Role Of Ethical Practice Reinforcement Strategies On Financial Performance Of Rural Saccos In Nyeri County Kenya

Abstract

The purpose of this study was to investigate the role of ethical practice reinforcement strategies on financial performance of rural SACCOs operating in Nyeri County. The study was guided by four objectives: to explore the role of personal behavior practice strategies in determining the financial performance of Rural SACCOs in Nyeri County, to examine the effect of organizational culture strategies in determining the financial performance of Rural SACCOs in Nyeri County, to investigate the role of performance management strategies in determining the financial performance of Rural SACCOs in Nyeri County and to examine the effect of decision making strategies in determining the financial performance of Rural SACCOs in Nyeri County. Agency theory, utilitarian theory, personal trait theory and decision theory were used in this study. The research adopts a descriptive survey research design. The target population for this study was the 42 Rural SACCOs operating in Nyeri County. Census was done where all the Senior Managers from 42 Rural SACCOs operating in Nyeri County were the respondents. A self-administered, questionnaire was used to collect data from the target respondents. The study achieved a response rate of 90.5%. Data analysis was conducted using statistical package for social sciences (SPSS) to generate descriptive and inferential statistics. Frequencies and percentages were generated from the data and presented using frequency distribution tables while linear regression analysis was done to establish relationship of each parameter of the independent variables in the study. The study findings revealed that personal behavior practice strategies, organizational culture strategies and decision making strategies had positive and significant effect on financial performance of rural SACCO. Performance management strategies had positive but insignificant effect on financial performance of rural SACCOs. The study further revealed that staffs were being effectively managed through constant monitoring and job rotations. In addition, SACCOs had designed an effective organization structure and they complied with regulatory authorities. The study recommends that SACCOs should review their internal control systems and seal the loopholes that pose opportunities for unethical practices. SACCOs should also review their human resource policy especially recruitment and selection procedures and ensures that the guidelines are adhered to when recruiting new employees. Future researchers should undertake comparative studies covering other Counties in order to validate whether the findings can be generalized.