MCOM Theses and Dissertations (2024)

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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.
Assessing the impact of COVID-19 on bank specific factors and credit risk management of Kenyan banks
(Strathmore University, 2024) Maina, V. W.
The global financial crisis of 2007 – 2009 was considered the most serious global economic crisis until the COVID-19 pandemic hit in 2020. The COVID-19 pandemic added to the difficult operating environment which occasioned high default rates, hence an increase in credit risk. The main objective of the study was to determine the impact of COVID-19 on bank specific factors that influence credit risk management of commercial banks in Kenya. The bank specific factors studied are liquidity, bank size and age of the bank. There is little empirical evidence on how banks responded with regards to credit risk management during COVID-19 pandemic and studies have also failed to highlight whether the relationship between bank specific factors and credit risk management was the same before and after COVID-19 pandemic. This study was anchored on asymmetric information and credit risk theories. The research philosophy implemented in the study was the pragmatism philosophy and the research design implemented was mixed method research design which combines both qualitative and quantitative research methods. Questionnaires were used to collect primary data and administered through google forms while secondary data was sourced from the annual reports for the period 2019 to 2021. The study’s target population was all the 39 commercial banks in Kenya. The study period was 2019 to 2021 since the study focuses on before and after COVID-19. The data analysis used descriptive statistics, diagnostic tests, correlation, and multiple regression analysis. The study established that bank size, age of the bank and ownership structure do not significantly influence credit risk management before and after COVID-19 except for liquidity ratio where a significant change was noted after COVID-19. The findings of this study can be used by banks’ management and scholars to help them understand the relationship between bank specific factors and credit risk management. The study recommends that commercial banks in Kenya should take stringent measures in implementing credit assessment processes and comply with all established lending requirements to improve financial performance. The bank management should closely monitor the restructured loans and implement debt collection.
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.
Determinants of occupational fraud occurrence in manufacturing companies in Kenya: moderated by macroeconomic factors
(Strathmore University, 2024) Oguya, J. A.
Fraud is a global issue that is pervasive in the manufacturing business. This is despite the fact that the manufacturing industry is critical for any country's economic development because it generates a significant portion of the world's GDP. The goal of this study was to establish the determinants of occupational fraud occurrence in manufacturing companies in Kenya, moderated by macroeconomic factors. The study's specific objectives were to assess the effect of employee attributes on occupational fraud occurrence in manufacturing companies in Kenya; to investigate the effect of firm attributes on occupational fraud occurrence in manufacturing companies in Kenya; to examine the effect of CEO attributes on occupational fraud occurrence in manufacturing companies in Kenya; and finally, to assess the moderating effect of macroeconomic factors on determinants of occupational fraud occurrence in manufacturing companies in Kenya. The study was based on the fraud diamond theory and rational choice theory, all of which describe the three key reasons why individuals commit fraud: pressure, opportunity, and rationalization. In the technique concentrating on positivist philosophy, an explanatory research design method was used. The research population was acquired using probability sampling. The target population consists of 1328 manufacturing enterprises that have registered with the Kenya Association of Manufacturers (KAM). The study used stratified random sampling. To capture the whole sample and collect thorough data, semi-structured questionnaires were delivered to employees via business level survey (enterprise survey). Descriptive statistics were used, as well as component analysis to decrease variables and ordinal regression analysis. The research may be useful to managers in Kenya's manufacturing industry. The study found that employees in financial or procurement roles have increased opportunities to manipulate transactions for personal gain due to their specialized roles and that companies with sound governance structures are better positioned to detect and prevent fraud through effective oversight. In addition, the study found that aligning CEO incentives with the company's long-term success rather than short-term financial gains the temptation for fraudulent activities. The study found that at 5% level of significance and 95% level of confidence, employee attributes, firm attribute, and CEO attributes were significant on occupational fraud occurrence. Finally, the study concluded that macro-economic were significant on moderating on determinants of occupational fraud occurrence in manufacturing companies in Kenya. Keywords: occupational fraud, manufacturing sector in Kenya, macroeconomic factors
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
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.
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.
Effect of Corporate Social responsibility on loan performance in commercial banks in Kenya
(Strathmore University, 2024) Cheruiyot, S.
