Is There a Moderated Mediation Model that Explains the Relationship Between Strategic Agility, Organizational Culture, Environmental Turbulence, and Organizational Performance? Evidence from Accredited Universities in Kenya

Accredited universities in Kenya are vital for quality education and research but face significant challenges that impact their performance. Issues such as strategic agility, organizational culture, and environmental turbulence contribute to difficulties in adapting to changes and maintaining effectiveness. Inadequate funding, outdated infrastructure, and regulatory constraints further exacerbate these challenges, affecting their ability to deliver high-quality education and remain competitive. This study employed a descriptive cross-sectional survey research design to investigate the moderating influence of environmental turbulence on the indirect link between strategic agility and organizational performance through organizational culture. The cross-sectional dataset was obtained from 78 accredited universities in Kenya using a questionnaire. The ordinary least squares model employed revealed that environmental turbulence moderated the indirect relationship between strategic agility and organizational performance via organizational culture in a synergistic manner, hence affirming moderated mediation. These findings highlight the moderating and mediating role of environmental turbulence and organizational culture in the link between strategic agility and organizational performance, providing managerial and policy implications. In the future, researchers should do longitudinal studies to look at how dynamics change over time, comparative sector analyses to get a bigger picture, and more mediators and moderators to fully understand the proposed links.

Introduction

Accredited universities in Kenya are critical for advancing the nation’s economic, social, and human capital development through high-quality graduate education, research, and community service (World Bank, 2020). They play a pivotal role in driving technological innovation and development, as emphasized by the Kenya Vision 2030 economic blueprint (Government of Kenya, 2018). By providing essential educational and research opportunities, these institutions support the country’s growth and competitiveness, making their success and adaptation to changing conditions crucial for national progress (World Bank, 2020).

In today’s rapidly evolving landscape, institutions of higher learning must navigate an increasingly turbulent environment characterized by swift technological advances, volatile market conditions, and shifting customer demands. To remain competitive and accomplish superior performance, firms need a strategic approach that incorporates agility. Strategic agility, which entails the ability to quickly adapt to changes and uncertainties, has become a vital capability for enhancing organizational performance in these dynamic contexts (Vrontiset al., 2023; Elali, 2021). Research shows that organizations proficient in adapting their strategies to evolving conditions are better positioned to achieve favorable outcomes (Ivory & Brooks, 2018). This underscores the significance of agility in sustaining a competitive edge and improving performance amid modern institutional complexities.

Organizational culture plays a crucial mediating role in linking strategic agility with organizational performance. This culture, viewed as shared values, beliefs, and practices within a firm, influences the implementation and effectiveness of strategic agility. A culture that promotes flexibility, innovation, and openness enhances strategic agility by creating an environment conducive to rapid adaptation and responsiveness (Reed, 2021). When organizational culture aligns with the principles of strategic agility, it supports the effective execution of adaptive strategies, thereby amplifying agility’s positive impact on performance (Heubeck, 2023). This mediation highlights the need for a supportive culture to fully leverage strategic agility benefits.

Environmental turbulence moderates the nexus between strategic agility and organizational performance. The effect of strategic agility on performance can vary depending on the level of environmental turbulence, which represents the degree of unpredictability and instability in the external environment (Khanet al., 2021). In highly turbulent settings, the effectiveness of strategic agility in improving performance can be more challenging due to increased uncertainties and disruptions (Wanget al., 2023). Research indicates that while strategic agility can enhance performance, its effectiveness may be constrained by high levels of environmental turbulence, complicating adaptation and responsiveness (Clausset al., 2019).

Additionally, environmental turbulence moderates the indirect relationship between strategic agility and organizational performance through organizational culture, resulting in a moderated mediation effect. This means that the impact of organizational culture on the relationship between strategic agility and performance is influenced by the level of environmental turbulence (Zhouet al., 2019). In turbulent conditions, a strong, adaptive culture becomes even more critical in supporting strategic agility and boosting performance, whereas lower turbulence may reduce the cultural mediation effect (Reed, 2021). This moderated mediation effect underscores the intricate interplay between strategic agility, organizational culture, and environmental turbulence.

