MCOM Theses and Dissertations (2014)

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Analysis of asymmetric and persistence in stock return volatility in the Nairobi Securities Exchange market phases
(Strathmore University, 2014) Ogega, Haggai Owidi
Asymmetric and persistence in the volatility of stock returns are very fascinating features of the behaviour of securities market. The persistence in volatility has a major effect on the future volatility of the security market under the influence of shocks and asymmetric features increases the volatility. This study examined salient features of financial time series of the stock market phases and the behaviour of stock return volatility in the Kenyan stock exchange during the market phases for the 20 share index and the 10 sampled companies over a period of 2003 to 2013. The results obtained shows that bullish market phase takes a longer time to die out than the bearish market phase and fluctuations in the series are variable in time with bear phase much more frequent than bull phase. The asymmetric effect, volatility persistence and clustering volatility behaviour of the volatility are fitted by the Fractionally Integrated Exponential GARCH (FIEGARCH) model. The volatility in the Kenyan stock market during both phases exhibits long-run memory and volatility asymmetry. Volatility estimate and diagnostic tests show volatility clustering, that is, shocks to the volatility process persist and the reaction to news arrival is asymmetrical, indicating that the effect of good and bad news is unsymmetrical with positive news impacting more during bullish and negative news more during bearish. In addition, the bullish phase exhibits a higher degree of long memory persistency meaning when there is a shock on volatility it takes a longer time to decay during bull than bear phase. The findings also lead to the rejection of efficiency market hypothesis (EMH) in NSE. The empirical results would be helpful to investors, policy makers and stock exchange administrators as these give indication of the behaviour of the volatility during the market phases. Furthermore, if traders know the behaviour during the phases, they will adjust to the market‟s moods.
An analysis of the relationship between competitive strategies and organizational performance : a case of mobile telecommunication companies in Kenya
(Strathmore University, 2014) Gathinji, Loice Nyawira
The main aim of the study was to examine the relationship between competitive strategies and organizational performance among firms in the mobile telecommunications industry in Kenya. The study identified the competitive strategies adopted by firms in the mobile telecommunication industry in Kenya, assessed the different levels of implementation of competitive strategies within the firms and lastly examined the relationship between competitive strategies and their performance, This study employed a descriptive survey design and collected data from 63 respondents out of the sample size of72 respondents selected purposively. The study revealed that in the telecommunication industry competition is high and product differentiation and low cost leadership are the most commonly used strategies. Other strategies include strategic alliance strategies and specific market focus strategies. The study concluded that the strategies adopted improved the overall organization performance and some of the key performance indicators that were influenced are: Sales and market share, customer retention, profitability and product developmentlinnovation. The study recommends that organizations should adopt strategies that allow them to achieve competitive advantage over others. Organizations that chose to adopt cost leadership strategy should focus on gaining competitive advantage by having the lowest cost in the industry. In order to achieve a low-cost advantage, an organization must have a low-cost leadership strategy, low-cost manufacturing, and a workforce committed to the low-cost strategy. Also the study recommends that when using product differentiation strategy, a company should focus its efforts on providing a unique product or service to enhance customer loyalty.
The audit performance gap of NSE listed companies: an analysis of client expectations and perceptions of auditing services
(Strathmore University, 2014) Mburu, David Wanyoike
The main objective of this research was to establish if an audit performance gap exists for public listed companies in Kenya. The gap considered was that between client expectations of auditing and client perceptions of the performance of audit firms. The study targeted NSE listed companies because they are mainly audited by the top four audit firms in Kenya. These firms are regarded as offering superior auditing services. The research sought to establish whether client expectations of auditing are being met and to determine how audit firms can improve their service offerings. Based on the data collected the researcher found that a narrow audit performance gap does indeed exist; client expectations are not being met. However, client expectations were found to be more reasonable than those of other stakeholders of financial information such as the public in particular. In order to reduce the performance gap the researcher suggested that clients need to be better educated on the scope of auditor responsibilities as some of their expectations were found to be wide of auditor responsibilities. Auditor training and further studies can also help improve auditor skills and in doing so help reduce the expectation gaps. The limitations of auditing have enhanced the need for more fraud examiners and forensic accounting services. These can help improve fraud prevention and detection while reducing stakeholders’ expectations of auditors. The research findings are of importance to audit firms as they highlighted the most important client expectations of auditing services as well as the expectations which are not being met. These findings are important as they will inform audit firms on how they can improve their services. The underlying theory of the research was the agency theory.
