Dynamic Capabilities and Strategic Renewal in Nigerian Financial Services Firms: A Grounded Theory Approach

This study developed a grounded theory of dynamic capabilities and strategic renewal in Nigerian financial services firms, addressing a significant gap in contextually grounded management theory for African emerging market contexts. Strategic renewal, the process through which firms transform their resource base and strategic orientation in response to environmental change, is increasingly critical in the volatile Nigerian financial services sector. While the Dynamic Capabilities Framework provides a theoretical foundation, its application to Nigerian financial firms remains largely theoretical and untested. A constructivist grounded theory design was employed. Forty-five in-depth interviews were conducted with senior executives, strategy managers, and innovation leaders in fifteen financial services firms spanning banking, insurance, and capital markets across Lagos, Abuja, Kano, and Port Harcourt. Constant comparative analysis, theoretical sampling, and memo-writing were employed throughout the data generation and analysis process. The resulting grounded theory, the Context-Embedded Strategic Renewal Model (CESRM), identifies regulatory navigation, political relationship management, and informal market intelligence networks as core categories unique to Nigerian financial services firms that mediate the relationship between dynamic capabilities and renewal success. The model extends the Dynamic Capabilities Framework by incorporating African institutional context factors absent from existing Western-derived theories. The study makes a significant original theoretical contribution to management science and recommends that Nigerian business schools integrate the CESRM into advanced strategic management curricula. Keywords: dynamic capabilities, strategic renewal, financial services firms, Nigeria, grounded theory