Moderating Effect of Competitive Intensity on the Relationship Between Human Capital and Competitive Advantage of Regional Airlines Operating from Kenya
DOI:
https://doi.org/10.53819/81018102t5329Abstract
Regional airlines operating from Kenya face significant challenges in maintaining their competitive advantage due to intense competition from domestic and international carriers, particularly European and Middle Eastern airlines, which dominate the Kenyan airspace. Therefore, the current study examined the moderating effect of competitive intensity on the relationship between human capital and competitive advantage of airlines in Kenya. The study was informed by human capital theory. The study adopted an explanatory research design, targeting 764 employees from 10 IATA-accredited airlines in Kenya, with a sample size of 263 determined using Yamane's formula. The data was analyzed through inferential statistics. The model fitness results showed that the interaction between human capital and competitive intensity significantly explains 64.9% of the variations in competitive advantage, as indicated by the R-square value of 0.649. The regression results indicated that the interaction between human capital and competitive intensity has a positive and significant impact on competitive advantage. The study concludes that competitive intensity significantly moderates the relationship between human capital and competitive advantage of regional airlines operating from Kenya, with the impact of human capital becoming stronger in highly competitive environments. The study recommends that regional airlines operating from Kenya should prioritize human capital development as a key strategic objective, particularly in highly competitive markets. Airlines should focus on enhancing employee capabilities, promoting skill development, and fostering a culture of continuous learning and improvement, while also considering the level of competitive intensity in their strategic human capital management decisions.
Keywords: Human capital, competitive advantage, regional airlines, Kenya
References
Adeola, O., & Ezenwafor, K. (2021). Human capital, competitive strategies and airline performance in Nigeria. International Journal of Aviation Management, 5(2), 123-142.
Al Amin, O., M. & Maina, J. (2020). Organizational Resources and Competitive Advantage of Airline Companies Operating in Kenya. Journal of Strategic Management, 4(3), 50-68.
Al Hashmi, M. A. A. M., Azam, S. F., & Khatibi, A. (2020). Human Capital Management In The United Arab Emirates: A Study In Aviation Sector. European Journal of Management and Marketing Studies.
Auh, S., & Menguc, B. (2005). Balancing exploration and exploitation: The moderating role of competitive intensity. Journal of Business Research, 58(12), 1652-1661. https://doi.org/10.1016/j.jbusres.2004.11.007
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108
Becker, G. S. (1962). Investment in human capital: A theoretical analysis. Journal of Political Economy, 70(5), 9-49. https://doi.org/10.1086/258724
Becker, G. S. (1964). Human capital: A theoretical and empirical analysis, with special reference to education. University of Chicago Press.
Bora, B., & Wainaina, L. (2020). Competitive advantages and internal organization dynamics in Kenya Airways. African Journal of Hospitality, Tourism and Leisure, 9(2), 1-16.
Budhwar, P., Pereira, V., Mellahi, K., & Singh, S. K. (2019). The state of HRM in the Middle East: Challenges and future research agenda. Asia Pacific Journal of Management, 36(4), 905-933. https://doi.org/10.1007/s10490-018-9614-8
Chigozi, M. P., Aga, C. C., & Onyia, E. (2018). Effect of Human Capital Development in Competitive advantage in Manufacturing Industries in South-East Nigeria. International Journal of Academic Research in Economics and Management Sciences, 7(3), 60--78. https://doi.org/10.6007/IJAREMS/v7-i3/4378
Chuang, H., Liu, M. & Chen, Y. (2015). The Effects of Human Resource Capability and Internal Customer Satisfaction on Organizational Effectiveness. International Journal of Distributed Sensor Networks, 12, 23-39. https://doi.org/10.1155/2015/835194
Coff, R., & Raffiee, J. (2015). Toward a theory of perceived firm-specific human capital. Academy of Management Perspectives, 29(3), 326-341. https://doi.org/10.5465/amp.2014.0112
Crook, T. R., Todd, S. Y., Combs, J. G., Woehr, D. J., & Ketchen Jr, D. J. (2011). Does human capital matter? A meta-analysis of the relationship between human capital and firm performance. Journal of Applied Psychology, 96(3), 443. https://doi.org/10.1037/a0022147
Delery, J. E., & Roumpi, D. (2017). Strategic human resource management, human capital and competitive advantage: is the field going in circles? Human Resource Management Journal, 27(1), 1-21. https://doi.org/10.1111/1748-8583.12137
Farah, H. A., Munga, J. & Mbebe, J. (2018). Influence of competitive strategies on performance of commercial airlines in Kenya: A survey of the airline industry in Kenya. International Academic Journal of Human Resource and Business Administration, 3(1), 170-189.
