The Role of Networking Capability on Organization Performance: A Perspective of Private Universities in Kenya

Abstract

Private Universities in Kenya have continuously faced a number of challenges such as declining quality of educational programs, quality of research, authenticity of degrees granted, flexibility of the university programs, innovations created and efficient utilization of resources at their disposal. Despite the increasing number of students seeking higher education, these numbers have not translated to better performance in these Universities. Modern business environment calls for organizations, including private Universities to identify and exploit strategic capabilities for them to effectively compete and boost their performance. These universities need to harness their resources, and exploit their competences in order to gain competitive advantage. There is therefore a need for private universities to consider networking capability by creating, maintaining, and utilising relationships with relevant stakeholders in order to boost their performance. This study sought to establish the effect of networking capability on performance of private universities in Kenya. The study was anchored on the Resource Based View theory. It was founded on positivist research philosophy and adopted a cross-sectional descriptive survey research design. Primary data collected from faculty deans, registrars’ administrations and finance, human resource managers and ICT managers was used in the study. Data analysis was carried out using descriptive statistics; means, frequencies and standard deviations and inferential statistics (correlation and regression analysis). The study established that private universities adopted networking capability only to a moderate extent (mean=3.39). There was a significant effect of relational trust (β=0.194; P=0.001), relational capability (β=0.079; P=0.000), relational strength (β=0.103; P=0.017), coordination within networks (β=0.106; P=0.010), and information sharing (β=0.278; P=0.000) on performance of private universities. Initiation of business relationships (β=0.053; P=0.412), and learning for success (β=0.007; P=0.926) had no significant effect on university performance. Overall, the study concluded that networking capability has a significant effect on performance of private universities in Kenya. Based on this conclusion, the study recommended that that private universities in Kenya should focus on ways of creating, maintaining, and maximizing avenues for information sharing, trust amongst stakeholders, inter-university relations, strengthen relations, and improve coordination within their networks. The study contributes to the body of knowledge by proposing a strategic capability model for private universities (and to a great extent public universities) for improving their performance by redirecting their focus to networking capability.