Businesses do not exist in a vacuum. They exist in a society from where they derive their benefits and to where they should extend a lending hand. Corporate social responsibility is a way of giving back to the society by businesses. In doing so, the businesses end up gaining by having favorable public perception thus increasing their overall financial performance. In Kenya, the interdependency is particularly pronounced in the Banking sector as most commercial banks have not been left behind in participating in CSR activities. Commercial banks in particular have come up with community-based programs targeting health, education and general welfare. Given that the main source of income for commercial banks is through interest paid in by borrowers for credit facilities extended, it was interesting to ascertain whether engaging in CSR activities would influence loan performance in commercial banks. The outcome of the previous studies on the influence of CSR on loan performance of commercial banks remains inconclusive. Therefore, the purpose of the study was to investigate the effect of CSR on loan performance of commercial banks in Kenya. The specific objectives were to determine the effects of philanthropic CSR, environmental CSR, economic CSR and ethical CSR on loan performance in commercial banks in Kenya. The study was grounded on the stakeholder theory and the Signaling theory and adopted the correlation design. The population of the study consisted of middle and senior level employees from thirty branches of ten purposively selected commercial banks in Nairobi City County. A sample of ninety respondents was selected using the purposive sampling techniques. The data was collected using closed-ended questionnaires. The data was analyzed using both the descriptive and inferential statistics with the aid of the SPSS. Descriptive statistics included frequencies, percentages, means and standard deviations, while the inferential statistical measures included the Pearson correlations and (simple) linear regressions. The results were presented in tables, charts and graphs. The results revealed that loan performance in commercial banks in Nairobi City County was influenced by philanthropic CSR, environmental CSR, economic CSR and ethical CSR. The study concluded that commercial banks must focus on supporting charitable programs targeting the less fortunate members of the society in order to improve their loan performance. They must also support sustainable environmental initiatives, engage in fair contracts and carry out ethical business practices in order to enhance their loan performance portfolio. The study recommended that commercial banks should continue to engage in corporate social responsibilities by investing more in philanthropic activities and environmental programs aligned to their goal. They should also engage in economic activities that meet their financial goals and ensure that all their financial activities are carried out in an ethical manner to influence loan performance. However, the study was limited to commercial banks in Kenya and the conclusions drawn may not relate to non-commercial banks.
Effect of data quality dimensions on internal audit performance of insurance companies in Kenya
(Strathmore University, 2024) Mbithi, E. M.
Data quality has emerged as a key factor in decision-making for firms across a range of industries in today's data-driven economy. The quality of the data obtained, stored, and used throughout business operations will have an impact on the level of success attained in conducting business both now and in the future as data becomes an increasingly significant component of every company activity. Additionally, poor data quality can result in poor business decisions, which can harm the organization's reputation and cause major financial losses as well as poor customer satisfaction and trust issues. Therefore, it becomes crucial to guarantee your organization's data quality. The primary goal of the study was to establish the effects of data quality dimensions on the performance of the internal audit amongst Insurance companies in Kenya. With regard to internal audit performance of Insurance sector in Kenya, the study primarily intended to focus on the following specific objectives: first to examine the effect of data security control on internal audit performance of insurance companies. Secondly, to examine the effect of data completeness on internal audit performance of insurance companies. Thirdly, to examine the effect of data reliability on audit internal audit performance of insurance companies in Nairobi Kenya. Fourth, to determine the effect of time-related dimensions on internal audit performance of insurance companies in Nairobi Kenya and to assess the moderating effect of audit professionalism on data quality and internal audit performance of insurance companies in Nairobi Kenya. The study objectives were anchored by two theories: Agency and Contingency theories. The study used explanatory research design with the target population being four hundred and twenty seven functional area heads from the insurance companies having their head offices in Nairobi County. A sample size of two hundred and six respondents were chosen using simple random sampling, and the sample size was determined using the stratified random sampling technique. Questionnaires were utilized as the research instrument to gather primary data. In order to evaluate the data, regression analysis was applicable with ordinal regression method employed to model the relationship between the ordinal outcome variable and the independent variables with results being presented in form tables, graphs and figures. The results revealed correlation (R) coefficient, R-square value, which shows a determination coefficient of eighteen percent. Then a significant statistical relationship between four variables and dependent variable and performance of insurance companies. The results analysis highlights the benefits of utilising data quality dimensions on insurance company internal audit performance, which was one of the study's primary contributions that was helpful to aspiring academics and researchers. More studies that quantitatively show the impact of the effective use of data quality aspects on internal audit performance, as ours does, are required. The primary objective of data quality dimension analysis in the field of data quality analytics is to enhance the internal audit performance of insurance firms, therefore this area of research was crucial. A fresh contribution to the field of study is the understanding of the elements affecting it. The study recommends that a risk-based approach on data quality analytics should be considered to enhance decision-making and trustworthy reporting. Keywords: Data quality, internal audit, performance, Insurance
Effect of mobile money and firm size on financial sustainability of SMEs: case of grocery retail shops in Nairobi County
(Strathmore University, 2024) Osore, D. O.
