This document summarizes a research project report on investigating the impact of corporate responsiveness on firm risk and market beta for listed banks in Kenya. The study used a descriptive research design and census approach to collect data from the listed banks' websites and Capital Market Authority website for three consecutive years. The results are presented using bar charts, frequency tables, and percentages. The study found that corporate responsiveness impacts firm risk and market beta. It provides recommendations for policymakers and areas for further research.
This document provides a summary of a thesis submitted by Dimitris Kosmidis in partial fulfillment of the requirements for a diploma in technology management. The thesis examines how maturing organizations can adapt emerging technologies to build socio-cultural welfare, using the human resources department of a company as a case study. It discusses the business framework and need for application integration, relevant technologies including SAP human resources solutions, and a people capability maturity model for organizational maturity. The conclusion evaluates how converging technologies can help organizations evolve their processes to create business and social value.
This document is a dissertation submitted by Arjun Jaideep to Dr. Rajesh for the degree of MBA at Amity University. The dissertation analyzes non-performing assets (NPAs) of public sector banks, private sector banks, and foreign banks in India. It includes chapters on literature review, research methodology, analysis and interpretations of findings, and conclusions and suggestions. The introduction defines NPAs and discusses asset classification, types of NPAs, reasons for accounts becoming NPAs, the impact of NPAs, and early symptoms of an asset turning non-performing. The dissertation aims to provide an overall view of the existence, treatment, and resolution of the NPA issue in India.
Factors Affecting Return on Assets (ROA) in Banking Companies Listed in Indon...AJSSMTJournal
The document discusses factors that affect return on assets (ROA) for banking companies listed on the Indonesia Stock Exchange from 2015 to 2018. It analyzes the effect of capital adequacy ratio (CAR), non-performing loans (NPL), loan to deposit ratio (LDR), net interest margin (NIM), operational costs to operating income ratio (BOPO), inflation, and Bank Indonesia rate (BI rate) on ROA. The results showed that CAR, NPL, inflation, and BI rate did not significantly influence ROA individually, while LDR, NIM, and BOPO did. Together, all independent variables significantly explained 95.8% of the variation in ROA, while the remaining 4.2
Comparative analysis of non performing assets of public and private sector banksNamita Garg
This document is a project report submitted by Namita for the completion of an MBA degree. The report analyzes and compares the non-performing assets (NPAs) of public sector banks and private sector banks in India. The report contains five chapters - an introduction to the Indian banking sector and NPAs, a literature review, research methodology, data analysis and interpretation, and findings, suggestions and conclusion. Tables of data on NPAs, loan compositions, and correlations between profits and NPAs of public and private sector banks are included. The goal of the report is to analyze differences in NPAs between public and private banks in order to understand bank performance and issues.
This document analyzes the financial performance of Sakthi Finance Limited over a 5-year period from 2004-2009 using ratio analysis and other financial tools. Key findings include that the company demonstrated good liquidity and solvency as measured by current, quick, and equity ratios. Net profit and return on investment increased over the period. Suggestions are made to reduce expenses further and introduce new deposit schemes to improve performance. In conclusion, while Sakthi Finance showed good overall financial results, some ratios like the current ratio declined over time, so ongoing monitoring is needed.
Comparative Analysis of Non Performing Assets of Public Sector, Private Secto...Gaurav Godwani
This document is a project report submitted in partial fulfillment of a Bachelor of Commerce degree. It provides an introduction to non-performing assets (NPAs) in the Indian banking system. It defines NPAs and discusses how assets are classified as standard, sub-standard, doubtful or loss based on the number of days past due and likelihood of recovery. The types, reasons, impacts and early symptoms of NPAs are also examined. The document then outlines the procedures for NPA identification and resolution in India, before discussing the objectives, methodology and overall findings of the research project.
Credit appraisal for term loan and working capital financing with special ref...Sandeep Singh
This document appears to be a student project report submitted for a post-graduate diploma program. It discusses credit appraisal for term loans and working capital financing, with a focus on consortium banking. The report includes an acknowledgements section, table of contents, and 14 main sections discussing topics like the banking industry, Punjab National Bank, types of lending, methodology, case studies, and recommendations. The case study analyzes a term loan provided to an energy company and discusses India's power sector scenario.
This document is a project report on comparing the non-performing assets of private and public sector banks in India. It includes an introduction describing the growth of NPAs in Indian banks and outlines the objectives of the study. The methodology section notes that descriptive and comparative research methods will be used, analyzing secondary data from selected private and public sector banks. The report appears to analyze trends in NPAs, attempt to identify reasons for high NPAs, and evaluate steps taken to manage and reduce NPAs.
This document provides a summary of a thesis submitted by Dimitris Kosmidis in partial fulfillment of the requirements for a diploma in technology management. The thesis examines how maturing organizations can adapt emerging technologies to build socio-cultural welfare, using the human resources department of a company as a case study. It discusses the business framework and need for application integration, relevant technologies including SAP human resources solutions, and a people capability maturity model for organizational maturity. The conclusion evaluates how converging technologies can help organizations evolve their processes to create business and social value.
This document is a dissertation submitted by Arjun Jaideep to Dr. Rajesh for the degree of MBA at Amity University. The dissertation analyzes non-performing assets (NPAs) of public sector banks, private sector banks, and foreign banks in India. It includes chapters on literature review, research methodology, analysis and interpretations of findings, and conclusions and suggestions. The introduction defines NPAs and discusses asset classification, types of NPAs, reasons for accounts becoming NPAs, the impact of NPAs, and early symptoms of an asset turning non-performing. The dissertation aims to provide an overall view of the existence, treatment, and resolution of the NPA issue in India.
Factors Affecting Return on Assets (ROA) in Banking Companies Listed in Indon...AJSSMTJournal
The document discusses factors that affect return on assets (ROA) for banking companies listed on the Indonesia Stock Exchange from 2015 to 2018. It analyzes the effect of capital adequacy ratio (CAR), non-performing loans (NPL), loan to deposit ratio (LDR), net interest margin (NIM), operational costs to operating income ratio (BOPO), inflation, and Bank Indonesia rate (BI rate) on ROA. The results showed that CAR, NPL, inflation, and BI rate did not significantly influence ROA individually, while LDR, NIM, and BOPO did. Together, all independent variables significantly explained 95.8% of the variation in ROA, while the remaining 4.2
Comparative analysis of non performing assets of public and private sector banksNamita Garg
This document is a project report submitted by Namita for the completion of an MBA degree. The report analyzes and compares the non-performing assets (NPAs) of public sector banks and private sector banks in India. The report contains five chapters - an introduction to the Indian banking sector and NPAs, a literature review, research methodology, data analysis and interpretation, and findings, suggestions and conclusion. Tables of data on NPAs, loan compositions, and correlations between profits and NPAs of public and private sector banks are included. The goal of the report is to analyze differences in NPAs between public and private banks in order to understand bank performance and issues.
This document analyzes the financial performance of Sakthi Finance Limited over a 5-year period from 2004-2009 using ratio analysis and other financial tools. Key findings include that the company demonstrated good liquidity and solvency as measured by current, quick, and equity ratios. Net profit and return on investment increased over the period. Suggestions are made to reduce expenses further and introduce new deposit schemes to improve performance. In conclusion, while Sakthi Finance showed good overall financial results, some ratios like the current ratio declined over time, so ongoing monitoring is needed.
Comparative Analysis of Non Performing Assets of Public Sector, Private Secto...Gaurav Godwani
This document is a project report submitted in partial fulfillment of a Bachelor of Commerce degree. It provides an introduction to non-performing assets (NPAs) in the Indian banking system. It defines NPAs and discusses how assets are classified as standard, sub-standard, doubtful or loss based on the number of days past due and likelihood of recovery. The types, reasons, impacts and early symptoms of NPAs are also examined. The document then outlines the procedures for NPA identification and resolution in India, before discussing the objectives, methodology and overall findings of the research project.
Credit appraisal for term loan and working capital financing with special ref...Sandeep Singh
This document appears to be a student project report submitted for a post-graduate diploma program. It discusses credit appraisal for term loans and working capital financing, with a focus on consortium banking. The report includes an acknowledgements section, table of contents, and 14 main sections discussing topics like the banking industry, Punjab National Bank, types of lending, methodology, case studies, and recommendations. The case study analyzes a term loan provided to an energy company and discusses India's power sector scenario.
This document is a project report on comparing the non-performing assets of private and public sector banks in India. It includes an introduction describing the growth of NPAs in Indian banks and outlines the objectives of the study. The methodology section notes that descriptive and comparative research methods will be used, analyzing secondary data from selected private and public sector banks. The report appears to analyze trends in NPAs, attempt to identify reasons for high NPAs, and evaluate steps taken to manage and reduce NPAs.
Comparative Analysis between The International Finance Investment (IFIC) and ...Sultan Mahmud
This document provides an overview and financial statements for two Bangladeshi banks - International Finance Investment and Commerce Bank Limited (IFIC) and Al-Arafah Islami Bank Limited (AIBL) for the year ending December 31, 2014. It includes the mission, vision, and profiles of both banks. The financial statements included are the balance sheet, profit and loss account, and cash flow statement for each bank for the year ending 2014. In the final chapter, a comparison of key financial metrics between the two banks such as total capital, total assets, total deposits, and various returns and ratios is presented.
