Enterprises In Kenya Research Articles

The Effect of Desk Tax Audit Practice on Tax Revenue Collection among Medium and Large Size Enterprises in Kenya

Purpose: Tax is a major issue of discussion for both developed and developing countries. For there to be significant progress in any nation, the government should look for ways of raising income to meet the needs of its citizens. The main objective of the study was to determine the effect of desk tax audit practice on Tax revenue collection among medium and large size enterprises in Nairobi region, Kenya. The study was guided by Lending credibility theory. Methodology: The target population was 562 employees in the Medium Taxpayer Office and Large Taxpayers Office Nairobi region, out of which 234 was sampled, and 167 respondents managed to fill and return the questionnaires implying a 71.4% response rate. Primary data was collected using structured questionnaires that was filled by employees in Medium Taxpayers Office and Large Taxpayers Office in Nairobi region. The study employed an explanatory research design. Data was then analyzed using descriptive statistics, Pearson’s correlation &regression model and finally Multiple regression model. Results: The study further found that Desk tax audit had a positive and significant effect on tax revenue collection β =0.329 p-value =0.0000<0.05. Recommendation: Based on the findings, the government should consider strengthening desk tax audit practices to enhance tax revenue collection. Policies could be developed to ensure regular and comprehensive desk audits are conducted to identify and address tax compliance issues promptly.

Influence of Organizational Market Culture on Change Management in Kenyan Social Enterprises

Firms ought to continuously adapt and modify their operations to fit the changing circumstances in the fiercely competitive and dynamic business environment. This suggests that businesses must incur substantial costs to carry out a variety of changes that will enable them to operate in the changing environment. Adjustments play an important part in defining firm competitiveness in the modern economic environment; however, many firms struggle to properly manage innovations, ensure long-term development, and motivate employees to accept change. This study explored the influence of organizational market culture on change management in social enterprises in Kenya. The study employed the Competing Values Culture theory to assess the company's culture. Using a descriptive design, the study targeted all 129 employees of Kidogo Early Years Company Limited, from top management to departmental level. Data collection involved questionnaire surveys for primary data. Analysis of quantitative data was by Statistical Package for Social Sciences version 29. The regression analysis findings revealed that organizational market culture (β = 0.310, p = 0.012) had significant positive influence on change management. The study concludes that organizations that are goal-oriented and market-driven are more adaptable to external pressures and are better positioned to manage change effectively. In view of the findings, the study recommends that for organizations with a market culture, it is crucial to embed a results-oriented approach that aligns change management with organizational goals and objectives. Practices such as setting clear performance targets, encouraging a competitive spirit, and focusing on market-driven strategies should be incorporated into daily operations. Keywords: Organizational Market Culture, Change Management, Social Enterprises, Organizational Culture Influence, Kenya

Stakeholders Pressure and Green Accounting Implementation in Kenyan Manufacturing Enterprises

The objective of this study was to establish the influence of stakeholders’ pressure on the Green Accounting (GA) implementation in Kenyan manufacturing enterprises. Lack of sufficient research on the factors influencing GA implementation and the paucity of existing literature created the need for this study. Stakeholder theory was applied. Data were gathered using questionnaires that the researcher self-administered. The Cronbach's alpha (α) reliability test was applied to evaluate the internal consistency of the measurements. The investigation's primary emphasis was on 1,107 manufacturing firms that are Kenya Association of Manufacturers members. The sample consisted of 294 firms. To ensure that each data stratum was fairly represented in the analysis, stratified random sampling was used in the study. The study's results showed that stakeholder pressure significantly and favorably impacted Kenyan manufacturing companies' adoption of green accounting. The study came to the conclusion that manufacturing companies in Kenya ought to embrace and apply GA. The study recommends that manufacturing enterprises in Kenya prioritize the training and development of their accounting professionals in environmental sustainability and the importance of stakeholders in green accounting implementation journey. Stakeholders pressure is an integral part of green accounting and thus stakeholders are recommended to continue having requirements to the manufacturing firms to adopt green accounting. Submitted 19th Jul 2024 Reviewed 27th Sep, 2024 Accepted 4th Oct 2024 Published 20th Oct 2024

Financial Resources and Green Accounting Implementation in Kenyan Manufacturing Enterprises