Financial sustainability is a critical aspect of the success of SMEs as an unsustainable SME can face significant challenges such as financial difficulties, decreased competitiveness, and even bankruptcy. Though adoption of mobile money services has been theorized to have the potential to improve the financial sustainability of SMEs, the studies conducted are still inconclusive. Majority of the SMEs also still continue to underperform even after incorporating mobile money services. was Against this background, the study sought to establish the effect of mobile money on financial sustainability of SMEs with a special focus on grocery retail shops in Nairobi County. The specific objectives are to establish the effect of mobile money usage, mobile money attributes and mobile money regulations on financial sustainability of grocery retail shops in Nairobi County. The study also sought out to establish the moderating effect of organizational size on the relationship between mobile money services and financial sustainability of grocery retail shops in Nairobi County. The study employs descriptive research design and the targeted population of the study was 10,450 grocery shops in Nairobi County. The respondents were owners, managers, or their equivalents in these grocery retail shops and a sample of 99 grocery shops was selected through simple random sampling. Data was collected using questionnaires and was analyzed using descriptive and inferential analysis. The study established that mobile money usage, money attributes and mobile money regulations had a positive effect on the financial sustainability of grocery retail shops in Nairobi County. The moderating regression model further revealed that incorporating organization size strengthened the impact on the relationship that exists between mobile money and financial sustainability. Moreover, the study denotes that factors such as convenience, security, and efficiency of mobile money transactions are crucial for enhancing the financial sustainability of these shops.Also, larger grocery retail shops may benefit even more from the implementation of mobile money services in terms of their financial sustainability. The study recommends that the mobile service providers should improve on aspects such as security, reliability, convenience, and transparency in mobile money transactions while policymakers and regulators should establish clear and supportive regulations that facilitate the growth and operation of mobile money services.
Effect of prolonged life expectancy on retirement funding sustainability among members of Kenya Association of Retired Public Officers
(Strathmore University, 2024) Masese, P.
Retired public officers in Kenya face challenges due to increased life expectancy and straining retirement funds. This study investigated the effect of prolonged lifespan on retirement funding sustainability, assessing healthcare access, cost of living, and alternative income sources. Grounded in Social Exchange and Life Course theories, it adopted a positivist philosophy and descriptive correlational design. The population of the study included retired public officers in Kenya, with a sample of 372 from the Kenya Association of Retired Officers (KARO). Quantitative data was collected through questionnaires and analysed using SPSS. Findings indicate healthcare access had a significant positive effect on retirement funding (β=0.328), implying a 32.8% increase with each unit rise. The cost of living by retirees had a significant negative effect (β=-0.192), suggesting a 19.2% decrease in funding per unit increase. Alternative income sources had a significant positive effect (β=0.275), indicating a 27.5% increase in funding per unit increase. The research provides insights for policymakers, fund managers, and retirees to address financial challenges, enhance funding options, and plan for secure retirement. Essentially, this research study advances the collective understanding of the unique cost of living by retired public officers and provides invaluable insights into the sustainability of retirement funding systems. By addressing the research objectives with diligence and rigor, this study serves as a guiding beacon for the development of comprehensive strategies and policies that safeguard the financial security and general well-being of retired public officers, thereby contributing to a more sustainable and secure retirement experience for all.
Effect of social media influencer attributes on consumer behaviour: a case study of cosmetic multinational firms in Nairobi County
(Strathmore University, 2024) Muhuni, J. K.
