Factors Influencing Organizational Performance of Airlines Business in Kenya: a Case Study of Kenya Airways

FACTORS INFLUENCING ORGANIZATIONAL PERFORMANCE OF AIRLINES BUSINESS IN KENYA: A CASE STUDY OF KENYA AIRWAYS

ABSOLOM NGARI IRUNGU

A RESEARCH PROJECT REPORT SUBMITTED TO THE SCHOOL OF MANAGEMENT AND LEADERSHIP IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DIPLOMA IN MANAGEMENT AND LEADERSHIP OF THE MANAGEMENT UNIVERSITY OF AFRICA

JULY 2019

DECLARATION Declaration by the Student

This project is my original work and has not been presented for a degree in any other University

Signature…………………………… Date ……………………… Absolom Ngari Irungu Dip.ML/2/00015/2/2018

Declaration by the Supervisor

This project has been submitted for examination with my approval as University Supervisor

Signature…………………………… Date ………………………

Juster Nyaga The Management University of Africa

DEDICATION I dedicate this work to my beloved wife Trizah and my Dad who have been very supportive in encouraging me to pursue my studies and to my kids, Prince and little Faith Jennifer for their unconditional love and support during this study and always.

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ACKNOWLEDGEMENT I take this opportunity to give thanks to the Almighty God for seeing me through the completion of this project. The work of carrying out this investigation needed adequate preparation and therefore called for collective responsibility of many personalities. The production of this research document has been made possible by invaluable support of many people. While it is not possible to name all of them, recognition has been given to a few.

Special thanks go to my family especially my wife Trizah, and my blessed son and daughter, Prince and Faith Jennifer for creating a conducive environment for learning. Am also thankful to my colleagues in college who have also been very supportive.

I am greatly indebted to my lecturer Dr. Judith Bijurenda and my supervisor Madam Juster Nyaga, for their professional guidance, advice and unlimited patience in reading through my drafts and suggesting workable alternatives, my profound appreciation to you. The staff of Kenya Airways cannot pass without my special acknowledgement for taking time off their busy schedule to provide me with all the information I needed in the course of the research. Without their immense cooperation I would not have reached this far. I would also wish to extend my sincere gratitude to all the colleague students, staff, lecturers and the entire Management University of Africa fraternity for changing me from what I was to what I am. Thank you all. May the Almighty God bless you all abundantly.

ABSTRACT

The purpose of the study was to establish the factors influencing organizational performance in Kenya Airways. The Specific objectives of the study were to: determine the influences of infrastructure, leadership, environmental and economic factors to the organizational performance in Kenya Airways. The external environment in which a firm operates presents the firm with opportunities, threats and constraints. It consists of macroeconomic factors which include political, economic, social, technological, environmental, and legal factors. These have a huge impact on organizational performance of the airline industry and thus, airlines cannot afford to ignore them as they will determine whether or not they sustain competitive advantage. The airline businesses depends on the wellbeing of international trade and the stability of the environment in which they operate. The study employed descriptive research design. The target population is 155 management level employees of Kenya airways, Jomo Kenyatta International Airport, Nairobi. The sample size was 57 employees of Kenya airways. Which is 30% of target population. The study used both primary and secondary data. The primary data was collected using structured questionnaires both open and closed. The data was be analyzed using qualitative and quantitative method using MS excel. The data was presented using tables, charts and graphs. From the finding it was concluded that infrastructure, leadership, environment factors and economic factors affect organizational performance in airline business in Kenya with special reference to Kenya airways. The study recommended that the management of Kenya airways should align their priorities strategically considering on optimization of the available infrastructure, be prudent in the choice of their top and unit leadership and management team, and as well as adjust their strategies considering the external environmental and economic factors.

TABLE OF CONTENTS

DECLARATION...... ii DEDICATION...... iii ACKNOWLEDGEMENT ...... iv ABSTRACT ...... v TABLE OF CONTENTS ...... vi LIST OF TABLES ...... viii LIST OF FIGURES ...... ix LIST OF ABBREVIATIONS ...... x OPERATIONAL DEFINITION OF TERMS ...... xi

CHAPTER ONE INTRODUCTION 1.0 Introduction ...... 1 1.1 Background of the Study ...... 1 1.2 Statement of the Problem ...... 3 1.3 Objectives of the Study ...... 3 1.4 Research Questions ...... 4 1.5 Significance of the Study ...... 4 1.6 Limitations of the study ...... 5 1.7 Scope of the Study ...... 5

CHAPTER TWO LITERATURE REVIEW 2.0 Introduction ...... 6 2.1 Review of Theoretical literature ...... 7 2.2 Critical literature Review ...... 9 2.3 Summary of gaps to be filled ...... 9 2.4 Conceptual Framework ...... 7

CHAPTER THREE RESEARCH METHODOLOGY 3.0 Introduction ...... 12 3.1 Research Design ...... 12 3.2 Target Population ...... 12

3.3 Sampling Design and Sample Size...... 12 3.4 Data Collection Instruments ...... 13 3.5 Data Analysis Methods ...... 14

CHAPTER FOUR DATA ANALYSIS, PRESENTATION AND INTERPRETATION 4.0 Introduction ...... 16 4.1 Presentation of Research Findings ...... 16 4.2 Summary of Data Analysis ...... 32

CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 5.0 Introduction ...... 35 5.1 Summary of Major Findings (As per Research Questions) ...... 35 5.2 Conclusion ...... 37 5.3 Recommendation ...... 37 5.4 Suggestion for Further Studies ...... 38 REFERENCES ...... 39 APPENDICES Appendix I: Introduction of Letter Appendix II: Questionnaire

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LIST OF TABLES

Table 3.1 Target Population ……………………………………………………….13 Table 3.2 Sample Size………...………………………………….……………….. 12 Table 4.1 Analysis on Response Rate…………………………….………………...15 Table 4.2 Gender of Respondents……………………………….………………….16 Table 4.3 Age of Respondents………………………………….………………… 17 Table 4.4 Highest Level of Education Attained of the Respondents………….… ..18 Table 4.5 Number of Years Respondents Worked in the Company……..….…….19 Table 4.6 Whether Infrastructure Influence Organizational performance ………. 20 Table 4.7 Rating the Influence of Infrastructure on Organizational performance ……………………………………….……………………………...…. 21 Table 4.8 Extent Which Infrastructure influence Organizational performance ……………………………………………………………………….….22 Table 4.9 Whether Leadership influence Organizational performance in Kenya Airways.………...……….……………………………………………. 23 Table 4.10 Rating the Influences of Leadership on Organizational performance …………….…………………………………..………………………. 24 Table 4.11 Extent to Which Leadership influence on Organizational performance …………………………..………..…………………………………….25 Table 4.12 Whether Environmental factors influence on Organizational performance ………………...... 26 Table 4.13 Rating the Influence of Environmental factors on Organizational performance …………………………………………………………..27 Table 4.14 Extent to Which Environmental factors Influence Organizational performance in Kenya Airways.………………………………………28 Table 4.15 Whether Economic Factors Influence Organizational performance …………………………………………………………………..…… 29 Table 4.16 Extent to Which Economic Factors Influence Organizational performance ………………………………………………………….30