Calendar anomalies - Evidence from the Nairobi Securities Exchange
(Strathmore University, 2014) Kiptanui, Peter Kipchirchir
Calendar anomalies are a phenomenon that seem to suggest that financial securities such as stocks, bonds and even derivatives, experience patterns of returns that coincide with particular points in the week, month or year. Previous studies have suggested that these effects are unique to certain markets and even within those geographical markets, are specific to certain financial products. The reason that calendar effects are considered of particular interest to researchers is twofold: first, they disprove traditional theories that support the existence of efficient markets and second, they offer insight to those who wish to take advantage of arbitrage opportunities to make a profit. The goal of this research thesis was to check the Nairobi Securities Exchange for calendar anomalies. In the event that they exist, the paper is meant to proceed and describe the magnitude of these effects. Should there not have been any effects. This research thesis intended to provide evidence to support that position. This evidence would enable scholars, policy makers and investors aware of what market they are operating in with regard to calendar anomalies. The specific calendar anomalies tested were the day of the week effect and the month of the year effect. These effects were tested in the NSE 20 index and the individual stocks of the Nairobi securities exchange. The results find very slight and diminishing effects in the index. Higher returns were noted in January and Friday going on to Monday. In the individual stocks, Friday was noted as the day with the highest return. However, the anomaly in individual stocks is recorded at very low levels; are as such were not significant to alter a rational investor's decision.
Contribution of foreign direct investment to job creation and skills development in selected multi-national companies in Kenya
(Strathmore University, 2014) Mwangi, Roy
The purpose of this study was to determine the contribution of Foreign Direct Investment (FDI) to skills development and job creation in selected multi-national companies in Kenya. The study further investigated the challenges faced in promoting FDI. The study was carried out in Multinational Companies guided by the United Nations Conference for Trade and Development investment guide report 2012 in Nairobi County using both inferential and descriptive survey research design approaches to achieve its objectives. To establish whether there is a significant relationship between FDI and job creation, correlation analysis was done for macro-economic data on FDI inflows against the data on the number of jobs created in the economy of Kenya since 1980. This was further supported by a descriptive survey at the micro economic level to get the specific information from the Multi-national companies within the scope of study. According to the findings, and contrary to the internalization theory, the study concludes that there is a significant relationship between FDI and job creation and that Multi Nationals operating in Kenya contribute to skills development and job creation. The study also highlights that more needs to be done by the Kenya government through policy improvement and review to foster and retain FDI from the Multi-Nationals.
Customer loyalty in fast food foreign franchises in Nairobi : antecedents and behavioral consequences
(Strathmore University, 2014) Nguti, Lucy Esther Kuthea
The aim of the study was to determine the levels of loyalty of the customers of the fast food foreign franchises, the factors that influence customer loyalty in fast food foreign franchises and the behavioural impact of customer loyalty in the fast food foreign franchises in Nairobi. Using purposive sampling, data was collected from the 25th of March 2014 to the 1st of April 2014 from one hundred and fifty customers who had visited fast food franchises in Nairobi more than once. The data was analysed using descriptive statistics, linear regression analysis and correlation analysis. It was established that factors that influence customer satisfaction and trust, and by extension customer loyalty, in fast food foreign franchises in Nairobi are service quality, price, good environment, food quality and convenient location. Service quality, price fairness and good environment were critical in ensuring customer satisfaction and trust which lead to customer loyalty. The study also established that the consequences of customer loyalty were willingness to pay more, interpersonal communication and repurchase behaviour. However, despite having a positive relationship with loyalty, the consequence of being willing to pay more only has a weak relationship with loyalty. This means that the customers may be loyal but they will still be price sensitive, thus when setting prices franchise holders will need to take that into consideration. The findings also indicated that only 40 percent of the consumers of fast food foreign franchises in Nairobi are truly loyal to their franchises of choice and were not likely to switch to other brands or establishments. However, 53 percent of the respondents exhibited spurious loyalty, which is a volatile type of loyalty. The franchise holders therefore need to handle their customers carefully since large proportions are liable to switch if dissatisfied. Further research could focus on a comparative study in loyalty levels between local and foreign fast food franchises in Kenya since about sixty percent of the respondents indicated that they were not loyal to the foreign fast food franchises. Further research could also be conducted in other towns with foreign fast food franchises such as Mombasa.