The impetus for this study stems from the urgent need for accredited universities in Kenya to navigate a challenging environment marked by rapid technological changes, shifting market demands, and unpredictable external conditions (Indiyaet al., 2021). As these institutions face growing competition and evolving educational needs, traditional strategic management approaches may no longer suffice. Strategic agility, which involves the capacity to swiftly adapt and respond to changes, has emerged as a crucial factor for improving performance and maintaining competitiveness (Shahet al., 2020). This study investigates how Kenyan universities can effectively harness strategic agility, focusing on the mediating role of organizational culture and the moderating impact of environmental turbulence (Ogolla, 2020).

The university education sector in Kenya is vital for driving economic, social, and human capital development by providing high-quality graduate education, research, and community service (Ministry of Education, 2019). This sector’s role in technological innovation and development is highlighted by the Kenya Vision 2030 economic blueprint (Ministry of Education, 2019). Despite ongoing efforts to enhance educational quality, the sector faces significant challenges. Declining student enrollment, changing market demands, limited financial resources, and the COVID-19 pandemic have all impacted performance. To address these challenges, universities need to adapt their operational policies, structures, and leadership (World Bank, 2020). Embracing strategic agility and fostering entrepreneurial and learning cultures will be essential for universities to effectively respond to these pressures and ensure their continued success and sustainability (World Bank, 2020).

Research Problem

Accredited universities in Kenya are grappling with significant challenges related to strategic agility, organizational culture, and performance amidst environmental turbulence. The rapidly evolving educational landscape, marked by swift technological advancements, fluctuating market demands, and changing regulatory conditions, requires universities to be strategically agile. Strategic agility, the ability to quickly adapt to changes and uncertainties, is essential for universities to stay competitive and effectively address emerging educational needs (Vrontiset al., 2023; Elali, 2021). However, many Kenyan universities face difficulties due to rigid systems and traditional practices that hinder their adaptability and overall performance. For instance, some institutions have struggled to integrate new technologies and innovative teaching methods because of outdated infrastructure and resistance to change (Indiyaet al., 2021).

Organizational culture plays a crucial role in determining how universities implement strategic agility and manage environmental turbulence. A culture that promotes flexibility, innovation, and openness can enhance a university’s ability to adapt and respond to changes effectively (Reed, 2021). On the other hand, a rigid and bureaucratic culture can obstruct agility and impair performance. For example, universities with conservative cultures may be slow to adopt new teaching methods or update administrative processes, which can undermine their competitiveness and performance in a rapidly shifting environment (Heubeck, 2023).

Environmental turbulence adds another layer of complexity to the relationship between strategic agility and performance. The level of unpredictability and instability in the external environment can affect how well universities can use their strategic agility to achieve positive outcomes. During periods of high environmental turbulence such as fluctuating government policies, economic uncertainties, and the COVID-19 pandemic universities often face difficulties maintaining performance levels and adapting their strategies (Khaw & Teoh, 2023). For example, the COVID-19 pandemic exposed gaps in digital infrastructure and support systems at many Kenyan universities, illustrating how environmental turbulence can impact their performance (World Bank, 2020).

Empirical research examining the relationships between strategic agility, organizational culture, environmental turbulence, and organizational performance frequently faces significant inconsistencies due to diverse conceptual interpretations and varying contextual factors, such as different regulatory environments and economic conditions. Methodological challenges, including the use of various econometric models, sampling variations, and different financial metrics, further complicate efforts to establish clear causal links among these variables. Moreover, industry-specific characteristics play a crucial role, highlighting the necessity for tailored approaches that address unique market dynamics. To improve the reliability and comparability of findings, it is essential to adopt standardized methodologies and robust model specifications. Research on accredited universities in Kenya serves as an example, emphasizing the importance of consistent and rigorous methods in exploring these complex relationships to ensure meaningful and comparable insights across studies.