The objective of this study was to influence of financial resources on the green accounting implementation in Kenyan manufacturing enterprises. Data for the study were collected using a descriptive cross-sectional approach. Data were gathered using questionnaires that the researcher self-administered. The Cronbach's alpha reliability test was applied to evaluate the internal consistency of the measurements. The investigation's primary emphasis was on 1,107 manufacturing firms that are Kenya Association of Manufacturers members. The sample consisted of 294 firms. To ensure that each data stratum was fairly represented in the analysis, stratified random sampling was used in the study. Together with descriptive statistics like means and standard deviations, inferential statistics were also used, such as multiple regression analysis, analysis of variance, and Pearson correlation. The study's findings indicated that financial resources significantly and favorably influence Kenyan manufacturing companies' adoption of green accounting. The findings of the regression and correlation analyses demonstrated that the drivers of green accounting had a major impact on the adoption of green accounting. The study came to the conclusion that manufacturing companies in Kenya ought to embrace and apply green accounting. The study recommended that manufacturing enterprises in Kenya to allocate adequate financial resources to green accounting with intention of achieving best results.

Effect of Royalty Payments on Tax Revenue Collection on Multinational Enterprises in Kenya

Purpose: The study sought to investigate the effect of royalty payments on tax revenue collection on MNEs in Kenya. The study was further explained by the accounting, economic and transaction theories. Methodology: The study adopted an explanatory research design and longitudinal research design while a secondary data collection method was used to collect data through content analysis of audited financial statements of a target population of 62 firms listed on the Nairobi Securities Exchange (NSE) in Kenya. The sample of the study was identified using inclusion-exclusion criteria to identify the 28 MNEs that met the sampling criteria for this study over an observation period of 11 years. Results: The study found that royalty payments negatively affect tax revenue collection (????=− 0.0000113, p = 0.025). Conclusion: The study concluded that there is a significant negative relationship between royalty payments and tax revenue collection. This study therefore recommends the government should introduce guidelines on royalty payments, specifically outlining the procedures through which an MNE should claim for deduction of royalty payments, from their incomes.

FINANCIAL INCLUSION AND PERFORMANCE OF TOP 100 SMALL AND MEDIUM ENTERPRISES IN KENYA

Access to services such as credit, insurance, and savings enables SMEs to invest in growth, innovation, and operational efficiency. SMEs leveraging financial inclusion can enhance their revenue generation, cash flow management, and overall profitability. The study sought to find out what impact finance inclusion has had on the performance of Kenya's top 100 SMEs. This study was guided by finance intermediation theories, technology acceptance theory, TAM signal theory and pecking order theory. The study1was carried1out on the basis of a descriptive research design. The target population consisted of top 100 medium size enterprises in Kenya as shown in the annual survey carried out by KPMG and nation media group in the years 2020. Respondents ware financial officers from Kenya's top 100 mid-sized companies. Stratified sampling was used to interview respondents based on company category. Respondents were selected using a purposeful selection process. Data1was collected using structured questionnaire. A pilot survey was conducted with 10 respondents, but the final survey did not include these respondents. Validity of research instruments was measured using content validity. The study examined the effects of micro savings, micro credit, micro insurance, and digital banking on the performance of Kenya's top 100 SMEs, revealing that tailored financial products significantly enhance operational efficiency and growth. Findings indicated that micro savings improve financial stability, while flexible repayment options for micro credit support sustainable business practices. Additionally, awareness and customized solutions for micro insurance products were found to bolster risk management among SMEs. Digital banking was highlighted as a critical enabler of faster transactions and better cash flow management. The conclusions suggest that targeted financial services and educational initiatives are vital for empowering SMEs to optimize their performance. Recommendations include developing customized financial products, enhancing digital banking infrastructure, and providing financial literacy training to improve overall business resilience and sustainability.