The determinants of volatility of the lending interest rate in Kenya
(Strathmore University, 2014) Githiaka, Teresa Nyokabi
This study sought to measure the volatility and identify the determinants of volatility of the lending interest rate in Kenya. Both secondary and primary data was used. Primary data was obtained from a sample of 44 financial institutions in Kenya. Secondary data was obtained from the Central bank and Kenya National Bureau of Statistics for the periods 1991 to 2012. This study was guided by the Loanable funds theory. In data analysis, the regression, descriptive statistics, F-test and GARCH models were used. The key findings from the study were: (1) The Garch reaction parameter (a) was 0.61426092 while the Garch persistence parameter β was 0.87405664. A high a that is associated with a low β produces a very high Garch volatility. This means that the lending interest rate was characterized by high volatility. Following the introduction of the CBR in 2005, volatility reduced from 84% to 22% (2) the main determinants of volatility the lending interest rate are the expected changes in inflation rate, central bank rate, growth domestic policy, treasury bills and exchange rate. The p values were less than 5% and hence significant; (3) the factors that management of financial institutions take into consideration when they are fixing the lending interest rate include, Central Bank rate of Kenya, expected changes in inflation rate, Credit worthiness of the borrower, expected changes in a country's exchange rate, economic growth measured by the GDP ,the deposit rate, amount of loan, characteristics of the credit market, nature of the collateral, liquidity and solvency of the bank, level of competition, purchase of government bonds by the banks, bank's expected profits, term of the loan, demand for capital, interbank rate and current year country's budget deficit. The research study confirmed the monetary policy, loanable funds and Fisher's theory of interest rate determination. Inflation, CBR and money supply were found to be major determinants of the lending interest rate. Further research was suggested on; why the lending rate has been on an increasing trend yet volatility has reduced since the CBR introduction? How can the bank's balance sheet and regulatory requirements be made optimal so that they don't have to affect the fluctuations of the lending interest rate with great magnitude?
Determinants of working capital investment levels in the manufacturing and construction firms listed at Nairobi Securities Exchange
(Strathmore University, 2014) Pius, Stephen Mwendwa
This study examined the determinants of working capital investment levels in the manufacturing and construction firms because there is no unanimity on its drivers despite the importance of working capital. Three objectives were identified: to investigate the managers’ perceptions on the determinants of working capital investment levels; to establish the manager’s opinion target working capital investment level; and to interrogate empirically, the influence of determinants of working capital on working capital investment levels in the manufacturing and construction firms listed at NSE. A questionnaire was used to solicit manager’s opinion and regression analysis was used to establish the influence of determinants of working capital on working investment levels. The findings were that managers monitor working capital investment levels on a daily basis; use current ratios and net working capital to total assets as indicators of capital and they suggested a target current ratio of 2:1. It was the managers’ opinion that the six variables, cash conversion cycle, operating cash flow, debt ratio, firm size, return on assets and sales are factors to consider in setting working capital investment levels. However size is a lowly ranked determinant. Regression results show that when current ratio is used as proxy of working capital investment level and simple regression model is run; cash conversation cycle, return on assets and size do not individually explain variations in current ratio [working capital investment levels]. However debt capital ratio and sales explain variations in current ratio. When net working capital is used as a proxy of working capital investment level and a simple regression model is run; cash conversion cycle, debt capital ratio, size and sales individually explains variations in this ratio. However cash from operations and returns from assets do not explain variations in working capital investment levels. When multiple regression models are run, a higher percentage of variations in working capital investment levels are explained by the variables. However, the fact that sales are negatively related to working capital investment level remains to be a puzzle. Therefore, managers ought to be clear on this important issue of working capital by specifying a target working capital investment level. The target working capital investment level can then be used to evaluate the efficacy of managers in carrying out their working capital functions. This information should be disclosed in annual report. Secondly, firms should develop a composite working capital index that is useful in predicting working capital investment levels.
The effect of credit risk management on financial sustainability of microfinance institutions in Kenya
(Strathmore University, 2014) Kanake, Joyce K.