A Comparative Study of Non- Performing Assets of Public and Private Sector BanksIJMTST Journal
on-performing assets are one of the major concerns for banks in India. NPA is an important parameters in
the analysis of financial performance of a bank as it results in decreasing margin and higher provisioning
requirements for doubtful debts. NPAs reflect the performance of banks. A high level of NPAs suggests high
probability of a large number of credit defaults that affect the profitability and net-worth of banks and erodes
the value of the assets. NPAs affect the liquidity and profitability, in addition to posing threat on quality of
assets and survival of banks. The Indian banking sector has been facing serious problems of raising
Non-performing assets (NPAs). The NPAs growth has a direct impact on profitability of banks. It involves the
necessity of provisions, which reduces the overall profits and shareholders’ value. The problems of NPAs is
not only affecting the banks but also the whole economy. In fact high level of NPAs in Indian banks is nothing
but a reflection of the state of health of the industry and trade. To improve the efficiency and profitability, the
NPAs have to be scheduled. Various steps have been taken by governments to reduce the NPAs. It is highly
impossible to have zero percentage NPAs. But at least Indian banks can try competing with foreign banks to
maintain international standard. An attempt is made in this paper that what is NPA? The factor contributing to
NPAs, reason for high NPAs and their impact on Indian banking operations, the trend and magnitude of NPAs
in selected
This document discusses credit appraisal, which refers to assessing a borrower's creditworthiness or ability to repay debt. It explains that banks conduct thorough analyses using financial ratios, risk evaluations, and other concepts to judge if a borrower poses default risk. The key aspects banks examine include the loan reason, company finances/history, management, market conditions, and ability to meet obligations. Effective appraisals benefit both banks and firms. Banks ensure loan safety while firms can more easily obtain financing. The document also outlines various stages in the appraisal process like feasibility studies and investment phases to thoroughly evaluate creditworthiness over time like a project cycle.
Non performing assets and its impact on performance of karnataka state co-opeIAEME Publication
This document discusses non-performing assets (NPAs) and their impact on the performance of the Karnataka State Co-operative Apex Limited bank. It defines NPAs as loans where interest or principal payments are overdue by 90 days or more. The bank has seen rising NPAs in recent years. The objectives of the study are to understand NPAs, examine reasons for rising NPAs, analyze their impact on bank performance, and suggest measures to reduce NPAs. Primary data was collected through bank officers and records, while secondary data came from annual reports, publications, and websites. Data analysis found that the percentage of sub-standard assets to gross NPAs decreased from 2007-2008 to 2009-2010 but increased in later
This document provides an overview of WCDMA theory and technology, including:
- Key technologies such as RAKE receivers, power control, handover, admission control, and AMR.
- Interface protocols including MAC, RLC, RANAP, RNSAP, NBAP, RRC, PDCP, and BMC.
- Channel structures including logical, transport, and physical channels for uplink and downlink.
- Network transport using ATM with AAL2 and AAL5, and IP transport.
- Examples of physical layer procedures like cell search and random access.
This document presents a system for predicting corporate bankruptcy using textual disclosures from SEC filings. It discusses how previous studies have used financial ratios and market data to predict bankruptcy, but that textual disclosures also provide important unstructured qualitative information. The proposed system uses natural language processing and machine learning algorithms to extract features from 10-K and 10-Q filings and predict bankruptcy with high accuracy, even before the final bankruptcy occurs. It aims to improve on previous bankruptcy prediction methods by incorporating both financial and textual data sources.
Brief Report: Theory of Mind, Relational Reasoning, and Social Responsiveness...Camilo Serna Restrepo
Understanding the underpinnings of social responsiveness and theory of mind (ToM) will enhance our knowledge of autism spectrum disorder (ASD). We hypoth- esize that higher-order relational reasoning (higher-order RR: reasoning necessitating integration of relationships among multiple variables) is necessary but not sufficient for ToM, and that social responsiveness varies independently of higher- order RR. A pilot experiment tested these hypotheses in n = 17 children, 3–14, with and without ASD. No child failing 2nd-order RR passed a false belief ToM test. Contrary to prediction, Social Responsiveness Scale scores did corre- late with 2nd-order RR performance, likely due to sample characteristics. It is feasible to translate this comparative cognition-inspired line of inquiry for full-scale studies of ToM, higher-order RR, and social responsiveness in ASD.
The document outlines the key objectives and concepts around corporate social responsibility and business ethics. It discusses the Davis Model of Corporate Social Responsibility, which includes ideas like social responsibility arising from social power and calculating social costs and benefits. It also covers varying opinions on social responsibility, approaches to meeting social obligations, and how society can help businesses meet their social obligations. Finally, it defines business ethics and discusses creating an ethical workplace through principles like the golden rule and Kant's categorical imperative.
This document summarizes a seminar on corporate social responsibility (CSR) from philanthropy to profit. It defines CSR as commitments by profit-oriented organizations to protect and improve social welfare. Initially, CSR involved charity like building schools and hospitals. Now, companies engage in CSR for benefits like increased sales, reputation, and productivity. The document reviews how companies like ITC, TCS, and Reliance conduct CSR activities and concludes that companies are increasingly using CSR to establish their reputation in communities.
Corporate social responsibility refers to a company's obligation to consider the impact of its activities on stakeholders and society. It has legal, ethical, economic, and philanthropic dimensions. Legally, companies must obey laws and regulations. Ethically, they are expected to act in ways that are considered appropriate by society. Economically, they are responsible for how resources are distributed. Philanthropically, companies can make voluntary contributions to improve society through strategic donations. There are debates around whether social responsibility increases or decreases profits and economic efficiency. While it may promote long-term thinking, it also imposes additional costs on businesses.
This document discusses responsiveness versus responsibility in online interactions. It provides tips for how to respond helpfully to others online without being a cyberbully or spreading misinformation. The key responsibilities outlined are to contribute only positives to online conversations, think critically about information sources, and be accountable for what you post and share.
The document discusses corporate social responsibility and social responsiveness. It defines corporate social responsibility as relating to human rights, environmental, labor standards and community involvement. It also discusses the need for both statutory regulation and self-regulation by companies on social and environmental matters. Several voluntary global codes of conduct are mentioned, as well as non-governmental organizations that act as watchdogs for corporate social responsibility practices.
The document summarizes Carroll's model of corporate social responsibility and discusses subsequent models that built on his work. Carroll's model proposes that CSR has four components: economic, legal, ethical, and discretionary/philanthropic responsibilities. Later models refined Carroll's work, such as Wartick and Cochran who defined CSR using three dimensions: principles, processes, and outcomes. The document also discusses criticisms of Carroll's model and alternative models proposed by scholars like Schwartz and Carroll that address some limitations through a three domain approach.
Financial Inclusion A Study on Role of Commercial Banks in the State of Karna...ijtsrd
Financial inclusion is the process of providing financial service for the weaker of section of the society and make sure that all the section peoples are also availing all the financial service. It emphasis on the financial systems for the development of economy. Financial inclusion increase in the saving habit of individuals which lead to the overall development of economy developing to the developed economy. Future Financial inclusion helps in the exploitation of lower section adoption of borrowing facilitates from the banks instead of money lending agency by facilitating easy access to formal credit. Hence a study is proposed to be undertaken to study how for commercial banks playing their role to include the financially excluded people in the state of Karnataka with special reference to rural areas. The samples is selected by administering Random sampling technique. The total numbers of samples are 300, the collected data are analyzed with the help of statistical tool. Dr. Muthu Kumar V | Mr. Shashi Kumar M ""Financial Inclusion- A Study on Role of Commercial Banks in the State of Karnataka (with Special Reference to Rural Areas)"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-3 , April 2019, URL: https://www.ijtsrd.com/papers/ijtsrd21603.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/21603/financial-inclusion--a-study-on-role-of-commercial-banks-in-the-state-of-karnataka-with-special-reference-to-rural-areas/dr-muthu-kumar-v
This document provides a summary of an analysis report on the Bank of Nova Scotia (Scotiabank). The report analyzes Scotiabank's business operations, marketing, IT systems, and financial performance to determine if it would be a good employer for recent business graduates. Extensive research was conducted using various sources and databases. The objective is to evaluate Scotiabank's primary activities and financial data. Sections include an introduction to the company, marketing/operations, corporate social responsibility, and financial information.
We are committed to providing 100% Plagiarism free quality academic assignments i.e. thesis, dissertations, Course work assignments, HND Business assignments, Research and Term papers and BSc Honors Applied Accountancy Oxford Brookes thesis (RAP, SLS and PPT). Pay by milestones. Please visit www.ghostwritingmania.com or reach my email inbox at ghostwritingmania@yahoo.com or add me on Skype: ghostwritingmania
This document is a research project report submitted by Kabethi Lucy Wanjiku in partial fulfillment of the requirements for a Master's degree in Business Administration at the University of Nairobi in 2013. The report examines the effect of working capital management practices on the financial performance of small and medium enterprises in Kenya. It includes declarations, acknowledgements, abstract, table of contents, and literature review chapters that provide background on key concepts such as working capital management, financial performance, their relationship, and prior empirical studies. The report aims to analyze whether SMEs in Kenya carry out working capital management and the impact of these practices on firm performance.
The document provides an introduction and background to a study on the sanctioning of term loans. It discusses the importance of the financial system and SME sector for economic development. The objectives of the project are to study the credit appraisal process for sanctioning term loans and working capital loans, understand the CMA data and financial analysis, and learn about the procedures at Bank of Baroda. It outlines the methodology, scope, limitations and structure of the banking industry in India. The major players, operations, and drivers of growth of the banking sector are also summarized.
This document discusses card banking and its current status and prospects in Bangladesh. It begins by defining key terms related to electronic banking and card banking such as e-money, smart cards, ATMs, SMS banking, online banking, and call centers. It then discusses the current status of card banking in Bangladesh, noting that while it is still developing compared to international standards, several private and foreign commercial banks offer some card, internet, and mobile banking services within their own networks. The prospects for card banking in Bangladesh are seen as positive, with the industry expected to grow as payment systems and technologies continue to develop with involvement from banks and other stakeholders.
Impacts of employee training on the performance of the commmercial banks in n...leonardakure
This document presents a research proposal that aims to study the impacts of employee training on the performance of commercial banks in Nairobi County, Kenya. It outlines the background, problem statement, objectives, research questions, assumptions, significance, limitations, delimitations, theoretical framework, conceptual framework, and operational definitions of the study. The research will employ a census study of all commercial banks in Nairobi County and target key informants such as HR managers, bank managers, and supervisors. Data will be collected through questionnaires and interviews and analyzed to determine the influence of employee training on bank performance.
summer internship project report on union bank of indiaabhishek rane
The document is a summer internship report submitted by Abhishek Krishnakumar Rane for their Master of Management Studies program through BES's Institute of Management Studies and Research. The report discusses a project conducted at Union Bank of India on opportunities in the power sector and assessing credit viability of power projects. It provides an overview of Union Bank of India, including its vision, mission, history and products/services. It also examines the bank's financial performance, strategies, and departments like marketing, finance, and HR. The report aims to gain comprehensive knowledge of the power sector and analyze various aspects of power project financing in India.
