MCOM Theses and Dissertations (2024)

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Effect of corporate risk disclosures on firm value of listed firms in Kenya
(Strathmore University, 2024) Ang'edu, E.
Listed corporations in Kenya encounter internal and external hurdles that jeopardize their competitive edge over the years, resulting in distressed cases, decline in share price, and in severe situations, entire destruction of value, resulting in delisting. The Nairobi Securities Exchange has witnessed significant growth in recent years, but there are questions about the market setting a premium on the deliberate efforts of information asymmetry and corporate governance practices. The general objective of the study is to investigate the effect of corporate risk disclosure on firm value of entities trading at the NSE. The research was supported by the Efficient Market Hypothesis theory, Signaling theory and the Agency theory. The study followed a positivist philosophy focused as it attempts to establish findings from the study variables by empirically demonstrating the influence and effect corporate risk disclosure has on NSE listed entities in Kenya. The study utilized secondary data acquired by content analysis from annual audited reports of 64 NSE listed corporations over 2015-2022. SPSS version 25 and Stata version 18 was used for the balanced panel data analysis in the descriptive statistics, regression analysis, and diagnostic tests employed. The regression results reveal a negative and statistically significant effect of corporate risk disclosure on firm value. This research adds to literature by presenting the findings of an emerging capital market in a developing country and recommends further can adopt further reports like integrated annual reports that will bring out more disclosures and risk statements. Further studies can adopt additional regression models with different type of dataset, have additional control variables and use other measures of firm value like Market to book value to provide a supplementary viewpoint on the relationship between risk disclosure and firm value.
Significance of the Auditor General forensic audit reports on effective investigation of corruption cases in Kenya
(Strathmore University, 2024) Nyakundi, A. N.
In Kenya, despite the presence of functional Anti-corruption institutions, the investigation and successful prosecution of corruption cases has been a challenge with most cases being dropped at the Judiciary for lack of sufficient evidence. This could be due to lack of comprehensiveness of forensic audit reports, interference with the independence of the auditor and usage of confidentiality to limit audit investigation. Therefore, this study was motivated to examine the significance the forensic audit reports from the Office of the Auditor General have towards effective investigation of corruption cases in Kenya. This was guided by three specific objectives, the first one was to establish the effect of forensic audit reports’ comprehensiveness and audit clarity on effective investigation of corruption cases in Kenya. The second specific objective was to establish the effect of access to Government Commercial in Confidence contracts on effective investigation of corruption cases in Kenya. The final specific objective was to establish the effect of the independence of the Office of the Auditor General on effective investigation of corruption cases in Kenya. The fraud management lifecycle theory, public choice theory, and fraud pentagon theory formed the theoretical framework of the study. Primary data, for analysis was collected by using structured questionnaires from 95 respondents that had been sampled from a target population of 125 respondents. They comprised of 9 investigation staff officers from the Ethics and Anti-Corruption Commission sampled from a target population of 12 respondents, 9 staff officers from the Office of the Director of Public Prosecutions sampled from a target population of 12 respondents and 77 forensic auditing staff from the OAG Office with a target population of 101 respondents. Descriptive, Pearson correlation and multiple linear regression models were employed for analysis. The regression analysis results were able to note that comprehensiveness and audit clarity in forensic audit reports is a factor that can significantly lead to effective investigation of corruption cases in Kenya. The results also observed that limited access to Government Commercial in Confidence Contracts decreases effective investigation of corruption cases in Kenya. The findings also observed that the independence of the Office of the Auditor General to utilize forensic auditing significantly increases effectiveness in investigation of corruption cases in Kenya. The study concluded that forensic audit report from the OAG should be comprehensive and clear enough to be valuable towards the efficiency of concluding subsequent investigations by other agencies on a matter. It also concludes that limited access to Government Commercial in Confidence Contracts decreases effective investigation of corruption cases in Kenya. Government Commercial in confidence outsourced contracts should be scrutinized by the OAG forensic auditing unit whenever any malpractice is suspected to establish transparency. Finally, the study concluded that, when the Office of the Auditor General is fully independent to use forensic auditing effectively, then its reports would improve effective investigation and prosecution of corruption cases. Keywords: Forensic Audit Report, Investigation, Prosecution, Corruption, Office of the Auditor General, Government Commercial in Confidence Contracts, Independence
Assessing factors influencing adoption of Artificial Intelligence in audit of public entities in Kenya
(Strathmore University, 2024) Apondi, A. M.
The current digital era, industrial 4.0 and surge of financial transactions leading to a deluge of data has complicated the work of contemporary auditor rendering traditional auditing methodologies inadequate. This has birthed Artificial Intelligence (AI) with capacity to match the transmuting nature of fraud. As other professions rush to benefit from AI, auditing has lagged behind with low levels among the big four that includes Deloitte, PricewaterhouseCoopers, Ernst & Young and Klynveld Peat Marwick Goerdeler. Key stakeholders such as professional bodies and Supreme Audit Institutions are under pressure to include risk in audit an arduous task for auditors using traditional methodologies compelling exploration of robotic auditors born from AI. However, the desire to espousal remains low with several factors considered as encouraging or stifling the process. The purpose of this study was to assess factors influencing the adoption of AI in audit of public entities in Kenya. The specific objectives were to determine the influence of technological, organizational and environmental factors guided by Technology Organization Environment (TOE) framework and Diffusion of Innovation (DOI) theory. It targeted all the active audit personnel in the Office of Auditor General (OAG) who is the principal government auditor in Kenya. Simple random sampling was used to select 333 auditors to participate in the study with structured questionnaire to collect data. Validity and reliability of the research instrument was ascertained in a trial study. Data was analysed using both the descriptive and inferential statistics riding on Statistical Package of Social Sciences (SPSS). Descriptive statistics included percentages, means and standard deviations, while the inferential included the multinomial logistic regression, spearman rank correlation and factor analysis. Tables and figures were used in data presentation. The results revealed that technological, organizational and environmental factors positively influence the low adoption of AI in audit of public entities in Kenya with odds ratios that are higher than 1. Organizational factors showed a slight edge over technology, which came second with environmental factors scoring least. However, they collectively accounted for 86.170% of factors that influence adoption of AI in audit of public service entities. To overcome the limitation in smart auditing, the study recommends stakeholders to focus on addressing the factors associated with adoption to match the emerging challenges in the wake of torrential flow of transactional data.