The changing environment of influencer marketing presents both opportunities and difficulties for multinational cosmetic companies in Nairobi, Kenya. A deep awareness of the qualities that lead to fruitful collaborations is necessary for the identification and engagement of suitable social media influencers. However, there is little research on the specific attributes of social media influencers and their effect on consumer behavior. This study sought to fill this gap by reviewing how various social media influencer attributes; perceived expertise, perceived trustworthiness and perceived loyalty have influenced consumer behaviour in cosmetic multinational firms in Nairobi County. The study was anchored on social influence theory and source credibility theory. The study was based on descriptive research design and positivism research philosophy. The unit of observation was 75 multinational cosmetic companies operating in Nairobi, Kenya. The unit of analysis was comprised of 5 consumers from each of the 75 selected multinational cosmetic companies, resulting in a total of 375 individual consumers. Therefore, a sample size of 375 was selected through systematic sampling. The study relied on primary data collected using questionnaires. Data was analyzed using descriptive and inferential statistics. Findings are presented in figures and tables. Results of the study depicted that there was a positive statistically significant effect of perceived expertise of social media influencers on consumer behaviour. Secondly, the study depicted that there was a positive statistically significant effect of perceived trustworthiness of social media influencers on consumer behaviour. Thirdly, there was a positive statistically significant effect of perceived loyalty of social media influencers on consumer behaviour. From the findings it can be concluded that social media influencers should enhance their expertise on the products that they serve as ambassadors to leverage their influential role on consumer preference and choices. Cosmetic products distributors in Kenya should evaluate their social media influencer collaborations and strictly engage those who demonstrate authenticity, reliability and capacity not only to connect but also influence consumer decision making. Consumers tend to develop affinity towards products whose social media influencers depicts loyalty on cosmetics they endorse that would nurture a culture of loyalty linked customer engagement. It was recommended that there is a need for development of training programs for employees and social media influencers, transparent dissemination of product information and development of social media influencer selection criteria.
Effect of strategic management practices on organizational performance: a case of marketing agencies in Nairobi County
(Strathmore University, 2024) Maina, M. W.
The marketing industry globally has been growing rapidly over the past few years. This has been due to the increasing demand for marketing services from national and international clients. As a result, competition in both global and local markets has become quite intense and this has led to the need for marketing agencies to rethink their strategies for them to be sustainable. In Kenya, the marketing sector is extremely competitive especially with the advent of digital marketing trends. Marketing agencies are thus forced to keep up with consumer trends and offer better value proposition to their clients in order to beat competition. To this extent, the overall objective of this thesis was to determine the effect of strategic management practices on organizational performance of marketing agencies in Nairobi County. Specifically the research sought to determine the effect of strategy formulation, strategy implementation and strategy evaluation on the performance of marketing agencies in Nairobi County. Regarding organizational performance, the study sought to measure customer satisfaction, efficiency and effectiveness as performance indicators. This research was supported by the contingency and RBV theories. Descriptive research design was applied and a positivism research philosophy adopted. The data was collected using questionnaires that were administered to 468 managers from 117 selected marketing agencies operating in Nairobi County. SPSS software was used to analyse the collected data. Mean and standard deviation was used for descriptive analysis while inferential analysis was used to establish the relationship between the study variables. This research established that the participants agreed that strategy formulation, strategy implementation and strategy evaluation had been adopted by marketing agencies in Nairobi County. The research findings concluded that the relationship between strategy formulation, strategy implementation and strategy evaluation and performance of marketing agencies in Nairobi County was positive and significant. The research recommended that marketing agencies in Nairobi County needed to step up their efforts to improve their strategic management practices, appropriately allocate enough resources for the implementation of the strategies and embrace ongoing training to ensure successful implementation of these strategic management practices. The study was limited to marketing agencies and focused only on Nairobi County. In addition it focused only on three strategic management practices. These limitations could be addressed in future researches.
Effect of Total Quality Management practices on the operational resilience of manufacturing SMEs in Nairobi, Kenya
(Strathmore University, 2024) Wambua, S. N.
Manufacturing SMEs often face constant challenges from the dynamic landscape of business. Since they are a crucial part of the economy, these SMEs need to be sustainable in the long run and go beyond performance, through recovery in the face of these disruptions, and put in place practices to help in mitigation for the future. The aim of this study was to ascertain the effects of Total Quality Management Practices adoption to the operational resilience of manufacturing SMEs. This study’s main aim goal was to determine the impact of TQM practices implementation on the operational resilience of manufacturing SMEs in Nairobi. The research was achieved by studying the manufacturing SMEs registered in Nairobi County’s licensing office, and the list was cross checked with KAM as of December 2018 within Nairobi, being a significant representation of SMEs in Kenya. The study utilized convergent mixed methods design and simple random sampling as well as purposive sampling because of the expected dynamic nature of the population in relation to the objective of the study, and the combination of the quantitative and qualitative aspect of the study. The study was guided by dynamic capabilities theory and resource orchestration theory. Primary data was collected from the participants through close-ended questionnaires and interview schedules, and analyzed through the latest version of the SPSS as well as through inductive coding. The population size was the 134 manufacturing SMEs in Nairobi, and the samples size was 100 manufacturing SMEs. Results indicate a strong association between employee involvement, top management commitment, supplier partnership and customer focus with operational resilience. The Analysis of Variance indicated Operational resilience across sectors of manufacturing SMEs was greatly attributed by Total Quality Management Practices adoption. TQM practices contribute to operational resilience for manufacturing SMEs by improving process efficiency, product quality, risk management capabilities, employee engagement, and supply chain relationships. SMEs can build resilience, adaptability, and sustainability in an increasingly uncertain business environment. TQM practices emphasize continuous improvement and optimization of processes by embedding TQM principles into their organizational culture and operations. The study serves as a strong starting point for scholarly investigations into operational resilience and TQM adoption in the manufacturing SME sector in the future. Knowledge gaps were addressed in the field because there has only been a limited amount of research on the adoption and implementation of overall quality management methods in the manufacturing SMEs industry in Nairobi. Manufacturing SMEs need to involve employee by providing comprehensive training programs to enhance employees' skills and knowledge related to resilience-building practices, such as problem-solving, decision-making, and adaptability. They also need to improve operational resilience through customer focus by conducting market research and gather feedback to understand customer preferences, expectations, and changing needs.
