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IJAREM: Current Issue (Volume 04 - No. 08, 2018)

 

1. Relationship between Financial Structure and Financial Performance of Listed Firms in Nairobi Securities Exchange in Kenya
Erastus G Ngure, Fredrick Mutea, Wilson Muema
Abstract
Firms have alternative ways of raising their funds. Corporate financing decisions made by the management leads to a financial structure and improper financing behaviour and decisions can lead to corporate failure. A quagmire exists in the mind of stakeholders and researchers as to whether there exists an optimal financial structure that maximizes shareholders‟ wealth. Thus when making financing choices there is need to consider evaluating the effect of the available financing alternatives on the firm‟s financial performance. The aim of the study was to examine the relationship between financial structure and financial performance of listed firms in Kenya, by determining the effect of internal financing, equity financing, short term debt and long term debt on financial performance. Descriptive and historical research design was adopted. The study was a census, featuring all the listed companies that were operational from the year 2009 to 2016. Primary data collected by questionnaires and secondary data obtained from NSE handbooks and published financial statements of the firms listed in the NSE were utilized. Descriptive statistics and multiple linear regressions were used to analyze the data which was presented in form of tables and charts. It was revealed that the mean internal financing of the companies listed at the NSE had consistently increased from 5.346 billion shillings in the year 2009 to 14.7 billion shillings in the year 2016. However, the study did not establish a significant relationship between internal financing and financial performance of listed firms in Kenya. A statistically significant relationship between equity financing and financial performance of listed firms in the NSE was established. The relationship between short term debt financing and financial performance of listed firms in Kenya was not significant. The mean long term debt financing for the firms listed at NSE had greatly increased from 3.367 billion shillings in 2009 to 15.587 billion shillings in 2016. The relationship between long term debt financing and financial performance of listed firms in the NSE was found to be statistically significant. It was concluded that two out of the four financial structure components included in the study were significantly associated with financial performance of listed firms in the Nairobi Securities Exchange in Kenya. A firm that utilizes equity finance is able to excel financially since the equity holders are the residual claimants and they have to ensure that resources are allocated efficiently to be able to maximize shareholders wealth. Affordable long term debt assists a firm to access productive technologies that it would not have otherwise achieved using internal financing. It was recommended that the board of directors of the listed firms should always give priority to funding options with no compulsory returns to avoid financial distress associated with difficulties in meeting financial obligations. Besides, the management of the listed firms should always perform accurate forecasting on projects they intend to venture into, against the cost of debt and taking into consideration the payback period, in the event they want to source for long term external funding. Since the study focused on firms listed in the NSE, it is suggested that the study be extended to other firms and institutions not listed to assess whether different findings may be reached regarding relationship between financial structure and financial performance.

 

2. The Relationship between Credit Reference Bureau Services and Performance of the Commercial Banks in Kenya A survey of commercial banks inMeru County
Kaugi Samwel Gatumu, Fredrick Mutea, Wilson Muema
Abstract
The purpose of this study was to establish the relationship between credit reference bureau services and the general performance of commercial banks in MeruCounty. Lending in the banking industry has been proven to be a risky endeavor especially in the developing world where there are weak legal and judicial systems. Information about the credibility level of potential borrowers is not readily available and most of the potential borrowers come from poor backgrounds; many of whom have never borrowed from commercial banks before and are unable to pledge collateral to guarantee payment of the loans they want to borrow. Sharing credit information gives people the opportunity to offer affordable credit access as the search costs and risk premiums are significantly lowered. This study sought to establish the relationship between credit reference bureau services and performance of the commercial banks in Kenya. Banks’ performance is compared against risk management, development of intellectual capital, increased business and information symmetry. The study adopted a descriptive research design. The design was suitable to answer the questions concerning relationship between credit reference bureau services and the performance of commercial banks in Meru County. The study was a census and focusing on all the eighteen banks operating in Meru County. Self - administered questionnaires were employed to collect data. The data was processed and analyzed using statistical package for social sciences (SPSS). Descriptive statistics and multiple regression analyses were used to examine the relationship between credit reference bureau services and performance of commercial banks in Meru County. The results are presented in summary reports, charts and tables. The study established that there is a significant relationship between improved risk management and performance of commercial banks in Meru County. Preventing losses by ensuring precautionary measures are taken is a key driver of performance and one of the vital elements in risk reduction. It was further established that there was a significant relationship between development of information capital and performance of commercial banks in Meru County. Information capital resources such as customer relations and human capital are imperative in the success of commercial banks and significant in sustaining a competitive advantage and creation of value in an organization. However, the study did not establish a significant relationship between increased business as well as information symmetry and performance of commercial banks in Meru County. It was hence concluded that improved risk management and development of information capital were significantly associated with performance of commercial banks in Meru County. The study recommends that the management of commercial banks should continuously identify, evaluate, monitor and mitigate all material risks and also do capital adequacy assessment with regard to their risk profile. Besides, the management of commercial banks must heavily invest in its employees to give it a competitive edge, since a bank is a knowledge-based firm where resources are intellectual in nature and non-tangible. It is suggested that the study be extended to other financial institutions to assess whether different findings may be reached regarding relationship between credit reference bureau services and the performance.