Effect of company specific characteristics on the adoption of emerging technologies in finance functions: case of non-financial companies listed in Kenya
(Strathmore University, 2024) Kebati, P. N.
Over the past decade, corporations have taken advantage of low-cost and efficient technologies to automate their finance departments in a bid to gain a competitive advantage through lowering administrative overheads, improving risk management, and ensuring that data that is required for decision-making by business leaders is provided on a real-time basis to ensure quick decision making. The study aimed to assess the level of usage of emerging technologies in the finance function of listed non-financial companies in the Nairobi Securities Exchange (NSE), identify company features and the type of emerging technologies adopted, and identify opportunities for the application of emerging technologies and challenges that hinder the adaption of the emerging technologies. Leveraging the Diffusion of Innovation Theory and Technology Organization Environment Theory, data on company characteristics was collected from primary data sources through a questionnaire administered to the Chief Finance Officers and secondary data from audited financial statements of 34 listed non-financial companies to assess the influence of company characteristics on the adoption of emerging finance technologies through the use of a binary logistic regression model. The findings indicated that the level of usage of emerging technologies in the finance function of listed non-financial companies in the NSE is at the initial phase of development with 21.7% of the companies having adopted the use of emerging technologies. The binary logistic regression model analysis found that company profitability, ownership concentration and ownership concentration and CFO tenure had a negative, relationship with the adoption of emerging finance technologies whilst company liquidity, size age, board independence, number of employees in the finance department, and CFO age had a positive relationship with the adoption of emerging finance technologies and none of the independent variables had a significant relationship with the adoption of the emerging finance technologies. The study also revealed a significant lack of enthusiasm among listed non-financial companies to identify opportunities for adopting emerging finance technologies, citing challenges such as insufficient IT infrastructure, limited awareness of functionalities, and a skills gap, and recommends that Companies invest in foundational tools and necessary talent to reap the potential benefits. This research contributes to the literature on technological innovation and breaks new ground by focusing on non-financial companies listed on the NSE.
The Effect of intellectual capital on financial performance of listed firms in Kenya: the moderating role of firm size
(Strathmore University, 2024) Kiminda, C. N.
The Nairobi Securities Exchange (NSE) plays a crucial role as a platform for capital raising and investment facilitation within Kenya's dynamic economy. Despite this, many firms listed on the NSE struggle with inadequate financial performance. This research aimed to explore the relationship linking intellectual capital to the financial performance of NSE-listed firms in Kenya, focusing on the prevalent issue of underperformance. Additionally, it investigated how firm size moderates this relationship. The study was based on three theoretical frameworks: The Resource-Based View theory, Social Capital Theory, and Dynamics Capabilities Theory, within a positivist philosophical stance. Both primary and secondary data were analyzed, with primary data being collected using structured questionnaires. The study followed a descriptive and cross-sectional research design, descriptive and inferential statistics were used to analyze the data. Correlation and multiple linear regression, were used to establish variations and associations between the variables. The study established that human capital has a positive relationship with financial performance of NSE listed firms. This was shown by the regression and correlation results which support the results as there existed a positive relation between human capital and ROA. The findings on structural capital and relational capital and financial performance similarly yielded a positive result establishing a positive relationship between structural capital and ROA and a positive relation between relational capital and ROA return on assets. The combined effect of intellectual capital positively affects financial performance measured in ROA.
The Factors affecting adoption of electric vehicles by public service vehicle matatu SACCOS in Nairobi City County, Kenya
(Strathmore University, 2024) Odhiambo, V.
