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The Effect of Alternative Investments on the Financial Performance of Pension Funds in Kenya
Full text linkAbstract Purpose - This research focused on the effects of alternative investments on the financial performance of pension schemes in Kenya. Methodology - This research was descriptive and Secondary data covering a period of 5 years, 2012-2016, and comprised a population of 442 segregated pension schemes and from which a sample of 90 schemes was selected using stratified sampling technique. Only data from 385 schemes was available. The remaining 57 schemes did not qualify for sampling due to incomplete data, data received did not pass sense checks and also responses to queries were not received on time. The data was obtained from the Retirement Benefit Authority and the Actuaries Survey from Alexander Forbes Consulting. Diagnostic tests carried out were tests for normality, multicollinearity and autocorrelation. They were used to test for data fitness before any further analysis. The study also employed the use of a linear multiple regression model to analyze the effect of alternative investments on the financial performance of pension funds in Kenya. The tests of significance used in the study were the t-test, F-statistic, the R-square and Adjusted R-square. Findings - From the findings, most pension schemes had the largest allocation in fixed income and government securities and quoted equity, with the least allocation in private equity and venture capital and real estate investment trusts. The R-square test indicated that 10.6% of the variations in the return on investments were due to the weights of the asset classes indicating that the weights of the asset classes are one among many factors which contribute to the returns of the pension funds. The regression coefficients yielded a positive relationship between this alternative asset classes and return on investments except private equity and venture capital. Implications - Fund managers and Trustees should therefore deliberate about this alternative asset classes which boost the growth of assets under management as well as increase retirees earnings
THE GROWING ROLE OF LABOR MARKET INTERMEDIARIES ON EMPLOYMENT RELATIONS AND IT’S IMPLICATIONS OF HUMAN RESOURCES MANAGEMENT
Full text linkThe role of labor market intermediaries has evolved drastically over the past few years andstill evolving due to global competition, selection and placement, legal constrictions,changes in employee-employer relations and leadership styles combined precipitate asignificant rise in their roles. The continued rise of labour market intermediaries hasraised more questions than answers questions about their functionality and rationale in thelabour market, and their value to people’s employment notions. Few studies have beencarried out on the emerging trends in work relations, the growing role of labour marketintermediaries and their implications on human resources management. A gap which thiscritical review seeks to fill by determining the different relations that exist in the workplaceand their effects on individuals and the management while trying understand traitscharacteristics that make them to be who they are for instance; mentors, trailblazers,communicators, foes, acquaintances and advocates in addition to establishing how labourmarket intermediaries carry out their activities in regard to work relations. Labourmarket intermediaries have been in existence for many years under different pretext suchas labor unions, expertise association, and professional licensing boards among others.Previous studies into work place relations mostly dwelt on their effects on job satisfaction,employee motivation, employee turnover and retention
Relationship Between Executive Compensation And Financial Performance Of Commercial State Owned Enterprises In The Energy Sector In Kenya
Full text linkPurpose - This paper focused on the relationship between executive compensation and financial perfomance of commercial state owned corporations in the energy sector in Kenya Methodology - This study adopted a cross - sectional research design. Secondary data on net income, total assets and executive compensation were extrated from the individual company published financial statements for a five year period Findings - The study finds weak negative relationship between executive compensation and financial performance. Regression analysis models infer that 38.9% and 45.2% of variations in financial performance of the commercial state owned firms is explained by variations in the firm size and by variations in both the firm size and the levels of executive compensation respectively. The study found that any unit increase in firm size has a commensurate decline in ROA for the firms to an extent of 0.059 and a unit increase in executive compensation has a commensurate decline in ROA for the firms to an extent of 0.027. Implication – the findings imply that there is no increased value for higher executive compensation in the public sector corporations. Thus, Corporations boards should re evaluate the comensation to justify value for the executive pay levels. Value – It is recomended that there be harmonization and review of the executive renumeration system to include pay for performance perks and to rationalize productive capacity of assets acquired to ensure they are utlized in value creatio
EFFECTS OF SELECTED FIRMS CHARACTERISTICS ON CAPITAL STRUCTURE DECISIONS OF FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE
