The construction industry in Kenya faces persistent challenges of inefficiency, poor quality, financial instability, and weak safety performance. These issues undermine competitiveness and limit contractors’ ability to deliver sustainable outcomes. Innovativeness has been identified globally as a key driver of organizational performance, yet its role in developing contexts remains underexplored. This study investigates the effect of contractor innovativeness on multidimensional organizational performance among Kenyan contractors. The study is grounded in the Resource-Based View, which conceptualizes innovativeness as a strategic resource, and Contingency Theory, which emphasizes that its effectiveness depends on environmental fit. Structural Equation Modeling was employed to test the relationship between innovativeness and ten performance dimensions: efficiency, technical capability, employee satisfaction, financial stability, managerial capability, customer satisfaction, growth, quality, profitability, and safety performance. Findings revealed that innovativeness exerts a significant positive influence across all dimensions, with the strongest effects on efficiency, technical capability, and employee satisfaction, and weaker effects on profitability and safety performance. The study contributes theoretically by demonstrating that innovativeness functions both as a strategic resource, consistent with the Resource-Based View, and as a contingent capability shaped by environmental fit, as emphasized in Contingency Theory. The findings underscore the need for contractors to embed innovation into their operations by investing in digital tools, participatory management, and structured safety practices. Policymakers should create enabling environments that support adoption while also embedding innovation benchmarks into accreditation and procurement systems, strengthening enforcement, and addressing systemic barriers. Researchers should explore hybrid frameworks and contextual moderators to deepen understanding of innovativeness in developing economies. Ultimately, innovativeness emerges as a multidimensional lever for enhancing organizational performance in construction.

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Keywords

Kenya; Contractor innovativeness; Organizational performance; Local contractors; Structural equation modelling; Resource-based view