Does the ‘Process’ of Process Capital Matter to Performance? Evidence from Kenyan Commercial Banks
Keywords:
Process capital, firm performance, efficiency, Intellectual capitalAbstract
Globalization, changing customer expectation and shrinking product life-cycle depict process capital as a key source of competitive advantage. Consequently, organizations are gradually becoming more process oriented to survive a dynamic environment. Scanty literature exists on the process capital-performance causality hence glaring misconception on measurement of process capital. Previous studies overlooked the process aspect of process capital; which apparently is the most important to performance. Therefore, this study argues that the “process” of process capital is what matters to performance. This hypothesis is tested using panel data for the years 2008-2017extracted from a sample of 31 commercial banks in Kenya. The findings show that process capital has a positive and significant effect on performance (β = 0.275, ρ-value 0.000<0.05). Consistent with the resource based view the study concludes that knowledge resources have an influence on organizational outcomes.
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