Control Environment and Financial Risk Mitigation Efficiency of Supermarkets during Covid-19 in Nairobi City County, Kenya
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Date
2023
Authors
Kimani, James Kamau
Journal Title
Journal ISSN
Volume Title
Publisher
KENYATTA UNIVERSITY
Abstract
Retail business ventures world over are well thought-out susceptible to various threats that needs to be tackled to shun impending financial fatalities/damages. As a result, it exposes the financial risk of retail businesses notably supermarket businesses in the UK recorded 40%, Netherland 35%, China 42% and America 29% respectively. Like any other type of business operating in Kenya, supermarkets face a myriad of financial and operating risks when carrying out their day to day operations. In the recent past, more than 17% of supermarkets in Nairobi and other areas in the country have been forced to close down. Among the factors that have contributed to the closure and poor survival rates in the supermarkets sector is the increasing financial and operational risks. Consequently, management duty’s significance in guaranteeing adequacy and efficacy of laid down guidelines and act in moderating such threats cannot be overemphasized. In today’s business environment with tight margins and fierce competition, management competence significantly determines whether or not C2a business entity going to be successful. Currently, this study sought to determine the influence of control environment on the financial risk mitigation efficiency among the supermarkets during COVID-19 in Nairobi County, Kenya. Particularly, it sought to institute the link amid ICT integration, management efficiency, physical controls of assets, authorization and approval of transactions and financial risk mitigation efficiency of supermarkets during COVID-19 in Kenya’s Nairobi City County. Contingency Theory (CT), Technology acceptance theory, Cressey’s Fraud Theory and Firm Value Maximization Theory serve as anchored theories. Descriptive research design was adopted by the study. Supermarkets as recognized by Kenya’s RETAK comprised the study’s target population. The study exclusively targeted branch managers/heads of the 66 supermarkets in Kenya’s Nairobi City County. Cumulatively, the population of the study was made of 66 respondents selected through purposive sampling technique. Descriptive statistics involving frequencies, means and standard deviations were used. Inferential statistics used were correlation and regression analysis. Diagnostic test such as multicollinearity and normality model fit analysis of variance and coefficient parameters were employed to validate the regression model. The study found that information communication and technology integration is a statistically positive significant predictor of financial risk mitigation efficiency (β1=0.191, p<.05). The study also found that management efficiency is a statistically positive significant predictor of financial risk mitigation efficiency (β2=0.339, p<.05). Further, the study found that physical control of assets is a statistically positive significant predictor of financial risk mitigation efficiency (β2=0.123, p<.05). Finally, the study further found that physical control of assets is a statistically positive significant predictor of financial risk mitigation efficiency (β2=0.733, p<.05). The study recommended that business organizations such as supermarkets should invest heavily in information technology integration into theory operations. Further, business organizations can enhance their financial risk mitigation by enhancing their managerial efficiency to minimize wastes and losses thus enhance the overall business efficiency.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration (Finance Option), Kenyatta University
Keywords
Control Environment, Financial Risk Mitigation Efficiency, Supermarkets, Covid-19, Nairobi City County, Kenya