 

3. The Impact of A Teacher’s Implementation of the Read works Digital Reading Program on Second Graders’ Reading Fluency and Comprehension Test Scores
Cynthia Molina
Abstract
Since elementary school student performance on the end-of-year summative Virginia Department of Education (VDOE) Standards of Learning (SOL) Reading test is vital in impacting school accreditation, computer-assisted instruction has become popular. Online reading programs have existed in many elementary schools in Norfolk Public School district since 1996, such as Breakthrough to Literacy (McGraw-Hill Companies, 2002a), Istationin 2014 (Mathes, Torgesen, & Herron, 2015), and the i-Ready program from 2015 to 2017 (Curriculum Associates, 2014). The problem is that there is insufficient empirical research supporting the use of the ReadWorks program at several Norfolk, Virginia’s elementary schools.
The purpose of this sequential, explanatory mixed methods study is to investigate the effects of teachers’ implementation of the ReadWorks online reading program on second-graders’ reading fluency and comprehension test scores in one Norfolk elementary school. The teachers’ choices of ReadWorks tests and the teachers’ design of reading lessons can impact students’ reading test scores on the STAR reading test (Renaissance Learning, Inc., 2018).

 

4. The Relationship between Strategic Planning and the Performance of Devolved Healthcare
A Survey of Public Hospitals in Meru County

Anthony Kiama Ngera
Abstract
The study investigated the relationship between strategic planning and performance of devolved healthcare, through a survey of public hospitals in Meru County. Strategic planning refers to the process of envisioning the future of the organization and breaking it down into executable strategies, goals, tactics and timelines. Organizational performance on the other hand refers to the outputs/results realized by an organization in line with their goals and objectives. The specific objectives of the study were to establish the relationship between the individual components of strategic planning (mission and vision statements, business environmental analysis, strategic formulation, strategic implementation and strategic monitoring and evaluation) with the performance of public hospitals in Meru County under the devolved healthcare context. Strategic planning is part of the strategic management process which entails the alignment of the organization’s activities alongside its long term objectives. Despite the evident challenges in devolved healthcare in form of frequent industrial strikes, lack of medical equipment and essential institutional structures among others, no studies had investigated these problems from a strategic planning standpoint, justifying the study. Performance of devolved healthcare was considered in light of the WHO framework for measuring the performance of health systems, which focuses on health improvement, health responsiveness and financial fairness. The study covered six Level 4 hospitals in Meru County (Nyambene, Kanyakine, Muthara, Timau, Mikinduri, Miathene) and one level 5 facility (Meru Teaching and Referral Hospital). It took the design of a descriptive survey with a semi-structured questionnaire used in data collection. Analysis of collected data was done using SPSS version.21 with descriptive statistics such as means and percentages generated. Elsewhere, linear regression model was used in inferential analysis that establishes the relationship between the dependent and independent variables. The results were consequently presented using charts and tables. The findings indicated that all the components of strategic planning had an impact on performance, with a positive relationship evident except for in business environmental analysis and strategic implementation. The components of strategic planning were also fully implemented except for strategic monitoring and evaluation. However, all the components of strategic planning except mission and vision were only found to contribute to performance (health improvement, financial fairness and responsiveness) to a moderate extent. Other findings included that financial fairness was the least attained area of performance while strategic planning could only explain around 85% of the performance of public hospitals in Meru County. Consequently, the study concluded that Meru County hospitals significantly practiced strategic planning which in turn affected performance, performance was still poor with respect to financial fairness, each component of strategic planning could be improved on and not all the performance of Meru County hospitals could be explained by strategic planning. It was recommended that strategic planning is fully implemented, the strategic planning components improved to better impacts on performance and specific strategies devised to improve on financial fairness. For future studies, it was recommended that research focuses on non-strategic factors affecting performance, strategic management as a whole and also investigate strategic planning with respect to other frameworks of performance such as financial metrics