The adoption of electric vehicle innovation is something whose time has come given the rising climate and environmental concerns. Its adoption, however, faces numerous challenges, especially in Kenya and other developing countries. The study investigated the variables that impact Kenya’s adoption of electric vehicles. The study purposed to establish the influence of cost of electric vehicles, infrastructure development, and knowledge on the adoption of electric vehicles by public service vehicle matatu SACCOs in Nairobi. The technological acceptance model and diffusion of innovation theories underpinned the study. The study made use of the descriptive cross-sectional survey approach to achieve this. The study targeted 272 PSV matatu SACCOs in Nairobi City County. The data was gathered using a structured questionnaire which was administered at the offices of PSV matatu SACCOs within Nairobi. Data analysis involved descriptive statistics in form of means and standard deviation and inferential statistics in form of correlation, simple and multiple linear regression analyses. Spearman's correlation revealed that infrastructure development had a strong and positive correlation with the adoption of electric vehicles by public service vehicle matatu SACCOs in Nairobi (r=0.463, p=0.000<0.05), moderate correlation between knowledge and adoption of electric vehicles by public service vehicle matatu SACCOs in Nairobi (r=0.376, p=0.000<0.05). The cost of electric vehicles had a negative correlation with adoption of electric vehicles by public service vehicle matatu SACCOs in Nairobi (r=-0.459, p=0.000<0.05). Multiple linear regression results showed that knowledge, infrastructure development, cost of electric vehicles explain 53.3 percent adoption of electric vehicles by public service vehicle matatu SACCOs. Regression coefficients showed that infrastructure development has a positive and statistically significant relationship with the adoption of electric vehicles by public service vehicle matatu SACCOs (β=0.157, p=0.000<0.05), knowledge also showed a positive and statistically significant relationship with the adoption of electric vehicles by public service vehicle matatu SACCOs (β=0.233, p=0.000<0.05). The cost of electric vehicles (β=-0.075, p=0.002<0.05) indicated a negative and statistically significant relationship between cost of electric vehicles and the adoption of electric vehicles. The study concludes that cost of electric vehicles, knowledge and infrastructure development are crucial determinants in the adoption of adoption of electric vehicles by public service vehicle matatu SACCOs. The study recommends government intervention to reduce costs, improve infrastructure, and create more awareness through policy development. The study recommends further studies examine other factors apart from the three identified factors; cost, infrastructure development, and knowledge that might influence the adoption of electric vehicles. A study should also be done to examine the influence of policies and rules on the adoption of electric vehicles. Key words: knowledge, infrastructure development, cost of electric vehicles, public service vehicle matatu SACCOS, Nairobi City County
Moderating effects of institutional ownership on determinants of cash holdings of non-financial firms listed on Nairobi Securities Exchange
(Strathmore University, 2024) Ongwae, J. K.
Cash is very crucial for businesses, impacting liquidity, operational flexibility, and strategic decision-making. This study investigates the moderating effects of institutional ownership on determinants of cash holdings in non-financial firms listed on the Nairobi Securities Exchange (NSE), factoring the unprecedented challenges posed by the COVID-19 pandemic. The pandemic has significantly altered the economic landscape, prompting firms to reassess their cash management strategies. The objectives of the study were; to establish the effect of profitability on cash holding of non-financial firms listed on the NSE, to establish the effect of firm size on cash holding of non-financial firms listed on the NSE, to establish the effect of board size on cash holdings of non-financial firms listed on the NSE, to establish the effect of board gender on cash holdings of non-financial firms listed on the NSE, to establish the effect of growth opportunities on cash holdings of non-financial firms listed on the NSE, to establish the effect of dividend payment on cash holdings of non-financial firms listed on the NSE, to determine the moderating effect of institutional ownership on cash holding and the determinants on non-financial firms listed on the NSE. The study used shiftability theory, trade off theory, pecking order and agency theory. The research design used in this study was longitudinal. For the period 2011-2022, a population of 44 non-financial firms listed on the Nairobi Securities Exchange was conducted. Out of the 44 firms, the research managed to get data for 31 firms. The population of the study comprised of agricultural, commercial and services, automobile and accessories, construction and allied, energy and petroleum, investment and services, manufacturing, and real estate investment trusts. Secondary data was derived from yearly reports and financial statements. The methodology applied was Arellano bond dynamic panel data model to test determinants of cash holding using shiftability, the trade off, pecking order and agency theories. The study found firm size had a negative significant relationship with cash holdings that was consistent with shiftability theory while profitability, board size, growth opportunities had a positive significant relationship that were consistent with pecking order, agency, and trade off theory. The study recommends guidelines to be set for different size firms as one-size-fits-all policies may not be suitable, and larger firms might have different liquidity needs compared to smaller ones. The study also recommends enforcement of disclosure requirements that mandate companies to report on the influence of institutional ownership on financial decisions, including cash management.
The Factors that affect commercial property prices in Nairobi County: a case of real estate players in Nairobi
(Strathmore University, 2024) Kiura, P. M.
Pricing is a key factor in achieving full occupancy and maximizing return on investment in the commercial property sector. To thrive in the competitive property market, it is essential for market players to identify the pricing factors that provide a competitive edge. This study aimed to establish the factors affecting commercial property prices in Nairobi County, the economic hub of the region. The broad objective was to determine the overall impact of various factors on commercial property prices, while the specific objectives focused on the effects of macroeconomic factors, property location, government policies, and competition. The study adopted a descriptive cross-sectional survey design to capture a snapshot of the current situation. The target population comprised real estate players registered with the Kenya Property Developer Agencies, active, highly ranked, and operating in Nairobi. A sample size of respondents was selected through a judgmental sampling method and stratified according to the type of firms. Primary data were collected using structured questionnaires. Data analysis was conducted using the Statistical Package for Social Sciences (SPSS). Quantitative data were analyzed through descriptive statistics, including mean and standard deviation. Inferential statistical analysis involved Pearson correlation analysis and multiple linear regression analysis to test the association between the variables. The findings revealed that location significantly influenced the pricing of commercial properties, highlighting the need for transparent and corruption-free property valuation processes. Macroeconomic factors, such as inflation and interest rates, also played a significant role in property pricing, emphasizing the importance of monitoring economic conditions. Competition was identified as a critical determinant, suggesting the need for regulatory mechanisms to ensure fair competition within the real estate sector. The study was anchored on the Real Estate Market Theory and the Hedonic Pricing Model, providing a robust theoretical framework for understanding property pricing dynamics. The insights gained from this study are crucial for policymakers and practitioners in formulating strategies to enhance market stability and investor confidence. The study's limitations included the reliance on a descriptive cross-sectional survey design, which cannot establish causality or changes over time, and the focus on Nairobi County, limiting the generalizability of the findings. Future research should consider longitudinal designs and explore additional variables such as technological advancements, demographic shifts, and environmental factors to provide a more comprehensive understanding of commercial property pricing. The findings were presented using tables and graphs, providing a clear visualization of the data and facilitating the interpretation of results. This study contributes to the empirical evidence on commercial property pricing and offers actionable recommendations for improving property valuation and market regulation.
