School of Business & Public Management

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Motivators of choosing a management course: A comparative study of Kenya and India
(The International Journal of Management Education, 2012) Nyaribo, Misuko; Prakash, Ajai; Owino, Edward
The quest for management training is gaining prominence as organizations restructure to assimilate a workforce with advanced skills in management. This paper presents a comparative examination of the motivators of pursuing a management course in Kenya and India. Five factors are proposed as critical influencers of student choices. A survey design guided by a structured questionnaire was employed in data collection. A comparative analysis reveals that the motivators to pursue an MBA course differ significantly amongst Kenyan and Indian university students. Influence of acquaintances and employability are critical motivators that emerge from the combined data set. A logistic analysis confirms that two predictors, institutional infrastructure and employability are statistically significant. Recommendations are made to institutions of higher learning on the key drivers of their customer expectations.
Small And Medium-sized Entities In The Agricultural Sector: Fair Value Reporting Challenges
(Agrekon, 2013) Njuguna, Peter; Wingard, W C
Biological assets should be valued at fair value less point of sale costs only if an active market exists. The quoted price in an active market is the appropriate basis for determining the fair value of the asset. The objective of this research was to identify the challenges in respect of fair value reporting on the part of small- and medium-sized entities that publish general purpose financial statements, but that do not have public accountability in implementing the requirements of the International Financial Reporting Standard for Small and Medium-sized Entities. Through the research it was established that in Kenya the commodity markets operate in a simplified auction system with no clear price discovery mechanism. The lack of an active and transparent market is a serious challenge in terms of the application of fair value to biological assets. Consequently most of the farmers prefer to model the market information available. In the light of the diverse nature of agricultural produce, this article recommends virtual trading and development of commodity futures in order to reduce the market access cost, to improve accessibility to market information and to transform the role of middle traders to that of market linkages.
Remittance and Household Expenditures in Kenya
(2013)
Remittances constitute an important source of income for majority of Kenyan households. The World Bank reports a steady increase in inward remittance flows to Kenya. In addition, the evolution of mobile-money services has led to an increase in domestic remittances received by Kenyan households, especially those in the rural areas. This paper endeavors to answer the question of how these increased remittance receipts are used in Kenya focusing on Education, Health, Food and "Other" household expenditure, using a panel survey of 295 households from Rift Valley and Nyanza provinces of Kenya. The Fixed Effects (FE) model is applied on the data, and the analytical results provide evidence that remittances are mainly used on immediate consumption needs such as payment of utility bills and transportation costs.
Small And Medium-sized Entities in the Agricultural Sector: Fair Value Reporting Challenges
(Taylor & Francis, 2013) Maina, Peter N; Wingard, H C
Biological assets should be valued at fair value less point of sale costs only if an active market exists. The quoted price in an active market is the appropriate basis for determining the fair value of the asset. The objective of this research was to identify the challenges in respect of fair value reporting on the part of small- and medium-sized entities that publish general purpose financial statements, but that do not have public accountability in implementing the requirements of the International Financial Reporting Standard for Small and Medium-sized Entities. Through the research it was established that in Kenya the commodity markets operate in a simplified auction system with no clear price discovery mechanism. The lack of an active and transparent market is a serious challenge in terms of the application of fair value to biological assets. Consequently, most of the farmers prefer to model the market information available. In the light of the diverse nature of agricultural produce, this article recommends virtual trading and development of commodity futures in order to reduce the market access cost, to improve accessibility to market information and to transform the role of middle traders to that of market linkages.