García-Sánchez, E., García-Morales, V.J. & Martín-Rojas, R. (2018). Influence of Technological Assets on Competitive advantage through Absorptive Capacity, Organizational Innovation and Internal Labor Flexibility. Sustainability, 10(65), 1-15. https://doi.org/10.3390/su10030770
Gikonyo, P. I. (2018). Organizational resources and sustainable competitive advantage among firms in the aviation industry in Kenya. Strategic Journal of Business & Change Management, 5(2), 60-78.
IATA (2020). The importance of air transport to Kenya. Retrieved from https://www.iata.org/en/iata-repository/publications/economic-reports/kenya--value-of-aviation/
ICAO (2018). The World of Air Transport in 2018. Retrieved from https://www.icao.int/annual-report-2018/Pages/the-world-of-air-transport-in-2018.aspx
Jambojet Annual Report (2020). Retrieved from https://www.jambojet.com/en/about-us/investor-relations/reports-and-presentations
Kamau, S. M., & Waweru, F. K. (2021). Effect of human capital on performance of airlines in Kenya. African Journal of Business Management, 15(3), 84-96.
KCAA (2021). Impact of COVID-19 on Aviation in Kenya. Retrieved from https://www.kcaa.or.ke/sites/default/files/docs/covid-19/KCAA%20COVID-19%20Impact%20Assessment%20Report.pdf
Kenya Airways Annual Reports (2017-2020). Retrieved from https://www.kenya-airways.com/ke/en/corporate/investor-relations/annual-reports
Kiiru, D. M. (2015). Strategic human resource management practices and performance of firms listed on the Nairobi securities exchange (Doctoral dissertation, Jomo Kenyatta University of Agriculture and Technology).
Muthigani, H. N., & Njagi, M. E. (2018). Effect of financial resources on performance of public health institutions in Embu County. Journal of Strategic management and Finance, 5(1), 18-32.
Nieves, J., & Quintana, A. (2018). Human resource practices and innovation in the hotel industry: The mediating role of human capital. Tourism and Hospitality Research, 18(1), 72-83. https://doi.org/10.1177/1467358415624137
Pearson, J., Pitfield, D., & Ryley, T. (2015). Intangible resources of competitive advantage: Analysis of 49 Asian airlines across three business models. Journal of Air Transport Management, 47, 179-189. https://doi.org/10.1016/j.jairtraman.2015.06.002
Peteraf, M. A., & Barney, J. B. (2003). Unraveling the resource‐based tangle. Managerial and Decision Economics, 24(4), 309-323. https://doi.org/10.1002/mde.1126
Ployhart, R. E., & Moliterno, T. P. (2011). Emergence of the human capital resource: A multilevel model. Academy of Management Review, 36(1), 127-150. https://doi.org/10.5465/AMR.2011.55662569
Ployhart, R. E., Nyberg, A. J., Reilly, G., & Maltarich, M. A. (2014). Human capital is dead; long live human capital resources! Journal of Management, 40(2), 371-398. https://doi.org/10.1177/0149206313512152
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.
Rotich, K. R. (2021). Effect of human resource capabilities on sustainable organizational competitiveness of mobile phone service providers in Kenya: A Moderating Role of Work Arrangements. Retrieved from http://ir.mu.ac.ke.
Turnbull, P. J., & Harvey, G. (2020). Ricardo Flies Ryanair: Strategic Human Resource Management and Competitive Advantage in a Single European Aviation Market (SEAM). Human Resource Management Journal, 4(1), 38-51.
Wright, P. M., Coff, R., & Moliterno, T. P. (2014). Strategic human capital: Crossing the great divide. Journal of Management, 40(2), 353-370. https://doi.org/10.1177/0149206313518437
Zhang, J., Fang, H., Wang, H., Jia, M., Wu, J., & Fang, S. (2017). Energy efficiency of airlines and its influencing factors: A comparison between China and the United States. Resources, Conservation and Recycling, 125, 1-8. https://doi.org/10.1016/j.resconrec.2017.05.007