EFFECT OF DIGITAL INNOVATION ON ORGANIZATIONAL PERFORMANCE IN KISII, KISUMU, AND NYAMIRA COUNTIES
Ogendi Moraa Rose - Department of Business Administration, School of Business and Economics, Kisii University, Kenya
Dr. Henry Omosa (PhD) - Lecturer, Department of Business Administration, School of Business and Economics, Kisii University, Kenya
Dr. Nyakagwa Ongaga (PhD) - Lecturer, Department of Business Administration, School of Business and Economics, Kisii University, Kenya
ABSTRACT
Digital innovation has become a critical driver of organizational performance by enabling improved operational efficiency, enhanced service delivery, effective communication, automation of processes, and data-driven decision-making. Despite significant efforts by the Kenyan government through initiatives such as the Digital Economy Blueprint and the National Digital Master Plan to promote digital transformation, county governments continue to experience challenges in adopting and effectively utilizing innovative digital solutions. This study examined the effect of digital innovation on organizational performance in Kisii, Kisumu, and Nyamira Counties. The study was anchored on the Diffusion of Innovation Theory (DIT) and the Unified Theory of Acceptance and Use of Technology (UTAUT). Primary data were collected using structured questionnaires administered to county government employees selected through stratified random sampling and purposive sampling, yielding a sample size of 325 respondents. A pilot study was conducted in Homabay County due to its comparable administrative and demographic characteristics. Content and construct validity were established through expert review and Principal Component Analysis (PCA), while reliability was assessed using Cronbach’s alpha coefficient with a threshold of 0.70. Data were analyzed using Statistical Package for Social Sciences (SPSS) Version 25.0 through descriptive statistics, Pearson product-moment correlation analysis, and simple linear regression. Diagnostic tests were conducted to confirm the assumptions underlying regression analysis. The findings established that digital innovation had a positive and statistically significant effect on organizational performance, explaining 38.2% of the variation in organizational performance (R² = 0.382, p < 0.05). The study concluded that adoption and effective utilization of digital innovations significantly enhance organizational performance by improving operational processes, service delivery efficiency, communication, and information management within county governments. The study recommends strengthening digital innovation initiatives through investment in emerging technologies, promotion of digital systems integration, enhancement of employee digital competencies, and development of supportive policies to facilitate sustainable digital transformation and improved organizational performance in county governments.