Corporate Turn Around Strategies By Financially Distressed Companies Quoted At The Nairobi Securities Exchange
(IISTE, 2014) Waweru, Gabriel; Mbogo, John
Firms that are experiencing financial distress take one action or another in order to turn around their performance. This study sought to find out what turnaround strategies are taken by companies that faced by financial distress. The financially distressed companies generally take actions that are aimed at reducing costs e.g. laying off employees, asset sales and dividend cuts or take actions that are aimed at increasing revenue generation e.g. asset acquisitions in order to improve efficiency. In severe cases of financial distress a company may opt or be forced into liquidation through bankruptcy proceedings. The Kenyan economy under the period of review had mixed results of growing and declining presumably as a result of among others, the global economic crises, the post election violence, loss of investor confidence at the NSE and increased inflation, thus the need to establish the restructuring strategies that the financially distressed companies took in order to turnaround their performance. This study carried out a survey of the companies that were listed for the entire period of the study (2002-2008). Performance of the companies was established by conducting the Z score analysis on each of the companies. The Z score analysis identified 8 companies has having been financially distressed at one point or another during the period of the study. The survey found out that employee layoff was the most preferred course of action being carried out by 63% by the companies. Asset restructuring was the second most preferred turnaround strategy being carried out by 50% of the companies. Debt restructuring and top management change were the least preferred turn around strategies each one of them being taken by one company each. The study also found out that, in the year of distress the restructuring strategies are more intensified and are carried out less intensively in the subsequent years after distress. This may is presumably because of reducing the immediate liquidity problems being faced by the firm.
Antecedents of Customer Perceived Value: Evidence of Mobile Phone Customers in Kenya.
(International Journal of Business and Social Science, 2014) Owino, Edward O.
As the mobile phone industry in Kenya gets competitive, customer retention becomes an imperative precursor to firm performance. For this reason, the study was so conceived to examine factors that influence customer perceived value amongst Kenyan mobile phone customers. The study analysed perceived service quality and the perception of price amongst cell phone users. A survey of 400 randomly selected respondents was undertaken. A structured instrument covering background information, customer expectation and customer perception was adopted in primary data collection. The results shows that perceived quality of service and perceived price determine customer’s perception of value. The results indicate the existence of a significant differences exist between what customers expect and what they perceive they experience after a service encounter. Service managers should compete on providing services of high value to gain a competitive edge in this market.
Service Quality in Kenyan Universities: Dimensionality and Contextual Analysis
(European Journal of Business and Management, 2014) Owino, Edward; Kibera, Francis; Munyoki, Justus; Wainaina, Gituro
The dimensionality of service quality remains debatable with extant literature revealing divergence in thought. This study examined the dimensions of service quality and tested the existence of a significant difference in service quality perception between public and private university students in Kenya. Guided by a positivist paradigm and cross-sectional sample survey, data was collected from 750 randomly selected respondents. A 56 item scale instrument based on performance only paradigm was self-administered to select university students. Factor analysis was employed in determining potent service quality dimensions and Analysis of Variance test used in comparative analysis. A four-factor construct was revealed, with service blueprint emerging as an additional dimension of service quality in the Kenyan university context. It was established that there exists a significant difference in the dimensions of service quality between public and private university students. This implied that an appreciation of service quality dimensions is imperative in managing student’s expectation and that the university managers have to apply contingent service quality practices. The study recommends adequate regulation to standardize service quality irrespective of the service context.
