Regulatory compliance, strategic agility and sustainable performance of non governmental organizations in lake region economic bloc, Kenya
Abstract/ Overview
Non-Governmental Organizations (NGOs) play a vital role in promoting socioeconomic
development in Kenya through humanitarian, advocacy, and development interventions.
However, many NGOs continue to experience sustainability challenges arising from
declining donor funding, increasing operational costs, governance constraints, changing
stakeholder expectations, and evolving regulatory requirements. Although Strategic Agility is
recognized as an important organizational capability for enhancing adaptability and
resilience, empirical evidence on its relationship with Sustainable Performance remains
limited, particularly regarding the moderating role of Regulatory Compliance. This study
examined the moderating role of Regulatory Compliance in the relationship between
Strategic Agility and Sustainable Performance among national NGOs operating within
Kenya’s Lake Region Economic Bloc (LREB). Specifically, the study sought to determine
the effect of Strategic Agility on Sustainable Performance, examine the effect of Regulatory
Compliance on Sustainable Performance, and establish its moderating role in the Strategic
Agility–Sustainable Performance relationship. The study was guided by a positivist research
philosophy and anchored on Dynamic Capability Theory and Institutional Theory. A
quantitative explanatory cross-sectional research design was adopted. The target population
comprised 674 registered NGOs. Taro Yamane’s (1967) formula was used because the study
had a known finite population and required a 5% level of precision, yielding an initial sample
of 251 NGOs. Proportionate sampling ensured representation across NGO sectors. A pilot
study involving 25 NGOs, representing approximately 10% of the initial sample, was
randomly conducted in five LREB counties to assess the clarity, feasibility, consistency, and
suitability of the research instrument, after which necessary refinements were made.
Following exclusion of the pilot participants, 226 NGOs constituted the main study, from
which 217 valid questionnaires were obtained, representing a 96% response rate. Data were
collected electronically using structured questionnaires through Kobo Toolbox and analyzed
using descriptive statistics, simple linear regression, and hierarchical multiple regression.The
findings showed that Strategic Agility had a statistically significant positive effect on
Sustainable Performance (β = .563, p < .001; R² = .564; F = 278.02, p < .001). Regulatory
Compliance also positively predicted Sustainable Performance (β = .637, p < .001; R² =
.606). In hierarchical regression, adding Regulatory Compliance increased explained variance
from 56.4% to 67.7% (ΔR² = .113; F = 224.57, p < .001). Adding the Strategic Agility ×
Regulatory Compliance interaction increased explained variance further to 71.7% (ΔR² =
.040; F = 179.84, p < .001). The interaction was negative and statistically significant (β =
−.148, p < .001), indicating that higher Regulatory Compliance reduces the incremental
contribution of Strategic Agility to Sustainable Performance. The findings therefore
demonstrate that while Strategic Agility and Regulatory Compliance independently
contribute positively to Sustainable Performance, their interaction is conditional. The study
concludes that sustainable NGO performance requires balancing strategic adaptability with
regulatory accountability. The study contributes to Dynamic Capability Theory and
Institutional Theory by demonstrating how organizational capability and institutional
governance jointly shape NGO Sustainable Performance in the LREB
