Senteu, Winston Sankale (2012) To Determine the Influence of Economic Environment Factors on the Profitability of Cargo Handling Companies Based At Jomo Kenyatta International Airport Nairobi Cargo Centre. Masters thesis, Kenyatta University.
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Abstract
Business environment connotes external forces, factors and institutions that are beyond the control of the business and they affect the functioning of a business enterprise. The prevalent economic environment determines the profitability of firms. This paper examines how economic environment influences profitability of cargo handling companies based at Jomo Kenyatta International Airport Nairobi Cargo Centre. This research employed a descriptive survey design to study the research problem. Data was collected from employees in top level and middle level management working in cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre. The target population for this study was from the 15 cargo handling companies in Jomo Kenyatta International Airport, Nairobi Cargo Centre. Sample of responding staff was drawn from 103 top and middle level managers from the staff working in these companies. A sample of 31 employees in middle and top level management was drawn using stratified random sampling. For this study, both primary data and secondary data were collected. A questionnaire was used to collect primary data. For the secondary data, the data will be collected from newspapers, published books, journals and magazines as well as other sources such as the companies' annual reports. To determine validity of the research instrument, a pre-test was conducted. Self-administered questionnaire were used in this study to collect quantitative data. Completed questionnaires were edited for completeness and consistency after data collection. Data was then analysed using statistical tools (SPSS V.17.0 and Excel) and presented using tables and graphs for further analysis and to facilitate comparison. The Likert scale was used to analyse the mean score and standard deviation. The study also used multivariate regression model to determine the relative importance of each of the four variables with respect to achieving profitability in the cargo handling companies in Jomo Kenyatta International Airport, Nairobi Cargo Centre. The study found out that foreign exchange rate affected the profitability of the cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre to a great extent and that the purpose of forex is to assist international trade and investment, unchecked speculative movement of currencies by large financial institutions impedes the markets from correcting global current account imbalances, exchange rate volatility effects firm's growth rate of profits and to not cover any foreign exchange exposures leaves the company equally vulnerable to adverse movements in the exchange rate. The study found out that taxation affected interest rate of the cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre to a very great extent. The study concludes that foreign exchange rate affected interest rate of the cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre to a great extent and that principal source and interest rate spread, market forces and level of interest are related to interest rate. The study further concludes that monetary and fiscal policy affected interest rate of the cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre to a great extent. The study recommends that the cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre should manage foreign exchange risks by adjusting prices to reflect change in import pricing resulting from currency fluctuation. The study further recommends that the management should look at the monetary and fiscal policy as they affect aggregate demand and the level of economic activity; the pattern of resource allocation and the distribution of income at the cargo handling companies based at Jomo Kenyatta International Airport, Nairobi Cargo Centre. The study further recommends that the management should come up with very rigid strategies that ensure conservatism and ease of administration to more complex strategies which attempt to maximize results by taking on additional risk. The study further recommends that managers should lay strategic emphasis on the application of tax shelter instruments such as debt, depreciation, research and development, corporate arms giving, and so on.
| Item Type: | Thesis (Masters) |
|---|---|
| Subjects: | H Social Sciences > HE Transportation and Communications H Social Sciences > HF Commerce |
| Divisions: | Africana |
| Depositing User: | Tim Khabala |
| Date Deposited: | 28 Mar 2018 14:02 |
| Last Modified: | 28 Mar 2018 14:02 |
| URI: | http://thesisbank.jhia.ac.ke/id/eprint/3655 |
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