 

5. Relationship between Working Environment and Employees Performance among Non-Governmental Organizations in Tharaka-Nithi County
Michael Mutuura Nduyo, Abel Moguche, Dr. Kenneth Mugambi
Abstract
The work environment which encompasses several factors impacts on the way the employees perform their work. A comfortable and all inclusive workplace environment will boost the employees‘ performance hence boosting the organizational performance. The general objective of the study was to establish the relationship between working environment and the performance of the employees among Non-Governmental Organization‘s in Tharaka Nithi County.The Specific objectives were to determine the influence of employees, communication, remuneration and work life balance on performance of employees among NGO‘s in Tharaka Nithi County. The study adopted descriptive survey research design.The total number of employees working in those Non-Governmental Organization‘s was 55. Data was collected by use of the questionaires and presented using tables,pie charts and graphs. The study found that trainings are carried out in NGOs in Tharaka Nithi County however they did not address the work requirements of the employees though results showed that training had a direct correlation to the performance of employees. The study also found that there was a direct correlation between communication in the organisations sampled end employees performance as captured in the results of the study, though the frequency of communication was not ascertained though respondents felt that they received adequate information. The NGOs also have a reward and remuneration policy in place which provides adequate guidelines with regards to employee compensation., but this did not have a direct influence on the perfroamcen of the employees and thus had not direct correlation with the performance of employees in the NGO‘s. The worklife balance in NGOs was found to have a direct correlation with the performance of the employees as many respondents felt that there should be a heallthy work-life balance to enable them work properly while also looking at their individual, family and social lives. The study recommends NGOs need to have clear training policies that are relevant for each role in the organization and the frequency of the trainings. They should also equip their employees with the relevant communication tools and increase the frequency of periodical meetings to ensure communication is timely. The NGOs should ensure that they continuously review their remuneration policy so as to continuously motivate their employees.

 

6. Relationship between Succession Planning Practices and Employee Retention in Tea Factories in Meru County (A Survey of Tea Factories in Region Four of KTDA Divisions)
Pheris Nkatha Njeru, Abel Moguche, Fredrick Mutea
Abstract
SSuccession planning practices in an organization contribute a lot on employee retention which means that the period which an employee productively stays in an organization could be determined by the succession planning practices in an organization. The way employees behave in an organization in a big way determines the overall outcome. Human resource studies and experiences have revealed that if proper succession planning practices are followed the employees in an organization are motivated to work since they are always in the same direction and the goals and strategies are common. The purpose of this study was to examine the relationship between succession planning practices and employee retention in Tea Factories in Meru County: a survey of tea factories in region four of KTDA divisions. The researcher adopted a descriptive design and it is suitable since the study collected data from several respondents. Primary data was obtained using the self-administered semi-structured questionnaire as the main data collection instrument and secondary data was obtained from the published factory records. The target population was 66 employees working in the respective tea factories and the sample size was 66 employees from the respective Tea Factories. The researcher did a census whereby the whole population was examined to acquire the intended information. The researcher used both primary and secondary data to seek information. A pilot study was done to enhance the reliability and validity of the questionnaire. The collected data was analyzed using IBM SPSS v.22 and further explained using descriptive statistics. The study combined data into a coherent knowledge through the descriptive statistical analysis of the collected data and further analyzed and tested the hypothesis using Spearman correlation analysis and presented the knowledge in the workable recommendations for easier consumption by the business community. The study found out that employee involvement in management, talent management, training & development and human resource planning had an influence on the succession planning practices in tea factories. The study therefore encouraged that the tea factories had a task to put more emphasis on employee involvement in management, talent management, training & development and also human resource planning.

IJAREM Features