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LIST OF FIGURES

Figure 2.1 Conceptual Framework……….……………………………………….. 11 Figure 4.1 Response Rate…………………….…………………………………… 15 Figure 4.2 Gender Analysis of Respondents……………………………………… 16 Figure 4.3 Age Analysis of the Respondents…………………………………… 17 Figure 4.4 Highest Level of Education Attained of the Respondents…………… 18 Figure 4.5 Number of Years Respondents Worked …………………………..…. 19 Figure 4.6 Whether Infrastructure Influence Organizational performance…………. .…………………………..…………………………………………….20 Figure 4.7 Rating influence of Infrastructure on Organizational performance …………………………………...……………..………………..……. 21 Figure 4.8 Extent to Which Infrastructure Influence Organizational performance .…… …………………………………………………….…………….22 Figure 4.9 Whether Leadership Influence Organizational performance ……………………………………………………….……..…..…….23 Figure 4.10 Rating Influence of Leadership on the Organizational performance …………………….…………………………………………….……24 Figure 4.11 Extent to Which Leadership Influence Organizational performance ………………………………………………………………………..25 Figure 4.12 Whether Environmental factors Influence Organizational performance ……….…………………………………………………….…………26 Figure 4.13 Rating Influence of Environmental factors on Organizational performance ………………………………………………………….27 Figure 4.14 Extent to Which Environmental factors Influence Organizational performance.…………………………………………………….……28 Figure 4.15 Whether Economic factors Influence Organizational performance..………………………………….……………..……….29 Figure 4.16 Extent to Which Economic Influence Organizational performance ………………………………………..……………….……….……..30

LIST OF ABBREVIATIONS

IATA International Air Transport Association KQ: Kenya Airways KCAA: Kenya Civil Aviation Authority AFRAA: Africa Airlines Association ICAO: International Civil Aviation Organization KLM: Koninklijke Luchtvaart Maatschappij PIC: Parliamentary Investment Committee PESTEL: Political Economic Social Technological Ecological & Legal factors

OPERATIONAL DEFINITION OF TERMS

Environmental Policy Environmental policy is the commitment of a business to the regulations, laws as well as other policy mechanisms that are concerned with environmental issues. Environmental policy impacts businesses because the law implies organizations to change their operational procedures and equipment so as to meet those standards which can cost businesses some good amount of money.

Productivity is defined as the amount of output in relation to the level of input required. Companies raise productivity by increasing their output and reducing their input

Environment Factors These includes the cultural barriers to investment, the ability to reach a competitive edge with new investments and the strategic use of new technologies and natural resources.

CHAPTER ONE INTRODUCTION

1.0 Introduction This chapter presents the background information of the study; the problem statement, objectives of the study, research questions, outlines the significance of the study, gives the scope of the study and limitation of the study.

1.1 Background of the Study The history of the global aviation industry has been a saga of continuing adjustment to changing national policy and economic conditions. Since 1960, fluctuating government demands and political intervention coupled with a variety of international events have teamed up to produce a roller-coaster-like sales curve: up to a peak, down to a valley. Over the years, the industry’s operations have become increasingly complex, with each increment of complexity heightening the industry’s problems in adapting to change. (Wensveen, 2017)

Air transport is one of the world’s most important industries. Its development and technical service achievements make it one of the major contributors to the advancement of modern societal development. The growth in the aviation sector cannot be matched by any other major form of transport due to its technicality and new innovations that is going on in the sector. The above has helped so much in economic and tourist development of the nation and the globe. Demand for air transport services has increased the influence of air transport in the nation and global economy, thereby enhancing rapid movement of passengers, goods and services to the domestic and world market. (Button, 2008).

Air transport system is fully driven by the global economy; it is an important catalyst to the global economy. International Air Transport Association (IATA) noted that air transport directly employs four million people worldwide and generates $400 billion in output. The efficiency and quality improvements in air passenger services contribute to the growth in government sectors such as hotel, tourism, etc. The free flow of people and information, together with improved air cargo operations, promote trade and improve the efficiency of the overall economy. That is to say that aviation sector imposes significant positive externalities to other industries, contributing to economic and employment growth to the nation (IATA, 2005). (Button, Lall, Stough and Trice, 1999). Button (2006) pointed out that in United States and Europe; more than 40% of air travels are for business purposes. The remaining trips are either for leisure or for visiting friends and relative trips provides the basis upon which social

ties are retained and, as such, allow for an efficient and integrated labour market. Air transport is ideal for the coordination of supply chains, and Air transport system is fully driven by the global economy; it is an important catalyst to the global economy.

According to the International Air Transport Association (IATA), air transport directly employs four million people worldwide and generates $400 billion in output. The efficiency and quality improvements in air passenger services contribute to the growth in government sectors such as hotel, tourism, etc. The free flow of people and information, together with improved air cargo operations, promote trade and improve the efficiency of the overall economy. That is to say that aviation sector imposes significant positive externalities to other industries, contributing to economic and employment growth to the nation (IATA, 2005). (Button, Lall, Stough and Trice, 1999). Button (2006) pointed out that in United States and Europe; more than 40% of air travels are for business purposes. The remaining trips are either for leisure or for visiting friends and relative trips provides the basis upon which social ties are retained and, as such, allow for an efficient and integrated labour market. Air transport is ideal for the coordination of supply chains, and thereby, improves the overall efficiency of the economy, thereby, improves the overall efficiency of the economy.

1.1.1 Kenya Airways

Kenya Airways Ltd, more commonly known as Kenya Airways (KQ), is the flag carrier of Kenya and the largest airline operator in East Africa. The company was founded in 1977, after the dissolution of East African Airways. Their head office is located in Embakasi, Nairobi, with its hub at Jomo Kenyatta International Airport. (Corporate history 2019). Kenya airways operates with the code KQ under International Air Transport Association (IATA) and as Kenya under International Civil Aviation Organization (ICOA) airline code (IATA, 2013). The airline was owned by the Government of Kenya until April 1995, and it was privatized in 1996, becoming the first African flag carrier to successfully do so. Kenya Airways is currently a public-private partnership. The largest shareholder is the Government of Kenya (48.9%), 38.1% is owned by KQ Lenders Company 2017 Ltd. (in turn owned by a consortium of banks), followed by KLM, which has a 7.8% stake in the company. The rest of the shares are held by private owners; shares are traded on the Nairobi Stock Exchange, the Dar Es Salaam Stock Exchange, and the Uganda Securities Exchange. The airline became a member of Sky Team in June 2010, and is also a member of the African Airlines Association since 1977 (About Kenya Airways 2019)

Kenya Airways is widely considered as one of the leading Sub-Saharan operators. As of June 2019, the airline has 3,986 employees. KQ has been facing financial troubles which have become more prominent in the recent past resulting in billions of losses and massive staff retrenchment. Recently, the proposals by the airline to take over the running of Jomo Kenyatta International Airport to the Parliamentary Investment Committee (PIC) in a bid to have the advantage of reducing operating expenses created a public uproar and hence rejected. PIC however made recommendation to the government to buy back all the shares of the airline as private interest cannot run the state owned airport. (Parliament, 2019)

