AI DRIVEN DYNAMIC CAPABILITIES AND COMPETITIVENESS OF FIRMS: A SURVEY OF TELECOMMUNICATION FIRMS IN NAIROBI COUNTY, KENYA

Masters in Business Administration

Abstract The increasing adoption of artificial intelligence (AI) is transforming the telecommunications industry by enabling firms to automate processes, improve decision-making and enhance service delivery. However, empirical evidence on how specific AI capabilities contribute to organizational competitiveness remains limited, particularly within the Kenyan telecommunications context. This study examined the effect of strategic AI capabilities on the competitiveness of telecommunication firms in Nairobi County, Kenya. Specifically, the study assessed the effects of machine learning, cybersecurity, computer vision, natural language processing and big data analytics on organizational competitiveness. The study was anchored on the Resource-Based View, Dynamic Capabilities Theory, Monotonic reasoning theory of AI and Task-Technology Fit Theory. A quantitative research design was adopted, targeting managers in telecommunication firms in Nairobi County. Data were collected using structured questionnaires and analysed using descriptive statistics and multiple regression analysis. The descriptive findings indicated varying levels of AI adoption, with machine learning recording the highest mean (2.96) and computer vision recording a mean of 2.30. Regression results established that machine learning (β = 0.254, p = 0.020), cybersecurity (β = 0.463, p = 0.003), computer vision (β = 0.592, p = 0.000), natural language processing (β = 0.497, p = 0.000) and big data analytics (β = 0.486, p = 0.000) had positive and statistically significant effects on organizational competitiveness, with the combined contribution of AI technologies to competitiveness recording a mean of 3.00.. Computer vision recorded the strongest effect despite its relatively low adoption. The study concludes that strategic AI capabilities are important technological resources for enhancing competitiveness through operational efficiency, cost reduction, service differentiation, customer responsiveness and innovation. The study recommends that telecommunication firms strengthen strategic investment in AI capabilities, particularly computer vision, while developing the infrastructure, skills and organizational processes necessary for effective AI integration. Key Words: AI Driven Dynamic, Capabilities and Competitiveness of Firms.Telecommunication Firm

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