This document describes a student financial service system project for a university. The system will allow students to access financial services like depositing money, applying for loans, and make payments for fees and other services online. Key features include creating bank accounts, depositing and withdrawing funds, applying and processing loans, accessing the library, and ordering food online. The system aims to streamline financial processes for students and ensure timely billing and collections. Non-functional requirements around performance, security, portability and maintainability are also specified. Use case diagrams show interactions between students, managers, library staff and the system for admission, financial, and payment processes.
Comparative Analysis between The International Finance Investment (IFIC) and ...Sultan Mahmud
This document provides an overview and financial statements for two Bangladeshi banks - International Finance Investment and Commerce Bank Limited (IFIC) and Al-Arafah Islami Bank Limited (AIBL) for the year ending December 31, 2014. It includes the mission, vision, and profiles of both banks. The financial statements included are the balance sheet, profit and loss account, and cash flow statement for each bank for the year ending 2014. In the final chapter, a comparison of key financial metrics between the two banks such as total capital, total assets, total deposits, and various returns and ratios is presented.
A Comparative Study of Non- Performing Assets of Public and Private Sector BanksIJMTST Journal
on-performing assets are one of the major concerns for banks in India. NPA is an important parameters in
the analysis of financial performance of a bank as it results in decreasing margin and higher provisioning
requirements for doubtful debts. NPAs reflect the performance of banks. A high level of NPAs suggests high
probability of a large number of credit defaults that affect the profitability and net-worth of banks and erodes
the value of the assets. NPAs affect the liquidity and profitability, in addition to posing threat on quality of
assets and survival of banks. The Indian banking sector has been facing serious problems of raising
Non-performing assets (NPAs). The NPAs growth has a direct impact on profitability of banks. It involves the
necessity of provisions, which reduces the overall profits and shareholders’ value. The problems of NPAs is
not only affecting the banks but also the whole economy. In fact high level of NPAs in Indian banks is nothing
but a reflection of the state of health of the industry and trade. To improve the efficiency and profitability, the
NPAs have to be scheduled. Various steps have been taken by governments to reduce the NPAs. It is highly
impossible to have zero percentage NPAs. But at least Indian banks can try competing with foreign banks to
maintain international standard. An attempt is made in this paper that what is NPA? The factor contributing to
NPAs, reason for high NPAs and their impact on Indian banking operations, the trend and magnitude of NPAs
in selected
This document discusses credit appraisal, which refers to assessing a borrower's creditworthiness or ability to repay debt. It explains that banks conduct thorough analyses using financial ratios, risk evaluations, and other concepts to judge if a borrower poses default risk. The key aspects banks examine include the loan reason, company finances/history, management, market conditions, and ability to meet obligations. Effective appraisals benefit both banks and firms. Banks ensure loan safety while firms can more easily obtain financing. The document also outlines various stages in the appraisal process like feasibility studies and investment phases to thoroughly evaluate creditworthiness over time like a project cycle.
Non performing assets and its impact on performance of karnataka state co-opeIAEME Publication
This document discusses non-performing assets (NPAs) and their impact on the performance of the Karnataka State Co-operative Apex Limited bank. It defines NPAs as loans where interest or principal payments are overdue by 90 days or more. The bank has seen rising NPAs in recent years. The objectives of the study are to understand NPAs, examine reasons for rising NPAs, analyze their impact on bank performance, and suggest measures to reduce NPAs. Primary data was collected through bank officers and records, while secondary data came from annual reports, publications, and websites. Data analysis found that the percentage of sub-standard assets to gross NPAs decreased from 2007-2008 to 2009-2010 but increased in later
This document provides an overview of WCDMA theory and technology, including:
- Key technologies such as RAKE receivers, power control, handover, admission control, and AMR.
- Interface protocols including MAC, RLC, RANAP, RNSAP, NBAP, RRC, PDCP, and BMC.
- Channel structures including logical, transport, and physical channels for uplink and downlink.
- Network transport using ATM with AAL2 and AAL5, and IP transport.
- Examples of physical layer procedures like cell search and random access.
This document presents a system for predicting corporate bankruptcy using textual disclosures from SEC filings. It discusses how previous studies have used financial ratios and market data to predict bankruptcy, but that textual disclosures also provide important unstructured qualitative information. The proposed system uses natural language processing and machine learning algorithms to extract features from 10-K and 10-Q filings and predict bankruptcy with high accuracy, even before the final bankruptcy occurs. It aims to improve on previous bankruptcy prediction methods by incorporating both financial and textual data sources.
Brief Report: Theory of Mind, Relational Reasoning, and Social Responsiveness...Camilo Serna Restrepo
Understanding the underpinnings of social responsiveness and theory of mind (ToM) will enhance our knowledge of autism spectrum disorder (ASD). We hypoth- esize that higher-order relational reasoning (higher-order RR: reasoning necessitating integration of relationships among multiple variables) is necessary but not sufficient for ToM, and that social responsiveness varies independently of higher- order RR. A pilot experiment tested these hypotheses in n = 17 children, 3–14, with and without ASD. No child failing 2nd-order RR passed a false belief ToM test. Contrary to prediction, Social Responsiveness Scale scores did corre- late with 2nd-order RR performance, likely due to sample characteristics. It is feasible to translate this comparative cognition-inspired line of inquiry for full-scale studies of ToM, higher-order RR, and social responsiveness in ASD.
The document outlines the key objectives and concepts around corporate social responsibility and business ethics. It discusses the Davis Model of Corporate Social Responsibility, which includes ideas like social responsibility arising from social power and calculating social costs and benefits. It also covers varying opinions on social responsibility, approaches to meeting social obligations, and how society can help businesses meet their social obligations. Finally, it defines business ethics and discusses creating an ethical workplace through principles like the golden rule and Kant's categorical imperative.
This document summarizes a seminar on corporate social responsibility (CSR) from philanthropy to profit. It defines CSR as commitments by profit-oriented organizations to protect and improve social welfare. Initially, CSR involved charity like building schools and hospitals. Now, companies engage in CSR for benefits like increased sales, reputation, and productivity. The document reviews how companies like ITC, TCS, and Reliance conduct CSR activities and concludes that companies are increasingly using CSR to establish their reputation in communities.
Corporate social responsibility refers to a company's obligation to consider the impact of its activities on stakeholders and society. It has legal, ethical, economic, and philanthropic dimensions. Legally, companies must obey laws and regulations. Ethically, they are expected to act in ways that are considered appropriate by society. Economically, they are responsible for how resources are distributed. Philanthropically, companies can make voluntary contributions to improve society through strategic donations. There are debates around whether social responsibility increases or decreases profits and economic efficiency. While it may promote long-term thinking, it also imposes additional costs on businesses.
This document discusses responsiveness versus responsibility in online interactions. It provides tips for how to respond helpfully to others online without being a cyberbully or spreading misinformation. The key responsibilities outlined are to contribute only positives to online conversations, think critically about information sources, and be accountable for what you post and share.
The document discusses corporate social responsibility and social responsiveness. It defines corporate social responsibility as relating to human rights, environmental, labor standards and community involvement. It also discusses the need for both statutory regulation and self-regulation by companies on social and environmental matters. Several voluntary global codes of conduct are mentioned, as well as non-governmental organizations that act as watchdogs for corporate social responsibility practices.
The document summarizes Carroll's model of corporate social responsibility and discusses subsequent models that built on his work. Carroll's model proposes that CSR has four components: economic, legal, ethical, and discretionary/philanthropic responsibilities. Later models refined Carroll's work, such as Wartick and Cochran who defined CSR using three dimensions: principles, processes, and outcomes. The document also discusses criticisms of Carroll's model and alternative models proposed by scholars like Schwartz and Carroll that address some limitations through a three domain approach.
Financial Inclusion A Study on Role of Commercial Banks in the State of Karna...ijtsrd
Financial inclusion is the process of providing financial service for the weaker of section of the society and make sure that all the section peoples are also availing all the financial service. It emphasis on the financial systems for the development of economy. Financial inclusion increase in the saving habit of individuals which lead to the overall development of economy developing to the developed economy. Future Financial inclusion helps in the exploitation of lower section adoption of borrowing facilitates from the banks instead of money lending agency by facilitating easy access to formal credit. Hence a study is proposed to be undertaken to study how for commercial banks playing their role to include the financially excluded people in the state of Karnataka with special reference to rural areas. The samples is selected by administering Random sampling technique. The total numbers of samples are 300, the collected data are analyzed with the help of statistical tool. Dr. Muthu Kumar V | Mr. Shashi Kumar M ""Financial Inclusion- A Study on Role of Commercial Banks in the State of Karnataka (with Special Reference to Rural Areas)"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-3 , April 2019, URL: https://www.ijtsrd.com/papers/ijtsrd21603.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/21603/financial-inclusion--a-study-on-role-of-commercial-banks-in-the-state-of-karnataka-with-special-reference-to-rural-areas/dr-muthu-kumar-v
This document provides a summary of an analysis report on the Bank of Nova Scotia (Scotiabank). The report analyzes Scotiabank's business operations, marketing, IT systems, and financial performance to determine if it would be a good employer for recent business graduates. Extensive research was conducted using various sources and databases. The objective is to evaluate Scotiabank's primary activities and financial data. Sections include an introduction to the company, marketing/operations, corporate social responsibility, and financial information.