1.2 Statement of the Problem

The external environment in which a firm operates presents the firm with opportunities, threats and constraints. It consists of macroeconomic factors which include political, economic, social, technological, environmental, and legal factors. These have a huge impact on organizational performance of the airline industry and thus, airlines cannot afford to ignore them as they will determine whether or not they sustain competitive advantage. The airline businesses depends on the wellbeing of international trade and the stability of the environment in which they operate. (Mwangi & Wekesa, 2017)

A number of scholars have examined and provided useful insights on research directions in organizational performance in the airline industry. These include studies, such as those by (Prajogo & Sohal, 2010) on the influence of international business practices on the financial performance of multinational corporations .using a survey of 50 American companies; airlines being one of them; The failure of airline industry leads to loss of jobs and consequently increased insecurity, low liquidity in the economy, and decline in economic growth. However, KQ have had difficulties in growing financial performance and stakeholder value and recently been struggling with debts and losses making it difficult to sustain their operations, it is for this reason that this researcher seeks to establish factors affecting financial performance in Kenya airways.

1.3. General Objectives

The general objective of the study was to determine the factors influencing the organizational performance of airline business companies in Kenya with specific reference to Kenya Airways.

1.3.1 Specific Objectives

The specific objectives of the were to;

i. To determine the extent which the infrastructural development affects the organizational performance in Kenya Airways ii. To establish the extent contribution of leadership to the organizational performance in Kenya Airways iii. To determine the influence of environmental factors on the organizational performance in Kenya Airways iv. To evaluate the influence of economic factors that affect growth the organizational performance in Kenya Airways

1.4 Research Questions

The study attempted to answer the following questions:

i. To what extent does infrastructural development influence organizational performance in Kenya Airways? ii. To what extent does leadership influence organizational performance in Kenya airways? iii. To what extent does environmental factors influence organizational performance in Kenya airways? iv. To what extent does economic factors influence organizational performance in Kenya airways?

1.5 Significance of the Study 1.5.1 Kenya Airway’s management

The results of this study will be a valuable resource to any person interested in understanding the organizational productivity in the aviation industry. The Kenya Airway’s management will utilize the findings and recommendations to develop more appropriate strategies of organizational productivity in s thus helping the organization achieve its objectives.

1.5.2 Ministry of Transport

The research results will enlighten the government and especially the Ministry of Transport (KCAA) on the influences of performance management in the aviation industry and hence

come up with a policy that will address the challenges the industry is facing in performance management.

1.5.3 Other Researchers

The research findings will be helpful to academicians since they contribute to the existing literature in the field of performance management particularly in the aviation industry.

1.6 Scope of the Study The study focused on factors affecting financial performance of airline business in Kenya with specific reference to Kenya Airways. Kenya Airways is located in Embakasi North Airport, Road. The study will be carried in July, 2019.

1.7 Chapter Summary

Chapter one has presented the introduction of the thesis. It has explained that the research aims at examining the factors influencing organizational performance at Kenya Airways. The chapter has further identified four areas specific objectives of the study, namely; To determine the extent which the infrastructural development affects the organizational performance in Kenya Airways; To establish the extent contribution of leadership to the organizational performance in Kenya Airways; To determine the influence of environmental factors on the organizational performance in Kenya Airways; and, To evaluate the influence of economic factors that affect growth the organizational performance in Kenya Airways. The chapter has further indicated that the study will be conducted among Kenya Airways (KQ) staff at the Jomo Kenyatta International Airport (JKIA) over a period not exceeding two weeks using a structured questionnaire schedule.

CHAPTER TWO LITERATURE REVIEW

2.0 Introduction The chapter presents the literature of the reviewed that forms a basis of the study. The concepts reviewed include financial performance. This chapter is concerned with the review of pertinent literature. It covers theoretical literature, critical review, summary and gap and conceptual framework. The study reviewed literature on factors affecting the organizational productivity of air transport companies in Kenya with specific reference to Kenya Airways.

2.1 Theoretical Literature Review This study will be guided by the following theories;

2.1.1 Contingency Theory

Contingency theory states that in management one thing or decision depends on the other things and for organizations to be effective, there must be ‘goodness of fit’ between their structure and the conditions in the bigger external environment Fielder, (1964). This management approach is contingent on organizations situation i.e. any unprecedented occurrence tending to interfere. The researcher in the application of contingency theory asserts that the selected strategic choice and application must conform to its contextual factors.

Scholars assert that contingency theory represents a blend of organizational decision making perspective and organizational structure. In the application of contingency theory organizational effectiveness in area of organizational performance should take into consideration

2.1.2 PESTLE Analysis Model

A PESTEL analysis is a tool used to analyze and monitor the macro-environmental these are factors that have an impact on an organization. It is also a situational analysis tool for business and is one of the most used models in the evaluation of the external business environment that is highly dynamic (Gupta, 2013), it hypotheses’ that a business interacts with its external environment in its operations and the external factors are uncontrollable by the business. Therefore, the PESTLE model takes into account key aspects in the external environment and appraises each of them to form conclusions of industry attractiveness, market potential, to determine current market and industry performance and to predict market or industry key success factors and trends for future growth and success as explained.

The application of the PESTLE model depends upon the industry or market the organization is based in, and factors to be taken into consideration by one business competing in one industry may differ from that of the factors that should be concerned by a business within a different industry (Dwyer & Tanner, 2002).

2.2 Critical Literature Review 2.2.1 Infrastructure and Organizational Performance

Well-trained and motivated workers, an effective operational and organizational system, and modern infrastructure are imperative for business. With modern infrastructure a company is likely to perform better, the better the infrastructure, the more opportunities for the company to perform successfully.

Infrastructure capital, understood as including transport related facilities (roads, railroads, ports and airports), water and waste water treatment facilities, telecommunications, and energy generation, transmission and distribution, is often mentioned as a prerequisite for the success of development policies and has therefore been for some time an important topic on the agenda of politicians and development practitioners that endow it with many virtues. Since the late 1980s, economists have produced hundreds of empirical papers on the subject, mostly making use of macro-level cross country or cross state data. Despite all this accumulated evidence, the link between infrastructure availability and economic productivity or growth is still subject to considerable uncertainty and debate. (Francis, 2011). Lack of proper infrastructure in Africa and specifically have impacted Kenya Airways organizational performance.

2.2.2 Environmental factors and Organizational Performance

For any enterprise to be successful in the marketplace, it is important to understand what factors exert impact on the development of their enterprise. Once positive and negative effects are identified, suitable strategies to handle any predicted adverse situation can be developed. Therefore, examining internal and external factors is considered the most important task for an enterprise. For an organization to survive and prosper it needs to address the challenges of the environment it faces. Porter, (1985), argued that the central tenets of a firm’s competitive advantage rest on the ability of the firm to position and differentiate itself in a given context. Environmental policies are another external factor that can impact the strategy of a business. Environmental policy is the commitment of a business to the regulations, laws as well as other policy mechanisms that are concerned with environmental issues. Environmental policy impacts businesses because the law implies organizations to change their operational

procedures and equipment so as to meet those standards which can cost businesses some good amount of money.

