MODERATING INFLUENCE OF CORPORATE GOVERNANCE ON ORGANIZATIONAL RESOURCES AND PERFORMANCE: EVIDENCE FROM REGIONAL DEVELOPMENT AUTHORITIES IN KENYA
Abstract
The objective of this study was to determine the influence of corporate governance on the relationship between organizational resources and performance of regional development authorities in Kenya. The specific objectives were to determine the influence of financial resources on the performance of regional development authorities in Kenya and establish the moderating effect of corporate governance on the relationship between financial resources and performance of regional development authorities in Kenya. The study was guided by resource based theory, dynamic capabilities theory and stewardship theory. The study adopted explanatory research design. The study was conducted in six regional development authorities that cover 47 counties. This includes Kerio Valley Development Authority, Ewaso Ngiro South Development Authority, Ewaso Ngiro North Development Authority, Coast Development Authority, Lake Basin Development Authority, Tana and Athi Rivers Development Authority. The targeted population was 169 comprising of chief managers, managers, heads of department and chief accountant. The study used stratified random sampling to select 118. Primary data was collected using structured questionnaires and interview schedules. Pilot study was conducted to test validity and reliability of research instruments. Validity was ascertained using content and construct validity while reliability using Cronbach alpha. Quantitative data was analyzed using STATA version 15. Model estimation and hypotheses testing adopted Structural Equation Modeling using AMOS version 23. Path diagram was used to establish the interrelationship between organization resources and performance via corporate governance. The null hypotheses were tested at 5% significance level. The findings revealed that corporate governance has significant moderating influence on the relationship between organizational resources and performance. Structural Equation Modeling (SEM) supported three paths corporate governance and organizational resources, corporate governance and performance as well as organizational resources and performance of RDA. Therefore, the study concluded that corporate governance is significant moderator between organizational resources and performance of regional development authorities. The study recommended that regional development authorities ought to reduce overdependence on exchequer to resources but generate their own financial resources. The study also recommended that board should be diverse in terms of gender, relevant industry experience and independent board member from the management.
Keyword: Technological Resources, Corporate Governance, Performance, Regional Development Authorities
CITATION: Wanyama, E. W. (2020). Moderating influence of corporate governance on organizational resources and performance: Evidence from regional development authorities in Kenya. The Strategic Journal of Business & Change Management, 7(3), 29 – 45.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i3.1656
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