Full text linkAbstract Purpose - Capital structure choice remains a crucial decision alongside the vital choices intended by a corporate since they have a high consequence on the value and the cost of the company. Therefore this study main focus was to examine the effects of selected firms characteristics on the capital structure decisions of companies registered at the Nairobi Stock exchange. Methodology - The study adopted a descriptive research design and used secondary data. The collected data was analyzed with the help of the SPSS software version 23 and presented with the help of frequency distributions, computation of mean and standard deviation. The association between the research variables was presented in a correlation matrix and a regression model. Findings - Firm size showed greatest influence on the company choice of capital structure among the firms followed by asset structure, profitability and liquidity. Further, the regression model also generated adjusted R squared value of 0.692 that is to mean 69.2% of the variations in financing options can be well illustrated by variations in the firm size, asset structure, profitability and liquidity. The findings from the study indicated an affirmative correlation among firm’s size and the financing options. The findings also revealed an affirmative association among assets structure against the source of financing. The findings from the research also showed that there is undesirable association among the firm’s profitability and source of financing of the firms listed at the NSE while a negative relationship among liquidity and the principal investment was exhibited in the research findings. This leads to a conclusion that rise in company size resulted to a rise in the investment structure of a firm therefore increase in demand to increase the capital base by seeking more financing. The study also found out that an increase in asset structure resulted in an increase in capital structure while an increase in profitability levels resulted in decrease in capital structure; increase in in liquidity levels led to a decrease in capital structure of the firms listed at the NSE. Implications –The study findings emphasize that firms should understand the specific characteristics that influence choice of their respective capital structure in order to opt for the best financing option. The study also further suggested that similar studies should be carried out every three to five years to find out the significance of firm characteristics on choice of capital structure of firms listed at the NSE Value -The findings of the study would be significant to public institutions and other non-listed firms in the choice of financing options and design of capital structure. Policy makers would infer the findings in formulation of relevant capital structure policies
RELATIONSHIP BETWEEN ENTREPRENEUR PROFILE AND MICROENTERPRISE GROWTH AT KAMUKUNJI IN NAIROBI, KENYA.
Full text linkABSTRACTThe paper provides knowledge on the relationship between entrepreneur profile andmicro-enterprise growth at Kamukunji. A correlational survey research design meets theobjective of the study. The sample includes 354 micro-enterprises selected by systematicsampling from Kamukunji Jua Kali Association membership register in 2006. Data werecollected using interview and observation guides, and field notes. Independent variablesinclude age, gender, education, ethnicity, religion, marital status, father, and motheroccupation. Dependent variables contain growth in sales, employees, departments, anddivisions. Descriptive statistics such as frequency distribution, percentages, standarddeviation, cross tabulation, and non-parametric analysis of variance were used in dataanalysis. The study provides results on factors influencing micro-enterprise growth atKamukunji and findings useful to entrepreneurs, consultants, researchers, and policymakers mainstreaming micro-enterprise growth
The Influence Of Market Orientation On The Choice Of A Shipping Firm By Fruit Exporters Of Refrigerated Cargo N Kenya
Full text linkIn the last few years, firms within the shipping business have transitioned from ahomogenous service business towards a heterogeneous market characterized by an increasein number of shipping firms, value offerings, well informed customer, rapid changes incustomer taste and preferences. The motivation of the study was to determine the influenceof market orientation on the choice of a shipping line by fruit exporters of refrigeratedcargo in Kenya. The study population consists of all the 39 fruit exporters of refrigeratedcargo as listed on the Fresh Produce Association of Kenya Website. A cross sectionaldescriptive survey was used. A questionnaire was developed to assist in collecting primarydata, while secondary data were obtained from renowned authors in the field of marketing.Analysis of data was done using descriptive and inferential statistics. The influence ofMarket orientation was measured using a construct developed by Narver and Slater’s(1990), customized for the shipping industry. The results reveal that Market orientationwas depicted by more emphasis on inter functional co-ordination compared to bothcustomer orientation and competitor orientation. Limitations encountered during research.The descriptive cross sectional research design could not measure changes inorganizational culture over time, the study was limited to a single industry put constraintson generalizing of the results. It was recommended that all studies done in future shouldadopt longitudinal research design to evaluate changes in organizational culture and theirinfluence on performance over time. Further, to capture representative view of industry,future studies need to use multiple informant approach
EFFECT OF ENTREPRENEUR CHARACTERISTICS ON PERFORMANCE OF NONTIMBER FOREST PRODUCTS SMALL AND MEDIUM ENTERPRISES IN KENYA
Full text linkLimited literature is available on the relationship between entrepreneurcharacteristics and performance of non-timber forest products small and medium enterprisesraising debate whether the link is tenable with such firms. Thus, a study covering 314 small andmedium enterprises in nine counties in Kenya was conducted to explore the relationship. Thecoefficient of determination, F statistic, and the t-value and their significance levels were used inpresenting the relationship between entrepreneur characteristics and firm performance. The resultsshow that that firm performance is significantly affected by entrepreneur characteristics of age,managerial skills, industry experience and social skills. Thus, it is concluded that entrepreneurcharacteristics and performance of non-timber forest products small and medium enterprises areempirically related. Firms run by relatively young, well-experienced and skilled entrepreneursregister better performance. It is necessary, therefore, that the non-timber forest products small andmedium enterprises match their strategic decisions with characteristics of owners/managers toenhance their competitiveness and performance. The implications of this study are that specificpolicy measures are necessary to encourage the many well trained but unemployed young people toengage in businesses. Additionally it also implies that specific training programmes are necessaryto equip the practitioners with necessary theoretical and practical capacities to enhanceperformance of their firms