The Effects of implementing audit report recommendations on corporate governance practices in Kenyan parastatals
(Strathmore University, 2024) Owino, C.
Corporate governance refers to the regulations, rules and standard operating procedures that direct how organizations and businesses run, manage, and control their operations. It involves the regulations, rules, practices and procedures that guide the regulation, management and operation of the activity’s organizations. Auditing is the objective and thorough study of a company's data, operations, activities, records and financial statements to see if they fulfil specified standards and laws. Thus, the study seeks to determine the effects of implementation of audit report recommendations on corporate governance practices in parastatals in Kenya. The specific objectives of the study were to establish the effect of quality of audit reports, regular-follow up audits and audit action plans on corporate governance practices in parastatals in Kenya. The study was guided by the agency theory, stakeholders’ theory and the signaling theory. correlational research was the anchoring design. The target population of the study involved the management and the board members of the parastatals in Kenya. The target population of the study included 1 auditor, 1 senior manager, 1 accountant and 1 board member as respondents. Stratified sampling was used to selected parastatals from the different ministries to participate in the study. Simple random sampling was used to select respondents who participated in the study from the selected parastatals. The analysis of data was done with the use of SPSS. The results were outlined in the form of descriptive and inferential statistics. From the regression results, there was a significant and positive relationship between quality of audit reports, regular follow up audits and audit action plans with corporate governance practices. The study concluded that quality of audit reports in the Kenyan parastatals is a significant determinant of corporate governance practices among the Kenyan parastatals. The study further concluded that regular follow-up of audits in the Kenyan parastatals is a significant determinant of corporate governance practices among the Kenyan parastatals. The study finally concluded that audit action plans in the Kenyan parastatals is a significant determinant of corporate governance practices among the Kenyan parastatals. The study recommended that the Auditors need to release quality audit reports by ensuring having qualified and experienced auditors and having minimal influence from management. The study further recommended that regular follow up of the previous audit reports needs to be done by the auditor in conjunction with the management. The study also recommended that audit committees or Parliamentary accounts committee needed to draw a formal audit action plan that would guide the process of implementing the audit recommendations where the recommendation issued earlier had not been implemented
The Effect of corporate parent roles on the operational performance of subsidiaries in international NGO`s in Kenya
(Strathmore University, 2024) Rao, E.
The not-for-profit sector has been rapidly growing in Africa and around the world playing a leading role in improved livelihoods and poverty alleviation. Through their work with multiple stakeholders across various geographic areas, organisations in the NGO sector come across challenges that necessitate the adoption of a decentralised structure including the need for operational performance and optimal service delivery. There is however lack of clarity on what drives the decentralisation including which functions ought to be decentralised and the impacts of decentralisation on the organisation’s performance. Additionally, there exist staff disagreements between the home and field office staff that could potentially impede the organisations work and deter responsiveness to partners and community concerns. Corporate parent roles arise because of the need to strengthen the decentralised entities, realize synergistic benefits and align the vision across the organisation. The value addition efforts have been seen to be challenging but essential for an improved business strategic position with effects that both improve or destroy value. This study sought to establish the effect of corporate parent roles (Portfolio manager, Synergy manager and the Parental developer) on the operational performance of subsidiaries in international NGO`S in Kenya. The systems theory and agency theory were used to anchor this study. A descriptive research design technique was employed and by use of a questionnaire, responses from 270 respondents in the 30 leading INGO`s by spend in Kenya were considered. The data that was collected was then analysed using correlation and regression analysis and descriptive statistics, to determine the relationship between the study variables to draw conclusions of the study. The results showed that the portfolio manager role, the synergy manager role and the parental developer role all have a significant positive influence on operational performance of INGO subsidiaries in Kenya. This study contributes to the policy formulation and operational structures of INGO`s. It also provides tools and techniques for practicing managers therefore enriching the Systems theory. The findings of this study were however limited to the Kenyan, INGO context and focused on corporate parent roles, limitations that future research should address.
The Effect of service design approaches on operational performance of five star hotels in Nairobi County, Kenya
(Strathmore University, 2024) Ouma, A. E.