Microfinance has been considered to be a powerful tool to fight poverty through the provision of basic financial services such as credit, savings, insurance, and transfer of funds. However, the credit support granted to such micro businesses usually lacks collateral, it is imperative that the management of such credit services be sound in order to mitigate the credit risks involved. Credit risk management determines the success and survival of the MFls. The performance of the MFI is crucial because it boils down to the long term survivaL The purpose of this research was to find out the effect of credit risk management indicators on financial sustainability of MFls in Kenya. Data was analyzed from 37 MFls who were registered with AMFI by 2012 in Kenya. A linear regression model was used where financial self-sufficiency was the dependent variable while predictor variables were portfolio at risk, risk cover ratio, loan loss provision, number of borrowers and total assets both as control variables for breadth of outreach and size of the organization respectively. The study found out that portfolio at risk and loan loss provision both had a significant negative effect on financial sustainability meaning increase in portfolio at risk and loan loss provision will reduce financial sustainability of the microfinance institution. Risk coverage ratio and number of borrowers had a positive impact on financial sustainability but not statistically significant. However total assets had a significant positive impact meaning increase in total asset would increase financial sustainability. The study therefore established that credit risk management affect financial sustainability of microfinance institutions in Kenya. Meaning that in order to increase financial sustainability of MFIs there is need to properly manage credit risk because according to the study, credit risk management significantly affects financial sustainability of microfinance institutions.
The effects of IT governance on the performance of Kenya state corporations
(Strathmore University, 2014) Mwangi, Onesmus Karanja
Embrace of IT in the state corporations is among the key factors the government of Kenya has recommended while evaluating performance. IT in this context is meant to not only drive service delivery but is also used to measure performance. As IT gets mainstream, the issue of IT governance becomes very relevant and therefore necessitating a study of the same in the Kenyan context. The study sought to understand the relevance of IT governance for Kenya, the status of embracing IT governance and the effects thereof as far as performance is concerned. State corporations were studied and their scores in their performance contract were related to their embrace of IT governance. The Control Objectives for Information and related Technology (COBIT 5) as a framework for the governance and management of enterprise IT was used as the point of departure for this study. The study of the relationship between IT governance and the wider corporate governance issues, COBIT 5, theories that underpin performance evaluation viz: stakeholder theory, agency theory and stewardship theory helped identify Critical Success Factors (CSFs) for IT governance performance. Based upon previous work, the researcher believed a positive correlation between the Critical Success Factors (CSF) and the IT governance performance. Online questionnaires were sent to respondents which were analyzed using Statistical Package for the Social Sciences (SPSS). The characteristic of data was done using frequencies and percentages (descriptive statistics). The statistical association between variables was tested using Chi square. The study shows that there is no significant scientific proven relationship between performance of the state corporations and embracing of IT governance. Although majority of respondents were of the view that state corporations objectives and IT objectives are harmonized and aligned, most of the respondents were not so sure on whether the board was abreast with the latest innovations in IT or whether they get independent assurance on the realization of the predetermined IT objectives. IT training was suggested as the most important element to be considered by the state corporations in order to realize benefit of investing in IT in the Kenya’s state corporations considerations.The study concluded that performance does not solely rely on IT governance. This implies that performance of sate corporations is also dependent on other things but not IT governance alone. It is the first attempt in Kenya to systematically investigate the effects of IT Governance in the performance of Kenya’s state corporations. The results contribute to the body of knowledge on IT Governance on the state corporations and will prompt the management and boards of the state corporations to discern IT governance in their enterprises.
An extension of earned value management for forecasting of project performance
(Strathmore University, 2014) Aming’a, Mary Moraa
The inherence of risks in every type of project due to the uncertain Project Management (PM) environment may affect the performance of a project leading to cost, time, and scope overruns. Thus, PM needs a technique that will cater for these problems and hence improve the performance of projects. Earned Value Management (EVM) is one of the best techniques for monitoring and forecasting of project performance. However, given a number of studies that have been done, EVM predicts the future performance of a project from its past performance without considering the possibility of other factors (risks) that may affect the performance of a project during the project life cycle. Therefore, the study sought to extend Earned Value Management in forecasting of project performance by advancing its forecasting formulae to incorporate the risk element into it for better forecasting of project performance. This was achieved by examining the risk factors that influence forecasting of project performance, assessing the ability of EVM in respect to forecasting of project performance, and developing a combined approach of EVM and Enterprise Risk Management for forecasting of project performance. The study found out a number of factors affecting the performance of projects such as equipment shortages, staff turnover, and climatic conditions among others. Further, the study ascertained that EVM has a weakness in forecasting of project performance because it does not take notice on the likelihood of risk elements that may affect the performance of a project in the cause of a project life cycle. The EVM-ERM model was found out to forecast project performance with reductions in completion time and cost. From the findings of the EVM-ERM model subjection to the infrastructure projects in Kenya funded by the World Bank, the study ascertained that the performance of the individual projects was enhanced with reductions in completion time and cost. Additionally, in comparing the efficiency of EVM and EVM-ERM, the study deduced that the latter model stood out in forecasting of project performance depicting an improvement in forecasting of completion time and cost of a project. Hence, it is imperative for the risk element to be incorporated to the EVM technique to enhance the performance of projects.
