Effect Of Ownership Identity on Performance of Commercial State Corporations in Kenya: A Case Study of Water Services Providers In Kenya

Abstract

The study of ownership identity on commercial state corporation is part of management strategic studies. Ownership identity is part of ownership structure which normally has two components of ownership concentration and ownership identity. Corporate governance studies have extensively been done on effects of ownership structures on corporate performance, yet little have been done on effects of ownership identity on performance of commercial state corporation: and that what motivated this study. The scope of the study is commercial state corporation which have been regarded as inefficient and bureaucratic. The major objective of the study was to investigate the effect of the of ownership identity, by deterring the influence of ownership concentration, analyzing the effects of leadership and examining the effects of organizational culture on performance of commercial state corporation. The independent variables that were measured individually for effect were ownership concentration, leadership and organizational culture, which were the pillars of Ownership identity. Ownership identity was operationalized as comprising the three variables and regressed against performance which was the dependent variable. To get the results the researcher conducted extensive research on the subject area, by reviewing theoretical and empirical literature, formulated hypothesis, designed research methodology and collected both primary and secondary data using instrument like questionnaires and reviewed document to get both quantity and qualitative data. Finally, the data was analyze using descriptive and regression analysis. The results showed that ownership identity had a positive effect on performance of commercial state corporations. The study established that organizational culture, had the greatest effect, followed by leadership and then ownership concentration had the least effect. The study found that WSP‟s carryout business of water and sanitation services through public-private partnership to enhance performance. These services are the responsibilities of the government to manage but the delivery of these services have been transferred to private limited companies. The county government are the legal owners of WSP‟s with high level of ownership concentration, providing leadership in appointing board of directors as the major shareholders but several stakeholders must be represented in the board. County government as an institution have the majority share in water service providers hence mostly influence the WSP culture's. This new form of partnership brings with it a new set of values, beliefs and norms with influence the behaviors of different stakeholders' involvement in the performance of WSPs, defining a different organizational culture. The research recommends a policy to define and regulate this new partnership.