Service design is a key factor in increasing customer attraction and retention, which in turn increases the operational performance of an institution, including hotels. A major research gap that this study sought to fill is evident from insufficient empirical studies on the impact of service design approaches in the context of five-star hotels in Nairobi County, Kenya. While service design has been recognized as an important factor in customer acquisition and retention, there is limited research focusing specifically on the organization operational performance of five-star hotels in this region. This study therefore sought to evaluate the effect of service design approaches on the operational performance of five-star hotels in Nairobi city county Kenya. The specific objectives are: to establish a relationship between tangibility and operational performance of five-star hotels in Nairobi County Kenya; to determine the impact of responsiveness on the organization operational performance of five-star hotels in Nairobi City County Kenya; to establish the relationship between the service sequencing and the organization operational performance of five-star hotels in Nairobi County, Kenya; and to establish the relationship between service evidencing and the organization operational performance of five-star hotels in Nairobi County, Kenya. The study was based on Parasuraman’s Model and ,The Porters’ Theory and Resource based theory. The study adapted a correlational descriptive research design to establish the relationship between variables. Stratified random sampling was also used to select 105 respondents from a target population of 142 respondents that included Operations, Marketing Managers and F&B Departments drawn from the 8 five-star hotels located in Nairobi District. Data was collected through questionnaires. Both descriptive and inferential statistical analysis was used where descriptive statistical analysis included mean and standard deviation, while inferential statistics was performed using Pearson's correlation and multiple regression analysis at the 95% interval level. The results were presented in tables, graphs and narratives. The study recommended that service design approaches factors that include tangibility, responsiveness, service sequencing and service evidencing (P <.05) have a significant effect on organization operational performance of five-star hotels in Nairobi city county, Kenya. The study recommended that there is need for the application of effective strategies such as service design approaches in order to improve the operational performance of five-star hotels, the management of five-star and various department heads need to evaluate how the five-star hotels that include service design approaches factors that include tangibility, responsiveness, service sequencing and service evidencing can be employed in order to achieve operational performance and there is need for the Government to allocate enough budget to train the Ministry officers and other industry players on standardization of services in the hotel sector to ensure that the hotels ensure quality services.
The Influence of firm and governance characteristics and the moderating effect of Capital Markets Authority Code (2015) on environmental, social and governance disclosures among listed companies in Kenya
(Strathmore University, 2024) Mnyogha, D.
The study examined the influence of firm and governance characteristics and the moderating effect of Capital Markets Authority Code (2015) on environmental, social and governance disclosures among listed companies in Kenya. The firm characteristics investigated are the leverage and profitability while the governance characteristics examined were board size, board independence and board gender. The study targeted 62 firms listed on the Nairobi Securities Exchange (NSE) from the year 2013 to 2021. Content analysis was used to measure environmental, social and governance disclosures (ESGD). Ontological research philosophy was used due to availability of secondary data. As well, the cause-effect among the study variables was underpinned by the following theories: legitimacy theory, agency theory, and institutional theory. Panel regression analysis was conducted to test the objectives. The results indicated that leverage, profitability, board size, board independence and board gender positively influence ESGD. In addition, firm size was found to have a positive controlling effect on ESGD. Regarding the moderating effect, CMA code (2015) moderates the effect of leverage, profitability, board size, board independence and board gender on ESGD as shown by improved r-square. The findings underscore the importance of leverage, profitability, board size, board independence and board gender in enhancing ESGD. These findings are useful to researchers, investors, policymakers and regulators in understanding what influences environmental, social and governance disclosures. Keywords- ESGD, Firm characteristics, Governance characteristics, Agency Theory, Institutional Theory, Legitimacy Theory, the CMA code (2015)
Effects of flexible work on job satisfaction among Nairobi’s multinational employees
(Strathmore University, 2024) Ogachi, C.
The study argued that flexible work arrangements have a lengthy historical background but have experienced gradual adoption. However, with the onset of the COVID-19 pandemic, companies globally, particularly for nonessential employees, were compelled to implement flexible work arrangements as a crucial safety measure. The purpose of the study was to determine the effects of flexible working arrangement on job satisfaction in MNCs in Nairobi County, Kenya. The study focused on these objectives: to determine the effect of flexibility in work location on job satisfaction of employees in multinational companies in Nairobi, to ascertain the influence of flexibility in work scheduling on job satisfaction of employees in multinational companies in Nairobi, and to establish the influence of flexibility in the number of hours worked on job satisfaction of employees in multinational companies in Nairobi. This study was based on two key theories: Herzberg’s Two Factor Theory that supports job satisfaction, and flexible firm theory which underpins flexible work arrangements. The study used descriptive research design, and questionnaires to collect data from the respondents. The findings were presented using descriptive and inferential statistics. The study findings revealed that flexible working arrangements have an impact on employee job satisfaction within multinational corporations. Notably, flexibility in work location emerged as a significant contributor to job satisfaction in multinational companies located in Nairobi County, Kenya. The study reported a positive relationship between flexibility in work location, flexible work scheduling, flexible working hours, and job satisfaction. All these aspects of flexible arrangements were found to be significant factors affecting job satisfaction in multinational corporations. As a practical recommendation, the study suggested that organizations consider adopting a combination of flexible working arrangements, along with other motivational factors, to enhance employee job satisfaction.
Determinants of tax evasion among individual taxpayers and moderating role of demographic factors in Nairobi Metropolitan area, Kenya
(Strathmore University, 2024) Kuria, S. N.