2.2.3 Economic factors and Organizational Performance

Economic factors are the most determining factors to the success of any enterprise, even though they are considered to be external factors, within the economy, some contributing factors such as the fluctuation of interest rate, economic crisis, and so on directly and strongly affects the consumption of buyers, and consequently, the profits of businesses.

No external factors affect business more than an economic factors, particularly the present state of the economy. As the economy goes through expansion and contraction, economic factors change over time. Positive economic conditions can be favorable for business development and adverse ones may generate negative consequences such as narrow down business sales, capital shortage or even bankruptcy.

Economic factors exert huge impacts on firms working in an international business environment. The economic environment relates to all the factors that contribute to a country's attractiveness for foreign businesses, such as monetary systems, inflation, and interest rates. Economic factors exert huge impacts on firms working in an international business environment. The economic environment relates to all the factors that contribute to a country's attractiveness for foreign businesses. Businesses rely on a predictable and stable mechanism. A monetary system that acknowledges countries and economies interdependence and that fosters growth, stability and fairness at a global level is important for prosperity, and the operation and growth of companies. Inflation, interest rates, and the borrowing costs of companies also contribute to a country's attractiveness. If a country has a high rate of inflation, its central bank will raise the interest rate, which increases the cost of borrowing for firms. High inflation also makes the value of the revenue in domestic currency fall, and this exposes firms to foreign exchange risks. It is even worse if firms produce in countries of high inflation and then sell products to countries of low inflation, since the input costs are on the rise while the revenue stays stable. (Akinyi, 2012)

2.2.4 Leadership Organizational Performance

Leadership quality plays as a key role in order to form and enforce a strategy. It works as a linkage which associates the heart of the institution with its body. The pledge kept by the leader is responsible for encouraging the institutions to become successful, and this success comes

out of making effective decisions for the formulation of strategy and their enactment. (Wensveen, 2007). If the strategies are not enacted with perfection, great strategies become insignificant. Irrespective of time as well as position, leaders are able to contribute significantly in the way how a firm functions its activities. Leadership which has effective strategies can work as the fundamental basis for fruitfully employing the strategic management process. (Button, 2008). Leaders who follow strategies are able to expedite the growth of suitable strategic activities, and they specify the ways to enforce them. These actions work as gate ways to higher average outcomes and strategic competitiveness. Leaders who work in different institutions are fully conscious about the requirement to chalk out the plan strategically for the future of their organizations and take part in the effective enactment regarding these well planned scheme. (Jabbar and Hussein, 2017)

2.2 Conceptual Framework

The study seeks to establish factors establish the factors influencing the organizational performance of airlines business in Kenya. The variables involved in the study can be better understood by the use of a conceptual framework. Atkinson, (2011) defines conceptual framework as a research tool that purposes to develop an understanding of the variables under investigation. The aforementioned aspects forming the study objectives interrelate conceptually as depicted in figure 2.1

Independent Variables Dependent Variable

Infrastructure

Economic Factors Organizational Performance in Kenya airways Leadership

Environmental Factors

Figure 2. 1 Conceptual framework Source: Author (2019) 2.3 Explanation of Variables 2.3.1 Infrastructure Infrastructure is the basic physical and organizational structures and facilities (e.g. buildings, airports, fleet, power supplies, etc.) needed for the operation of an enterprise. It determines the

ability of the business to run and operate at cost effective and efficient levels and thus influences organizational performance and its growth strategies. 2.3.2 Leadership Leadership is the ability of an individual or a group of individuals to influence and guide members of an organization towards a common goal and objectives of an organization. Leadership involves making sound and sometimes difficult decisions, creating and articulating a clear vision, establishing achievable goals and providing followers with the knowledge and tools necessary to achieve those goals. If a leader lack in any way to articulate above competences the results will directly affect running of the organization and consequently its overall performance.

2.3.3 Economic Factors Economic factors are the most influential factors to the success of any business venture, even though they are considered to be external factors, within the economy, some contributing factors such as the fluctuation of interest rate, economic crisis, and so on directly and strongly affects the consumption of buyers, and consequently, the profits of businesses.

2.3.4 Environmental Factors Environment Factors are includes the cultural barriers to investment, the ability to reach a competitive edge with new investments and the strategic use of new technologies and natural resources. The external environment of airline industry is very crucial to the survival of the various airlines as it exerts enormous impact on the airline industry.

2.4 Chapter Summary Chapter Two has reviewed existing literature on the four areas of interest for the current study. The literature reviewed relate to; the four research objectives, namely; influence of infrastructure on organizational performance; influence of leadership on organizational performance; influence of economic factors on organizational performance; and, influence of environmental factors on organizational performance. It is evident that there exists extensive empirical and theoretical literature on organizational performance and factors affecting organizational performance. However, scholars and research results indicate discrepancies in the conceptualization of the various elements influencing customer loyalty in the airline industry. The current study aims to contribute literature to this issue by examining the factors contributing towards organizational performance at KQ by focusing on how infrastructure,

leadership and economic as well as environmental factors influences organizational performance in KQ. The next chapter provides the research methodology for the study.

CHAPTER THREE RESEARCH METHODOLOGY

3.0 Introduction The chapter describes the methodology that was adopted to carry out the study. It gives the details of the research design that was used, target population, sampling design, data collection methods and procedures and data analysis. It also presents the limitation of the study and ethical considerations.

3.1 Research Design The study applied an explanatory research design. According Mugenda and Mugenda (2003) explanatory research focuses on the why question. Explanatory research seeks to find relationship between variables (Kothari, 2004). Given its fundamental nature, explanatory research often explains the reason why the problem actually exists. The design was appropriate in enabling the researcher to explain the influences of employee performance management practices on organizational productivity in aviation industry.

3.2 Target Population

Lyon (2007) defines target- population as universal set of the study of all members of real ‘or hypothetical set of people, events or objects to which an investigator wishes to generalize the result. The target population of the study has been mainly derived from the staff of Kenya Airways Nairobi. The research has use a target population of 155 persons

Table 3.1 Target population

Category population percentage Top level Management 6 3 Middle level Management 47 30 Lower level Management 102 66 TOTAL 155 100

Source: (Author, 2019) 3.3 Sampling Design and Sample Size

Kothari (2004) defines a sample as a definite plan for obtaining a sample from a given population. Sampling is a procedure by which some elements of the population are selected as representatives of the target population through the use of probability to acquire a representative degree of reliability in the selected area. The researcher has used stratified

random sampling where a sample of 30% has been selected because According Gay and Airasian (2003) a sample size of 50% of the total population is representative. The study selected 57 respondents which is 50% of the total population.

Table 3.2 Sample size

Category Target population Sample size Top level Management 6 2 Middle level Management 47 17 Lower level Management 102 38 TOTAL 155 57

Source: (Author, 2019) Source: Author (2019) 3.4 Data Collection Instruments

Kothari (2004) defines a questionnaire as a method for eliciting, recording, and collecting of information. A questionnaire is a printed form containing a set of questions for gathering information administered by the researcher or his or her assistants or self-administered under supervision or unsupervised.