Moderating Role of Entrepreneurial Orientation on the Relationship between Relationship Lending and Financial Performance of manufacturing SMEs in Kenya
(European Journal of Business and Management, 2015) Rotich, Abraham K; Wanjau, Kenneth L,; Namusonge, Gregory
The purpose of this study was to determine the moderating role of entrepreneurial orientation (EO) on the relationship between relationship lending and financial performance of manufacturing SMEs in Kenya. Relationship lending has gained a lot of interest worldwide as it is seen as an avenue to help bridge the information gap between SMEs and the banks thus ultimately helping SMEs access credit. Further, although credit is important to SMEs, entrepreneurial orientation (EO) is key as it determines the success or failure of SMEs. There is little research that has been done to determine if EO moderates the relationship between relationship lending and SME performance in Kenya. The study used a crossectional survey research design with the population being the 620 manufacturing SMEs involved in relationship lending arrangements with commercial banks in Kenya. Stratified random sampling was used to pick a sample of 160 from which the proprietors / CEOs of the respective companies filled the questionnaires. The main data collection instrument was a semi structured questionnaire. The hypotheses in this study were tested using structural equation modeling and hierarchical moderated multiple regression (MMR). The study found evidence that EO moderates the relationship between relationship lending and financial performance of manufacturing SMEs in Kenya. Further the study determined that relationship lending positively impacts on financial performance of SMEs. It also found
The Influence Of Stakeholder’s Perceptions Of Paratransit Saccos On Performance Of Urban Public Road Transport Industry In Kenya
(Strategic Journal of Business & Change Management, 2015) Wamalwa, Lucy S
The objective of Kenyan Government Legal Notices No. 161 of 2003, No. 83 of 2004 and No. 65 of 2005, Was to restore order, reduce accidents, increase passenger safety, reduce conflicts and safeguard private investment in the public transport sector .This notice directed all current and potential paratransit operators in Kenya to establish Paratransit SACCOs ; as a condition for the licensing of their vehicles to operate public service transport. The transport industry is affected by stakeholders who are affected by the achievement of the organization objectives. Their influence on the performance of urban road transport can be negative or positive, depending on whether their expectations are being met or not. The purpose of this study was to determine the influence of stakeholder’s perceptions of paratransit SACCOs on performance of urban public transport industry in Kenya. The specific objective was to determine the perceptions of paratransit owners on the effect of paratransit SACCOs on the performance urban public transport industry, To ascertain the perceptions of Local Authority on the effect of paratransit SACCOs on the performance of urban public transport industry and finally To investigate the perceptions of paratransit operators on the effect of paratransit SACCOs on the performance of urban public transport industry. The study targeted 635paratransit (matatu) SACCOS registered in Kenya. A sample of 64 was selected from the registered SACCO. Data was collected using questionnaire and analyzed using descriptive statistics. Based on the findings of the study, it was concluded that stakeholder’s perceptions of the Paratransit SACCOS significantly influenced the performance of urban road transport in Kenya. The study recommended that the government should adequately engage stakeholders during urban road policy formulations and implementations this will result to the stakeholders ownership of decisions, reduces negative influence and consequently success of the policy.
Youth Engagement with Co-operatives in Kenya
(ResearchGate, 2016) Mwangi, Renson M.; Maina, Rosemary; Kairo, David; Simiyu, Christine N.; Njogo, Michael
Dynamism, innovation, entrepreneurship, adaptability, continuity and renewal; words that are benignly associated with youth. But the youth face daunting challenges that inhibit realization of this potential; unemployment, ostracization, inexperience, self-destruction through substance abuse among others. Moreover, in spite of the enumerated potential of the youth, their engagement and participation in Kenyan co-operative societies is largely undocumented and less is known about their involvement with, as well as their attitudes and behaviors towards co operatives. How much knowledge about co-operatives do the youth possess? What is their level of awareness about the potential positive impact of co-operatives on their welfare? What impediments do they encounter when joining co-operatives? Relying on survey data collected from nine (9) Counties in Kenya, and focus group discussions held in five major towns, this research sought to examine and gain valuable insights into the perceptions, behavior and attitudes of the Kenyan youth toward co-operatives. While most of the youth were found to be cognizant of the existence of co-operatives, knew people who have benefitted from them, and perceive co-operatives to be important vehicles for accessing credit and accumulating saving, paradoxically many of them did not belong to co-operative. These findings have important implications on how co-operatives can engage the youth: a) Educate them on the importance of saving for the future and encourage them to engage in income-generating activities. b) Co operatives should strive to ingratiate themselves with the youth by developing products that resonate with them. c) When reaching out, adoption of communication technologies that appeal to the youth is crucially essential. d) Co-operatives should make themselves more accessible to the youth by flexing membership rules and savings plans. e) Learning institutions – schools, colleges and universities – should consider incorporating co-operative studies in their curricula to enlighten young people on the co-operative model. f) Co-operatives should also consider developing mentorship programs to mainstream the youth into leadership.