Project Management Information Systems and Performance of Monitoring and Evaluation Systems in The State-Owned Enterprises, Kenya

This study investigated the relationship Project Management Information Systems (PMIS) and the performance of Monitoring and Evaluation (M&E) systems in Kenya's state-owned enterprises (SOEs). The efficient execution of state-owned projects was identified as critical for achieving national development goals; however, challenges such as inadequate integration of PMIS, ineffective M&E systems, inefficient resource deployment, and difficulties in measuring project outcomes often hindered success. A baseline survey indicated that while 40% of SOEs had begun to integrate PMIS into their M&E processes, only 25% reported significant improvements in project tracking. The study aimed to examine the relationship between PMIS utilization and M&E performance, focusing on resource allocation and technological development. A descriptive research design was employed, targeting 263 SOEs, with data collected from 384 respondents, primarily M&E managers. The results demonstrated a robust correlation between resource allocation, technological development, and M&E performance, with Pearson correlation coefficients of 0.653 and 0.763, respectively. Regression analysis revealed that PMIS accounted for 64.9% of performance variance in M&E systems, underscoring its critical role in enhancing project outcomes. The findings indicated that effective resource allocation and technological advancements were essential for improving organizational performance. Recommendations included investing in technology, enhancing resource allocation strategies, and fostering a culture of innovation within SOEs. Additionally, the study highlighted the need for continuous training to equip staff with the skills to leverage technological advancements. Areas for further research were identified, emphasizing the importance of exploring contextual factors affecting performance, the long-term impacts of PMIS implementation, and comparative studies with the private sector to enhance understanding of resource allocation and technological strategies across different organizational contexts. Overall, the research underscored the vital role of integrated PMIS and effective M&E in optimizing the performance of state-owned enterprises in Kenya

Relationship Between Risk-Taking and the Growth of Youth Owned Enterprises in Kenya

Purpose: Youth businesses play a key role in poverty alleviation when run based on entrepreneurial orientation. However, these micro and small enterprises face a mix of achievement and frustration, with previous findings showing that three out of five companies fail within the first few long periods of activity, despite government efforts to improve the sector. This study aimed to examine the relationship between risk-taking and the growth of youth-owned enterprises in Kenya. Methodology: The study is supported by expected utility theory. A cross-sectional survey methodology was utilized which incorporated qualitative and quantitative research methods. A stratified sampling technique was employed to obtain 397 SMEs from 55,300 SMEs registered by the seven selected counties in Kenya namely; Nairobi, Murang’a, Nakuru, Machakos, Mombasa, Kisii, and Isiolo counties. Data was analyzed using descriptive and regression analysis. Results: The study findings demonstrate that risk-taking had a positive association with the growth of youth-owned enterprises in Kenya. Conclusion: The study concluded that risk-taking helps youth-owned businesses in Kenya to expand. The study suggested that owners of youth businesses should focus on how to carry out a thorough risk assessment and oppose any risk related to financial, social, and psychological risk respectively.

The Moderating Effect of Business Networking Skills on Relationship between Entrepreneurial Orientation and the Growth of Youth Owned Enterprises in Kenya

Purpose: Youth businesses play a key role in poverty alleviation when run based on entrepreneurial orientation. However, these micro and small enterprises face a mix of achievement and frustration, with previous findings showing that three out of five companies fail within the first few long periods of activity, despite government efforts to improve the sector. This study aims to assess the moderating effect of business networking skills of communication, coordination, and relationship skills between entrepreneurial orientation and the growth of youth-owned enterprises in Kenya. Methodology: The study is supported by networking theory-Resource Based View. A stratified sampling technique was employed to obtain 397 SMEs from 55,300 SMEs registered by the seven selected counties in Kenya namely; Nairobi, Murang’a, Nakuru, Machakos, Mombasa, Kisii, and Isiolo counties. A cross-sectional survey methodology was utilized. Data was analysed using descriptive and inferential statistics. Results: The findings indicated that the association between entrepreneurial orientation and expansion of youth-owned businesses in Kenya was positively moderated by networking skills. Conclusion: The study concludes that networking skills, as measured by communication, coordination, and relationship skills lessen the overall influence of entrepreneurial orientation on the expansion of youth-owned businesses. The study suggests that founders of youth businesses should continue to hone their networking skills. In particular, they should be clear in communication just like other players in the market to effectively convey the right message, and apply relationship skills respectively.