Research Objective

The objective of this study is to determine the moderating influence of environmental turbulence on the indirect relationship between strategic agility and organizational performance of accredited universities in Kenya.

Theoretical Underpinning

The linkage among strategic agility, organization culture, environmental turbulence, and organizational performance is principally anchored on two major theoretical frameworks: dynamic capabilities and contingency theories. Dynamic Capability Theory (DCT), developed by Teeceet al. (1997), provides insights into how organizations enhance their performance by adapting to fast-changing environments through the development and reconfiguration of both internal and external capabilities. Unlike the Resource-Based View (RBV), which focuses on static resources, DCT highlights the necessity for continuous adaptation, integration, and realignment of resources to meet the unpredictable demands of the environment (Reed, 2021). The theory revolves around two critical components: the “dynamic” aspect, which refers to an organization’s ability to renew and adjust its competencies, and the “capability” component, which underscores the firm’s internal processes for reconfiguring resources. This adaptability enables organizations not only to survive but also to thrive in volatile conditions. DCT is particularly relevant in understanding the relationship between strategic agility, organizational culture, environmental turbulence, and performance, as it emphasizes the importance of flexibility and resource optimization in sustaining competitive advantage (Elali, 2021).

Contingency Theory (CT), introduced by Lawrence and Lorsch (1967), complements DCT by explaining how organizational effectiveness is determined by the alignment between internal structures and external environmental conditions. This theory argues that there is no one-size-fits-all approach to organizational design; instead, an organization’s performance depends on how well its structure and strategies fit external factors such as market shifts, cultural dynamics, and regulatory changes (Indiyaet al., 2021). CT emphasizes that for optimal performance, organizations must align their internal processes with the specific demands of their environment. This alignment can be seen in the way accredited universities in Kenya must respond to regulatory changes and market dynamics by adapting their strategies and structures to maintain competitiveness. By ensuring their internal processes are flexible and responsive to external challenges, universities can navigate environmental turbulence and improve their overall performance.

Empirical Literature

Various empirical studies have explored the relationship between strategic agility, organizational culture, environmental turbulence, and organizational performance across sectors and settings, revealing complex moderated mediation effects. For instance, Zhouet al. (2019) analyzed the moderated mediation effects of marketing agility and performance in China’s food processing industry. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) and PROCESS macro, they found that marketing agility had a direct positive impact on financial performance, with stronger effects during periods of high market turbulence. This highlights that environmental turbulence moderates the relationship between agility and performance, as agile firms tend to perform better in unpredictable conditions. Moreover, the indirect effect of marketing agility on performance via innovation capability was more pronounced in less turbulent environments, suggesting environmental turbulence alters both direct and indirect relationships.

Similarly, Rauet al. (2021) investigated how organizational slack moderates the indirect effect of strategic planning on organizational performance, with organizational learning as the mediator. Their findings revealed that firms with ample slack resources were better able to utilize strategic agility, fostering organizational learning and enhancing performance. This suggests that while environmental factors like turbulence are crucial, internal organizational elements such as resource availability and culture are also vital in determining performance outcomes. Heubeck (2023) studied dynamic managerial capabilities and their impact on firm performance in Germany’s DAX firms, with organizational slack as a moderating factor. The study found that in firms with high slack, strategic agility positively influenced performance through research and development (R&D) intensity. This demonstrates that strategic agility’s effect on performance is contingent not only on external environmental factors but also on internal capabilities like managerial skill and resource flexibility, emphasizing the importance of an organizational culture that fosters innovation and agility in turbulent environments.