Constructs of Successful and Sustainable SME Leadership in East Africa
(Research Gate, 2016) Mwangi, Renson M
Despite the markedly increased foreign investment, East African economies remain characterized by low levels of investment and capital formation with high level of attrition among indigenous small and medium enterprises.While there is a high failure rate among these SMEs, some are beginning to turn the corner and are exhibiting signs of robustness, inovetivness and sustainability. Relying on narrative accounts of successful SMEs leaders in Kenya and Uganda obtained through interviews and focus group discussions, this study sought to construct an account of leadership practices and ascription of success for SMEs that had succeeded. The study identified eight leadership constructs characteristic of successful SME leaders in Kenya and Uganda grouped into visioning, building commitment, social capital, personal values, anticipation and resilience, resourcefulness, responsiveness, and entrepreneurial orientation. While these results, on the face value, are apparently not unique, it was in the nuances of the leadership practice that difference was made. In conclusion, the study highlights implications for these findings in relation to policy and leadership practice among SMEs.
Rediscovering Success: A Case Study Of Cic Insurance Group
(ResearchGate, 2016) Mwangi, Renson M; Nyamori, Robert O
Thirteen years ago, CIC Insurance Group (CIC) was inexorably on the verge of total collapse. The company could not meet the minimum share capital requirements set by the government regulator. Not even the injection of Kes. 90 million (cc. US $ 1.1 million) grant from the International Cooperative and Mutual Insurance Federation (ICMIF) nor the deployment of international consultants could save the company from the inevitable apocalypse, so it appeared. CIC has its roots in the cooperative movement having been formed by Kenya National Federation of Cooperatives (KNFC) in 1968 as an insurance agency before its registration as insurance company in 1978 operating under the name Co-operative Insurance Services Limited (CIS). The purpose then was to provide insurance and underwrite risk for Kenyan cooperatives. Initial support from cooperatives ensured the insurance company enjoyed rapid growth. However, this was to change for the worse after the company started experiencing difficulties and hardship that were ascribed to inept technical experts, poor corporate governance, and inappropriate business models. The CIC story is a familiar one, especially in Africa where business successes are often few and sparsely dispersed. Readers are more accustomed to tales of failure and misery, high levels of unemployment and hopelessness that ominously stalk the continent with indefatigable zeal. Nonetheless, the CIC story has an interesting twist. After more than a decade tittering on the edge of collapse, the company was able to re-invent and rediscover success. The recovery story is phenomenal, ranked 32nd out of 37 insurance firms in 1999 in Kenya; CIC has been on an exponential growth trajectory and is now one of the leading insurance companies in Kenya. It is in this context that the CIC story – the rise from obscurity to become one of the largest insurance companies in Kenya and a leading micro-insurer in Africa – ought to be told. This case study will serve a number of purposes. Firstly, it will inspire other entrepreneurs to overcome challenges and scale heights as exemplified by CIC Insurance group. Secondly, in spite of the negativity associated with the many African countries, it showcases Kenya as a land of innovation and success. Thirdly, it will provide a pedagogical tool for teaching MBAs and other business students to understand the history and the strategies for success of what is clearly a Kenyan case. This last point is important especially because many of the case studies employed in teaching MBAs in Kenya and many African universities are based on Western businesses, which alienates students from thinking that they could build similar successful businesses in Africa.