This study was motivated to establish the determinants of tax evasion and moderating role of demographic factors of age and level of education among individual taxpayers in Nairobi, Kenya. This was precisely addressed by four specific objectives; namely, to establish the influence of behavioral, administrative and economic factors on tax evasion among individual taxpayers in Nairobi Metropolitan area, Kenya, besides establishing the moderating role of age and level of education. The study was anchored on the Economic Deterrence Theory, Theory of Planned Behaviour, the Classical Growth Theory and the Social Identity Theory. The study was guided by the descriptive correlational research design. The target population was individual taxpayers based in the Nairobi Metropolitan area, Kenya. Based on anecdote data, the target population comprised of 10,411,220 people living in the five counties of Nairobi Metropolitan area, Kenya, namely, Nairobi, Machakos, Kajiado, Kiambu and Murang’a. The total sample size of the individual taxpayers to be randomly sampled were 768. A structured questionnaire was used to collect data. A pilot test was carried out of 78 individual taxpayers before the main data collection exercise in order to assess the reliability and the validity of the questionnaire. Cronbach’s alpha test was used assess the reliability of the questionnaire. The factor analysis model was used by the study to assess the construct validity of the survey tool. Descriptive and Multinomial Logistic regression models were used to show the effect of behavioral, administrative and economic factors on tax evasion among the individual taxpayers in Nairobi Metropolitan area, Kenya, and how age and level of education moderates the relationship between the factors and tax evasion. Results showed that; there is a significant negative impact on the likelihood of major tax evasion for every one-unit increase in the behavioral factors score; for every one-unit increase in the administrative factors score, the odds of major evasion decrease by a big margin; when the economic factors score increases by one unit, the odds of major evasion increased greatly. Additionally, results revealed that age and education moderate the relationship between behavioral factors and tax evasion; between administrative factors and tax evasion; but do not significantly moderate the relationship between economic factors and tax evasion. It is concluded that enhancements in taxpayer behavior, such as increased compliance, ethical tax practices, adherence to religious principles, and positive tax morale, substantially reduce the probability of engaging in major tax evasion. It is recommended that policymakers should promote ethical tax practices and enhance taxpayer behavior through targeted education campaigns and community programs that emphasize compliance, and positive tax morale. Key words: Tax morale, Tax evasion, Classical Growth Theory, Tax Compliance, Tax Incentives
Influence of expatriate induction management programs on expatriate performance among Non-Governmental Organizations in Sudan: a case study of Concern Worldwide’s operations in Sudan
(Strathmore University, 2024) Lubembe, E. K.
Induction program is one thing that local as well as multinational enterprises must put in place for the success of the business and in enhancing employee’s productivity. Humanitarian organizations operating in low-income countries often have to deal with unique challenges like cultural differences, limited resources, and security risks. Moreover, low-income countries also present unique socio-economic and political contexts for expatriate which needs them to be inducted to get well prepared for the working environment in the foreign country. These concerns require a different approach to effectively organize and make the expatriates induction successful. In line with these contextual and knowledge gaps, the objective of this study was to assess the influence of Induction Management programs on Expatriate performance among Non-Governmental Organization : A case study of Concern Worldwide in Sudan with specific objectives being to assess the influence of Expatriate induction training, organizational cultural induction, organizational Safety Procedures Induction and administrative induction program on Expatriate performance in Concern Worldwide in Sudan. The study was based social learning theory, reinforcement theory and a person-centered dynamic theory and how they contribute towards the development of new knowledge on the induction management program and expatriate performance. The study adopted a pragmatism philosophy the research design adopted was the correlational research design and the target population was 150 respondents. Data was collected using both interview guides and structured questionnaire. And the model used for the quantitative data was multiple regression model. While for the qualitative data a thematic analysis was adopted with the aid of NVivo. Results were presented using tables, figures and quotes/excerpts for the qualitative part. The results pinpointed a range of crucial problems for personnel with Concern Worldwide, showing a necessity for a better support system and workplace setting. Number one is the fact that the shortage of domestic psychological support services is raised as a key issue by workers during induction. The findings emphasize the importance of comprehensive induction programs. Effective expatriate induction training, cultural integration initiatives, safety procedure inductions, and administrative support are all critical components that contribute to the successful performance of expatriates in their respective roles. These results underscore the necessity for organizations to invest in well-structured induction programs to ensure their expatriates are well-prepared and supported. The study provides valuable insights into the impact of induction programs on expatriate performance, and assert that there are several limitations that should be acknowledged including, the study's sample size and scope being limited to 150 expatriates and just being specific organizations with different working environment within the regions, which in one way or the other may affect the generalizability of the findings. The study suggested a Future research to include a more diverse and larger sample to validate and extend the findings across different contexts and industries
The Effect of enterprise risk management practices on the organizational performance of non-financial firms listed on the Nairobi Securities Exchange: the moderating role of firm characteristics
(Strathmore University, 2024) Robert, H. M.
In the context of the dynamic corporate environment, where successful economic performance and value creation are paramount objectives, this study investigated the effect of ERM practices on the organizational performance of listed non-financial firms in the NSE, with an exploration of how firm characteristics moderate this relationship. Through a mixed-method approach using both primary and secondary data sources, the study aimed to establish the relationship between ERM practices (risk culture, risk identification and governance, risk assessment mitigation, and control) and organizational performance, determine the impact of firm characteristics on this relationship, and explore management perceptions regarding the relationship between ERM practices and organizational performance. Secondary data was collected from the financial statements of all the 39 listed non-financial firms. Primary data was collected through the issue of questionnaires to 114 CEOs, CFOs and CROs. Objective one entailed the analysis of data using descriptive statistics and Structural Equation Modeling (SEM) in the R statistical programming language to unveil structural linkages. The structural model assessment revealed a significant (p < 0.05) relationship between ERM and its eight components, except for objective setting and information & communication (p > 0.05). Furthermore, a positive correlation was identified between ERM and organizational performance. The correlation matrix indicated that all eight ERM components exhibited a positive correlation with organizational performance. For objective two, a multiple regression analysis determined a direct impact of ERM practices on organizational performance. Additionally, the analysis indicated a positive influence of firm characteristics on organizational performance, albeit statistically insignificant. For objective three, the management concurred with the regression analysis, acknowledging the impact of ERM practices on organizational performance. They perceived a risk-focused culture as a primary motivator for ERM adoption, with unsupportive cultures identified as barriers. One key limitation of the study was the use of composite score to measure organizational performance. Future research could benefit from examining the direct impact of ERM practices on the four perspectives of the Balanced Scorecard (BSC): Financial, Customer, Internal Business Processes, and Learning & Growth. Overall, the study enhances understanding of how ERM practices contributes to improved organizational performance and informs future research directions in this area.