Elsewhere, Khanet al. (2021) examined the role of absorptive capacity as a moderator between social capital, strategic renewal, and firm performance, particularly in the context of environmental turbulence. The study showed that absorptive capacity, which reflects a firm’s ability to recognize and integrate external knowledge, positively moderated the indirect effect of social capital on performance through strategic renewal. This indicates that organizational culture is essential in determining how effectively firms can renew strategies in response to environmental turbulence, enhancing performance. Wanget al. (2023) expanded on these ideas by studying disruptive innovation and its impact on firm performance in China’s high-tech industry, focusing on innovation speed and quality as mediators and marketing-supporting institutions as moderators. The study revealed that the indirect effect of disruptive innovation on performance through innovation speed was significantly moderated by marketing-supporting institutions, which act similarly to organizational culture by shaping how firms leverage strategic agility in turbulent environments. The findings stressed that supportive external environments, combined with strong internal cultures, are crucial for achieving high organizational performance.

Conceptual Framework

The conceptual model outlines the relationships between strategic agility, organizational culture, environmental turbulence, and organizational performance in Kenya’s accredited universities. It highlights key metrics for measuring these variables and shows how they interact to influence performance. Fig. 1 provides a clear framework for understanding these dynamics.

Fig. 1. Conceptual model.

Research hypothesis:

H₀₁: There is no significant moderating effect of environmental turbulence on the indirect relationship between strategic agility and organizational performance of accredited universities in Kenya.

Methodology

The study employed a descriptive cross-sectional survey design, targeting a population of 78 accredited universities in Kenya. Given the manageable size and availability of data, a census approach was adopted. Data on strategic agility, organizational culture, environmental turbulence, and organizational performance were gathered using a 5-point Likert scale.

Measurements

In this study, various indicators were used to measure the key variables: strategic agility, organization culture, environmental turbulence, and organizational performance. Strategic agility was measured as the average of four indicators: strategic sensitivity, collective commitment, resource fluidity, and partnership collaboration. Institutional culture was assessed using three components: adaptability culture, entrepreneurial culture, and adaptability culture. Environmental turbulence was determined by combining five measures: stable turbulence, slow incremental change, fast incremental change, discontinuous predictable change, and discontinuous unpredictable change. Institutional performance was calculated as the average of four indicators: customer perspective, funding perspective, internal business processes, and learning and growth indicators.

Data Analysis

The study employed Ordinary Least Squares (OLS) regression analysis to estimate the variables, specifically strategic agility, organizational culture, environmental turbulence, and organizational performance. OLS was selected for its ability to generate unbiased and efficient estimates, particularly in the context of cross-sectional data. This method allowed for a comprehensive assessment of the moderated mediation.

Econometric Model

where

(1) $$\begin{array}{rcl}OP& =& b_0+a_0{b}_1+a_1{b}_{1}SA+a_0{b}_{2}ET+a_1{b}_{2}SA\times ET\\ & & +c_1^{\prime }SA+c_2^{\prime }ET+c^{\prime }3SA\times ET+\epsilon \end{array}$$

b₀, a₀ – constants

c’, a, b – regression coefficients

SA – strategic agility

ET – environmental turbulence

SA × ET – product of strategic agility and environmental turbulence

OP – organizational performance

Findings and Discussions

The descriptive statistics for strategic agility, organization culture, environmental turbulence, and organizational performance are highlighted in Table I.

Table I. Descriptive Statistics

Variable	Number	Mean	Standard Deviation	Skewness	Kurtosis
Strategic agility	66	3.99	0.63	−0.73	0.66
Organization culture	66	3.91	0.65	−0.35	−0.33
Environmental turbulence	66	3.88	0.63	−0.55	−0.26
Organizational performance	66	3.79	0.53	−0.44	0.80

Table I displays the descriptive statistics for the study’s variables: strategic agility, organizational culture, environmental turbulence, and organizational performance. Strategic agility exhibits the highest mean score (M = 3.99) and the lowest standard deviation (SD = 0.63), indicating a strong and consistent perception among participants. Organizational culture (M = 3.91, SD = 0.65) and environmental turbulence (M = 3.88, SD = 0.63) also received positive ratings, though with slightly more variation. Organizational performance shows the lowest mean (M = 3.79) and a standard deviation of 0.53, suggesting a somewhat lower but still positive evaluation with the least variability. The skewness and kurtosis values for all variables are within acceptable limits, indicating that the data distributions are reasonably symmetric and not excessively peaked, suggesting balanced responses from the participants.