Extent of credit card fraud in the hotel industry in Kenya
(Strathmore University, 2014) Yego, Peninah Cherono
This research was conducted with the main objective of establishing the extent of credit card fraud in the Hotel industry in Kenya. The research sought to establish the impact of credit card fraud to this industry, factors that contribute to the fraud and measures that the industry players are taking to address it. The research targeted four and five star hotels in Nairobi, which primarily are target for business and leisure travellers. The empirical study was conducted in a sample of 20 hotels, out of a target population of 25 hotels in Nairobi, Kenya. The target response comprised of the hotel Finance Managers, Information Technology Managers, Credit Control Managers and Internal Auditors. The research adopted both a descriptive and explanatory research design; data obtained was analyzed using descriptive statistics. The analytical results showed increased acceptance of credit cards as a mode of payments in the hotels. However, fear of fraudulent charges still keeps the clients from using their cards. The respondents placed the financial loss as a result of credit card fraud between Ksh. 0-5 Million annually. It was however seen that fear of damaged hotel reputation is of more concern to the hotels than the financial loss. The study also showed that lost or stolen cards, identity theft, counterfeit credit cards and the internet are common factors that contribute to credit card fraud in hotels. The respondents additionally pointed out hotel cashier's indirect theft from card paying guests as another way through which card fraud occurs in the hotels. Most respondents indicated that full implementation of the Payment Card Industry Data Security Standards (PCI DSS) was the optimal way for the Hotel industry to mitigate against credit card fraud; this includes ensuring optimal security of client data held or interacted with at the hotels. These measures are already being implemented by some hotels, although still at the initial stages.
Factors affecting financing of private telecommunications companies in Kenya: an exploratory study
(Strathmore University, 2014) Malitt, Edmund
The purpose of the study was to explore the factors affecting external financing of private telecommunications companies in Kenya. The study targeted privately owned telecommunication companies in Kenya and the funding constraints they face.The findings of the study indicate that telecommunication companies in Kenya to a large extent source for funds externally (95%), many early life companies (0 to 5 years) have not fully benefited from the external funding for both for Operating expenditure (Opex) and capital expenditures (Capex). The main factors influencing sources of funds were identified to be decision making, interest rates, and government policies, age of company, inflation and available sources of funds. Funding constraints included high interest rates, over-regulations, and slow pace of external funding procedures amongst many other challenges.Chi square and factor analysis was used to test relationship between identified variables and to test for reliability of the factors under study. Findings indicate that political instability is the most important determinant factor in funding. This must be strengthened to keep telecoms liquid in the long-run. The results also show that market regulation had the highest impact as a constraint.The study recommends the need to engage investors and venture capital firms to reap the benefits of untapped markets segments in the telecommunication sector in Kenya. The involvement of the government as a facilitator through the provision of policy and economic environment will continue to be more critical. A stable regulatory and economic environment as identified in this study is equally important to the sourcing of external funds.There is need for further studies to seek deeper knowledge on the priorities of telecommunications investors and the donor community and thus begin the process of creating a valuable relationship for both investor and recipient companies.
Factors influencing the adoption of Environmental Management Accounting (EMA) practices among manufacturing firms in Nairobi, Kenya
(Strathmore University, 2014) Wachira, Maria Mumbi
Concerns about the preservation of the environment have encouraged businesses to implement environmental management accounting (EMA) practices which has been shown to contribute to managerial decision making. However local manufacturing entities have been reluctant to adopt EMA, thus this research seeks to establish if there is a business case for the adoption of EMA practices. The study used surveys to establish the levels of adoption of EMA practices, which were consequently tested against the factors identified in the research using both simple and multiple regression analysis. Next, semi-structured interviews were conducted to complement the findings from the questionnaires. The findings of the study reveal that the costs of compliance, the environmental strategies employed by an organization and the organization’s financial performance are able to explain the variability in the levels of adoption of EMA practices. This research offers a preliminary understanding of the techniques used in EMA and those that are prevelently used by manufacturing companies operating in Nairobi. The study will be particularly useful to the Kenya National Cleaner Production Center (KNCPC), since it is a governmental body mandated with the task of training manufacturing businesses in EMA and promoting resource efficiency among local manufacturers. The results from the research can be used to make structural changes in the way EMA trainings are conducted by the KNCPC. Furthermore, the findings can encourage production managers of manufacturing entities to promote efficient production through the implementation of EMA practices.
