Ethical Practices and Financial Management on Organisational Performance: A Case Study of Kenya Ports Authority Mombasa

ABSTRACT The research was conducted at Kenya Ports Authority Company which is situated along the Kilindini road in Mombasa. The general objective of the study was to establish the relationship of ethical practices and financial management on organizational performance. The other objectives of the research were to find the roles ethical practices play in financial management and also to come up with recommendations for effective ethical practices under the financial management on organizational performance. In the literature review, theories were used to support the study and concepts linked and analyzed to bring a conceptual framework. In the research methodology, the study employed a simple descriptive statistical correlation design since it wanted to establish the relationship among the three variables. A sample size of 80 patticipants (20 managers and 60 employees) respondents was chosen from a population of 800 staff using purposive sampling and 80 clients were interviewed using the convenient sampling technique. The total sample size added up to 160 respondents. The findings of the study reveal that ethical practices is highly practiced in the financial management of Kenya Pmts Authority and maximum emphasis has been put abreast of developments in its field to increase on its performance. It therefore concluded that ethical practices and financial management enhances organizational performance to a greater extent. Moreover, the study recommended that business managers should develop the necessary ethical practices and considerations in the financial depaitment to achieve sufficient comfort level from the stakeholders as well as maximum profit levels.

 TABLE OF CONTENTS 

Page 

DECLARATION .............................................................................................................. ii 

APPROVAL ..................................................................................................................... iii 

DEDICATION ................................................................................................................. iv 

ACKNOWLEDGEMENT ................................................................................................ v 

TABLE OF CONTENTS ................................................................................................ vi 

LIST OF TABLES ........................................................................................................... ix 

LIST OF FIGURES ........................................................................................................... x 

LIST OF ABBREVIATIONS ......................................................................................... xi 

ABSTRACT .................................................................................................................... xii 

CHAPTER ONE ................................................................................................................ 1 

INTRODUCTION ............................................................................................................. 1 

1.0 Background of the Study ............................................................................................... 1 

I.I Statement of the Problem ............................................................................................ 3 

1.2 Objective of the Study ................................................................................................... 4 

1.2.1 General Objective ....................................................................................................... 4 

1.2.2 Specific Objectives ..................................................................................................... 4 

1.3 Research Questions ........................................................................................................ 4 

1.4 Scope of the Study ......................................................................................................... 5 

1.4.1 Geographical scope ..................................................................................................... 5 

1.4.2 Theoretical scope ........................................................................................................ 5 

1.4.3 Content scope .............................................................................................................. 5 

1.5 Significance of the Study ............................................................................................... 5 

CHAPTER TWO ............................................................................................................... 7 

LITERATURE REVIEW ................................................................................................. 7 

2.0: Introduction .................................................................................................................. 7 

2.1 Theoretical Framework .................................................................................................. ? 

2.2: Fig 1.0-Conceptual Framework .................................................................................... 8 

2.3: Ethics and Ethical practices .......................................................................................... 9 

2.4 Financial management and Ethics ............................................................................... 12 

2.4.1 Ethics and Management.. .......................................................................................... 14 

2.5 Organizational performance ........................................................................................ 15 

2.6 Ethical Practices and Financial Management. ............................................................. 16 

2. 7 Ethical practices and Organizational performance ...................................................... 17 

CHAPTER THREE ......................................................................................................... 19 

METHODOLOGY .......................................................................................................... 19 

3.0: Introduction ................................................................................................................ 19 

3.1 Research Design .......................................................................................................... 19 

3.2 Study Population .......................................................................................................... 19 

3.3 Sample size .................................................................................................................. 19 

3.4 Sampling Procedures ................................................................................................... 20 

3.5 Data Sources ................................................................................................................ 20 

vi 

3.5.1 Self Administered Questionnaires ............................................................................ 20 

3.5.2 Secondary data .......................................................................................................... 21 

3.6 Data Collection Methods ............................................................................................. 21 

3.6.1 Questionnaire ............................................................................................................ 21 

3.6.2 Interviews ................................................................................................................. 22 

3.7 Measurement of the Research Variables ..................................................................... 22 

3.8 Data Validity and Reliability ....................................................................................... 22 

3.9 Data processing, analysis and presentation ................................................................. 23 

3.10 Limitations of the Study ............................................................................................ 23 

CHAPTER FOUR ........................................................................................................... 25 

DATA PRESENTATION, ANALYSIS AND INTERPRETATION .......................... 25 

4.0 Introduction ............................................................................................................... 25 

4.1 Bio-data of the Respondents ..................................................................................... 25 

4.1.1 Managers' Position in the Organizational Hierarchy ............................................... 25 

4.1.2 Employees' Position in the Organizational Hierarchy ............................................. 26 

4.1.3 Education Levels of Managers in the Organization ................................................. 27 

4.1.4: Education Level of Employees in the Organization ................................................ 28 

4.1.5: Duration of Service in the Organization by Respondents ....................................... 29 

4.1.6 Clients' Countries of Origin .................................................................................... .31 

4.1.7 Quantity of Goods Shipped Through the Port .......................................................... 32 

4.2 Ethical Practices and Organizational Performance ...................................................... 34 

4.2.1 Integrity Levels and Organizational Performance .................................................... 34 

4.2.2 Professional Ethics and Organizational performance .............................................. .35 

4.2.3 Conflict Management and Organizational Performance .......................................... 37 

4.2.4 Employees' Adaptation to Bribery and Corruption Temptations ............................ .37 

4.3 A Reflection on the Role of Ethical Practices in the Organization's Financial 

Management ...................................................................................................................... 38 

4.3.1 Integrity Practices and Financial Management.. ....................................................... 38 

4.3.2 The Ethical Practice of Competence and Financial Management.. .......................... 39 

4.3.2 Organizational Revenue Performance and Financial Management.. ........................ 40 

4.3.3 Credit Management and Financial Performance ..................................................... .4 I 

4.3.4 The Effect of Receipt and Disbursement of Funds on Financial Performance ........ 42 

4.3.5 Capital Budgeting and Financial Management ........................................................ 43 

4.4 The Role of Good Ethical Practices and Financial Management towards Proper 

Organizational Performance ............................................................................................. .45 

4.4.1 Professionalism and Competence in Kenya Ports Authority's Operations ............. .45 

4.4.2 Ethical Practice of Objectivity and Organizational Performance ............................ .45 

4.4.3 Financial Records Management and Organizational Performance .......................... 48 

4.4.4 Cost Reduction Aspects and Organizational Performance ...................................... .49 

4.4.5 Level of Profitability and Organizational Performance ............................................ 49 

4.4.6 Quality of Service and Organizational Performance ................................................ 50 

4.5 The Extent to which ethical practices and Financial Management Affect 

Organizational Performance .............................................................................................. 51 

Vil 

CHAPTER FIVE ............................................................................................................. 54 

SUMMARY, CONCLUSION AND RECOMMENDATIONS ................................... 54 

5.1 Introduction ............................................................................................................... 54 

5.2 Summary of Findings ............................................................................................... 54 

5.3 Conclusion ................................................................................................................... 55 

5.4 Recommendations ........................................................................................................ 56 

5.4 Areas for Further Research ....................................................................................... 57 

REFERENCES ................................................................................................................ 58 

APPENDICES .................................................................................................................. 62 

APPENDIX I: INTRODUCTION LETTER ..................................................................... 62 

APPENDIX II: ................................................................................................................... 63 

QUESTIONNAIRES ......................................................................................................... 63