Corporate entrepreneurship, ambidextrous leadership and sustainable perfomance of Micro-Finance firms in Kenya

Abstract

Sustainable Performance of Micro-Finance Institution is crucial to ensure environmental, social and economic performance. Corporate entrepreneurship has enabled most of the leading firms to grow and become sustainable in the long-term. An ambidextrous leader plays a role in improving the corporate entrepreneurship practices in the firms to ensure sustainable growth and performance. However, microfinance institutions face numerous challenges in the financial market, from competition to low- risk loan portfolios. Hence, a need to examine the role of corporate entrepreneurship strategies that can reduce these challenges as well as the moderating role of ambidextrous leadership. The main purpose was to establish the moderating effect of ambidextrous leadership style on the relationship between corporate entrepreneurship and the sustainable performance of microfinance firms in Kenya. The specific objectives were: to establish the effect of innovativeness, risk taking and pro-activeness on sustainable performance of Microfinance firms in Kenya; and to examine the moderating role of ambidextrous leadership style on the relationship between innovation, risk taking and pro-activeness on the sustainable performance of Microfinance firms in Kenya. The study was anchored on the Innovation Theory of Entrepreneurship, the Contingency Theory, and the Triple Bottom Line Theory. The study used both explanatory and cross-sectional research design and correlational design. The study targeted 467 branch managers from Microfinance institutions. A sample of 215 was selected using random sampling technique. The study used a structured questionnaire to collect data from the respondents. Content, face, and criterion validity was achieved through interrogation by experts, while construct validity was determined via factor analysis. Reliability of the instrument was tested using the Cronbach's alpha while validity was tested using KMOS. Data was analysed through descriptive and inferential statistics. The findings revealed that innovativeness (β = 0.502, P<0.05), pro-activeness (β 1 = 0.303, P<0.05) and risk taking (β = 0.107, P<0.05) had a positive and statistically significant effect on sustainable performance of MFIs. Further, ambidextrous leadership moderated the relationship between pro- activeness (β = -0.004, ∆R 2 = 0.011 P<0.030), risk taking (β = -0.004, ∆R 2 = 0.011 P<0.030) and sustainable performance of the MFI. Similarly, it did not moderate the relationship between innovativeness and sustainable performance. The study concluded that corporate entrepreneurship had a positive impact on sustainable performance, while ambidextrous leadership has a moderating effect. The study recommends MFIs to pursue corporate entrepreneurship to remain sustainable. It should also encourage managers should exercise a moderate level of ambidextrous leadership to enhance the effect of corporate entrepreneurship on sustainable performance.