Moderating Effect of Adaptive Capacity on Workplace Diversity Practices and Organizational Performance: A Sectoral Analysis of Publicly Quoted Companies in Kenya
Abstract
The study examined the sectoral moderating effect of adaptive capacity on the relationship between workplace diversity practices and organizational performance of publicly quoted companies in Kenya. Anchored on dynamic capabilities theory, the study adopted a pragmatic philosophical underpinning through a convergent parallel mixed-methods design. The study targeted 168 respondents for the quantitative survey, comprising three senior managers, heads of human resource, finance, and strategy, from each of the 56 publicly quoted companies on the Nairobi Securities Exchange. Following pretesting, six companies were excluded from the final data collection, namely Sasini Plc from the Agricultural sector, Kenya Airways from the Commercial and Services sector, Bamburi Cement Ltd from the Construction and Allied sector, KenGen Plc from the Energy and Petroleum sector, CIC Insurance Group from the Insurance sector, and British American Tobacco Kenya Plc from the Manufacturing and Allied sector. This reduced the target population to 150 respondents from the remaining 50 companies. Out of the 150 questionnaires distributed, 132 were completed and returned, representing a response rate of eighty-eight percent. Data were analyzed using sectoral descriptive statistics and correlation analysis, while qualitative data were analyzed through thematic analysis. The study found that adaptive capacity is a dynamic, context-sensitive moderator that plays a positive and statistically significant moderating role on the relationship between internal, external, and organizational diversity practices and organizational performance across all sectors of publicly quoted companies on the Nairobi Securities Exchange, leading to rejection of the null hypothesis. Adaptive capacity demonstrated a more powerful role as a moderator than as a standalone performance predictor, a finding corroborated by qualitative evidence showing that process innovation, lean structures, and adaptive capacity are mutually reinforcing organizational capabilities. The study recommends that boards of directors and senior management of NSE-listed companies deliberately invest in sector-specific adaptive capacity frameworks alongside workplace diversity practices to achieve sustained organizational performance outcomes across all sectors of publicly quoted companies on the Nairobi Securities Exchange in Kenya.
Keywords: Adaptive capacity, workplace diversity practices, organizational performance, publicly quoted companies, Nairobi Securities Exchange, Kenya
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