Factors influencing the auditors reported opinion
(Strathmore University, 2014-06) Muhwa, Gideon Gonzi
The auditing function as part of the corporate governance structure in many organizations plays an increasingly important role in monitoring the control system of a company and its financial reporting systems (Cattryse, 2005). Auditing was identified as one of the key participants to promote good governance in the corporate sector (Brownbridge, 1998); hence, the management should realize the importance of the internal audit function in their institutions.
The implication of Information Technology outsourcing on operational firm performance : a study on companies in Nairobi
(Strathmore University, 2014) Namiinda, Anne
The general purpose of the study was to investigate the implication of I.T. outsourcing on operational performance of companies in Nairobi. The study sought to find out whether there is a change in cost savings after I.T. outsourcing, change in efficiency of service provision and provision of up to date technology and determine the impact of outsourcing of information technology on the provision of up-to-date Technology. Two theories were applied in this research which is transactional cost theory and agency theory. The research targeted companies operating in Nairobi where questionnaires were sent out to the targeted population for collection of primary data while secondary data was collected from the financial statements. Data collected from questionnaires was coded and entered in SPSS software for analysis. The study found out from the analyzed data that there was indeed reduction of costs after I.T. outsourcing. From the questionnaires, the study found that most respondents were of the opinion that there was efficient provision of I.T. services and provision of up to date technology which was due to the economies of scale enjoyed by the vendor or service provider. The study also found that I.T. outsourcing is not as widespread in Kenya as in other parts of the world. Companies in Kenya should consider outsourcing I.T. as it reduces costs and enables them to focus on their core competences. This should however be done with caution and with inclusion of all stakeholders in I.T. as well as signing of service level agreements (S.L.A.s) with the vendors.
Influence of celebrity endorsements on young consumers' behaviour in Kenya
(Strathmore University, 2014-05) Njuguna, Simon P.M.
The purpose of this study was to establish the influence of celebrity endorsement on young consumers’ behavior in Kenya. The following two specific objectives were addressed: examine the celebrity attributes that influence young consumers’ brand choice in Nairobi and examine the celebrity attributes that influence young consumers’ brand recall in Nairobi. The target population was consumers aged between the age of 18 and 34 who were drawn from Nairobi County. The data was collected using researcher-administered questionnaires adapted from previous studies and modified by the researcher. Twenty one elements of celebrity attributes were used to gather the respondents’ responses under each of the two dimensions of consumer behaviour. Descriptive analysis, reliability and factor analysis were used to analyze data which was presented in tables and figures. This study found that celebrity endorsement do positively influence on young consumers’ behaviour. When used as endorsers, celebrities were found to add an appeal to the endorsed brand and this makes it easier for consumers to correctly remember (recall) the brand as having been previously seen or heard in the crowded market and subsequently this gives them a compelling reason for choosing that particular brand among the competing alternatives. All the four models demonstrated fit with the practice of celebrity endorsement targeting young consumers. The findings generated from the study should provide the marketing managers with an understanding of celebrity attributes that influence consumers’ behavior among the youths in the Kenyan context. This should help them to understand consumers’ perception of celebrities and enable them to align their brand with a celebrity that resonates with the target audience. Based on these conclusions, this study recommends that future research may be undertaken exploring alternative research design such as triangulation (utilization of more than one designs) to collect data from the respondents and targeting different age groups and in different geographic settings using more dimensions of consumer behaviour to provide a richer research base for researchers to compare the outcome with the results of this study. The study was conducted within a period of six months running from November 2013 to April 2014.