Semi structured questionnaires have been used in the study. The researcher had self- administered the questionnaire to all respondents as it is inexpensive and allowed the respondents to complete the questionnaire within one week.

3.4.1 Validity and Reliability

Reliability deals with the quality of measurement. It is the consistency or repeatability of data measurements. Validity concerns with whether the concept really measures the aimed concept. Validity and reliability of the data collected is vital to ensure good data quality. Pre-testing of data collection instrument will enable the researcher to access clarity of the instrument and its ease of use.

According to Mugenda and Mugenda (2003), pre-testing was allowed the errors to be discovered as well as acting as a tool for training a research team before the actual collection of the data begins. Five Questionnaires were piloted at Safari Link where these questionnaires were self-administered by the researcher.

3.5 Data Analysis Methods

According to Kothari (2004), data analysis procedure includes the process of packaging the collected information putting in order and structuring its main components in a way that the findings can be easily and effective communicated. After the field work, before analysis all questionnaires were adequately checked for reliability and verification. Editing, coding and tabulation was carried out. The data collected was presented in form of tables, pie-charts and graphs and analyzed using Microsoft Excel.

3.6 Chapter Summary

Chapter 3 has provided the methodology of the study and has described the blue print of the study or the research design. The chapter has identified a descriptive research design as the design that the study intends to utilize. The chapter has also described the study population and the sampling design. The chapter has mentioned that the sampling design for the study was stratified random sampling and the method of data collection was the use of structured questionnaires. The study has further mentioned that descriptive was used to present the data, which was analyzed through Microsoft Excel. The next chapter, Chapter 4 provides the results of the survey.

CHAPTER FOUR

DATA ANALYSIS, PRESENTATION AND INTERPRETATION

4.0 Introduction This chapter analyses the findings, interprets and presents data in line with the objectives of the study. The data obtained is presented in percentage, tables, pie charts and bar graphs.

4.1 Presentation of Research Findings The researcher wanted to know the background information of the respondents and factors influencing the organizational productivity of airline companies in Kenya with specific reference to Kenya Airways, the response the analysis are as follows

4.1.1 Analysis on Response Rate

The researcher wanted to know the response rate of respondents, the analysis is as follows:

Table 4.1 Analysis on Response Rate Category Frequency Percentage % Returned 33 58 Not returned 24 42 Total 57 100 Source: Author (2019)

42%

58%

Returned Not returned

Figure 4.1 Response Rate Source: Author (2019) From the table and figure 4.1 above the researcher found that out of all questionnaires administered 58% of the questionnaires were answered while 42% were not answered. Therefore, this indicated that most of the questionnaires were administered.

4.1.2 Gender Analysis of Respondents Gender allowed the researcher to determine whether she was actually reaching the target audience and gathering the information effectively. The researcher sought to know the gender of respondents, the analysis is as follows:

Table 4.2 Gender Analysis of Respondents Category Frequency Percentage % Male 26 79 Female 7 21 Total 33 100 Source: Author (2019)

21%

79%

Male Female

Figure 4.2 Gender of Respondents Source: Author (2019) From the table and figure 4.2 above the researcher found that most of the respondents were male representing 79%, female respondents representing 21%. Therefore, this indicated that most of the respondents who participated in the study are male. 4.1.3 Age Analysis of Respondents Age determines how informed an individual is. The researcher sought to know the age of respondents, the analysis is as follows:

Table 4.3 Age of respondents Category Frequency Percentage % Less than 25yrs 8 25 26-35yrs 14 42 36-45yrs 6 18 46-55yrs 5 15 Total 33 100 Source: Author (2019)

15% 24%

Less than 20yrs 21-30yrs 18% 31-40yrs 41-50yrs

43%

Figure 4.3 Age of Respondents Source: Author (2019) From the table and figure 4.3 above the research found that most the respondents were less than 25 years representing 25%, 26-35 years representing 42%, 36-45 years representing 18%, and 46-55 years representing 15%, therefore this indicated that most respondents were between 26- 35 years hence were mature enough to handle the questions. Research shows that the older people tended to give more informed and effective response

4.1.4 Highest Level of Education Attained

The researcher wanted to know the respondents’ highest level of education attained in the organization, the analysis is as follows:

Table 4.4 Highest level of education attained of the Respondents Category Frequency Percentage % Primary 2 6 Secondary 6 18 College 9 27 University 16 49 Total 33 100 Source: Author (2019)

18%

49%

27%

Primary Secondary College University

Figure 4.4 Highest level of education attained of Respondents Source: Author (2019) From the table and figure 4.5 above the researcher found that the respondents who had primary level of education represents 6%, secondary level represents 18%, college level represents 27% and university level represents 49%. Therefore, this indicated that most of the respondents have university level of education. Respondents with the highest level of education attainment likely give reliable and accurate data about the organization.

4.1.5 Number of Years Respondents worked in the company The researcher wanted to know the respondent’s period they had worked in Kenya airways as employee and analysis is as follows:

Table 4.5 Number of Years Respondents worked in the company Category Frequency Percentage % Less than 5years 8 25 6-15 years 14 42 16 - 25 years 6 18

Over 25years 5 15

Total 33 100 Source: Author (2019)

15% 25%

18%

42%

Less than 5years 6-15 years 16 - 25 years Over 25years

Figure 4.5 Number of Years Respondents worked in the company Source: Author (2019)

From the table and figure 4.5 above the researcher found that most the respondents had worked in Kenya airways less than 5 years represents 25%, 6-15 years represents 42%, 16-25 years represents 18% and above 25 years’ experience represents 15%, and therefore this indicated that most respondents had experience of 6-15 years in Kenya airways.

4.1.6 Whether infrastructure influence organizational performance in Kenya airways. The researcher wanted to know to whether infrastructure influence organizational performance in Kenya airways. The analysis is as follows:

Table 4.6 Whether infrastructure influence organizational performance in Kenya airways.

Category Frequency Percentage % Yes 27 81 No 6 19 Total 33 100

Source: Author (2019)

19%

81%

Yes No

Figure 4.6 whether infrastructure influence organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.6 above the researcher found that 81% agreed that infrastructure influence organizational performance in Kenya airways. While 19% indicated that it doesn’t influence organizational performance in Kenya airways.

4.1.7 Rating the influences of infrastructure on organizational performance in Kenya airways. The researcher wanted to explain how respondents rate the influence of infrastructure on organizational performance in Kenya airways. The analysis is as follows:

Table: 4.7 Rating the influences of infrastructure on organizational performance in Kenya airways. Category Frequency Percentage Average 3 9 Above average 10 30 Below average 20 61 Total 33 100

Source: Author (2019)

Average 30% Above average

61% Below average

Figure: 4.7 Rating the influences of infrastructure on organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.7 above 9% of respondents rated the influences of infrastructure on organizational performance in Kenya airways to be on average, 30% above average, 61% rate it as below average. Therefore, majority of respondents rated the influence of the infrastructure on organizational performance in Kenya airways to be below average.

