Strategic Innovation, Dynamic Capabilities, and Performance of Commercial Banks in Juba, South Sudan

This study examines the performance of commercial banks in Juba, South Sudan, highlighting how strategic innovations and dynamic capability influence their performance. The purpose of this research focuses on four main objectives: to evaluate the effects of collaborative partnerships, employee engagement, information technology adoption, dynamic capabilities, and performance of Commercial banks in Juba, South Sudan. This study was guided by the three theories: the dynamic capabilities, the resource-based view, and the institutional. The study employed a correlational research design targeting a sample of 30 commercial banks in Juba, with the study population comprising key decision-makers, department heads, and middle-level managers from a total population of 625 individuals. This research design used a stratified random sampling method to select the entrant study in the research. The data was collected through questionnaires, which were distributed to the sample officers to fill out and return. The data was cleaned up and analyzed by using the Statistical Package for the Social Sciences and Structural Equation Modeling to test the study hypotheses. The research finding revealed the statistically significant; collaborative partnerships displayed a strong positive correlation with performance β = 0.613, explaining 37.6% of variance; employee engagement had an even greater influence of β = 0.645, accounting for 41.6% of variance; and information technology adoption emerged as the most impactful factor β = 0.678, explaining 46% of variance and dynamic capabilities served as an important moderator, amplifying the positive effects of these innovations and contributing to a total variance explanation of 65.2%. In conclusion, the study revealed that collaborative partnerships, particularly those involving knowledge sharing and access to external resources, serve as vital strategic tools for enhancing performance and competitiveness in resource-limited environments. Employee engagement explained the importance of active staff involvement and commitment in driving bank success. Information technology adoption had the strongest impact, highlighting the critical role of digital transformation in aligning goals, enhancing operations, and fostering innovation. Additionally, strong dynamic capabilities, such as agility and adaptability, significantly enhanced the effectiveness of strategic innovations, enabling banks to respond effectively to change and maximize the benefits of their initiatives. Recommendations: Future research should have focused on longitudinal studies to evaluate the long-term effects and sustainability of strategic innovations on performance in South Sudanese banks, while examining the boundary conditions and nonlinear relationships among different innovation dimensions. It should also have explored the influence of leadership styles, organizational culture, and external stakeholders to better understand factors that enhanced innovation effectiveness. Employing mixed-method approaches and conducting comparative studies across African emerging markets could have provided deeper insights into contextual challenges and best practices for implementation. Additionally, integrating customer perspectives and analyzing how innovations diffused within the sector would have helped ensure relevance and widespread adoption. Policymakers and industry leaders should have leveraged these findings to craft targeted regulatory policies, capacity-building initiatives, and stakeholder engagement efforts that fostered a resilient, inclusive, and sustainable banking environment aligned with national economic goals.