Antecedents of Brand Loyalty in Leading Supermarket Chains in Kenya: The Mediating Role of Customer Satisfaction
(International Institute for Science, Technology, and Education, 2017) Muturi, Francis M; Omwenga, Jane; Owino, Edward
The purpose of the study was to establish the extent to which customer satisfaction mediates the relationship between service quality, brand image, customer perceived value with brand loyalty in leading supermarket chains in Kenya. The population of interest comprised of customers of supermarkets in Kenya. A supermarket store sample of 30 stores from Nairobi and Nakuru counties was picked at random from the list of the stores of the four main supermarkets (Nakumatt, Uchumi, Naivas & Tusky’s). A sample of 384 customer respondents was interviewed. The study used multiple linear regression analysis in a four step process which established that customer satisfaction significantly affects brand loyalty. The study also shows that customer satisfaction fully mediates the relationship between service quality, brand image, customer perceived value with brand loyalty in leading supermarkets in Kenya. The dimensions of brand Image, service quality and customer perceived value dimensions are antecedent to brand loyalty and are a significant marketing tool for retail stores that wish to enhance the customers repurchase intention and the intention to recommend. A higher level of customer satisfaction leads to brand loyalty which is paramount to being competitive in the marketplace. The study recommends that supermarkets must strive towards increasing customer satisfaction with a view of enhancing brand loyalty and market share retention.
Service Value Assessment in Emerging Chain Restaurants in Nairobi Kenya
(Journal of Research in Marketing and Entrepreneurship, 2017) Owino, Edward; Nyaribo, Wycliffe M; Wadawi, Joe K
Traditionally, Kenya’s restaurants have in the past largely depended on international tourists for the main stay of their business. With the earlier steady growth of Tourism in the 1980s, these restaurants registered very good business, also supported by the fact that there were only a handful of restaurants that could be considered as ‘tourist class’. However, tourist arrivals in Kenya began to face serious challenges in the 1990s. Simultaneously, more serious restaurant ventures made market entry, especially within the capital city of Nairobi. It has been acclaimed that the prices charged for local hospitality services have not worked well to support it. As this takes place, questions have been asked as to whether these new investments have introduced product and service quality that is worth the price that they charge for the same. It was against the argument that is developing above that this study carried out a value assessment amongst the emerging chain restaurants in Nairobi city. The study sought to establish the part played by restaurants in building destination competitiveness through quality service offer and value pricing. A series of chain restaurants operating in Nairobi were identified all together with the specific unit and outlets that they operate. The customers in these restaurants were conveniently sampled and interviewed to inform this study of their perceptual judgment of service and value. The data was then be analyzed and interpreted to establish the extent to which these customers approve of service and value and how this can influence Kenya’s destination competitiveness, both for domestic and international tourists. The assessment of customer expectation and perception resulted in a four-factor construct. An assessment of service quality led to the identification of the critical latent variables that leads to customer attraction and satisfaction in restaurants. An evaluation of prices charged indicated that price is a critical component in value assessment amongst customers.
The Effects of Relationship Banking and Entrepreneurial Orientation on Financial Performance of Manufacturing Firms in Kenya
(KCA Journal of Business Management, 2017) Rotich, Abraham K; Wanjau, Kenneth
The purpose of the study was to determine if relationship banking, and entrepreneurial orientation (EO) affect the financial performance of manufacturing firms in Kenya. The study adopted a cross-sectional research design with the population being 620 manufacturing SMEs involved in relationship banking with commercial banks in Kenya. Stratified random sampling was employed to pick a sample of 138 manufacturing SMEs with the respondents being the owner/ managers of the sampled SMEs. A semi structured questionnaire was used for data collection. The data was analyzed regression analysis with the moderating effects of EO being tested using the moderated multiple regression. The study revealed that EO moderates the relationship between relationship banking and financial performance of manufacturing SMEs in Kenya. The study concluded that relationship banking and financial performance have a positive relationship and that EO moderates this relationship. By forging strategic links with the banks, manufacturing SMEs would be able to access funding which is key to their growth and survival.
TQM perspectives under the competitive strategies and the organization performance in Kenyan manufacturing sector
(Academy of Strategic Management Journal, 2017) Wamalwa, Lucy S.