We are committed to providing 100% Plagiarism free quality academic assignments i.e. thesis, dissertations, Course work assignments, HND Business assignments, Research and Term papers and BSc Honors Applied Accountancy Oxford Brookes thesis (RAP, SLS and PPT). Pay by milestones. Please visit www.ghostwritingmania.com or reach my email inbox at ghostwritingmania@yahoo.com or add me on Skype: ghostwritingmania
This document is a research project report submitted by Kabethi Lucy Wanjiku in partial fulfillment of the requirements for a Master's degree in Business Administration at the University of Nairobi in 2013. The report examines the effect of working capital management practices on the financial performance of small and medium enterprises in Kenya. It includes declarations, acknowledgements, abstract, table of contents, and literature review chapters that provide background on key concepts such as working capital management, financial performance, their relationship, and prior empirical studies. The report aims to analyze whether SMEs in Kenya carry out working capital management and the impact of these practices on firm performance.
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This document discusses card banking and its current status and prospects in Bangladesh. It begins by defining key terms related to electronic banking and card banking such as e-money, smart cards, ATMs, SMS banking, online banking, and call centers. It then discusses the current status of card banking in Bangladesh, noting that while it is still developing compared to international standards, several private and foreign commercial banks offer some card, internet, and mobile banking services within their own networks. The prospects for card banking in Bangladesh are seen as positive, with the industry expected to grow as payment systems and technologies continue to develop with involvement from banks and other stakeholders.
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The impact of corporate responsiveness on firm risk and market beta
1. THE IMPACT OF CORPORATE RESPONSIVENESS ON FIRM
RISK AND MARKET BETA
A CASE OF LISTED BANKS IN KENYA
BY
PAUL WAMBUA MUTUKU D63/72935/2012
FRANCIS KUNG’U MWANGI D63/72683/2012
MURITHI GODFREY NJUE D63/68191/2011
GROUP 14 MEMBERS
DAC 512: CORPORATE GOVERNANCE, REPORTING AND
REGULATION
PRESENTED TO: MR. DUNCAN ELLY OCHIENG
A RESEARCH PROJECT REPORT SUBMITTED IN PARTIAL
FULFILMENT OF COURSE WORK FOR
MASTERS OF SCIENCE IN FINANCE,
SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI
MARCH 2012
2. ii
DECLARATION
This project is our original work and to the best of our knowledge it has not been
submitted for the award of a Masters degree in any other University.
Paul Wambua Mutuku D63/72935/2012
Francis Kung‘u Mwangi D63/72683/2012
Murithi Godfrey Njue D63/68191/2011
3. iii
Abstract
The purpose of this study was to investigate the impact of corporate responsivess on
firms risk and market beta. The study sought information from the listed Kenya Banks
website and Capital Market Authority website. Corporate responsiveness of a firm is the
timely and appropriate response to concerns, requests or desire of the stakeholders. These
stakeholders includes; investors, customers, creditors, employees, auditors, suppliers,
corporate activists, competitors, industry regulators and government agency.
Services can be paraphrased in terms of their key characteristics. They are intangible and
in substantial; they cannot be handled, smelled, tasted, heard, etc. There is neither
potential nor need for storage and they are said to be inseparable and perishable. Because
services are difficult to conceptualize, marketing them requires creative visualization to
effectively evoke a concrete image in the customer's mind.
The study adopted a descriptive research design. Census study of the target population
was employed since all the data for the three years consecutive financial report of the
listed Kenyan banks. The target population was involved in the study because it was
accessible and manageable (Saunders et al, 2003).
Causal – comparative research was used to explore relationships between variables.
Descriptive statistical method was used to analyse data using and excel spreadsheets. The
results are presented by use of bar charts, frequency distribution tables and percentages.
The study revealed that the provision of air traffic control service was rated to be good.
The shift sequence was flexible giving time to relax. However, the working hours are
long and need to be reduced by splitting the night shift into two. Air navigation
equipment are sometimes unreliable due to poor maintenance and there is need to invest
in modern air navigation equipment and install an automatic take-over generator to curb
power failures. Both monetary and non monetary remuneration of air traffic controllers
has reduced their morale and this has a very great influence on the provision of air traffic
control services. Turnover of air traffic controllers is high due to resignations attributed to
4. iv
TABLE OF CONTENTS
DECLARATION................................................................................................................ii
Abstract..............................................................................................................................iii
TABLE OF CONTENTS................................................................................................... iv
DEFINITION OF TERMS ................................................................................................ vi
CHAPTER ONE................................................................................................................. 1
INTRODUCTION .............................................................................................................. 1
1.1 Background of the banking industry in Kenya..................................................... 1
1.2 Corporate responsiveness..................................................................................... 2
1.3 Statement of the Problem..................................................................................... 3
1.4 Objectives of the Study ........................................................................................ 4
1.4.1 General Objective............................................................................................ 4
1.4.2 Specific Objectives .............................................................................................. 4
1.4.3 Research Questions........................................................................................... 4
1.4.4 Research Hypothesis......................................................................................... 5
1.5 Justification of the Study...................................................................................... 6
CHAPTER TWO ................................................................................................................ 7
LITERATURE REVIEW ................................................................................................... 7
2.1 Introduction.......................................................................................................... 7
2.2.2 Market Risk ...................................................................................................... 9
2.2.4 Asset pricing................................................................................................... 12
2.2.5 Asset-specific required return......................................................................... 13
2.2.6 Risk and diversification.................................................................................. 13
2.3 Banking Services................................................................................................ 15
2.3.1 Standard banking activities............................................................................. 15
2.3.2 Banking channels............................................................................................ 15
2.3.3 Business model............................................................................................... 16
2.3.4 Bank products................................................................................................ 17
2.6 Nature of industry competition .......................................................................... 20
2.7 Other Related Literature review......................................................................... 20
2.8 The Conceptual Framework................................................................................. 21
2.9 Empirical Framework......................................................................................... 22
2.9.1 Model specification ........................................................................................ 23
RESEARCH METHODOLGY ........................................................................................ 24
3.1 Introduction.......................................................................................................... 24
3.2 Research Design................................................................................................. 24
3.3 Target Population............................................................................................... 24
3.4 Data Collection Instruments and Procedures ..................................................... 24
3.5 Validity and Reliability...................................................................................... 24
3.6 Data Analysis and Presentation...................................................................... 25
3.7 Limitations of the Study........................................................................... 25
DATA ANALYSIS AND PRESENTATION OF RESULTS.................................. 26
5.1 Introduction .................................................................................................. 31
5.2 Summary of Findings................................................................................... 31
5.3 Conclusions................................................................................................ 33
6. vi
DEFINITION OF TERMS
Automated Teller Machines
These usually are machines which execute the roles of tellers; that of paying cash, for
account holders.
A branch
This is the bank retail location i.e. the business points where the bank has a physical and
permanent location.
Call center
This is a section that provides call services to customers and also answers to any of
customers‘ queries.
Mail
Most banks use mail to communicate to their customers, e.g. by sending out statements
Mobile banking
Is a method of using one's mobile phone to conduct banking transactions.
Online banking
Is a term used for performing transactions, payments etc. over the Internet
Relationship Managers
Mostly for private banking or business banking, often visiting customers at their homes
or businesses
Telephone banking
Is a service which allows its customers to perform transactions over the telephone with
automated attendant or when requested with telephone operator
7. 1
CHAPTER ONE
INTRODUCTION
This chapter contains the background of the study, statement of the problem, objectives
of the study, research questions, research hypothesis, and justification of the study.
1.1 Background of the banking industry in Kenya
The banking industry in Kenya has experienced rapid growth in the last seven years in
terms of numbers of banks and their branch networks with some spreading their reach
regionally. Rao et al (2007) observes that banks stores, process and transact a variety of
electronic information for various stakeholders, this information in particular need to be
kept secure, confidential, and accurate.
Currently, there are forty-six commercial banks in Kenya (central bank of Kenya, 2009).
Thirty-five of the banks, most of which are small to medium sized, are locally-owned.
The industry is dominated by few large banks most of which are foreign-owned, though
some are partially locally owned. The commercial banks offer corporate and retail
banking services but a small number, mainly comprising the larger banks, offer other
services including investment banking. Commercial banks in Kenya are governed by the
Companies Act, the Banking Act, The Central bank of Kenya Act and various prudential
guidelines issued by the central Bank of Kenya.
The banking sector was liberalised in 1995 and exchange controls lifted. The CBK,
which falls under the minister for finance docket, is responsible for formulating and
implementing monetary policy and fostering the liquidity, solvency and proper
functioning of the financial system. The Central Bank publishes information on Kenya‘s
commercial banks and non-banking financial institutions, interest rates and other
publications and guidelines. The banks have come together under the Kenya Bankers
Association (KBA), which serves as a lobby for the banks‘ interest and addresses issues
affecting its members. The efficiency and the range of service provided by banks have
tremendously increased. This is as a result of the banks having taken to large use of
corporate responsiveness which plays a very important role in Banking.
8. 2
Banking sector is facing a number of challenges today this may this may include new
regulations for instance, the finance Act 2008, which took effect on 1 January 2009
requires banks and mortgage firms to build a minimum core capital of Kshs one billion
by December 2012. This requirement will help transform small banks into more stable
organisations. The implementation of this requirement poses a challenge to some of the
existing banks and they may be forced to merge in order to comply.
1.2 Corporate responsiveness
Corporate responsiveness of a firm is the timely and appropriate response to concerns,
requests or desire of the stakeholders. These stakeholders includes; investors, customers,
creditors, employees, auditors, suppliers, corporate activists, competitors, industry
regulators and government agency. Corporate responsiveness, like operational
responsiveness, is the ability of business processes and systems to respond to changing
conditions and customer interactions in real time, enabling business leaders to capitalize
on opportunities, increase efficiencies, and reduce risk. As the pace of business continues
to increase and customers expect greater access to customized information, corporate
responsiveness will give your business a competitive edge. Should something unexpected
occur, corporate responsiveness assures a prompt and effective resolution, while still
making sure that the right things happen at the right time and in the right way. The
commitment toward stakeholders should be a priority when firms focus on their
employees, since the trust and loyalty of this group benefits not only the company but
also the employees‘ themselves.