An inquiry into the perceived skills gaps of professional accountants in Kenya : the case for innovative training and examination methodologies
(Strathmore University, 2014) Ng’ang’a, Erasto Mukuria
This research was aimed at identifying the skills gaps of accountants working in various sectors of the Kenyan economy. These skills are both technical and non-technical (vocational, additional or complementary). In addition, the research was aimed at identifying the most appropriate method of training accountants, the length of time that is most appropriate for training accountants, the length of time that student accountants should spend in practical training, the most appropriate methodology or methodologies for teaching accountants and finally, the most effective methods of assessing the competence of accountants. The research was done through self-administered questionnaires among selected organizations. In relation to technical skills, skill gaps were identified in the areas of forensic auditing, the East African tax management protocol and the Customs and Excise Act. In additional (vocational or complementary) skills, gaps were identified in the use of social media, public speaking, persuasiveness, presentation skills and finally negotiation skills. With regard to the method of training preferred for accountants, respondents settled for a combination of academic and professional courses. A period of between 3 and 5 years was indicated as the most appropriate for training accountants. The research findings also indicate that student accountants should be trained practically for a period of between 1 and 2 years. The teaching methods recommended for accountants, in their order of preference were tutorials, distance learning, lecture method and finally case methodology. With regard to the assessment methods most suitable for accountants, the research findings indicate that paper-based examinations and real-life business cases would be most ideal.The research findings indicate that practical attachment is not a favored method of training. The research findings are also in general agreement with the view that technical knowledge is best assessed through paper-based examinations.
Market differential reaction to profit warning announcements and dividend decrease : an empirical analysis of the Nairobi Securities Exchange
(Strathmore University, 2014) Mitau, Carol Betty Ndanu
The main aim of the study was to investigate the market differential reaction to profit warning announcements and dividend decreases by carrying out an empirical analysis of the Nairobi Securities Exchange. To achieve this objective, an event study was employed over a window of 11 days consisting of 5 days before and 5 days after the announcement of both events. The sample consisted of 11 companies that had issued profit warning announcements and had dividend decreases over the period 2002 to 2012. There were 25 observations of companies that issued profit warnings and 55 observations of companies that had a decline in their final dividend between the periods 2002 to 2012. Abnormal returns were calculated using the market adjusted model and tests of significance conducted on them. The study found that the average abnormal returns on the day before the profit warning announcement and the day of the announcement were statistically significant at the 5% level while those on the first day after announcement were significant at the 10% level. On the other hand, the average abnormal returns the day before the dividend decrease, the third day and were statistically significant at the 5% level while the rest were significant at the 10% level. The results showed that at the Nairobi Securities Exchange, profit warning announcements and dividend decreases are generally associated with negative average abnormal returns. The Mann- Whitney Rank Sum test was run so as to determine whether there is a statistical significant difference between the average abnormal returns elicited by the two events. The test concluded that there is no statistical significant difference in median average abnormal returns between profit warnings and dividend decreases.
Market share measurement for universal mobile telecommunication system operators in Kenya
(Strathmore University, 2014) Ominde, Diana Kageha
The purpose of this study was determine the market share of key mobile operators of Universal Mobile Telecommunication Systems. Data was collected on identified factors under the voice segment by reviewing documents of the CCK quarterly report published by the CCK. This data was a representation of all the operators present from the year 2009 to 2013. The descriptive statistic ofthe data was carried out by analysis ofstandard deviations, percentages and means. The output of this descriptive statistic showed that the factors indeed have impact on the market share. The data was then fitted in the model and output generated on quarterly basis clearly outlining the percentage effect ofeach factor on individual's operators' market share. This thesis assesses the usefulness of the identified factors for UMTS market share measurement. the inclusive of the factors is defined as a discrete event using logit model. The results obtained from logit model confirm the ability ofTLMT (especially the Minutes ofUse indicator) to estimate the current market share per operator and to anticipate change in one quarter ahead. Results from the out-of-sample GDP growth value are ambiguous. Nevertheless the Call Termination Rates significantly improved original measure based on a model with standard macroeconomic variables and therefore we conclude in favour of its measurement power. The key findings of this study outline the rate at which the market is dynamic using logit model. This model incorporates all factors in the dynamic market and analyzes their effect on the UMTS operators. The result shows the dynamism which is consistent with logit model. Effective factors in this market share dynamism are: Number of subscription, Minutes of Use, Total Local Mobile Traffic, Call Termination Rate and GDP. The result also shows that the logistic model has a better explanatory and predictable power. Therefore, implication of this research is that the quarterly report produced by CCK with regards to the market share controlled by each operator can be revised and factors mentioned in this study can as well be considered during the percentage estimations. The conclusion is, for effective policy making and fair competition amongst the operators in this market, the regulatory board can consider the call termination charges across the networks within the market as a factor influencing and affecting the operators' market share.

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