4.1.8 Extent to which infrastructure influence organizational performance in Kenya airways.

The researcher wanted to know the extent to which infrastructure influence organizational performance in Kenya airways. The analysis is as follows:

Table 4.8 Extent which infrastructure influence organizational performance in Kenya airways. Category Frequency Percentage % Very great extent 18 55 Moderate extent 11 33 Low extent 1 3 Very Low Extent 3 9 Total 33 100 Source: Author (2019)

3% 9%

Very great extent

Moderate extent

33% 55% Low extent

Very Low Extent

Figure 4.8 Extent to which infrastructure influence Organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.8 above the researcher found that 55% of the respondents agreed that infrastructure influence organizational performance in Kenya airways to very great extent, 33% moderate extent 9% low extent and 3% very low extent. This indicated that majority agreed that infrastructure influence organizational performance in Kenya airways to very great extent.

4.1.9 Whether leadership influence organizational performance in Kenya airways. The researcher wanted to know whether leadership influence organizational performance in Kenya airways. The analysis is as follows:

Table 4.9 Whether leadership influence organizational performance in Kenya airways.

Category Frequency Percentage % Yes 27 81 No 6 19 Total 33 100 Source: Author (2019)

19%

Yes

No 81%

Figure 4.9 Whether leadership influence organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.9 above the researcher found that 81% agreed that leadership influence organizational performance in Kenya airways. While 19% indicated that it doesn’t leadership influence organizational performance in Kenya airways.

4.1.10 Rating the influences of leadership on organizational performance in Kenya airways.

The researcher wanted to explain how respondent’s rates the influence of leadership on organizational performance in Kenya airways. The analysis is as follows:

Table: 4.10 Rating the influences of leadership on organizational performance in Kenya airways.

Category Frequency Percentage Average 3 9 Above average 10 30 Below average 20 61 Total 33 100

Source: Author (2019)

Average 30% Above average Below average 61%

Figure: 4.10 Rating influences of leadership on organizational performance in Kenya airways. Source: Author (2018) From the table and figure 4.10 above 9% of respondents rated the influences of leadership on organizational performance in Kenya airways to be on average, 30% above average, 61% rate it as below average. Therefore, majority of respondents rated the influence of leadership on organizational performance in Kenya airways to be below average.

4.1.11 Extent to which leadership influence organizational performance in Kenya airways. The researcher wanted to know the extent to which leadership influence organizational performance in Kenya airways. The analysis is as follows:

Table 4.11 Extent which leadership influence organizational performance in Kenya airways.

Category Frequency Percentage % Very great extent 18 55 Moderate extent 11 33 Low extent 1 3 Very Low Extent 3 9 Total 33 100 Source: Author (2019)

60 55%

40 33% 30

20 9% 10 3% 0 Very great extent Moderate extent Low extent Very Low Extent

Figure 4.11 Extent to which leadership influence organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.11 above the researcher found that 55% of the respondents agreed that leadership influence organizational performance in Kenya airways to very great extent, 33% Moderate extent 9% low extent and 3% very low extent. This indicated that majority of respondent agrees that leadership influence organizational performance in Kenya airways to very great extent.

4.1.12 Whether environmental factors influence organizational performance in Kenya airways. The researcher wanted to know whether environmental factors influence organizational performance in Kenya airways. The analysis is as follows: Table 4.12 Whether environmental factors influence organizational performance in Kenya airways.

Category Frequency Percentage % Yes 27 81 No 6 19 Total 33 100 Source: Author (2019)

19%

Yes

81%

Figure 4.12 Whether environmental factors influence organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.12 above the researcher found that 81% agreed that environmental factors influence organizational performance in Kenya airways. While 19% indicated that environmental factors doesn’t influence organizational performance in Kenya airways.

4.1.13 Rating the influence of environmental factors on organizational performance in Kenya airways. The researcher wanted to explain how respondent’s rates the influence of environmental factors on organizational performance in Kenya airways. The analysis is as follows:

Table: 4.13 Rating the influence of environmental factors influence organizational performance in Kenya airways.

Category Frequency Percentage Average 3 9 Above average 10 30 Below average 20 61 Total 33 100

Source: Author (2019)

Average 30% Above average Below average 61%

Figure: 4.13 Rating influences of environmental factors on organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.13 above 9% of respondents rated the influence of environmental factors on organizational performance in Kenya airways to be on average 30% rated above average and 61% rate below average. Therefore, majority of respondents rated influence of environmental factors on organizational performance in Kenya airways. below average

4.2.14 Extent to which environmental factors influence organizational performance in Kenya airways. The researcher wanted to know the extent to which environmental factors influence organizational performance in Kenya airways. The analysis is as follows:

Table 4.14 Extent which environmental factors influence organizational performance in Kenya airways.

Category Frequency Percentage % Very great extent 18 55 Moderate extent 11 33 Low extent 1 3 Very Low Extent 3 9 Total 33 100 Source: Author (2019)

3% 9%

Very great extent Moderate extent 33% 55% Low extent Very Low Extent

Figure 4.14 Extent to which environmental factors influence organizational per in Kenya airways. Source: Author (2019) From the table and figure 4.14 above 55% of the respondents agreed that environmental factors influence organizational performance in Kenya airways to very great extent, 33% moderate extent 9% low extent and 3% very low extent. This indicated that the majority of respondents agreed that environmental factors influence organizational performance in Kenya airways to very great extent.

4.1.14 Whether economic factors influence organizational performance in Kenya airways. The researcher wanted to know whether economic factors influence organizational performance in Kenya airways. The analysis is as follows: Table 4.15 Whether economic factors influence Organizational performance in Kenya airways.

Category Frequency Percentage % Yes 27 81 No 6 19 Total 33 100 Source: Author (2019)

19%

Yes

81%

Figure 4.15 Whether economic factors influence organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.15 above the researcher found that 81% agreed that economic factors influence organizational performance in Kenya airways. While 19% indicated that it doesn’t influence organizational performance in Kenya airways.

4.2.16 Rating influences of economic factors on organizational performance in Kenya airways. The researcher wanted to know how respondents rated the influences of economic factors on organizational performance in Kenya airways. The analysis is as follows:

Table: 4.16 Rating influences of economic factors on organizational performance in Kenya airways. Category Frequency Percentage Average 3 9 Above average 10 30 Below average 20 61 Total 33 100

Source: Author (2019)

Average 30% Above average

61% Below average

Figure: 4.15 Rating influences of economic factors on organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.15 above 9% of respondents rated the influences of cash flow management on organizational productivity in Kenya airways. on average, 30% above average and 61% rate it below average. Therefore, majority of respondents rated the influences of cash flow management on organizational productivity in Kenya airways to be below average.

4.2.17 Extent to which cash flow management influence Organizational productivity in Kenya airways. The researcher wanted to know the extent to which cash flow management influence Organizational productivity in Kenya airways. The analysis is as follows: Table 4.16 Extent which cash flow management influence Organizational productivity in Kenya airways. Category Frequency Percentage % Very great extent 18 55 Moderate extent 11 33 Low extent 1 3 Very Low Extent 3 9 Total 33 100 Source: Author (2018)

60 55%

40 33% 30

20 9% 10 3% 0 Very great extent Moderate extent Low extent Very Low Extent

Figure 4.16 Extent to which economic factors influence organizational performance in Kenya airways. Source: Author (2019) From the table and figure 4.16 above 55% of respondents agreed that economic factors influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that majority of respondents agreed that economic factors influence organizational performance in Kenya airways to very great extent.

