Abstract:
The general objective of the study was to establish the relationship between strategic capabilities
and performance of selected commercial banks in Nairobi City, Kenya. Specific objectives; to
establish the influence of innovations capability on performance of selected commercial banks in
Nairobi City, Kenya, and to determine the influence of technical knowledge capability on
performance of selected commercial banks in Nairobi City, Kenya. The study adopted a descriptive
cross-sectional survey. The target population of this study comprised 3 commercial banks in
Nairobi County. The study population composed of 236 members of staff in at management level
currently working at head office of the commercial banks. The study sample was 149 respondents.
Stratified and simple random sampling technique was used to select the sample. The questionnaire
was the selected instrument or tool for data collection for the study. The researcher administered
the questionnaire individually to all respondents of the study. The study carried out a pilot study
to pre-test and validates the questionnaire. Quantitative data collected was analyzed by the use of
descriptive statistics using SPSS and presented through percentages, means, standard deviations
and frequencies. The information was displayed by use of bar charts, graphs and pie charts and in
prose-form. Multiple regressions were done to establish the influence of strategic capabilities on
performance of selected commercial banks in Nairobi County. The study found that relationship
between innovations Capability and performance of selected commercial banks in Nairobi City,
Kenya is significantly positive. Also, Technical Knowledge Capability and performance of
selected commercial banks in Nairobi City, Kenya is significantly positive. The study therefore
recommends management of the bank to embrace various forms of innovations including, product,
service, market, and process innovations. It is also recommended for banks to become more
proactive in developing products and services that create value for customers. Banks must also
empower their frontline executives to become more customer oriented as that presents an
opportunity to get customer inputs toward innovative decision making. Bank should improve its
technical knowledge capacity through Knowledge management, talents and skills acquisition,
Knowledge creation, Knowledge gathering, Knowledge diffusion and Knowledge use.