Effects of dynamic capabilities on performance of travel firms in Nairobi County
(Strathmore University, 2024) Kufwafwa, A. M.
Over the recent past, the global business environment has been marked by intense competition and dynamism, with businesses being compelled to adapt and realign their resources as well as capabilities in order to attain superior performance. In Kenya, the travel industry within the tourism sector has been subject to instability, rapid technological shifts and changing consumer preferences. Consequently, in spite of heavy investment in marketing capabilities, travel firms have continued to face dismal performance. It was therefore important for the travel firms to develop and maximize on dynamic capabilities so as to attain superior performance in the wake of such environmental dynamism. This study examined the effects of dynamic capabilities on the performance of small and medium-sized travel firms in Nairobi County, with the moderating effects of firm characteristics. The study was anchored on the Resource-Based View and the Dynamic Capabilities Approach. This study utilized judgement sampling where primary data was collected through self-administered questionnaires. The research population consisted of 350 tour operators and travel agents, from which a sample size of 129 was under study. The research response rate was approximately 56%, which accounted for 72 out the 129 travel firms in the sample space. Descriptive data was presented using bar graphs and pie charts. Data analysis was done through Spearman’s rho correlation analysis and multiple regression analysis. The research established that there was a significant positive relationship between dynamic capabilities, namely innovation capabilities, learning capabilities and resource reconfiguration capabilities, and the performance of small and medium-sized travel firms in Nairobi County. The moderating variable of firm characteristics (firm age and firm size) had significant effect on the relationship between dynamic capabilities and firm performance, and therefore moderated the relationship.
Effects of exchange rate volatility on Kenya-China bilateral trade
(Strathmore University, 2024) Miriti, G. K.
Developing countries are often associated with trade deficits; Kenya is no exception. Since independence, Kenya has prominently experienced trade deficits, with Kenya's leading partner, China, accounting for over 30% of this trade deficit. Among the factors influencing a country's trade balance, exchange rates are considered fundamental in affecting the level of trade. Despite this, only a few studies have explored the effect of the volatility of exchange rates on trade and trade balance in Kenya, and even fewer studies have examined this relationship by considering Kenya and its leading trade partner, China. This study explored the impact of USDKES volatility and the ensuing implications for this bilateral relationship. Contrary to previous studies in Kenya, this study used disaggregated categorical commodity data to explore Kenya's exchange rate-trade balance nexus. The study was anchored on a positivist research philosophy and employed a descriptive correlational design. The study used the Garch (1, 1) model to model volatility. The ARDL was used to determine the short-run and long-run effects of the exchange rate volatility on imports, exports, and trade balance. The trade data used was for the period ranging from 2005 to 2022. The study's results pointed to an adverse effect of exchange rate uncertainties on imports from China and no significant impact on exports and the bilateral trade balance. The study recommends that the government employ exchange rate policies to reduce the trade deficit level. Additionally, exchange rate policies can promote economic growth in Kenya.
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.
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.
Ethical leadership and employee job satisfaction in architectural firms, in Nairobi County, Kenya
(Strathmore University, 2024) Mutinda, L. K.
