Mediating Effect of Organisational Learning on the Relationship between Strategic Capability and Organisational Performance of Commercial Banks in Kenya

Abstract

Strategic capability is essential to the competitiveness and performance of commercial banks operating in increasingly dynamic technological, competitive and regulatory environments. However, possessing strategic capabilities may not be sufficient unless banks effectively acquire, disseminate and apply organisational knowledge. This paper examined the mediating effect of organisational learning on the relationship between strategic capability and organisational performance of commercial banks in Kenya. Strategic capability was examined through leadership alignment, resource optimisation and technological innovation, while organisational learning comprised knowledge acquisition, knowledge dissemination and knowledge application. Organisational performance was assessed using financial and non-financial indicators. The study was anchored on the Resource-Based View and Organisational Learning Theory and adopted a pragmatic philosophy and mixed-methods research design. The target population comprised managerial employees drawn from commercial banks in Kenya. Primary data were collected using a semi-structured questionnaire containing closed-ended and open-ended questions. Quantitative data were analysed using descriptive statistics and regression-based mediation analysis, while qualitative responses were analysed thematically. The findings established that strategic capability positively influenced organisational performance and significantly enhanced organisational learning. Organisational learning was also found to contribute positively to organisational performance. Further analysis established that organisational learning mediated the relationship between strategic capability and organisational performance, indicating that banks derive greater performance benefits from their strategic capabilities when they effectively acquire, share and apply organisational knowledge. Qualitative findings further demonstrated the importance of training, cross-functional collaboration, knowledge sharing and practical application of lessons in improving decision-making, innovation and service delivery. The paper concludes that organisational learning provides an important mechanism through which strategic capability is translated into improved organisational performance. It recommends that commercial banks strengthen knowledge acquisition, dissemination and application systems and integrate organisational learning into leadership alignment, resource optimisation and technological innovation initiatives.

Keywords: Strategic Capability, Organisational Learning, Organisational Performance, Knowledge Acquisition, Knowledge Dissemination, Knowledge Application, Commercial Banks, Kenya.

DOI: 10.7176/EJBM/18-9-07

Publication date: September 30^th 2026