Trust is an element of strategic stability and, when it disappears, strategy implementation
has to resort to slow and costly mechanisms and to rules of behaviour. According to this
argument, by developing longer-term relationships with primary stakeholders such as
customers, suppliers, as well as present and future employees, firms expand the set of
value-creating exchanges with these groups beyond what would be possible with
interactions limited to market transactions (Hillman and Keim 2001)
9. 3
Business of all sizes practice some form of strategic management in response to
competition for its survival and sustained profitability. Business use strategic
management to formulate as well as implement strategy in order to compete successfully.
Lawrence and lorsch (1967) noted that strategic management is applied for the purpose of
molding, directing and relating an organization directly to its environment. Further
Murray (1988) considered strategic management as the most critical elements of the
management of organization because it explains success and survival to a large extent.
Ansoff and McDonnel (1990) notes that strategic responses involve change in the firms‘
strategic behavior to assure success in transforming future environment. Pearce and
Robinson (1997) defined strategic response as the set of decisions and actions that results
in the formulation and implementation of plan designed to achieve a firms objectives.
Therefore it is a reaction to what is happening in the economic environment of
organizations.
Porter (1998) views operational response as part of a planning process that coordinates
operational goals with those of the larger organization. Hence operational issues are
mostly concerned with certain broad policies and policies for utilizing the resources of a
firm to the best support of its term competitive strategy.
In the 1990‘s many companies have acknowledged the critical importance of being
customer oriented, customer pay attention to after sales services and responsiveness‘ of
employers (Kotler,1997).
1.3 Statement of the Problem
The Kenyan banking sector is an important sector in improving the economy of the
country. Over the past years, the banking sector has witnessed phenomenal growth in
asset base attributed to the increase in deposits and injections of capital as well as
retention of profits by industry players. To maximize on market opportunities, most
banks have been flexible and reacted to the market signals. Competition has been very
intense leading to most banks employing different strategies in order to remain
competitive. The provision of banking services is affected by various factors which
10. 4
includes; cost of running the business, government regulations, Bank fraud, ineffective
and inefficient work force, competition, exchange rate, staff turnover and negative
publicity.
This study sought to determine the impact of corporate responsiveness to firm risk and
market beta of the ten listed commercial banks in Kenya and also to improve the
understanding of factors that affect banking industry. It was therefore important to
examine corporate responsiveness on the firm risk and market beta in order to ensure
compliance with the required regulations of the Capital Market Authority and other
regulatory authorities. It is against this background that the purpose of this study was to
identify the impact of corporate responsiveness.
1.4 Objectives of the Study
1.4.1 General Objective
To determine impact of corporate responsiveness on firm risk and market beta.
1.4.2 Specific Objectives
(i) To determine how board size reduce the banks‘ risk.
(ii) To assess how environmental framework reduces the firms risk
(iii) To assess how social responsibilities framework increases business
opportunities
(iv) To determine how board composition give the firm a competitive advantage
over its competitor thus reducing the market beta.
(v) To assess how leadership structure contributes to increased growth and
earning thus reducing firms risk.
1.4.3 Research Questions
This research sought information to answer the following questions:
(i) How does board size reduce the banks‘ risk?
(ii) How does environmental framework reduce the firms‘ risk?
(iii) How does social responsibilities framework increases business opportunities?
11. 5
(iv) How does board composition give the firm a competitive advantage over its
competitor thus reducing the market beta?
(v) How does leadership structure contribute to increased growth and earning thus
reducing firms risk?
1.4.4 Research Hypothesis
Four hypotheses are proposed in this study:
a. Hypothesis [Ho1] There is no significant relationship between board
size and bank risk
b. Hypothesis [Ho2] There is no positive correlation between
environmental framework and firms‘ risk.
c. Hypothesis [Ho3] There is no statistically significant relationship
between social responsibilities and business opportunities.
d. Hypothesis [Ho4] There is no statistically significant relationship
between board composition and market beta.
e. Hypothesis [Ho5] There is no statistically significant relationship
between leadership structure and increased growth & earning.
12. 6
1.5 Justification of the Study
This study will benefit the following groups;
a) Top management of the Banks who will use the study outcome to understand
how corporate responsiveness reduces their company risk.
b) The staff of the Banks – who will use the information from the research
study to improve their provision of services
c) The policy and regulatory authorities of the banks industry– who will use this
study to effectively formulate appropriate policies and regulations to govern
the industry and provide adequate oversight to banking and services offered
d) The results of the study are beneficial to the Government and this study adds
to existing literature on impact of corporate responsiveness of the company
risk and market beta.
e) The study report will also be beneficial to the current and potential investors
in decisions making on investment in the industry.
13. 7
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
In this chapter the study reviewed the literature that has been published in banking
industry relating to banking and quality service delivery. The study also considered
how banking services are offered in Kenya. The importance of corporate
responsiveness to banks service delivery with special focus on risk reduction.
The most critical functions of banks from the point of view of society and the
economy are their role in the payment system. They supply the accounts through
which payments transactions are made. They are specialist at assessing and monitoring
credit risk due to their long-term relationships with customers. Banks also contribute
to the supply of liquidity in the economy as deposits can be converted very quickly
into cash or used for payments. The economy as a whole cannot afford easily the cost
of disruptions in these services (Market intelligence 2006).
Nicholas, 2009 noted that stiff competition in the banking industry has seen bank
business managers embark on business strategies biased towards increased business
volumes. Increased consumer awareness has led to customers demanding efficient
services at affordable cost. Therefore, to optimize the bank‘s objective function, and
faced with the constraint of providing efficient and affordable services, the only
feasible solution is to invest in good ICT infrastructure. It is now apparent that any
bank embarking on business growth strategy has to consider whether its ICT platform
is adequate and robust enough to support its business model. Any mismatch between
business growth and IT infrastructure could lead to unmanageable operational risks.
The most notable impact of development in ICT on the banking sector has been
improved efficiency. As more and more banking business processes are automated,
banks are in a position to offer services to many customers using reduced human
resources.
14. 8
2.2.1 Service Provision
A service is the non-material equivalent of a good. A service provision is an economic
activity that does not result in ownership, and this is what differentiates it from providing
physical goods. It is claimed to be a process that creates benefits by facilitating either a
change in customers, a change in their physical possession or a change in their intangible
assets. By supplying some level of skill, ingenuity and experience, providers of a service
participate in an economy without the restrictions of carrying stock (inventory) or the
need to concern themselves with bulky raw materials. On the other hand, their investment
in expertise does require marketing and upgrading in the face of competition which has
equally few physical restrictions. Providers of services make up the tertiary sector of the
industry (Wikipedia: The Free Encyclopedia, 2008).
Services can be paraphrased in terms of their key characteristics. They are intangible and
in substantial; they cannot be handled, smelled, tasted, heard, etc. There is neither
potential nor need for storage and they are said to be inseparable and perishable. Because
services are difficult to conceptualize, marketing them requires creative visualization to
effectively evoke a concrete image in the customer's mind. From the customer's point of
view, this characteristic makes it difficult to evaluate or compare services prior to
experiencing the service delivery. They are perishable, unsold service time is a lost
economic opportunity. For example aircraft seats, once the aircraft departs, those empty
seats cannot be sold, and a doctor who is booked for only two hours a day cannot later
work those hours. There is a lack of transportability as services tend to be consumed at
the point of ―production‖ (Wikipedia: The Free Encyclopedia, 2008).
There are two dimensions of service delivery improvement. The first is institutional
performance. The focus here is improved performance in the application of policies,
efficient systems, processes, organization, technology, infrastructure (including way
finding and signage) and resources. The second dimension is at the individual
performance level. Here, there has to be accountability that is linked to job descriptions
and delegation of authority, education and training, commitment to delivering services,
15. 9
ethical conduct, effective placement in both back and front office, and appropriate
performance management in areas of rewards and discipline (Nel,2006).
2.2.2 Market Risk
Market risk is measured by beta, which is another measure of investment risk that is
based on the volatility of returns. In contrast to standard deviation, beta measures
volatility relative to a relevant baseline rather than to the mean of the asset that is being
evaluated. Beta is the appropriate measure of an asset's contribution to your portfolio's
risk, as it measures only systematic risk, i.e., market risk.
You should recall that the standard form of the equation of the regression line is Y = a +
bX. When you regress one asset on another asset or a benchmark index, the slope of the
regression line, b, is referred to as the dependent variable's beta and it describes the
movement of the asset (the dependent variable) relative to its benchmark the independent
variable).
2.2.3 Market Beta
The market's beta is by definition 1.0 and it is the baseline market risk. The risk-free
asset's beta is necessarily 0.0. Beta is a commonly published statistic that you can use to
evaluate the market risk of assets that you are considering adding to your portfolio.
Portfolio betas are calculated as the weighted average of the betas of the assets that
comprise the portfolios. For a broadly diversified portfolio, this would entail developing a
weighted average index of the appropriate indexes.
As beta is a measure of risk, it can be related to standard deviation. Indeed, an asset's beta
is equal to the product of its correlation coefficient, R, and its standard deviation divided
by the market's standard deviation. The Beta (β) of a stock or portfolio is a number
describing the correlation of its returns with those of the financial market as a whole.
An asset has a Beta of zero if its returns change independently of changes in the market's
returns. A positive beta means that the asset's returns generally follow the market's
16. 10
returns, in the sense that they both tend to be above their respective averages together, or
both tend to be below their respective averages together. A negative beta means that the
asset's returns generally move opposite the market's returns: one will tend to be above its
average when the other is below its average.
