Strategic Resource Configuration and Performance of Level Four and Five Private Hospitals in Nairobi City County, Kenya

Abstract

The healthcare sector in Nairobi County, Kenya particularly private hospitals is facing increased competition and rising patient expectations. This pressure has driven the need for strategic resource configuration to improve operational performance. However, there remains limited understanding of how such configurations impact hospital performance in the region. This study aimed to evaluate the effect of strategic resource configuration on the performance of level four and five private hospitals in Nairobi County. It specifically investigated how configurations of human, financial, physical, and technological resources influence performance and examines the mediating role of competitive advantage in this relationship. The research was grounded in three key theories: the Dynamic Capabilities Theory, Kaplan and Norton’s Balanced Scorecard, and Porter’s Competitive Advantage Theory. It hypothesizes that strategic resource configuration significantly and positively affects hospital performance, with competitive advantage acting as a mediator. This study focused on a population of 50 performance of level four and five private hospitals targeting 252 respondents from senior and mid-level management. A sample of 151 respondents was selected from departments such as operations, finance, HR, and ICT. Data was gathered using structured questionnaires, with a pre-test conducted to ensure clarity and reliability. A descriptive research design guided the collection and analysis of quantitative data. Data analysis included descriptive statistics, percentages, means, and standard deviations, and inferential techniques like regression and mediation analysis to test the proposed hypotheses. Results were presented in tables for ease of interpretation. The study established that financial resource configuration has a significant effect on performance (β = 0.212, p = 0.004<.05); human resource configuration has a significant effect on performance (β = 0.258, p = 0.000<0.05); physical resource configuration has a significant effect on performance (β = 0.241, p = 0.000<0.05) and technological resource configuration had a significant effect on performance (β = 0.289, P= 0.002<0.05). It was further revealed that competitive advantage partially mediates the relationship between strategic resource configuration level four and five private hospitals in Nairobi County (β = 0.352, p < 0.05) implying that while strategic resources configuration directly improve performance, their greatest impact is achieved when strategically transformed into unique advantages such as superior service quality, efficiency, and innovation. The study concludes that strategic alignment of resources is a critical driver of hospital performance, consistent with both the Dynamic Capabilities Theory and Porter’s Competitive Advantage Model. Based on these findings, the study recommends that hospital managers strengthen financial discipline, invest in continuous staff development, upgrade infrastructure and technology, and deliberately leverage these resources to secure competitive positioning. Further research should extend this analysis to public hospitals and other regions to enhance the generalizability of results. The findings offer both theoretical and practical contributions, enhancing the understanding of how strategic resource configurations affect hospital performance. The study aimed to assist policymakers, hospital administrators, healthcare professionals, and academics in formulating effective strategies that respond to the dynamic and competitive nature of the healthcare environment