Internal Control and Organizational Performance of Daldhis Construction Company, Somalia

ABSTRACT 

This study carried out an investigation on the role of internal control in influencing organizational performance of Daldhis Construction Company of Mogadishu, Somalia. The objectives of the study were 1) to examine the internal control procedures at Daldhis Construction Company, Mogadishu, Somalia, 2) to determine the organizational performance levels in at Daldhis Construction Company, Mogadishu, Somalia and 3) to establish whether there is a significant relationship between internal control and organizational performance in at Daldhis Construction Company, Mogadishu, Somalia. The design of the study was descriptive correlational. In data collection the researcher used questionnaires which were divided into three. Section A dealt with profile of respondents, B dealt with internal control and C dealt with organizational performance of the company. The population of the company was 140 and a sample of 104 was arrived at by use of the Slovenes formula. In identifying this sample within the population, simple random sampling, stratified sampling and purposive sampling procedures were applied. Analysis entailed frequencies, percentages, means, standard deviation, t statistic, ranks, charts and interpretations. From the findings, it was clear that the internal control employed in the company were not effective. Additionally, the organizational performance of the company was found to be low and at unacceptable levels. It was also established that there was a relationship between internal control and organizational performance and this was calculated at a value of 0.837 on the Pearson Correlation scale and this denoted a strong and positive relationship. Internal control were also found to significantly influence organizational performance of the company at an R Squared coefficient of 0.701. The study recommended confirmation of transactions, job rotation and training of employees.

TABLE OF CONTENTS

DECLARATION

APPROVAL ii

DEDICATION

ACKNOWLEGDEMENT

ABSTRACT

TABLE OF CONTENTS

LIST OF TABLES vm

LIST OF FIGURES

LIST OF EQUATIONS

LIST OF ACRONYMS xl

CHAPTER ONE 1

1.0 INTRODUCTION 1

1.1 BACKGROUND OF THE STUDY 1

1.2 STATEMENTOFmE PROBLEM 6

1.3 PURPOSEOFTI-IESnJDy 6

1.4 OBJECrIvES OFTHE STUDY 7

1.5 RESEARcH QuEsTioNs 7

1.6 SCOPE OF S11JDY 7

1.7 SIGNIFICANCE5 OF THE STUDY 8

1.8 OPERATIoNAL DEFINm0N OF KEY TERMS 8

CHAPTER TWO 9

LITERATURE REVIEW

2.0 INTR0DUCn0N 9

2,1 THEoRETICAL REVIEW 9

2.2 CONCEPTUAL FRAMEWORK 10

2.3 INTERNAL CONTROL 11

2.4 ORGANIzATIONAL PERFORMANCE 15

2.5 CHALLENGES FACED IN INTERNAL CONTROL ADMINISTRATION 17

2.5 RELATIONSHIPS BETWEEN INTERNAL CONTROL AND ORGANIZATIONAL PERFORMANCE 19

2.6 RESEARCH GAPS 20

CHAPTER THREE .22

RESEARCH METHODOLOGY 22

3.0 INTRODUCTION 22

3.1 REsEARCH DESIGN 22

3.2 PoPuL~]iON 22

3.3 SAMPLE SIZE AND PRoCEDuRE 22

3.4 SAMPLING PROCEDURE 24

3.5 DATA COLLECTION METHODS 24

3.6 VALIDITY AND RELIABILTFY OF THE INSTRUMENT 25

3.7 DATA GATHERING PROCEDURES 26

3.8 DATA ANALYSIS 27

3.9 ETHICAL CONSIDERATIONS 28

CHAPTER FOUR 29

FINDINGS PRESENTATIONS AND ANALYSIS 29

4.0 INTRODUCTION 29

4.1 DEMOGRApHIC CHARACTERISTICS OF RESPONDENTS 29

4.2 OBJECTIVE ONE: INTERNAL CONTROL TECHNIQUES 31

4.3 OBJECTIVE Two: ORGANIZATIONAL PERFORMANCE 34

4.4 OBJECTIVE THREE: RELATIONSHIPS BETWEEN INTERNAL CONTROL AND ORGANIzATIONAL PERFORMANCE 38

CHAPTER FIVE

DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 41

5.0 INTRoDUCTION 41

5.1 DISCUSSION OF FINDINGS 41

5.2 CONCLUSION 43

5.3 RECOMMENDATION 44

5.4 SUGGESTED AREAS FOR FURTHER STUDY 45

REFERENCES 46

APPENDICES

APPENDIX I: INFORMED CONSENT

APPENDIX II: QUESTIONNAIRE ii

APPENDIX III: INTERVIEW GUIDE v

APPENDIX IV: TIME FRAME FOR RESEARCH VI

APPENDIX V: RESEARCH BUDGET vn