In finance, the capital asset pricing model (CAPM) is used to determine a theoretically
appropriate required rate of return of an asset, if that asset is to be added to an already
well-diversified portfolio, given that asset's non-diversifiable risk. The model takes into
account the asset's sensitivity to non-diversifiable risk (also known as systematic risk or
market risk), often represented by the quantity beta (β) in the financial industry, as well
as the expected return of the market and the expected return of a theoretical risk-free
asset
The Security Market Line, seen here in a graph, describes a relation between the beta
and the asset's expected rate of return
The CAPM is a model for pricing an individual security or a portfolio. For individual
securities, we make use of the security market line (SML) and its relation to expected
return and systematic risk (beta) to show how the market must price individual securities
in relation to their security risk class. The SML enables us to calculate the reward-to-risk
ratio for any security in relation to that of the overall market. Therefore, when the
expected rate of return for any security is deflated by its beta coefficient, the reward-to-
risk ratio for any individual security in the market is equal to the market reward-to-risk
ratio, thus:
17. 11
The market reward-to-risk ratio is effectively the market risk premium and by rearranging
the above equation and solving for E(Ri), we obtain the Capital Asset Pricing Model
(CAPM).
where:
is the expected return on the capital asset
is the risk-free rate of interest such as interest arising from government bonds
(the beta) is the sensitivity of the expected excess asset returns to the expected
excess market returns, or also ,
is the expected return of the market
is sometimes known as the market premium (the difference
between the expected market rate of return and the risk-free rate of return).
is also known as the risk premium
Restated, in terms of risk premium, we find that:
which states that the individual risk premium equals the market premium times β.
The SML essentially graphs the results from the capital asset pricing model (CAPM)
formula. The x-axis represents the risk (beta), and the y-axis represents the expected
return. The market risk premium is determined from the slope of the SML.
18. 12
The relationship between β and required return is plotted on the securities market line
(SML) which shows expected return as a function of β. The intercept is the nominal risk-
free rate available for the market, while the slope is the market premium, E(Rm)− Rf. The
securities market line can be regarded as representing a single-factor model of the asset
price, where Beta is exposure to changes in value of the Market. The equation of the
SML is thus:
It is a useful tool in determining if an asset being considered for a portfolio offers a
reasonable expected return for risk. Individual securities are plotted on the SML graph. If
the security's expected return versus risk is plotted above the SML, it is undervalued
since the investor can expect a greater return for the inherent risk. And a security plotted
below the SML is overvalued since the investor would be accepting less return for the
amount of risk assumed.
2.2.4 Asset pricing
Once the expected/required rate of return, , is calculated using CAPM, we can
compare this required rate of return to the asset's estimated rate of return over a specific
investment horizon to determine whether it would be an appropriate investment. To make
this comparison, you need an independent estimate of the return outlook for the security
based on either fundamental or technical analysis techniques, including P/E, M/B etc.
Assuming that the CAPM is correct, an asset is correctly priced when its estimated price
is the same as the present value of future cash flows of the asset, discounted at the rate
suggested by CAPM. If the observed price is higher than the CAPM valuation, then the
asset is undervalued (and overvalued when the estimated price is below the CAPM
valuation). When the asset does not lie on the SML, this could also suggest mis-pricing.
Since the expected return of the asset at time is , a higher
expected return than what CAPM suggests indicates that is too low (the asset is
19. 13
currently undervalued), assuming that at time the asset returns to the CAPM
suggested price.
The asset price using CAPM, sometimes called the certainty equivalent pricing
formula, is a linear relationship given by
where is the payoff of the asset or portfolio.
2.2.5 Asset-specific required return
The CAPM returns the asset-appropriate required return or discount rate—i.e. the rate at
which future cash flows produced by the asset should be discounted given that asset's
relative riskiness. Betas exceeding one signify more than average "riskiness"; betas below
one indicate lower than average. Thus, a more risky stock will have a higher beta and will
be discounted at a higher rate; less sensitive stocks will have lower betas and be
discounted at a lower rate. Given the accepted concave utility function, the CAPM is
consistent with intuition—investors (should) require a higher return for holding a more
risky asset.
Since beta reflects asset-specific sensitivity to non-diversifiable, i.e. market risk, the
market as a whole, by definition, has a beta of one. Stock market indices are frequently
used as local proxies for the market—and in that case (by definition) have a beta of one.
An investor in a large, diversified portfolio (such as a mutual fund), therefore, expects
performance in line with the market.
2.2.6 Risk and diversification
The risk of a portfolio comprises systematic risk, also known as undiversifiable risk, and
unsystematic risk which is also known as idiosyncratic risk or diversifiable risk.
Systematic risk refers to the risk common to all securities—i.e. market risk. Unsystematic
risk is the risk associated with individual assets. Unsystematic risk can be diversified
20. 14
away to smaller levels by including a greater number of assets in the portfolio (specific
risks "average out"). The same is not possible for systematic risk within one market.
Depending on the market, a portfolio of approximately 30-40 securities in developed
markets such as UK or US will render the portfolio sufficiently diversified such that risk
exposure is limited to systematic risk only. In developing markets a larger number is
required, due to the higher asset volatilities.
A rational investor should not take on any diversifiable risk, as only non-diversifiable
risks are rewarded within the scope of this model. Therefore, the required return on an
asset, that is, the return that compensates for risk taken, must be linked to its riskiness in a
portfolio context—i.e. its contribution to overall portfolio riskiness—as opposed to its
"stand alone riskiness." In the CAPM context, portfolio risk is represented by higher
variance i.e. less predictability. In other words the beta of the portfolio is the defining
factor in rewarding the systematic exposure taken by an investor.
The efficient frontier
Main article: Efficient frontier
The (Markowitz) efficient frontier. CAL stands for the capital allocation line.
The CAPM assumes that the risk-return profile of a portfolio can be optimized—an
optimal portfolio displays the lowest possible level of risk for its level of return.
Additionally, since each additional asset introduced into a portfolio further diversifies the
portfolio, the optimal portfolio must comprise every asset, (assuming no trading costs)
with each asset value-weighted to achieve the above (assuming that any asset is infinitely
21. 15
divisible). All such optimal portfolios, i.e., one for each level of return, comprise the
efficient frontier. Since the unsystematic risk is diversifiable, the total risk of a portfolio
can be viewed as beta.
2.3 Banking Services
Banking service is defined as a service whose objectives are to accept customer deposits,
lend out funds to businesses and individuals and offering financial counsel. A bank
connects customers that have capital deficits to customers with capital surpluses. Due to
their critical status within the financial system and the economy generally, banks are
highly regulated in most countries. Most banks operate under a system known as
fractional reserve banking where they hold only a small reserve of the funds deposited
and lend out the rest for profit. They are generally subject to minimum capital
requirements which are based on an international set of capital standards, known as the
Basel Accords
2.3.1 Standard banking activities
Banks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers on the bank, and collecting cheques deposited to
customers‘ accounts. Banks also enable customer payments via other payment methods
such as Clearing House , Wire transfers or telegraphic transfer and automated teller
machine (ATM). Banks borrow money by accepting funds deposited on current
accounts,savings account and by accepting term deposits. Banks provide almost all
payment services and it is important to note that Non-banks entities that provide payment
services such as remittance are not normally considered an adequate substitute for having
a bank account. Banks borrow most funds from households and non-financial businesses,
and lend most funds to households and non-financial businesses
2.3.2 Banking channels
Banks offer many different channels to access their banking and other services which
includes:
Automated Teller Machines
22. 16
These usually are machines which execute the roles of tellers; that of paying cash, for
account holders. These machines are frequently replenished depending on the cash
requirements of the people and businesses around where it is located. Customers want to
access their monies at any given time and ATMs therefore provide a solution
A branch
This is the bank retail location i.e. the business points where the bank has a physical and
permanent location. The branch is often constructed as per the regulators standards with
adequate security features and apparatus.
Call center
This is a section that provides call services to customers and also answers to any of
customers‘ queries. They are usually accessible with ease and always listen to customers‘
grievances and concerns
Mail
Most banks use mail to communicate to their customers, e.g. by sending out statements
Mobile banking
Is a method of using one's mobile phone to conduct banking transactions.
Online banking
Is a term used for performing transactions, payments etc. over the Internet
Relationship Managers
Mostly for private banking or business banking, often visiting customers at their homes
or businesses
Telephone banking
Is a service which allows its customers to perform transactions over the telephone with
automated attendant or when requested with telephone operator
2.3.3 Business model
23. 17
A bank generates revenue in a variety of different ways including interest, transaction
fees and financial advice .The main method is via charging interest on the capital it lends
out to customers The bank profits from the difference between the level of interest it pays
for deposits and other sources of funds, and the level of interest it charges in its lending
activities This difference is referred to as the spread between the cost of funds and the
loan interest rate. Historically, profitability from lending activities has been cyclical and
dependent on the needs and strengths of loan customers and the economic conditions
prevailing in the country. Fees and financial advice constitute a more stable revenue
stream and banks have therefore placed more emphasis on these revenue lines to smooth
their financial performance. Banks have sought to increase the methods of payment
processing available to the general public and business clients. These products include
debit cards, prepaid cards, smart cards, and credit cards. These makes it easy for
customers to conveniently make transactions However, with convenience of easy credit,
there is also increased risk that consumers will mismanage their financial resources and
accumulate excessive debt. Banks make money from card products through interest
payments and fees charged to consumers and transaction fees to companies that accept
the credit- debit - cards. This helps in making profit and facilitates economic
development as a whole.
2.3.4 Bank products
Bank products are broadly into categories; Retail banking and Business banking.
Under retail banking falls the followings products
Current accounts,Savings accounts,Credit card,Debit card,Mortgage,Personal loan
andTerm deposits
Under business banking
Risk management,Term loan ,Cash Management and Business loan
2.4 risk and capital
Risk is the probability of adverse occurrence multiplied by the impact of that adverse
occurrence. Risks can come from uncertainty in the financial markets, project failures
legal liabilities, credit risk and accidents. Banks face a number of risks in order to
24. 18
conduct their business, and how well these risks are managed and understood is a key
driver behind profitability, and how much capital a bank is required to hold. Some of the
main risks faced by banks include:
Credit risk: risk of loss arising from a borrower who does not make payments as
promised.
Liquidity risk: risk that a given security or asset cannot be traded quickly enough
in the market to prevent a loss (or make the required profit).