The Kenya manufacturing industry contributes to 10.7% of the country GDP, 26% of the merchandise exported and 12 % of formal employment. The manufacturing industry in Kenya is faced with a number of challenges one of which is competition from local firms as well as well-established multinationals. This necessitates the need for the sector to implement a viable business strategy in order to improve its competitiveness. Generic strategies are widely accepted both academically and practically as sustainable competitive strategies and their influence on performance have been critically examined in a wide range of business settings in countries worldwide. TQM on the other hand establishes quality enhancement as a dominant priority and one that is vital for long-term effectiveness and survival, it focuses on increasing efficiency and improving processes, providing superior customer value and meeting customer needs. The purpose of this study was to examine the mediation effect of TQM practices, on the relationship between competitive strategies and organization performance in the Kenyan manufacturing industry. The study adopted a descriptive research design. The target population for the study was 39 ISO certified, manufacturing firms. The target respondents were the CEO, Strategic managers and Quality Assurance Managers a total of 117 respondents. A pilot test was conducted to assess the questionnaire validity and reliability of the data. Structural equation modeling (SEM) and multiple Regression analysis were used. The finding indicated that TQM partially mediates the relationship between cost leadership strategy and organization performance (organization learning and growth and internal process performance) but TQM fully mediated the relationship between differentiation strategy and the following performance measures internal process performance and organization learning and growth.
Test For Stock Return Anomalies At The Nairobi Securities Exchange
(International Journal of Information Research and Review, 2017) Njogo, Michael
Prior empirical studies have identified the existence of various stock return anomalies in several countries stock markets. In Some stock markets, return anomalies are discovered and then they disappear once traders exploit them to earn excess returns. Further, some of the return anomalies are more pronounced in some stock markets than in other stock markets. The purpose of this study was to test the existence of size, value, momentum; profitability and investment stock return anomalies at the Nairobi securities exchange in Kenya. Explanatory research design was adopted in establishing the existence of stock return anomalies at the Nairobi securities exchange in Kenya. The target population was 45 companies that were listed at the Nairobi securities exchange by January 2009 (after excluding companies that were not trading consistently and those that were delisted). A census of 45 companies was used to construct stock portfolios between 2009 and 2014.The existence of stock return anomalies was explored using sorts of returns on anomaly variables and multivariate regressions. The results of the hypotheses tests lead to a conclusion that size stock return anomaly, value stock return anomaly and investment stock return anomaly existence is statistically significant while profitability stock return anomaly and momentum stock return anomaly have an insignificant existence at the Nairobi securities exchange. The developed six factors model incorporating market risk and the five stock return anomalies proxies has a high explanatory power and its F-statistic value indicates that it is an adequate model for explaining some of the stock portfolio return variations (not explained by CAPM) at the Nairobi Securities Exchange in Kenya. This study recommends a policy framework for enhancing factor investing strategies at the Nairobi securities exchange. Factor investing policy framework is based on stock return anomalies that have been proven empirically by researchers to earn a stock return premium in the long run. In adopting a factor investment strategy, investment advisors, retail investors and stock brokers at Nairobi securities exchange should allocate more investment resources to small cap stocks than in big cap stocks, invest more in value stocks than in growth stocks and invest more in stocks of firms with low growth in assets in the current period than firms with high growth in assets in the current period for stock return optimization.
Influence of Employee Pro-activeness on Perceived Service Quality by Government Ministries in Kenya
(European Journal of Business and Management, 2017) Nafula, Fanice J.; Mukulu, Elegwa; Marangu, Wilfred N; Muturi, Willy
In government ministries in Kenya, entrepreneurial behaviour can surface in the form of a government officer discharging their duties in a different and valuable way from the norm. It is against this background that this study sought to establish the influence of employees’ pro-activeness on perceived service quality by government ministries in Kenya. The specific objective was to examine the influence of employees’ pro-activeness on perceived service quality by government ministries in Kenya. The study adopted descriptive survey research design. This being a census study; all the executive officers of every ministry were selected to take part in the study as they are perceived to be knowledgeable on the issues under study and for which they are either responsible for their execution or they personally execute them. The questionnaire was pre-tested on pilot respondents who were not part of the study respondents but who were knowledgeable in the study aspects in order to ensure their validity and relevance. The data collected was analyzed using descriptive and inferential statistics. Cronbach’s alpha coefficient was used to measure the reliability of the scale, which was used to assess the interval consistency among the research instrument items. The regression results showed that employees’ pro-activeness had significant and positive effect on perceived service quality by government ministries in Kenya. The study recommends that government ministries in Kenya should, therefore, strive to improve on employees’ pro-activeness because it was found to have a significant and positive effect on perceived service quality by government ministries in Kenya.