Transparency as a Determinant of Financial Performance in State-Owned Commercial Enterprises in Kenya

State-owned commercial enterprises (SOCEs) in Kenya register below-par output in fiscal standards. Many explanations have been proffered for this state of affairs, including competition and fluctuations in the local and global economies. Additionally, it is important to examine how factors internal to these enterprises shape their financial performance. As such, this study aimed to examine the role of transparency as a corporate governance strategy in the fiscal output of state-owned commercial enterprises as anchored by legitimacy theory. Further, the study adopted explanatory research design. It targeted 476 board members and 379 corporate executives from 46 SOCEs in Kenya. The sample size was 295, consisting of 142 corporate executives and 153 board members, who were selected via stratified random sampling. To collect primary data, a questionnaire and document analysis were deployed. Data was analysed using descriptive statistics. Test for relationship between variables was done using covariance-based structural equation modelling (CB-SEM) along with Analysis of Moment Structures (AMOS) software. The study results revealed that transparency (estimate = 1.946, critical ratio = 3.676, p < 0.001) positively and significantly influenced the financial performance of SOCEs. It was thus deduced that transparency was a determinant of SOCEs’ fiscal output in Kenya. Therefore, SOCEs should deploy centralized real-time monitoring of financial performance through dashboards, build data management capacities and adopt business intelligence and data analytics technologies that allow for data driven and intelligence-based decision-making by the SOCEs’ board and corporate executives.

Transformational leadership in a crisis: Dimensional analysis with psychological capital

Previous research attests to the benefits of transformational leadership (as a unitary construct) for various employee outcomes. Less is known about how specific dimensions of transformational leadership relate to outcomes during crisis. In the present paper, we investigate how each dimension of transformational leadership, namely, intellectual stimulation, individualized consideration, inspirational motivation, and idealized influence relate to employees' psychological capital in a crisis, specifically the COVID-19 pandemic. A cross-sectional study was conducted where employees from 301 small and medium sized enterprises in Kenya completed a survey containing the variables of interest. Quantitative data analysis using partial least squares structural equation modelling was utilized to test the study hypotheses using Smart PLS 4 software. Results showed that only two of the four transformational leadership dimensions had a positive and significant impact on employees' psychological capital: Intellectual stimulation and individualized consideration. In terms of the theorized hypotheses, fear of COVID-19 moderated the relationship between (a) idealized influence, (b) intellectual, and (c) individualized consideration, and employees’ psychological capital. However, only intellectual stimulation reached a significant effect size. The present study reveals the varied relevance of transformation leadership dimensions to psychological capital in a crisis. A new condition (emotional assessment of a crisis) for assessing this relationship was proposed. We discuss theoretical and practical implications, strengths, limitations, and suggestions for future studies.

Public Financial Reporting Practices, Regulations and Accountability for State-Owned Enterprises in Kenya

Public Financial Reporting Practices, Regulations and Accountability for State-Owned Enterprises in Kenya

Determinants of Mobile Customer Relationship Management Adoption and Its Impact on Firm Performance in Kenya

ABSTRACT This study investigates the determinants of mobile customer relationship management (mCRM) adoption, and its impact on firm performance measured as sales revenue performance. Data collected from business enterprises in Kenya is analyzed using an instrumental variables endogenous treatment effects model. We find that information technology infrastructure, firm size, and competition are positively associated with the adoption of mCRM. We also find that mCRM has a positive and significant impact on sales revenue performance. We conclude that government investment in information and communications technology infrastructure facilitating the mCRM interface may play a critical role in enhancing firm performance.

Strategic Risk Agility on the Performance of Edible Oil Manufacturing Company at Pwani Oil Products Limited, Kenya

An organization’s capacity to foresee and address strategic risks pro-actively and flexibly is strategic risk agility. It entails seeing possible dangers and opportunities, evaluating how they could affect the organization, and swiftly adjusting and reacting to shifting conditions. Disruptive technologies, economic downturns, supply chain disruptions, and regulatory changes are a few examples of strategic risks that demand agility and flexibility to manage. This study primarily focused on the impact of strategic risk agility on the performance of edible oil manufacturing enterprises in Kenya. The study sought to establish the effect of strategic risk adaptability on the performance of edible oil manufacturing companies in Kenya, at Pwani Oil Products Limited. The research was guided by the Theory of Dynamic Capability. A descriptive research design was adopted for this study. The primary instrument for data collection in this study was a Questionnaire. The target population was 380 employees from the edible oil manufacturing company, Pwani Oil Products Limited for the period between August to November 2023. The sample consisted of 30% of the target population (70 men, 45 women and work experience of 0-11 years). The reliability of the questionnaire was assessed by measuring its internal consistency using Cronbach's Alpha. Conclusion are that the ability to swiftly adjust production processes, adapt to changing market demands, and respond to unexpected disruptions can translate into improved financial performance. The study's outcomes underscore the importance of strategic risk innovation and collaboration in enhancing financial performance. It is evident that these factors are pivotal for success. The recommendations are that Pwani Oil Products Limited should invest in improving its strategic risk adaptability. This can be achieved through regular risk assessments, scenario planning, and flexible business strategies. The company should develop a culture that encourages employees to quickly adapt to changing market conditions and mitigate risks effectively.

