MCOM Theses and Dissertations (2025)

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    Effects of board and firm characteristics on cash conversion cycle in Kenyan non-financial listed firms: moderated by inflation rate
    (Strathmore University, 2025) Getuma, C.
    In 2022, the liquidity ratio of eight (8) business stocks was below 10 percent, which is an increase compared to six (6) stocks in 2021. This indicates a further decline in liquidity. This study sought to assess the effect of board, firm characteristics and cash conversion cycle in Kenyan Listed Firms, moderated by inflation. Specifically, the study sought to examine the effect of firm characteristics on the cash conversion cycle of Listed Firms in Kenya. Also, the study assessed the effect of board characteristics on the cash conversion cycle of Listed Firms in Kenya. Additionally, it investigated the moderating role of inflation rate on the relationship between board characteristics and firm characteristics on the cash conversion cycle of Listed Firms in Kenya. The study was based on two theories: the Liquidity Preference Theory and Resource Dependency Theory. The current study used a correlational research design and the positivism philosophy. The 63 companies listed on the NSE were the study's target population. The study focused on 45 non-financial listed firms. Panel data was gathered from publicly available financial statements on the websites of 45 publicly traded companies for the years 2019 to 2023, as well as published audited financial statements. The data abstraction tool was used to acquire the panel data. Descriptive statistics, panel regression analysis, and spearman's simple correlation analysis were used to analyze the data. The study included ethical considerations. The results showed that independent directors had a positive and significant effect on the cash conversion cycle. Further results showed that board diversity in terms of proportion of male directors in the board had a negative and significant effect on the cash conversion cycle. In addition, results showed that board size had a positive and significant effect on the cash conversion cycle. Regression results showed that firm age had a negative and significant effect on the cash conversion cycle amongst the firms listed in the NSE. Furthermore, the data indicated that the cash conversion cycle was positively and marginally impacted by business size. In addition inflation moderated the relationship between board characteristics and cash conversion cycle of companies listed on the NSE. However, inflation did not moderate the relationship between firm age, firm size and cash conversion cycle of firms listed in NSE. Therefore, our study suggests that companies listed on the NSE keep their board member count at an ideal number. The management of the listed company should make sure that board members have a great deal of autonomy so they can participate freely in the appropriate decision-making process. Legislators ought to enact measures that promote diversity on the board among board members. This would guarantee the fusion of concepts that would maximize the performance of the SACCOs by integrating ideas from both genders. Businesses can add value by building up their inventory, but only to the point where doing so will optimize returns and reduce maintenance costs while accounting for the effects of inflation and the cash conversion cycle. By doing this, finance managers may monitor their different industries and maintain a short cash conversion cycle. The study also relied on secondary data from the financial statements of the NSE firms in Kenya. While these are a reliable source of data, it is quantitative in nature and therefore it was not possible to fully interrogate issues of the NSE firms as may have been the case if interviews were conducted.
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    Management control systems, firm size and financial sustainability: the case study of microfinance banks in Kenya
    (Strathmore University, 2025) Akiza, C. A.
    This thesis examines how management control systems support financial sustainability in Kenyan Microfinance Banks (MFBs), particularly focusing on fourteen licensed microfinance banks (MFBs) in Nairobi. Driven by increasing public demand for accountability and responsible business practices, the research explores the roles of planning, organizational culture, administrative, and cybernetics controls on financial sustainability. The research adopts a positivist philosophy, emphasizing objective measurement and hypothesis testing through quantitative methods and was conducted in the month of May 2024. Grounded in the Resource-Based View and Contingency theories, the study employed an explanatory research design, surveying 182 managers through semi-structured questionnaires and analyzing data using multiple regression. The findings reveal that planning management has a statistically significant positive impact on financial sustainability. Other factors, such as administrative control, a strong organizational culture, and cybernetics control, also contribute to financial sustainability. The study finds that the impact of these management controls is moderated by the size of the organization, underscoring the need to tailor control systems to the specific context of each MFB. The study concludes that by strengthening the management control systems and adapting them to their organizational environment, MFBs can enhance their financial sustainability. The study is limited by its focus on only licensed Microfinance Banks in Nairobi, which may affect the generalizability of the findings to other regions or unlicensed institutions. Additionally, the cross-sectional design and reliance on self-reported data from managers introduce potential response bias and limit the ability to establish causality.
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    Analysis of the effect of efficiency on liquidity in Kenya’s next derivatives market moderated by market innovation
    (Strathmore University, 2025) Nsale, P. C.