Multiple studies affirm that the future of business and leading change in various workplace practices is in ethical leadership. Moreover, ethical leadership is essential in fostering winning teams, lowering turnover, improving productivity, and boosting employee loyalty. It also fosters values that are key in improving job satisfaction, such as honesty, integrity, transparency, fairness, and trust. The aim of this research was to investigate the impacts of ethical leadership on workers’ job satisfaction in architectural firms in the Nairobi region of Kenya. The main objective was understand how ethical leadership dimensions such as rewards and sanctions, balanced processing, moral perspective and moral sensitivity in architectural firms in Nairobi influence job satisfaction. The study was based on three key theories which include the leader-member (LMX) theory, the theory of contingencies and the theory of transformation which highlight the importance of ethical leadership in job satisfaction. The research employed a quantitative research methods to acquire relevant insights into the subject matter. The research also utilized primary data to acquire relevant details on the level of impact achieved by ethical leadership. The study samplesd 385 employees in different architectural firms around the Nairobi region who completed questionnaires that were distributed among them. SPSS software version 20 was used to analyze the acquired data, and tables displayed the results. Standard deviations, means, and frequencies were the descriptive statistics used to examine the data, and the correlation between the variables. From the data analysis a moderate positive correlation was established between rewards and sanctions and job satisfaction (r = 0.725, P<0.05), between balanced processing and job satisfaction (r = 0.358, P<0.05), between moral perspective and job satisfaction (r = 0.480, P<0.05) and between moral sensitivity and job satisfaction (r = 0.655, P<0.05). Additionally regression analysis established a significant positive relationship between rewards and sanctions and job satisfaction (β = 0.412), between balanced processing and job satisfaction (β = 0.405), between moral perspective and job satisfaction (β = 0.567) and between moral sensitivity and job satisfaction (β = 0.601) upon establishing a strong relationship between these variables, the study recommends that firms in this sector should emphazise on ethical leadership as it affects job satisfaction and achievement of overall organizational goals.
Factors influencing the level of preparedness to adopt IFRS 17 in insurance firms in Kenya
(Strathmore University, 2024) Mutuku, R. M.
Financial reporting by insurance companies has been a challenge for a long time and the initial proposal was to have IFRS 4 provide minimal guidelines on these reporting complexities. After a long duration of stakeholder engagement, IFRS 17 came into effect in 2023 although it was approved for implementation in 2018 to assist in accounting and reporting critical issues in complex insurance contracts and features. However, in the close of the year 2023 only 14 insurance firms had fully adopted IFRS 17. The main question of the study therefore was why are insurance firms taking too long to fully adopt IFRS 17? What were the impending factors affecting the level of preparedness to adopt IFRS 17?.The drive of this study was therefore to assess factors influencing the level of preparedness to adopt IFRS 17 in insurance companies in Kenya and the specific objectives were to assess the effect of board characteristics on the level of preparedness to adopt IFRS 17, to establish the effect of financial metrics on the level of preparedness to adopt IFRS 17, to evaluate the effect of type of insurance business on the level of preparedness to adopt IFRS 17 and to establish management views on the challenges and strengths facing the level of preparedness to adopt IFRS 17 on Kenyan insurance companies. The organizational readiness for change theory and the absorptive capacity theory functioned as the study's guiding theories. The population of the study comprised of all 56 licensed insurance companies in Kenya regulated by the Insurance Regulatory Authority of Kenya. It was through structured surveys that primary data was gathered. Secondary data was taken from the Insurance Regulatory Authority’s annual published supervisory reports and insurance companies final financial statements using a data collection sheet covering the five-year period from 2018 to 2022.Panel data regression analysis, correlation analysis and descriptive statistics were used to analyze the data. Inferential results showed that taking all factors, ceteris paribus (solvency ratios, liquidity ratios, earnings ratios, profitability ratios, board size, board composition, number of females in the board, board independence and type of business) the level of preparedness to adopt IFRS 17 in insurance companies in Kenya would be 0.637. The data results analyzed also showed that the seven independent variables had a positive influence, while two had negative influence on the level of preparedness to adopt IFRS 17 in insurance companies in Kenya. Additionally, the ANOVA analysis showed a significant difference between the groups confirming that all the nine variables were fit in the regression equation. Findings also indicated that unit growths in the seven variables (solvency ratios, liquidity ratios, earnings ratios, profitability ratios, board size, board independence and female in the board) would result in a positive growth on the level of preparedness to adopt IFRS 17. On the contrary, a unit growth in board composition and type of business would result in a negative growth on the level of preparedness to adopt IFRS 17. The study recommendations will assist insurance firms in the process of full implementation and assist regulators in promoting stability without reducing size of the industry.