Innovation Strategy and Performance of Manufacturing Small and Medium Enterprises in Kenya

Innovation Strategy and Performance of Manufacturing Small and Medium Enterprises in Kenya

Innovative Structure and Performance of Manufacturing Small and Medium Enterprises in Kenya

Innovative Structure and Performance of Manufacturing Small and Medium Enterprises in Kenya

Leadership Skills and Growth of Micro and Small Farm Inputs Enterprises in Kenya

Micro and small farm inputs enterprises play a key role in many economies across the world since they supply farmers with agricultural inputs for food production and economic growth. Several policies and programs have been put in place to promote the growth of farm inputs MSEs in Kenya. However, despite this effort, most of these enterprises continue to struggle with growth problems. This study sought to determine the influence of leadership skills on the growth of farm inputs MSEs in Kenya. The study was supported by skills leadership theory. The study adopted a positivist research philosophy and descriptive survey design. The target population was 4,931 farm-inputs MSEs registered by the Agricultural Market Trust of Kenya. Data was analyzed using descriptive and inferential statistics through Statistical Package for Social Sciences (SPSS) version 23. The findings indicated that leadership skills had a positive and significant influence on the growth of farm inputs MSEs in Kenya (b=1.111, p=0.000). The study concluded that leadership skills significantly and positively contribute to the increase in the growth of farm inputs MSEs in Kenya. The study recommended the need for farm inputs for MSE owners to strengthen their leadership skills for improved productivity and growth of enterprises through training. In particular, the farm inputs MSEs’ owners should focus on enhancing the following aspects of leadership skills: implementation plans for business activities, problem identification techniques, action plans to resolve business crises, selection of the right staff, and supporting staff during delegation of duties and responsibilities.

Dynamic Capabilities and Competitive Advantage of Deposit Taking Savings and Credit Cooperative Societies in Nairobi City County, Kenya

Despite providing financial support and access to over 48% of the adult population and 82% of small enterprises in Kenya, Deposit Taking Savings and Credit Cooperatives faced intense competition from other financial institutions, leading to reduced competitiveness. The general objective of the study was to investigate the effect of dynamic capabilities on the competitive advantage of Deposit Taking Savings and Credit Cooperatives in Nairobi City County, Kenya. The specific objectives were to explore the effect of marketing capability, knowledge management capability, technological innovation capability, financial management capability on the competitive advantage of Deposit Taking Savings and Credit Cooperatives in Nairobi City County, Kenya. The study was grounded in Marketing Mix Theory, Knowledge-Based Theory, Technology Acceptance Theory, Resource-Based Theory, Dynamic Capabilities Theory, and Competitive Advantage Theory. It employed a descriptive research design, with a target population of 47 Deposit Taking Savings and Credit Cooperatives operating in Nairobi City County. The units of observation included 384 top and middle-level management staff in key departments. The study used a stratefied random sampling for sampling, involving all 47 Deposit Taking Savings and Credit Cooperatives in Nairobi. Additionally, a sample of 196 top and middle management staff was selected using the Yamane Formula. A structured survey tool was utilized for gathering data. Secondary data on competitive advantage was sourced from published articles, referred journals, and other relevant materials. The data gathered included both quantitative and qualitative elements, analyzed descriptively and inferentially, with averages, frequencies, and percentages serving as useful metrics. Qualitative data was analyzed using content analysis and presented in narrative form. The relationships between variables were examined through regression analysis, with tables used to summarize responses. The study analyzed the response rate to understand the participation and engagement level of 196 respondents in a sample of Deposit Taking SACCOs, consisting of 55 senior managers and 141 middle-level managers. The overall response rate was 94.4%, with senior managers returning 90.9% of questionnaires and middle-level managers returning 95.7%. The regression analysis showed that marketing capability, knowledge management capability, technological innovation capability, and financial management capability had a significant positive impact on the competitive advantage of Deposit Taking SACCOs in Nairobi City County. These capabilities contributed to competitive advantage through various factors, such as market expansion, communication efficiency, and financial stability. Recommendations for SACCOs included developing strong marketing strategies, implementing knowledge management systems, investing in robust technology, and enhancing financial management practices. Suggestions for future studies encouraged further exploration of dynamic capabilities and competitive advantages in SACCOs, as well as other financial institutions in Kenya.