    Liquid and efficient derivatives markets are essential for financial resilience, effective risk management, and capital market development. This study examines how efficiency influences liquidity in Kenya’s NEXT derivatives market, and by assessing the effect of operational efficiency on liquidity, analyzes the dynamics between liquidity and market efficiency; and evaluates the moderating role of market innovation on the relationship between efficiency and liquidity. Anchored in market microstructure and efficiency theories, the study adopted a positivist research philosophy within a quantitative descriptive research design. The study population included all Futures contracts and their underlying asset prices, with a census sampling technique used to select and collect secondary data from January 2021 to December 2024 in the Nairobi Securities Exchange (NSE). Data analysis combined descriptive and econometric methods. Descriptive statistics were applied to calculate means, standard deviations for each variable. Econometric techniques, including panel regression, vector autoregressive, and Granger causality, were applied. A Market Innovation Index was constructed using principal component analysis to test moderation effects, reflecting a dimensionality reduction technique of eight standardized innovation-related related. STATA and EViews were used for data processing. The findings indicated that trading volume and order books enhance liquidity, while high transaction costs and exchange rate volatility had adverse effects. Price discovery is more efficient in futures contracts, though asymmetry volatility reveals inefficiencies in price adjustment. Innovation was found to significantly moderate the effect of trading volume on liquidity but not the impact of transaction costs. Granger causality tests identified a unidirectional relationship from efficiency to liquidity. These findings suggest that regulatory and technological improvements are crucial for strengthening Kenya’s derivatives market. The study provides a data-driven foundation for reforms and comparative analysis in other emerging derivatives markets. Keywords: Liquidity, Efficiency, Operational Efficiency, Market Efficiency, Market Innovation.
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    Perceived effectiveness of whistleblowing in detection of fraud in Kenyan Football Clubs: moderated by ethical climate
    (Strathmore University, 2025) Orwa, C.
    Fraud in sports organisations undermines financial stability, integrity and public trust. In the Kenyan football Premier League, governance challenges including fraud, financial mismanagement and corruption continue to pose significant risks. Whistleblowing is a globally recognised tool for uncovering fraud, but its implementation and effectiveness within the Kenyan Football Premier League clubs remain underexplored. This study’s primary objective was to assess the effectiveness of whistleblowing systems on the detection of fraud in Kenyan Premier League Football Clubs. The specific objectives include: to examine the influence of the attributes of whistleblowing systems and to determine the influence of management perceptions towards whistleblowing on the detection of fraud in Kenyan Football Clubs. Additionally, the study sought to establish the moderating effect of ethical climate on the relationship between whistleblowing systems and the detection of fraud in Kenya. The study was underpinned by the Fraud Diamond Theory and the Machiavellianism Theory. It applied a pragmatism research philosophy along with a mixed methods research design. The target population was all the 18 football clubs in the Kenyan Premier League. A sample of 464 respondents was selected purposively. Primary data was collected using both closed and open-ended questionnaires. Descriptive and inferential statistical analyses were conducted using the Statistical Package for Social Sciences. The results were then presented using graphs and tables. The Pearson Correlation analysis indicated that all the predictor variables were positively and significantly correlated with the outcome variable. The predictor with the strongest association with the outcome variable was Attributes of Whistleblowing Systems followed by Management Perceptions Towards Whistleblowing. Additionally, Ethical Climate was found to have a positive and significant moderating role on the relationship between Whistleblowing Systems and Detection of Fraud. There are both significant and statistically significant relationships between the predictor variables and the outcome variable according to the regression analysis. The Beta Coefficient analysis showed that the Ethical Climate was the most critical determinant of Detection of Fraud, followed by Attributes of Whistleblowing Systems, and Management Perceptions Towards Whistleblowing, respectively. The study recommends that the Kenya Football federation should create clear rules to protect whistleblowers. These rules should allow football stakeholders to report wrongdoings anonymously and should protect them from being punished for speaking up. To make sure the rules are fair and accepted, the federation should involve different people in football like club officials, players and referees, when creating them. The federation should also take a strong stand against fraud by introducing tough penalties to stop dishonest behaviour in these clubs.
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    Strategies for enhancing the effectiveness of tax audits in Kenya Revenue Authority, Nairobi region: moderated by organizational culture
    (Strathmore University, 2025) Tomno, I. J.
    Ineffective tax audits can reduce government revenue, and undermine the integrity of the tax system. The significant gap between potential and actual tax revenue, frequent occurrences of tax evasion and avoidance, and a general lack of compliance among taxpayers points to the inefficiency and ineffectiveness of tax audits at the KRA. While there may be studies on the effectiveness of automation, whistleblower programs, taxpayer education, and continual professional training of tax audit strategies globally, limited research exists on its specific application and impact on tax audits within Kenya. The purpose of this study was to evaluate strategies for enhancing the effectiveness of tax audits in the Nairobi Region of the Kenya Revenue Authority. Specifically, the study sought to assess the influence of automation, whistleblower programs, taxpayer education and continual training on the effectiveness of tax audits in the KRA. The study also assessed the moderating role of organizational culture in the relationship between the implementation of tax audit strategies and the effectiveness of tax audits at the KRA, Nairobi Region. The study was anchored on the Technology Acceptance Model, Deterrence theory and the Human capital theory. The research adopted a positivist philosophy and utilized a descriptive correlational research design. The target population was the 10271 employees of the Kenya Revenue Authority in Kenya. The sample size was 214 employees from the KRA Nairobi Regional Audit Centres. Data collection was conducted through structured questionnaires and analyzed using both descriptive and inferential statistics. The presentation of the data was in the form of tables. The findings of the study may inform policy-makers and contribute to the academic field on the effectiveness of tax audits. The study found that automation, whistleblower programs, taxpayer education have a significant positive impact on the effectiveness of tax audits at KRA. The study revealed that organizational culture plays a significant moderating role in the relationship between tax audit strategies and audit effectiveness. The study recommends that KRA should continue to invest in the development and regular upgrading of automated systems, strengthen the whistleblower program and enhance its training programs. KRA should also continue to foster a positive organizational culture by promoting collaboration, shared goals, and adaptability to change.