4.2 Limitations of the study In some instances some respondents decided to withhold information thereby denying the study the much needed data. The study was limited to respondents in operation and commercial staff, human resource and management.

Some of anticipated challenges that the researcher has faced included:

4.2.1 Uncooperative Respondents

Some of the respondents were unwilling to give information thinking that their identity would be revealed and that may work on their disadvantage. To solve this the researcher will explain to them the importance of the study to the organization thus convincing them to participate.

4.2.2 Confidentiality

Airline business being sensitive employees were not willing to give most information as they treat it as confidential information, due to assumption that researcher may be sent by competitor and can be used at their disadvantage by the competitors, this problem was difficult to solve however the researcher assured them that it was for academic purpose only.

4.2.3 Fear of victimization Top management have a tendency to be suspicious of researcher, some of the respondents would be concern about the extent of information the management would want them to contribute without any repercussions, but this concern was addressed up front by using the Introductory Letter attached and provided the necessary student details.

4.3 Chapter Summary 4.3.1 General Information On analysis of response rate, table and figure 4.1 above the researcher found that 58% of the questionnaires were answered while 42% were not answered. Therefore, this indicated that most of the questionnaires were administered. On the gender analysis table and figure 4.2 above 79% of respondents were male while 21% were female. Therefore, this indicated that most of the respondents who participated in the study are male. On Age analysis table and figure 4.3 above the researcher found that 25% of the respondents were less than 25 years 42% were 25- 35 years, 18% were 36-45 years and 15% were 46-55 years. On analysis of respondent’s highest level of education attained in the organization, table and figure 4.5 above 6% were in primary level 18%, in secondary level 27% in college level and 49% in university level. On analysis of number of years respondents had worked in the company, table and figure 4.5 above ,25% of respondents had worked less than 5 years, 42% for 6-15 years 18% for 16-25 years and 15%, for over 25 years’ in Kenya airways.

4.3.2 Infrastructure

From the table and figure 4.6 above 81% of respondents agreed that infrastructure influence organizational performance in Kenya airways, while 19% indicated that it doesn’t influence organizational performance in Kenya airways. On the respondent’s rating on the influences of infrastructure on organizational performance in Kenya airways., table and figure 4.7 above, 9% of respondent’s rates the influences of infrastructure on organizational performance in Kenya airways to be on average 30%, above average and 61% below average. Therefore, the infrastructure influence organizational performance in Kenya airways as it was rated below average. On the extent to which infrastructure influence organizational performance in Kenya airways, table and figure 4.8 above 55% of respondents agreed that infrastructure influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of infrastructure on organizational performance in Kenya airways to very great extent.

4.3.3 Leadership

On whether leadership influence organizational performance in Kenya airways, table and figure 4.9 above 81% of respondents agreed that leadership influence organizational productivity in Kenya airways, and while 19% indicated that it doesn’t influence organizational performance in Kenya airways. On respondent’s rating on the influences of leadership on organizational performance in Kenya airways. the table and figure 4.10 above indicates that 9% of respondents rates the influences of leadership on organizational performance in Kenya airways to be on average 30% above average and 61% below average. Therefore, the leadership influence organizational performance in Kenya airways as it was rated below average. On the extent to which leadership influence organizational performance in Kenya airways, table and figure 4.11 above indicates that 55%, of respondents agrees that leadership influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of leadership on organizational performance in Kenya airways to very great extent. 4.3.4 Environmental Factors

On the whether environmental factors influence organizational performance in Kenya airways, table and figure 4.12 above indicates that 81% of respondents agreed that environmental factors influence organizational performance in Kenya airways, while 19% indicated that it doesn’t influence organizational performance in Kenya airways. On the rating influences of environmental factors on organizational performance in Kenya airways, table and figure 4.13 above 9% of respondents rated the influences of environmental factors on organizational performance in Kenya airways to be on average, 30% above average and 61% below average. Therefore, the environmental factors influence organizational performance in Kenya airways as it was rated below average. On the extent to which environmental factors influence organizational performance in Kenya airways, table and figure 4.14 above indicates that 55%, of respondents agreed that environmental factors influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of environmental factors on organizational performance in Kenya airways to very great extent.

4.3.5 Economic Factors

On whether economic factors influence organizational performance in Kenya airways, table and figure 4.15 above indicates that 81% of respondents agreed that economic factors influence organizational performance in Kenya airways, while 19% indicated that it doesn’t influence organizational performance in Kenya airways. On respondent’s rating on influences of economic factors on organizational performance in Kenya airways, the table and figure 4.16 above indicates that 9% of respondents rated the influences of economic factors on organizational performance in Kenya airways to be on average, 30% above average and 61% below average. Therefore, majority of respondent agreed rated economic factors influence organizational performance in Kenya airways to be below average. On the extent to which economic factors influence organizational performance in Kenya airways, table and figure 4.17 above indicates that 55% of the respondents agreed that economic factors influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of economic factors on organizational performance in Kenya airways to very great extent.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

This entailed the summary of findings, discussions, conclusions and recommendations of the research project carried out.

5.1 Summary of Major Findings

5.1.1 How does infrastructure influence organizational performance in Kenya airways?

From the table and figure 4.6 above 81% of respondents agreed that infrastructure influence organizational performance in Kenya airways, while 19% indicated that it doesn’t influence organizational performance in Kenya airways. On the respondent’s rating on the influences of infrastructure on organizational performance in Kenya airways., table and figure 4.7 above, 9% of respondent’s rates the influences of infrastructure on organizational performance in Kenya airways to be on average 30%, above average and 61% below average. Therefore, the infrastructure influence organizational performance in Kenya airways as it was rated below average. On the extent to which infrastructure influence organizational productivity in Kenya airways, table and figure 4.8 above 55% of respondents agreed that infrastructure influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of infrastructure on organizational performance in Kenya airways to very great extent.

5.2.2 To what extent does leadership influence organizational performance in Kenya airways?

On whether leadership influence organizational performance in Kenya airways., table and figure 4.9 above 81% of respondents agreed that leadership influence organizational performance in Kenya airways a while 19% indicated that it doesn’t influence organizational performance in Kenya airways.

On respondent’s rating on the influences of leadership on organizational performance in Kenya airways. the table and figure 4.10 above indicates that 9% of respondents rates the influences of leadership on organizational performance in Kenya airways to be on average 30% above

average and 61% below average. Therefore, the leadership influence organizational performance in Kenya airways, as it was rated below average. On the extent to which leadership influence organizational performance in Kenya airways, table and figure 4.11 above indicates that 55%, of respondents agrees that leadership influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of leadership on organizational productivity in Kenya airways to very great extent.

