and Competitive Advantage. Ultimately, the study established that Organizational Capabilities mediated the relationship between Transformational Leadership and Competitive Advantage for manufacturing firms in Kenya. Additionally, the findings clarified the alignment of Organizational Capabilities and HPWS with CA for manufacturing firms in Kenya.