PERCEIVED VALUE OF INVESTMENT PROMOTION INCENTIVES, MACROMARKETING ENVIRONMENT AND PERFORMANCE OF FIRMS IN EXPORT PROCESSING ZONES IN KENYA
Full text linkThe broad objective of this study was to establish the influence of perceived value ofinvestment promotion incentives, and macro-marketing environment on performance of firms in theexport processing zones (EPZs) in Kenya. It was anchored on international trade, macro-marketingand Foreign Direct Investment theories. The study tested the direct influence of investmentpromotion incentives and the moderating effect of macro-marketing environment on firmperformance. The study was a census cross-sectional survey of all EPZ firms. Secondary data wereobtained from various reports and bulletins. Primary data were collected from the study populationusing a semi-structured self-administered questionnaire. Analysis of data was done throughdescriptive and inferential statistics. Hierarchical multiple linear regression, was used to test thehypotheses. Results indicated that both the direct and moderation effects were statisticallysignificant. Findings of the study imply that provision of investment promotion incentives should besupported by conducive macro-marketing environment for desired firm performance. The resultsalso imply that the theory and concept of country marketing may guide the formulation andapplication of investment promotion strategies to position the country as an investment destination.The study has contributed to theory development, policy formulation and marketing practic
Group Cohesion and Strategic Context On The Relationship Between Top Management Team Composition And Performance Of Family Firms: A Critical Review Of Literature
Full text linkAccording to the upper echelons theory, TMT composition impacts on organizationalperformance. However, empirical studies have found contradictory results with somereplication studies being unable to duplicate any previous findings. Theseinconsistencies in empirical findings have led to the conclusion that the relationshipbetween TMT composition and firm performance is not a direct and straightforwardone as envisaged by the upper echelons theory. This has led to the search for thevariables that mediate or moderate this relationship. This study focused on family firmsand studied family firm specific variables of TMT composition namely family ratio,number of generations in the TMT and number of nuclear units within the TMT. Thisstudy established that the impact of TMT composition on firm performance in familyfirms is mediated by group cohesion. This is because the family firm is fraught withmany dynamics among the family members some of which are not related to thebusiness. Due to this, it was concluded that whether or not the TMT composition in thefamily firm impacted performance positively or not, was dependent upon the family’sability to pull in the same direction that is how cohesive the family was. In addition, itwas established that family firms pursuing complex strategies in terms of their productsor markets were likely to benefit the most from TMT composition. This is because thestrategic context triggered deliberations and information sharing which harnessed thediverse skills availed by the TMT composition. Thus the strategy context moderated therelationship between TMT composition and firm performance. It was also noted that acomplex strategic context was capable of triggering conflict and disagreements thusnegating the impact of TMT composition on firm performance. The study thereforeconcluded that the impact of strategic context needed to be reviewed in light of thegroup cohesiveness. Further it was noted that to fully understand the impact of TMTcomposition on family firm performance, the moderating effect of strategic context andthe intervening effect of group cohesion needed to be considered. Due to the uniquenessof the characteristics of family firms and the convergence of ownership andmanagement in family firms, the resource based view, stewardship and agency theoriesneeded to be considered in addition to the upper echelons theory when explaining theimpact of TMT composition on family firm performance. It was observed that thestrategic management field had lagged behind in research on family firms despite thegrowing importance of family firms in modern day economies. In line with this it wassuggested that policy makers needed to design policies and legal frameworks that areappropriate to family firms. The study encouraged families to get involved in themanagement of their firms and foster cohesiveness among TMTs in order to deriveoptimal results for their businesses
A CONCEPT PAPER OF GREEN SUPPLY CHAIN MANAGEMENT PRACTICES IN KENYA
Full text linkGreen supply chain has emerged as proactive area in healthcare. The study examinesrelevant literature review that explains green supply chain practices especially in health in Kenya.The health sector is often a key sector in a developing society .This is due to its contribution towellbeing among its citizens. The paper shall also propose a conceptual framework based on theliterature to explain the relationship between greening practices in the supply chain andorganizational performance. Firms involved in the supply chain of medical related supply arecurrently under pressure to supply environmentally conducive and biodegradable products.Findings from the paper indicate, that a firm’s commitment to conserve the environment is drivenby suppliers and consumers needs of the same.Key words: Green supply chain management, green procurement, green packaging, eco design,waste management reverse logistics and practices