Perceived effectiveness of anti-money laundering preventive measures in reducing incidences of money laundering through commercial banks in Kenya
(Strathmore University, 2024) Oyoo, J.
Many legislative and institutional efforts have been directed at countering money laundering for over thirty years but there are several accounts of money laundering cases still being reported worldwide. Banks are important in combating money laundering. They have been heavily penalized for violating Anti-Money Laundering (AML) regulations and, in some instances, for their controls failing to prevent money laundering. The above raises the question of whether the underlying problem is just a violation of policies and regulations or whether the existing AML system is flawed. Given the above, the study assessed the perceived effectiveness of AML preventive measures as applied by commercial banks in Kenya to reduce the likelihood of money laundering. The specific objectives were to determine whether customer due diligence measures and the ongoing monitoring of transactions using digital systems by commercial banks as required by the applicable law are effective in reducing money laundering incidences. The study assessed how the corporate culture of commercial banks in Kenya affects compliance with the AML preventive measures which in turn affects the measures’ effectiveness in reducing incidences of money laundering. The theory of the crying wolf and the fraud diamond theory were applied in the study. The research philosophy adopted for the study was the positivist research philosophy. Questionnaires were administered to obtain primary data. The questionnaires were distributed to 76 respondents drawn from 38 commercial banks registered by the Central Bank of Kenya as of 31 December 2022. 64 responses were received translating to an 84% response rate. Two respondents which included account opening officers and compliance officers were selected from each bank. Descriptive and inferential statistics were applied to analyze the data. In addition, reliability and diagnostic tests were first conducted before inferential statistics analysis. Multiple regression analysis was used to analyze the data. The results showed that the AML preventive measures which comprised client due diligence and ongoing monitoring of transactions and corporate culture had a positive and statistically significant effect on the reduction of incidences of money laundering in commercial banks. From the findings of the study, it was noted that employees play a big role in the implementation and compliance with AML requirements. Therefore, commercial banks should continuously train and update their staff on money laundering trends to improve their efforts in reducing money laundering cases. Further, although CDD, ongoing monitoring and corporate culture are important individually, their applicability and assessment should be done holistically. Therefore, the study recommends the regulator and banks ensure that policies, resources, and efforts are directed at all three measures concurrently. Also, due to limitation of time, the study did not include the updates to the POCAMLA (2009) and POCAMLAR (2013) which were done during the study. Therefore, future studies should consider looking into the impact of the update on regulations in the implementation and effectiveness of AML measures.
Determinants of a saving culture in unit trusts among the young adults in Nairobi County, Kenya
(Strathmore University, 2024) Musyoka, M. M.
This study seeks to establish determinants of the adoption of unit trusts for savings among young adults aged 18-24 in Nairobi County, Kenya. The specific objectives include: to determine the influence of financial literacy; parental socialisation, peer influence, and level of income, on the development of a savings culture in unit trusts among the young adults aged 18-24 in Nairobi County, Kenya. This study seeks to address a number of knowledge gaps. Firstly, there have been few studies carried out on the determinants a savings culture in unit trusts among the young adults in Kenya. Secondly, there are studies which have been conducted on credit products rather than on savings which has rendered their findings completely inappropriate for this study given the different circumstances surrounding credit products. Thirdly, there has been limited research on the factors that influence the uptake of unit trusts for savings. The study was underpinned by the Consumer Socialisation Theory. The study applied a descriptive correlational research design since it purposed to arrange and explain the various attributes of the study items. The target population of the study was all the 36 licensed trust funds in Kenya. This study used questionnaires for collecting data so as to enable the collection of more thorough inquiries and because it offered the convenience of accessing individuals who have busy schedules. This study applied a 5-point Likert Scale then the Statistical Package for Social Sciences (SPSS) (version 20) was used to carry out descriptive and inferential statistical analysis. According to the results, the young adults have gained financial numeracy and financial knowledge which has improved their financial planning. As youth, they have trained in budgeting which has enhanced their debt management and boosted their ability to save. Their investment or savings practices reflect their level of financial literacy. The young adults have experienced challenges making enough revenue to save. They tend to have impulsive consumption behaviours, to alternate between brands, however, and are also knowledgeable about financial management. The study recommended that the Government needs to come up with funding initiatives for young adults so as to enable them acquire savings products such as unit trust funds. The managers of unit trust funds should come up with promotional strategies that reward individuals for referring others to acquire their products among the young adults since they tend to follow the recommendations of their peers. Given the dearth of local research on the adoption of unit trust funds in general, this study will set the tone for other local researchers and scholars to delve into this category of financial products so as to build on the body of knowledge. The study was limited by individuals who were unwilling to provide information; the 36 licensed unit trust funds, and the four determinants of adoption of unit trust savings. Key words: Financial Literacy; Level of Income; Parental Socialisation; Peer Influence; Saving Culture; Strategic Determinants; Unit Trusts; and Young Adults Aged 18-24.