Market risk: risk that the value of a portfolio, either an investment portfolio or a
trading portfolio, will decrease due to the change in value of the market risk
factors.
Operational risk: risk arising from execution of a company's business functions.
These could be risks from lapses in control mechanisms
Reputational risk: a type of risk related to the trustworthiness of business.
Regulatory Risk: Is the risk of non-compliance with regulatory guidelines.
Foreign Exchange Risk: prospective risk to earnings arising from adverse
movements in currency exchange rates.
Interest rate risk: Is the current or prospective risk to earnings and capital
arising from adverse movements in interest rates.
Strategic Risk: is the current and prospective impact on earnings or capital rising
from adverse business decisions, improper implementation of decisions.
The capital requirement is a bank regulation, which sets a framework on how banks and
depository institutions must handle their capital. The categorization of assets and capital
is highly standardized so that it can be risk weighted.
2.5 Economic functions
The economic functions of banks include:
Issue of money
25. 19
Banks issue money in the form of banknotes and current accounts subject to check or
payment at the customer's order. These claims on banks can act as money because they
are negotiable or repayable on demand, and hence valued at par. They are effectively
transferable by mere delivery, in the case of banknotes, or by drawing a check that the
payee may bank or cash.
Netting and settlement of payments
Banks act as both collection and paying agents for customers, participating in interbank
clearing and settlement systems to collect, present, be presented with, and pay payment
instruments. This enables banks to economize on reserves held for settlement of
payments, since inward and outward payments offset each other. It also enables the
offsetting of payment flows between geographical areas, reducing the cost of settlement
between them.
Credit intermediation
Banks borrow and lend back-to-back on their own account as middle men. Credit quality
improvement – banks lend money to ordinary commercial and personal borrowers
(ordinary credit quality), but are high quality borrowers. The improvement comes from
diversification of the bank's assets and capital which provides a buffer to absorb losses
without defaulting on its obligations. However, banknotes and deposits are generally
unsecured; if the bank gets into difficulty and pledges assets as security, to raise the
funding it needs to continue to operate, this puts the note holders and depositors in an
economically subordinated position.
Maturity transformation
Banks borrow more on demand debt and short term debt, but provide more long term
loans. In other words, they borrow short and lend long. With a stronger credit quality than
most other borrowers, banks can do this by aggregating issues (e.g. accepting deposits
and issuing banknotes) and redemptions (e.g. withdrawals and redemption of banknotes),
maintaining reserves of cash, investing in marketable securities that can be readily
26. 20
converted to cash if needed, and raising replacement funding as needed from various
sources
Money creation
Whenever a bank gives out a loan in a fractional-reserve banking system, a new sum of
virtual money is created.
2.6 Nature of industry competition
Competition is the act of trying to be the best among the competitor in the market. It is
the act of seeking or endeavoring to gain what another is endeavoring to gain at the same
time. It is common strife for the same objects of superiority. Competition becomes the
basis of protection to consumer in banks are forced to give the best to the customer in
order to be competitive in the market. It is therefore important to research competition by
identifying existing levels of demands and supply before one goes into production or
service provision.
Waheeduzzan and Ryans (1996) assets that we can regard the notion of competition as
associated with four major group of thought. The four major groups are; advantage and/or
price competitiveness perspective, strategy and management perspective, historical and
social cultural perspective and development of indicators of national competitiveness.
Pearce & Robinson (1997) asset that a further complexity of competition arises due to the
limit of analysis and perspective of the analyst. They alluded to the fact that politician are
interested in the competitiveness of the economy. A sound microeconomic, political,
legal and social context creates the potential for competitive but is not sufficient.
Competition ultimately depends on improving the microeconomic capability of the
economy and sophistication of local companies, in both their operations and strategy. The
competitiveness of a firm is the result of competitive advantages relative to other firms.
2.7 Other Related Literature review
The imperfect capital markets view of risk management is discussed in Smith and Stulz
(1985) and further developed in Froot, Scharfstein and Stein (1993). In Froot et al., the
27. 21
firm‘s production function is concave and raising external finance is costly; these
assumptions ensure that fluctuations in internal funds destroy firm value. The intution is
that a negative shock to internal funds cannot be cost lessly offset by increasing external
finance and thus results in lower investment; this has a large impact on firm profit
because the marginal product of investment is high when the level of investment is low.
The spirit of Smith and Stulz is similar: hedging reduces the probability of financial
distress, which increases firm value because of exogenous fixed costs of bankruptcy.
Empirical work to test these ideas has generally focused on firms‘ use of financial
derivatives. Some papers analyse broad cross sections of non-financial firms, while
others focus on particular industries (such as gold mining or banking) where derivatives
use is particularly prevalent.
2.8 The Conceptual Framework
This section discusses the conceptual framework for analysing the best ways and means
of delivering quality service and responsive by the banks as a means of reducing risks
and competition. The independent variables were board size, social responsibility
framework, environmental framework, board composition, leadership structure.
Corporate responsiveness in this model is a function of board size, social responsibility
framework, environmental framework, board composition, leadership structure. From the
diagram, the researcher was able to ask questions like; how does board size reduce the
banks‘ risk? How does environmental framework reduce the firms‘ risk? Does social
responsibilities framework increase business opportunities? Does board composition give
the firm a competitive advantage over its competitor thus reducing the market beta? How
does leadership structure contribute to increased growth and earning thus reducing firms
risk?
28. 22
Figure 2.1 Schematic diagram showing variable relationships
Affects Dependant variable
Independent Variables
Source: Researcher (2012)
2.9 Empirical Framework
Corporate governance mechanisms assure investors in corporations that they will
receive adequate returns on their investment (shleifer and Vishy, 1997). If this
mechanism did not exist or did not function properly, outside investors would not lend
to firms or buy their equity securities. Alves and mendes (2002) concluded in their
respective studies that there is a positive relationship between good corporate
governance practices like responsiveness and firm value.
Board composition
Market beta and Firm Risk
Leadership structure
(CEO duality)
Board Size
Social responsibility
framework
Environmental frame
work
29. 23
2.9.1 Model specification
The study used the following economic model.
Y=β0+ β1x1+ β2x2+ β3x3+ β4x4+ β5x5+ξi
Where, Y= the dependent variable which is the market Beta,
β0 = constant of proportionality
X1=Board size
X2 =Environmental frame work
X3 =Board composition
X4 =Social responsibilities
X5 =Leadership structure (CEO duality)
ξ i = the error term assumed to have zero mean and independent across time period.
β1, β2, β3, β4, β5= Are the coefficient of the explanatory variables of corporate
responsiveness i.e x1, x2, x3, x4, x5.
The control variables are Firm size, Asset structure and Debt structure.
30. 24
CHAPTER THREE
RESEARCH METHODOLGY
3.1 Introduction
This chapter provides the plan of how the research was carried out. It contains the
research design, target population, sampling design, data collection instruments and
procedures, validity and reliability, data analysis and presentation and research
constraints.
3.2 Research Design
The study adopted a causal research design which was used to explore relationships
between variables and to determine causes for the current status of the phenomenon
under study since the cause-and effect relationship do not permit experimental
manipulation as supported by Mugenda and Mugenda, 1999.
3.3 Target Population
The population of interest of this study was all banks listed in the NSE whose financial
report for the year 2011 was considered. The target population was involved in the study
because it was accessible and manageable (Saunders et al, 2003).
3.4 Data Collection Instruments and Procedures
Secondary data was obtained from quoted banks website and Capital market Authority
website. It was therefore appropriate that the researcher collected data by themselves
from the website.
3.5 Validity and Reliability
The Researcher obtained audited financial reports which are published thus the reliability
and validity was confirmed since the auditor had given unqualified opinion.
31. 25
3.6 Data Analysis and Presentation
The researcher edited (verified) the secondary data for completeness, consistency and
coherence. The data was then coded and entered into excel spread sheet and SPSS
software to build a database that was used to describe, analyse and present the data. The
data was presented using descriptive techniques such as percentage and correlation
coefficient. These measures enabled the researcher to analyze and interpret views of
respondents on account of concurrency and divergence thereby responding to the
objective. This enabled the researcher to determine the impact of corporate
responsiveness on firm risk and market beta. The results are presented by use of graphs,
charts, frequency tables and percentages.
3.7 Limitations of the Study
Notwithstanding the standardized procedures, some factors may have had minimal effects
on data obtained.
1. It was not easy to look for the material in the internet since there was a
countrywide problem of the internet as result of the breakdown of the internet
cables eg the undersea fibre. In such circumstances the researchers did do not lose
hope of obtaining the information.
2. One of our group members pulled out of the group and even dropped the course
unit. The remaining members worked tirelessly to ensure that the project is
complete. These limitations however did not have any significant negative effect
on the quality of the data and the results.
32. 26
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION OF RESULTS
4.1 Introduction
This chapter presents the research findings on the impact of corporate responsive on firm
risk and market beta of Equity Bank. The findings consist of how corporate
responsiveness reduce the equity bank risk, how corporate responsive increase efficiency,
how corporate responsiveness increase business opportunities, how corporate responsive
give the firm a competitive advantage over its competitor thus reducing the market beta,
and how corporate responsive contribute to increased growth and earnings.
The study set out to determine the impact of corporate responsiveness on firm risk and
market beta. The study targeted a sample of three consecutive years of financial reports
of Equity Bank from 2009 to 2011. The study managed to collect data from the CMA and
Equity Bank website.
4.2 Study findings
The following are the study findings regarding the impact of corporate responsiveness on
firm risk and market beta presented below.
4.2.1 Distribution of how corporate responsiveness reduces the Equity Bank risk
While a total of 42 air traffic controllers were given the questionnaires, only 34 returned
them. The results in Table 4.1 show that a total of 34 respondents participated in the
study, out of which 76.5% were male and 23.5% were female. This indicates that more
respondents were male. The findings therefore suggest that there are more male
employees in the air traffic control service sector at J.K.I.A than female.
