The strategic and governance challenges faced by firms in Kenya's dynamic and often complex business environment are critical to national economic development, yet a comprehensive, longitudinal analysis integrating managerial perspectives with macro-level governance data is lacking. This study aims to identify and analyse the predominant strategic challenges and governance issues affecting businesses, and to examine the interplay between firm-level strategic responses and the evolving institutional governance framework. A sequential explanatory mixed-methods design was employed. Quantitative analysis of a longitudinal firm-level dataset was followed by in-depth qualitative interviews with senior executives and institutional stakeholders to contextualise and explain the statistical patterns. Quantitative analysis revealed that regulatory uncertainty was cited as a primary constraint by over 60% of firms in the sample. Qualitative data identified a core theme of strategic adaptation through informal networks, which executives utilise to navigate formal institutional voids and bureaucratic delays. The business landscape is characterised by a persistent tension between formal governance structures and informal adaptive strategies, with regulatory unpredictability remaining a systemic impediment to strategic planning and investment. Policymakers should prioritise enhancing regulatory predictability and transparency. Firms are advised to formalise risk assessment frameworks that explicitly account for governance volatility while maintaining adaptive relational capabilities. Strategic management, corporate governance, institutional environment, mixed methods, Kenya, business challenges This paper provides a novel, integrated analysis by combining longitudinal firm-level data with rich qualitative insights to delineate the mechanisms through which governance factors directly shape strategic decision-making in an emerging African market.