INNOVATION DRIVEN GROWTH STRATEGIES AND ORGANIZATIONAL PERFORMANCE IN NCA 4 CONSTRUCTION FIRMS IN KENYA: THE MODERATING ROLE OF ECONOMIC CONDITIONS

This study examines the effect of innovation driven growth strategies on organizational performance among NCA Category 4 construction firms in Kenya, with particular emphasis on the moderating role of economic conditions. Despite sustained growth in Kenya’s construction sector, many medium-tier firms continue to experience constrained performance characterized by limited competitiveness, slow growth, and operational inefficiencies. This study addresses this gap by evaluating the effects of product development and diversification strategies and examining how economic conditions influence the strategy–performance relationship. A descriptive and correlational research design was adopted targeting 6,624 registered NCA Category 4 firms, from which a sample of 363 firms was selected using cluster sampling techniques. Primary data were collected from senior management using structured questionnaires. Data were analyzed using descriptive statistics, correlation analysis, and multiple regression, with hierarchical regression applied to test moderation effects. The findings indicate that both product development and diversification strategies have a positive and statistically significant effect on organizational performance, with diversification exhibiting a stronger influence.