33. 27
Table 4.1 The distribution of respondents by gender
Gender Frequency Percentage
Male 26 76.5
Female 8 23.5
Total 34 100.0
Source: Research Data (2008)
4.2.2 Distribution of respondents by years of service
The respondents who participated in the study were requested to specify the duration of
service in the organization. This item was to verify whether most of the employees had
worked in the organization for a long period of time. The results in Figure 4.1 show that
32% of the ATCOs who participated in the study had worked in the organization for a
period of more than 15 years, 21% had worked between 11 and 15 years, 38% between 5
to 10 years and 9% had worked for less than 5 years. This finding shows that most of the
respondents had considerable years of service giving them adequate experience and
hence quite conversant with the challenges in the provision of air traffic control service.
Figure 4.1 The distribution of respondents by years of service
16,337
31,536
50,334
69,843
104,431
0
20,000
40,000
60,000
80,000
100,000
120,000
2006 2007 2008 2009 2010
Customerdepositsinmillionsofshs
Years
Growth in customer deposits
Growth in customer deposits Expon. (Growth in customer deposits)
34. 28
Source: Research Data (2008)
4.2.3 Educational Level of Respondents
This item was meant to solicit information on whether most employees had the necessary
qualification in their areas of specialization. According to the study results in Table 4.2,
47.1 % of the respondents were diploma holders, 17.6% graduates, 11.8% had higher
diploma or certificate and 2.9% had other qualifications like ATC rating; all the
percentages being valid as there was a non response rate of 8.8%. These results suggest
that most of the employees had acquired specialized technical skills in their respective
areas of operation. With this level of education and technical qualifications, their
performance is expected to be high.
Table 4.2 The distribution of the highest level of education attained.
Education Frequency Percentage
Certificate 4 11.8
Diploma 16 47.1
Higher Diploma 4 11.8
Degree 6 17.6
Any Other 1 2.9
Non Response 3 8.8
Total 34 100.0
Source: Research Data (2008)
4.2.4 Distribution of ATC ratings attained
9
38
21
32
0
10
20
30
40
50
<5
5-10
11-15
>15
Years
Percent
35. 29
The respondents who participated in the study were requested to state the kind of ATC
ratings attained. Most of the respondents had more than one rating. Majority of the
respondents, as indicated in Table 4.3, had Aerodrome rating, representing 94% of the
possible ratings, 88% had Approach procedural, 35% had Approach radar, 29% had
Area/Airways and 6% had Area radar. However there was 6% none response rate to this
question. This implies that the there are appropriately qualified ATCOs impacting
positively in the provision of the various types of air traffic control service.
Table 4.3 The distribution of ATC Ratings
ATC Ratings Percentage
Aerodrome 94
Approach Procedural 88
Approach Radar 35
Area/Airways Procedural 29
Area Radar 12
Non response 6
Source: Research Data (2008)
4.3 Provision of air traffic control service.
This section assessed the level of provision of air traffic control service. The respondents
were required to answer a number of questions in relation to provision of ATC services.
4.3.1 Rating of provision of air traffic control service at JKIA
According to the results in Figure 4.2, 76% of the respondents said provision of air traffic
control service at JKIA was good, 15% very good and 9% fair. This depicts the signs of
confidence of the respondents in this vital service as no cases of being poor or very poor
were recorded.
Figure 4.2 Rating of ATC at JKIA
37. 31
CHAPTER FIVE
SUMMARYOF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter provides a summary of the findings, conclusions and recommendations on
the challenges faced in the provision of air traffic control service in Kenya, a case study
of JKIA and suggestions for further research. The research questions have been reviewed
in relation to the findings and conclusions and recommendations have been derived from
the findings, comparison and suggestions made.
5.2 Summary of Findings
The study sought to determine challenges faced in the provision of air traffic control
service in Kenya. Specific objectives included to determine how shift sequence and
working hours affect the provision of air traffic control service, to assess how and to what
extent turnover of air traffic controllers affects the provision of air traffic control service,
to determine how remuneration of air traffic controllers affects provision of air traffic
control service and to determine how air navigation equipment affect the provision of air
traffic control service.
The respondents profile indicated that 76.5% of male respondents participated in the
study and 23.5% were female respondents. The duration of service in the organization
raised no doubt to the responses given as most respondents had worked for a period long
enough to know the operations at JKIA. Respondents also had the required form of
education and technical qualifications.
According to the research findings, the provision of air traffic control service was rated to
be good by 75% of the respondents. The study however revealed remuneration, working
38. 32
conditions, shift sequences, resignations of ATCOs and leadership style in KCAA as
some of the factors which need to be addressed.
Regarding the effects of shift sequence and working hours on the provision of air traffic
control service. According to the study, 91% of the respondents said the shift sequence
influence provision of this vital service to a great extent. Respondents however hailed
flexibility of the shift work as it gave ATCOs time to relax, reduce fatigue and prepare
for concentration in the next shift. Long working shift was indicated as a major weakness
in the provision of air traffic control service. In regard to long working shift, 94% of the
respondents said the management is aware of this but has done nothing according to the
51.7% of the respondents. 48.3% indicated optimism towards this issue as they indicated
that the KCAA is working on a plan to reduce the working hours. To avoid this, 63% of
the respondents suggested that the management should reduce the working hours by
splitting the night shift into two whereas 37% suggested more investment on human
resource. The study witnessed that indeed the working hours influence provision of air
traffic control service and that the management has been alerted on this though according
to 56% of the respondents nothing has been done.
On the issue of how air navigation equipment affect the provision of air traffic control
service, 97% of the respondents confirmed air navigation equipment play a vital role in
the provision of air traffic control service and to 68% the effect is of a very great extent.
In this regard, respondents hailed the management for providing serviceable air
navigation equipment. However the major weakness is that the air navigation equipment
are sometimes unreliable due to poor maintenance yet they are serviceable. This study
thus indicates the need for more investment in modern air navigation equipment and
installation of an automatic take-over generator to curb the power failure as indicated by
the 89.3% of respondents. The respondents (94%) confirmed that ATCO‘S have raised
the issue of air navigation equipment with the management of KCAA and according to
50% of the respondents said nothing has been done while the other 50% indicated that the
KCAA is providing the air navigation equipment.
39. 33
Further, the study sought to determine how remuneration of ATCOs affects provision of
air traffic control service. All respondents (100%) indicated that both monetary and non-
monetary remuneration influence provision of air traffic control service to a very great
extent. Respondents indicated that good remuneration raises morale and the major
weakness at the KCAA is due to, not honouring of allowances and promotion promises
(70.4%). The issue has also been raised with the management but according to 77.4% of
the respondents, nothing has been done. In this regard, respondents suggested that the
issue should be addressed immediately. Indeed Pearson correlation analysis indicated a
positive relationship (0.321) between remuneration and provision of air traffic control
service .Well paid staff will deliver well and vice versa.
Finally, the study assessed how and to what extent turnover of air traffic controllers
affects the provision of air traffic control service. The study revealed that the turnover of
ATCOs has a very great effect (72 %) in the provision of air traffic control service.
Respondents (66.7 %) attributed the turnover to the work load leaving even more work to
those who are left. Though according to 87% of the respondents management is aware of
this, 50% of the respondents indicated nothing has been done and 50% said there is more
recruitment and calling back of the retirees. The study does suggest that more investment
on human resource be done and improve motivation according to 51% and 48.8%
responses respectively. The management is still much aware of this according to 63% of
the respondents.
5.3 Conclusions
The study concludes that the provision of air traffic control service was rated to be good
(75%). Resignations (72%) and remuneration (59%) posed a great challenge. The air
traffic controllers are not adequately remunerated (100%) and this influenced the
provision of air traffic control service to a very great extent (62%). The shift sequence
and working hours have a significant effect (91%) as they are not flexible 78% and quite
long 62%. Air navigation equipment influence the provision of air traffic control service
(97%) with maintenance of serviceability at 50% and investment in modern air
40. 34
navigation equipment required (89%). The turnover of air traffic controllers impacts to a
very great extent (72%) on the provision of air traffic control service due to the increase
in workload (67%).
Correlation analysis was in agreement with these findings since it revealed that there is a
positive relationship between shift sequence and provision of air traffic control service as
indicated by the Pearson correlation (0.04). In addition shift sequence influences the
provision of air traffic control service and that management is aware of the fact
(correlation = 0.361). Further remuneration and workings conditions reveals have a weak
positive correlation (correlation=0.037). Also there is a positive correlation
(correlation=0.02) between air navigation equipments and provisions of ATC services.
This conforms to the findings in figure 4.7 which revealed that air navigation equipment
influences provision of air traffic control service
5.4 Recommendations
In view of the findings, the study has come up with the recommendations in order to
improve the provision of air traffic control service in Kenya.
That the management reduces the working hours of air traffic controllers by investing on
human resource. It is notable that though the respondents are happy with current shift
sequence, they are not comfortable with the long working hours on shifts.
That the workload be reduced to avoid the turnover of air traffic controllers. This requires
more air traffic controllers that are motivated and recognized for the vital role they play
in managing air safety.
That remuneration, both monetary and non-monetary, be structured. Notable is that well
remunerated staff will have high morale, show commitment, like the work and be proud
of it. This will go a long way in ensuring better provision of air traffic control service.
However this should not be used as a gesture to show that air traffic controllers are poorly
41. 35
paid as it is a management issue which needs to be looked keenly as some were still
comfortable with the allowances and salary given.
That the management should sustain the current air navigation equipment in a serviceable
state, invest and install modern air navigation equipment to be used in the provision of air
traffic control service in order to enhance safety.
5.5 Suggested areas for further research
The study identified areas that are currently ‗missing‘ or insufficiently addressed in the
challenges in the provision of air traffic control service in Kenya and may require further
study.
The turnover of air traffic controllers should be studied more keenly to establish the
causes in order to avoid or reduce it. The exact number or the turnover rate as it could not
be appropriately captured in this study.
Those who have resigned can further be requested to provide their views on how to
improve the provision of air traffic control service in Kenya.
42. 36
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