Cashflow Management Practices and Financial Performance of Small and Medium Business Enterprises in Kenya

This comprehensive review examines cash management and its impact on the financial performance of Small and Medium Enterprises (SMEs). The review covers theories, practices, and empirical evidence, providing insights into financial management strategies. Theoretical perspectives include the Dynamic Trade-Off Theory and the Free Cash Flow Theory, which shed light on the implications for SMEs' financial management strategies. Empirical evidence underscores the importance of cash accountability, internal controls, cash policy, cash budgeting, and financial performance metrics like profitability, liquidity, and solvency. Effective cash management is crucial for SMEs as it enables growth, optimizes investments, enhances profitability, and ensures financial stability. This synthesis offers valuable insights for policymakers, practitioners, and academics seeking to understand and enhance SMEs' financial performance through sound cash management practices.

Venture Capital and Financial Performance of E-Commerce-Driven Firms in Kenya

Purpose: Businesses that rely on e-commerce for growth frequently find that their ability to obtain sufficient capital is critical to their success. Funding from venture capital firms is essential in this context. Due to insufficient capital, e-commerce-driven businesses in Kenya have continuously underperformed financially. Numerous of these businesses, such as Rupu, OLX Kenya, and ePay, encountered financial difficulties and eventually lost the ability to continue operating. This study's main objectives were to evaluate the impact of capital management support, financing options, and cost of capital on the financial performance of Kenyan e-commerce businesses. Additionally, the study sought to fully evaluate the moderating impact of regulatory structure on venture capital funding and the financial performance of Kenyan e-commerce-driven firms. The trade-off, stakeholder, financial liberalization, and agency theories all lend credence to this research. The research philosophy of positivism, which emphasizes the use of empirical data to evaluate theories and hypotheses, was applied to perform this study.
 Methodology: The study examined a population of 45 e-commerce-driven businesses that obtained venture capital financing between 2017 and 2022 using a descriptive cross-sectional survey research approach. A stratified simple random sampling design technique was employed to choose 45 e-commerce-driven businesses as a sample. Surveys were distributed to collect primary data. Important stakeholders, including investors, executives, and founders, were among the participants in the study. Descriptive statistics were employed to summarize the data, such as measures of central tendency (particularly the mean), variability (expressed by the standard deviation), and frequency distributions. Regression analysis, an inferential statistic, was also employed in the study to investigate the relationship between venture capital funding and financial success. The gathered data were coded before entering into the Statistical Package for Social Science (SPSS) program to make the analysis process easier. The analysis's final results were provided as tables.
 Findings: The findings showed that the cost of capital, financing strategies, and capital management support significantly impact Kenyan e-commerce enterprises' financial performance. The aggregate score of 3.73 in cost of capital indicated consensus among participants on the impact of venture capital on e-commerce companies' financial performance. Participants perceived a significant correlation, with a standard deviation of 1.15 reflecting varying opinions. Most agree that lower venture capital costs lead to better financial success, influencing organizations' financial decisions significantly. The study concluded that venture capital funding has a considerable impact on the financial performance of e-commerce-driven enterprises in Kenya. The report advised management to thoroughly understand the total cost of capital related to venture capital funding.
 Unique Contribution to Theory, Practice and Policy: The study on venture capital and financial performance of e-commerce-driven firms in Kenya has made significant contributions to theory, practice, and policy. It has enhanced theoretical understanding by examining the relationship between venture capital investments and the financial performance of e-commerce firms, providing insights into the dynamics of these markets. In practice, the study has offered valuable guidance to e-commerce entrepreneurs and investors by identifying factors that influence financial performance and informing strategic decision-making. Additionally, the findings have implications for policy formulation, as they highlight the importance of fostering an enabling environment for venture capital investments in the e-commerce sector to spur economic growth and innovation in Kenya.