Abstract
The main aim of this study was to establish the influence of management capability on the financial performance of small scale road work construction companies in Kenya. The design used in the research was descriptive survey. The study targeted the small scale roads construction companies in Bomet County. These are the companies that work under the road construction agencies in Kenya namely Kenya National Highways Authority, Kenya Urban Roads Authority and Kenya Rural Roads Authority in the county. The target population was the 102 small scale roadwork construction companies in Bomet County. The sample was selected using proportionate stratified sampling method. The sample had 81 respondents. A questionnaire with both closed ended and open ended questions was used as the tool for the collection of primary data. Descriptive statistics such as Minimum, Mean and Standard Deviation were used describe analyse quantitative data. Bi-variate Linear Model was used for inferential analysis with the help of SPSS. The findings show that management's capability influences the financial performance of construction firms. This is because management's capability was tainted by incompetence, poor management skills, ineffective communication, and reluctance to make decisions and inadequate planning and budgetary provisions. The study recommended that the management should attend seminars and workshops in order to improve their management skills and capabilities in handling projects in a fast emerging economy. In addition, the project owners, contractors, and consultants should hold their responsibilities to avoid any delay or unnecessary cost. It was suggested that a further study should focus on other elements of management capability like personal characteristics of managers to show how they affect the financial performance of the construction firms.
Highlights
Firm performance is affected by many documented and undocumented factors (Morrish et al, 2010)
The findings showed that majority of the respondents (63.7%) had been in the firm for 6 to 10 years could understand the issues being investigated. 36.1% had below 5 years working experience and there was no respondent who had worked in the firms under study for more than 10 years
The study concludes that management capability in the construction firms was statistically significantly affecting financial performance
Summary
Firm performance is affected by many documented and undocumented factors (Morrish et al, 2010). The organizational set up and resources available to a firm will have a long term effect on the operations and performance of the firm outmost care must be taken in order to come up with the most prudent, beneficial and effective decisions that will facilitate their composition and use. Both Management theory and economic theories lay emphasis to managerial capabilities as critical in the process of wealth accumulation and effective management
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