Table II displays the findings from the moderated mediation analysis, which examines how strategic agility influences organizational performance through organizational culture, with environmental turbulence as a moderating factor. The results detail the conditional indirect effects of strategic agility on organizational performance at varying levels of environmental turbulence. At low environmental turbulence (ET = −1.01), the indirect effect of strategic agility on organizational performance through organizational culture is −0.007, with a bootstrap standard error (BootSE) of 0.05 and confidence intervals (BootLCI and BootUCI) ranging from −0.11 to 0.08. This indicates that, at low turbulence, the indirect effect is minimal and statistically insignificant, as the confidence intervals include zero. In contrast, at the average level of environmental turbulence (ET = 0.00), the indirect effect rises to 0.11 with a BootSE of 0.04 and confidence intervals extending from 0.04 to 0.19. This suggests a moderate positive indirect effect, where organizational culture moderately mediates the relationship between strategic agility and organizational performance.

Table II. Moderated Mediation Regression Results for Strategic Agility, Organizational Culture, Environmental Turbulence and Organizational Performance

Indirect effect SA → OC → OP
ET	Effect	BootSE	BootLCI	BootUCI
Conditional indirect effects of strategic agility on organization performance
−1.01	−0.01	0.05	−0.11	0.08
0.00	0.11	0.039	0.04	0.19
1.11	0.23	0.07	0.09	0.36
Index of moderated mediation
ET	0.11	0.04	0.03	0.19

At high environmental turbulence (ET = 1.11), the indirect effect increases further to 0.233, with a BootSE of 0.070 and confidence intervals ranging from 0.09 to 0.36. This significant positive indirect effect indicates that organizational culture strongly mediates the relationship between strategic agility and organizational performance under high turbulence conditions. The index of moderated mediation, showing a value of 0.11 with a BootSE of 0.04 and confidence intervals between 0.03 and 0.19, confirms the statistical significance of the moderated mediation effect. This implies that environmental turbulence enhances the mediating role of organizational culture, strengthening the indirect effect of strategic agility on organizational performance as turbulence increases. The findings of this study converge with the outcomes reported by Zhouet al. (2019), Rauet al. (2021) and Heubeck (2023).

Recommendation

Based on the findings, several actionable recommendations made for management practices and policy formulation. It is advisable for organizations to invest in strengthening their strategic agility by cultivating a robust organizational culture, particularly in highly turbulent environments. Management should focus on building and maintaining a culture that enhances adaptability and resilience, as this will improve how strategic agility influences organizational performance. Policy frameworks should promote ongoing learning and flexibility to help organizations better manage changing conditions. Additionally, implementing training initiatives that align organizational culture with strategic objectives can enhance the mediation effect and boost overall performance. Recognizing the impact of environmental turbulence and supporting a culture that adapts to these conditions will be essential for sustaining high performance.

Suggestions for Future Research

Future research should build on the current study by using longitudinal methods to examine how relationships between strategic agility, organizational culture, environmental turbulence, and performance evolve over time, offering insights into causal pathways. Moreover, comparative studies across various sectors, such as healthcare, manufacturing, and finance, could reveal sector-specific differences in these relationships, enhancing the generalizability of findings. Expanding the investigation to include additional mediators and moderators, like leadership styles, organizational structures, and technological advancements, could provide a more nuanced understanding of how strategic agility impacts performance. These approaches would help uncover new insights and refine strategies for improving organizational effectiveness and resilience across diverse settings.