The Mediation Effects of TQM on the Relationship between Differentiation Strategy and Financial Performance of Manufacturing Firms in Kenya
(International Journal Of Business & Management, 2017) Wamalwa, Lucy S; Oloko, Margaret A; Owino, Edward
Firms that adapt Differentiation strategy develop competitive advantage by creating a product or service that is unique or creates the perception in the minds of customers that the firm or its products and services are superior to those of its 'competitors and also possess characteristics that are distinctive from those of its competitor’s. TQM elements; continuous improvement; leadership and Customer-orientation encourage innovation within the organization leading to development of unique products and quality customer service; leadership encourages generation of ideas from employees for solving problems or developing new products while Customer-orientation encourages organizations to search consistently for new customer needs and expectations, so companies can survive in this globally competitive environment. There is strong link between differentiation strategy and TQM. The study aimed to establish the mediation effects of TQM on the relationship between differentiation strategy and financial performance of manufacturing firms in Kenya. The target population for the study was 39 ISO certified, manufacturing firms. The target respondents were the CEO, Strategic managers and Quality Assurance Managers from the 39 ISO certified manufacturing firms a total of 117 respondent. Structural equation modelling (SEM) and multiple Regression analysis were used to analyse the relationships between differentiation strategy, TQM and organization performance. The study finding indicated that TQM partially mediates the relationship between generic strategy and financial performance of manufacturing firms in Kenya.
Effect Of Budgeting Practices On The Financial Performance Of Insurance Companies In Kenya
(International Journal of Economics, 2017) Njogo, Michael; Ngumi, Daniel K
Purpose: The general objective of this study was to establish the impact of budgeting practices on financial performance of insurance companies in Kenya. Methodology: The study applied descriptive research design. The population of the study comprised the 45 insurance and reinsurers companies that are were registered by the year 2010.The target sample was 50% of the population. A sample size of 50% is adequate for a descriptive study which has a small population. This implied that the sample was 23 insurance companies. Convenient sampling was used to obtain the 23 insurance companies. The study used secondary data collected from the Insurance Regulatory Authority, Association of Kenya Insurers and the respective insurance and reinsurers companies. The study used Statistical Package for Social Sciences (SPSS Version 17.0) and Stata version 13 to analyze the panel data. Descriptive statistics such as, mean and frequencies and inferential statistics (regression and correlation analysis) were used to perform data analysis. Results: The study found out that CAPEX variance and performance (ROI) are negatively and significant related (r=-0.1611, p=0.000), OPEX variance and performance (ROI) are negatively and significant related (r=-0.1267, p=0.000), human resource variance and performance (ROI) were negatively and significantly related (r=-0.1129, p=0.000) while income variance and performance (ROI) were also positively and significantly related (r=0.2136, p=0.000). From the findings, the study concluded that CAPEX variance has a negative and significant effect on performance (ROI). The study also concluded that OPEX variance has a negative and significant effect on performance (ROI). In addition, the study concluded that human resource variance has a negative and significant effect on performance (ROI) and lastly, the study concluded that income variance has a positive and significant effect on performance (ROI). Policy recommendation: Study recommended that insurance companies should focus on minimizing the variances. Secondly, the study recommends that insurance firms need to focus on maximizing income variance since it was found to have a positive effect on performance. This would ensure that they derive maximum returns from their operations.