Research Journal of Business and Finance

Effects of Governance Systems on Organizational Performance of Water Service Companies in Kenya

Joslyn Nkonge, Julius Itunga — Wed, 13 Dec 2023 00:00:00 +0000

Good Governance is a process whereby public and private institutions manage resources to promote development, human rights, justice, peace, accountability, responsiveness, inclusiveness, democracy, and adherence to the rule of law. However, there are many challenges in the governance systems, including politics, corruption, lack of transparency, and lack of accountability. This research focused on the governance systems of water sector companies in Kenya from 2002 to 2021. The purpose of this study was to determine the effects of governance systems on the organizational performance of water service companies in Kenya. The study was limited to 79 registered Water and Sanitation companies in Kenya and 47 Senior Executives in charge of water and sanitation in every county in Kenya, and theCEOs/Senior Executives of the two water regulatory bodies, Water Services Regulatory Board (WASREB) and Water Resources Management Authority (WRMA). The following theories were used; The Systems Theory, The Good Governance Theory and The Resource-Based View Theory. To determine the sample size, simple random sampling techniques were used. Self-administered questionnaires and interview guide questions were used to collect primary data. A sample size of 281 respondents was used. The data was analysed using the Statistical Package for the Social Sciences (SPSS). Correlation and linear regression techniques were used to test the research hypotheses. The study found that water governance framework and performance had a statistically significant linear relationship (r= 0.524, p<.05). The study revealed that water framework variables account for 52.4% of the variability in the performance of water service companies in Kenya. The findings from the regression model indicated that the governance framework significantly influences the organisational performance of water service companies (β = 0.311, p<0.05). The results of this study may be used by water service companies and County Governments in the formulation and implementation of strategies regarding water governance.

Influence of Transaction Costs on Unsold New Houses Held by Members of Kenya Property Developers Association in Nairobi County

Fridah Karimi Kirera Ngeera — Wed, 13 Dec 2023 00:00:00 +0000

Despite the housing shortage in Kenya, property developers continue to record high numbers of unsold new houses thus tying up funds
which jeopardizes the capacity of property developers to engage in constructing more new houses to meet the ever-increasing demand. The purpose of this study was to determine the influence of transaction costs on unsold new houses held by members of the Kenya Property Developers Association (KPDA). The study adopted a positivist philosophy and descriptive correlational research design. The study population consisted of 4,085 unsold new houses. A sample size of 364 units was drawn using a multistage random sampling technique. Property managers of the members of KPDA were the unit of observation and data was collected through a self-administered questionnaire. Data analysis was done through descriptive statistics which comprised of relative frequency distributions, means, and standard deviation. Inferential statistics used included ordinal logistic regression and one-way analysis of variance. The study findings from the generalized ordinal logistic regression revealed that transaction costs of the unsold new houses explained 18.7% of the duration they remained unsold (r 2 = 0.187. Moreover, the results indicated that registration fees (β = 0.398, p < 0.05), real estate agent commissions (β = 0.568, p < 0.05), and legal fees (β = 0.306, p < 0.05) had a significant influence on the duration that new houses remained unsold. The study concluded that transaction costs of the unsold new houses impact the duration the houses remained unsold. The study recommends that residential property developers should consider reducing the transaction costs of the unsold house to below 5% of the quoted price.

Networking Capability and Competitive Advantage of Event Management Ventures in Kenya

Rebecca Chelagat Cheruon, Jacqueline Korir, Rose Burugu — Wed, 13 Dec 2023 00:00:00 +0000

With rising competition within the events management industry, competitive strategies help focus on assessing organizations' strengths, growth opportunities, and competitive threats. Traditional competitive advantage models may not wholly be applicable to smaller firms because they assume the existence of scale economies. Yet, small firms cannot compete with larger organizations in economies of scale. The study sought to establish the influence of networking capabilities (NC) on the competitive advantage of Event Management Ventures (EMVs) in selected counties in Kenya. Networking capabilities were categorized into 4 main sub-domains namely: Coordination, internal communication, relational skills, and partner knowledge. The target population comprised 310 managers and 20 entrepreneurs of EMVs from four purposively selected counties, of which 245 were sampled. Statistical Packages for Social Sciences (SPSS) was used for analyzing data. The results indicated that networking capabilities (β=0.197, p=0.001) significantly influenced the competitive advantage of EMVs thus, NC contributes to the competitive advantage of EMVs. Therefore, entrepreneurs and managers should deliberately engage in networking activities and turn those networks into profitable business relationships.

Central Bank Rate Pass-Through Effects on Kenya’s Lending Rate

David Musimbi, Jennifer Njaramba, James Maingi — Wed, 13 Dec 2023 00:00:00 +0000

Several African nations, including Kenya, Nigeria and South Africa, have seen dramatic shifts in their monetary policy framework and financial environment during the last two decades. To manage and stabilize the economy, the Central Bank of Kenya (CBK) stopped intervening directly in lending low interest rates at financial institutions and instead turned to indirect and market-based measures to carry out monetary policy. Even though it was predictable that a changing financial environment would have a substantial impact on the efficacy of monetary policies, there has not been sufficient research done to determine how IRPT affects lending rates. The purpose of this article was to analyze the pass-through effects of the central bank rate on lending rates in Kenya. The study adopted a non-experimental research design. Data was collected from the CBK, the Kenya Bureau of National Statistics, and the Nairobi Stock Exchange between 2010 and 2021 quarterly data. The study's theoretical underpinning was the loanable funds theory and cost of capital. The cost-of-funds method is based on the conventional marginal cost pricing model for financial markets and helps explain how market prices are transmitted to consumers. The error correction model was used to measure the short-term effect of bank rate changes on Kenyan lending rates. The findings showed that Kenya has an incomplete IRPT which means that increases in the lending rate would be less than proportional whenever there is a change of a specific percentage in the CBR.According to the study, this may be one of the causes of some banks' foreign ownership, their independence from the central bank's liquidity, and their slow reaction times to signals from the central bank to modify lending rates. The study recommends that since commercial banks are a very important component in the transmission mechanisms, they should follow suit in the adjustment of the lending rates.