The Effect of corporate governance mechanisms on the operational performance of small and medium-sized enterprises in Nairobi

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dc.contributor.authorRanka, Moses
dc.date.accessioned2021-09-14T13:02:18Z
dc.date.available2021-09-14T13:02:18Z
dc.date.issued2020-11
dc.descriptionA Thesis submitted in partial fulfillment of the requirements for the award of the Degree of Masters of Business Administration at Strathmore University Business Schoolen_US
dc.description.abstractEntrepreneurial firms require good operational performance to achieve full profits potential of the business. They also require inputs on business operations, good strategy and best practices in the industrial sector. In order to realize this, good corporate governance practices are vital in assisting SMEs (small to mediumā€sized enterprises) in improving on their operational performance. The issue of corporate governance has been a growing area of management research especially among SMEs firms. The limited studies in the area with respect to SMEs have focused mainly on developed economies. This study therefore sought to examine the effects of corporate governance on the operational performance of SMEs. The study specifically assessed the adoption of corporate governance structures among SMEs by testing for the effects of formal board, board roles, board competency and audit committee on the performance of SMEs. The main objective of the study was to determine the effect of corporate governance mechanisms on the operational performance of SMEs in Nairobi. The specific objectives of the study were to examine the influence of the existence of SME board on the operational performance of the SMEs in Nairobi; to establish the effect of board roles and mandates on the operational performance of the SMEs in Nairobi; to determine the effect of Board Managerial competency on the operational performance of the SMEs in Nairobi and to establish the effect of audit committee on the operational performance of the SMEs in Nairobi. The study target population was drawn from 83 selected managers of SMEs in Nairobi. The sourced data was quantitative primary data. In analyzing quantitative data, the study used descriptive statistics. In addition, regression analysis was used to determine the significance of independent variables affecting the operational performance of the SMEs. The results of the study indicated that corporate governance mechanisms sampled on the study had a positive influence and significant on the operational performance of the firms except for the formal board which was not significant. The regression analysis established that audit committee contributes most to the operational performance of SMEs followed by board competency, board roles and formal board respectively. The study recommends that the management of SMEs should monitor the size of the board to ensure there are smooth coordination; board duality and composition, which are very important to operational performance of the SMEs. Finally, the study also recommends that SMEs should hold committee meetings regularly and they should be keen on the audit committee composition. The main contribution of this study to knowledge lies in the effort to strengthen the corporate governance of SMEs in order to positively help in improving the operational performance of firms.en_US
dc.identifier.urihttp://hdl.handle.net/11071/12152
dc.language.isoen_USen_US
dc.publisherStrathmore Universityen_US
dc.subjectOperational performanceen_US
dc.subjectEntrepreneurshipen_US
dc.subjectCorporate governanceen_US
dc.titleThe Effect of corporate governance mechanisms on the operational performance of small and medium-sized enterprises in Nairobien_US
dc.typeThesisen_US
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MBA Theses and Dissertations (2020)