Change Management and Sustainable Competitive Advantage of Islamic Financial Institutions in Kenya
Keywords:
Change Management, Sustainable Competitive Advantage, Islamic Financial Institutions, KenyaAbstract
This study investigated the effect of change management on sustainable competitive advantage of Islamic financial institutions in Kenya. Guided by the Strategic Intent Model and the Path-Goal Leadership Theory and employing a positivist mixed-methods research design, data were collected from 110 managers drawn from all nine licensed Islamic financial institutions operating in Kenya. Quantitative data obtained from managers in operations, business development, portfolio management, human resources, and finance were analyzed using SPSS version 26, while qualitative insights were gathered through interviews with senior executives, including directors and chief executive officers. The findings indicate that change management reflected in institutional adaptability, leadership communication, employee engagement, innovation orientation, and risk mitigation—significantly predicts sustainable competitive advantage, explaining 40.4% of the variance (R² = 0.404, β = 0.635, p < 0.001). Qualitative evidence further revealed that structured, consultative, and value-driven change processes enhance organizational resilience, customer trust, and competitive positioning while ensuring compliance with regulatory and Shariah principles. The study concludes that change management is a critical strategic capability that enables Islamic financial institutions to align internal processes with environmental dynamics and sustain long-term competitiveness. Strengthening inclusive, transparent, and strategically aligned change management practices is therefore essential for enhancing sustainable competitive advantage in the Islamic finance sector.
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Copyright (c) 2026 Maleeha Muhidin, Paul Katuse, Timothy C Oketch
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This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