5.1.2 In what ways does environmental factors influence organizational performance in Kenya airways?

On the whether environment factors influence organizational performance in Kenya airways, table and figure 4.12 above indicates that 81% of respondents agreed that environmental factors influence organizational performance in Kenya airways while 19% indicated that it doesn’t influence organizational performance in Kenya airways.

On the rating influences of environmental factors on organizational performance in Kenya airways, table and figure 4.13 above 9% of respondents rated the influences of environmental factors on organizational performance in Kenya airways to be on average, 30% above average and 61% below average. Therefore, the environmental factors influence organizational performance in Kenya airways as it was rated below average. On the extent to which environmental factors influence organizational performance in Kenya airways, table and figure 4.14 above indicates that 55%, of respondents agreed that environmental factors influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of environmental factors on organizational performance in Kenya airways to very great extent.

5.1.3 How does economic factors influence organizational performance in Kenya airways?

economic factors on organizational performance in Kenya airways, the table and figure 4.16 above indicates that 9% of respondents rated the influences of economic factors on organizational performance in Kenya airways to be on average 30% above average and 61% below average. Therefore, majority of respondent agreed rated economic factors influence organizational performance in Kenya airways to be below average. On the extent to which economic factors influence organizational performance in Kenya airways, table and figure 4.17 above indicates that 55% of the respondents agreed that economic factors influence organizational performance in Kenya airways to very great extent, 33% moderate extent 3% low extent and 9% very low extent. This indicated that the influences of economic factors on organizational productivity in Kenya airways to very great extent.

5.2 Recommendations

The study found that infrastructure, leadership, environment factors and economic factors affect organizational performance of airline business in Kenya with special reference to Kenya airways. Based on the findings the following recommendations were made.

5.2.1 Infrastructure

The government can come up with core infrastructure like airports, conference centres and roads that can boost and support the growth of airline businesses in Kenya. These infrastructure will cause a substantial impact on the competitiveness, ambitiousness and expediency of airline companies and enable them to weather competition among competitive market, precarious industry changes, overwhelming business climates and the lack of exploitable opportunities may influence organizational performance in Kenya Airways. The management of Kenya airways should align their priorities in fleet expansion to existing market opportunities in Kenya by investing in cost effective aircraft models in terms of fuel consumption, running and maintenance costs.

5.2.2 Leadership

Leadership is the ability of an individual or a group of individuals to influence and guide members of an organization towards a common goal and objectives of an organization. Leadership involves making sound and sometimes difficult decisions, creating and articulating a clear vision, establishing achievable goals and providing followers with the knowledge and tools necessary to achieve those goals. If a leader lack in any way to articulate above competences the results will directly affect running of the organization and consequently its

overall performance. Profitable firms tend to hire and retain high performing and strategic decision makers to drive their vision, whereas loss making firms are found to be faulty in their strategic direction. This indicates that leadership may also reflect the growth aspect of firms. The management of Kenya airways should be strategic in the appointment of over business leaders as well as unit leaders and managers to enhance firm’s performance.

5.2.3 Environmental factors Quality aspects have become one of the most important factors in global competition today. Increasing demand by customers for better quality of product in market place. Management of Kenya airways should provide quality product and services in order to compete in the marketplace successfully and should adopted a quality-oriented strategy to achieved improved productivity and higher profit.

5.2.4 Economic Factors

Economic factors are the most influential factors to the success of any business venture, even though they are considered to be external factors, within the economy, some contributing factors such as the fluctuation of interest rate, economic crisis, and so on directly and strongly affects the consumption of buyers, and consequently, the profits of businesses.

The success of any enterprises largely depends on a number of factors including sound cash flow management practices. The objective of cash flow management is having enough cash available as and when it is needed, and that sound cash flow management practices involves better timing of expenditure decisions, earlier collection and banking of revenue, and more accurate forecasts of cash flows. The management of Kenya airways should ensure positive cash flow for smoothing its overall operation.

5.3 Conclusion

From the finding it was concluded that infrastructure, leadership, environment factors and economic factors affect organizational performance in airline business in Kenya with special reference to Kenya airways. The study concludes based on the findings.

5.4 Suggestion for Further Studies

The study examined on the factors affecting organizational performance of airline businesses in Kenya with special reference to Kenya airways. Further studies should be done on: Factors affecting organizational performance in other sectors and other factors apart from

infrastructure, leadership, environment factors and economic factors affecting organizational productivity in Kenya airways.

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APPENDIX

APPENDIX I: INTRODUCTION LETTER

My name is Absolom Irungu, a student at The Management University of Africa undertaking a Diploma in Management and Leadership.

As a requirement, I am required to do a research and my topic is “Factors Influencing Organizational Performance of Airlines Business in Kenya: A Case Study of Kenya Airways (KQ).”

You have been selected as one of the respondents and I request you to answer the questions to the best of your knowledge and ability. The information you will give will be used solely for academic purpose and will be confidential.

Thank you

Absolom N. Irungu

THE MANAGEMENT UNIVERSITY OF AFRICA

APPENDIX II: QUESTIONNAIRE

Dear respondent this questionnaire aims at collecting information related to the factors influencing organizational performance in Kenya Airways. The information given will be for academic purpose only and will be treated as very confidential. For each of the question below, please tick in the space provided for the answer that describes your opinion

Section A: Background Information

1. What is your gender?

Male Female

2. What is your age?

Less than 20yrs 21-30yrs 31-40yrs

41-50yrs Over 50yrs

3. What is your level of Education?

Primary Secondary

College University

4. What is your marital status?

Married Single Others

5. How long have you been working in the company?

Less than 5years 6-15 years 16 - 25 years

Over 25years

Section B: Infrastructure

6. a) Does infrastructure influence organizational performance in Kenya Airways?

Yes

b) Rate the influences of infrastructure on Organizational performance in Kenya Airways.

Above Average

Average

Below Average

7. To what extent does infrastructure influence on organizational performance in Kenya Airways?

a. Very Great Extent

b. Moderate Extent

c. Low Extent

d. Very Low Extent

Section C: Leadership

8) Does Leadership influence organizational performance in Kenya Airways.?

Yes

b) Rate the influences of Leadership on the Organizational performance in Kenya airways.

Above Average

Average

Below Average

9. To what extent does leadership influence Organizational performance in Kenya airways?

a. Very Great Extent

b. Moderate Extent

c. Low Extent

d. Very Low Extent

Section D. Environmental Factors

10. Does environmental factors influence organizational productivity in Kenya Airways?

Yes

b) Rate the influences of environment factors on Organizational performance in Kenya Airways.

Above Average

Average

Below Average

11. To what extent does environment factors influence Organizational performance in Kenya Airways?

a. Very Great Extent

b. Moderate Extent

c. Low Extent

d. Very Low Extent

Section E. Economic Factors

12. Does economic factors management influence organizational performance in Kenya Airways?

Yes

b) Rate the influences of economic factors influence Organizational performance in Kenya Airways.

Above Average

Average

Below Average

13. To what extent does economic factors influence Organizational performance in Kenya Airways?

a. Very Great Extent

b. Moderate Extent

c. Low Extent

d. Very Low Extent