The Influence of organisational restructuring on the performance of companies listed on the Nairobi Securities Exchange
(Strathmore University, 2024) Githinji, J.
NSE listed firms have adopted various strategies to improve performance. Despite various strategies adopted, it remains uncertain how the restructuring has influenced performance of these organisations. This study therefore sought to find out the influence of organisational restructuring on performance of companies listed on the Nairobi Securities Exchange. It was guided by specific objectives namely: to determine the influence of operations restructuring, governance restructuring, downsizing and job restructuring on the performance of the companies listed on the NSE. The study was anchored on Theory of Change, Structuration Theory and Resource Based Theory. The study adopted descriptive research design. The targeted population of this study were the 179 senior managers of the seven companies listed on the Nairobi Securities Exchange based in Nairobi County, that have undergone restructuring in the last five years. A non-probability technique of purposive sampling was applied to select a sample size of 124 respondents. A structured questionnaire was used as an instrument for primary data collection. For quantitative data, descriptive statistics and inferential statistics was used in the analysis of data. From the data collected, the study had a high response rate. The study concludes that operations restructuring, governance restructuring and downsizing had a positive and significant relationship on organisational performance in NSE listed firms. The study also concludes that organisational restructuring had a positive and significant relationship on organisational performance in NSE listed firms. In contrast, the study established that job restructuring does not influence the organisational performance in NSE listed firms. The study recommends management should engage their employees when undertaking downsizing and ensure that there is a good approach in their downsizing process to take care of the emotive reactions that may arise. The study recommends that board diversity components, including gender diversity, board size, board independence, and board-director duality are very important to organisational performance and need to be strengthened. The study recommends that the policy makers should develop clear guidelines for organizational restructuring which can include best practices for communication, employee engagement, and redundancy management. The study recommends policy makers to promote training and support for companies undergoing restructuring. Policymakers could offer workshops or financial assistance for companies to help them plan and execute restructuring initiatives smoothly. Lastly, the study recommends policy makers to strengthen regulations for listed companies to incorporate regulations that require companies to disclose restructuring plans in detail and to provide clear justification for the chosen approach. This can increase transparency and accountability. During data collection, certain limitations were encountered as some respondents were reluctant to provide necessary information, likely due to their attitudes towards the study or concerns about potential victimization. To address this challenge, efforts were made to build rapport with respondents by explaining the purpose of the research and ensuring them that any information provided would be kept confidential. Furthermore, the study faced difficulties with questionnaire returns. To overcome this, research assistants facilitated a self-administered approach where they delivered and retrieved the questionnaires from respondents. The study recommended that additional research should be done on other variables of restructuring, for instance financial restructuring, and its influence on organisational performance in the NSE listed firms.
Effects of strategic capabilities on sustainable performance in commercial domestic airlines in Kenya
(Strathmore University, 2024) Mutua, F. N.
In an industry characterized by intense competition, volatile market conditions, evolving customer preferences, effective deployment of strategic capabilities has emerged as a critical determinant of a domestic commercial airline’s performance. Strategic capabilities encompass having tangible and intangible resources, threshold, and core competencies that enable organizations to align resources with their long-term objectives. Airlines that leverage strategic capabilities bolster their competitive positioning and financial stability. Compared to the rest of the globe, Africa’s airline industry performance is below average in market share and profitability. The competitive threats from multinational players globally have made African airlines aware of their precarious situation. That has incentivized the airlines to proactively engage in strategic capabilities to enhance their performance. In Kenya, several challenges face the commercial domestic airlines, including high fuel prices, cost control, fleet replacement, high taxes, and an unconducive business environment. To effectively compete in the global market, competitive strategies have gained traction as a way of enhancing performance, gaining market share, enhancing profitability, and brand loyalty. However, extant literature linking strategic capabilities adopted and influence on social, economic, and environmental performance of domestic commercial airlines is thin. This area has received little attention in academic inquiry. Therefore, the study closed the gap by investigating the effect of strategic capabilities, namely tangible and intangible resources, threshold, and core competencies, on domestic commercial airlines' economic, social and environmental performance in Kenya. This study used a quantitative descriptive research design to estimate the variables. The strategic balancing theory informed the study’s review and utilized positivist research philosophy. Purposive sampling was utilized to select 103 respondents. A questionnaire was utilized to collect primary data. Data was analyzed using descriptive and inferential analysis with SPSS. Ordinal regression was employed to determine the magnitude and nature of the relation between the variables. The result of the study demonstrated that tangible resources, threshold, and core competencies had a positive impact on economic performance of the airlines, while intangible resources had an adverse effect. Intangible resources, threshold, and core competencies positively impacted the airlines' social and environmental performance, while tangible resources were found to have an adverse effect. The study recommends that investment deepening by the national government to create a conducive environment and lower the cost of doing business and airlines to enhance the passenger experience and brand loyalty. Airlines are also encouraged to adopt measures to minimize their carbon footprint by investing in alternative fuels, efficient fleets, and green technologies, and support community initiatives to enhance their reputation and drive sustainable business. The main limitation of the study was that it was a cross-sectional study, hence it is difficult to establish trends or variable patterns over time.

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