Post on 08-Feb-2023
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DECLARATION
I, declare that this is my original work and has not been presented for a degree in anyother university other than Jomo Kenyatta University of Agriculture and TechnologyMombasa campus.
Agnes Nyamvula Tsuma,
HD333-COO5-0360/2010
…………………. …………………Signature Date
This project has been submitted for examination with my approval as UniversitySupervisor
DR. FRED MUGAMBI
……………… ……………….Signature Date
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ACKNOWLEDGEMENT
I would first like to thank Almighty for giving me the grace to undertake the project. My
sincere gratitude is to Dr. Fred Mugambi for his consistent support throughout the
project, and my parents and husband who have been pillars of strength throughout.
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ABSTRACT
Low funding has been one of the major problems facing public institutions. The
government is finding it more difficult to meet the vast needs of the society hence
institutions are facing shortages intensively. In an attempt to bridge the gap between the
budgetary allocations and actual expenditures most universities have started income
generating units with the aim of boosting their operational expenses. This study seeks to
determine the factors that contribute to the performance of income generating units in
public universities and specifically a case study of Technical University of Mombasa.
This project outlined are four main objectives which were to determine the effect of;
allocation of resources, internal controls, management capacity and work culture on
performance of income generating units in the university.
The perception of universities as merely institutions of higher learning has gradually
given way to the view that universities are important engines of economic growth and
development. History has shown that the higher the success, the tougher the demands that
are placed on institutions as well as on individual players. Various issues were
highlighted the need for diversification of business areas; consolidation and expansion of
existing programmes; relationships with various university organs, corporate governance
and image, and human resource-related issues hence literature was reviewed in relation to
the variables identified in this research to determine what other scholars have written
with regards to the study. The target population identified was from TUM staff from the
specific departments and the management. Purposive sampling technique and random
sampling technique were used in the study due to its uniqueness and convenience. Data
collection was done using the questionnaire and interview guide to ensure sufficient data
is collected from the respondents. Data analysis was done using SPSS and presentations
made in pie charts, distribution graphs, diagrams and figures to clearly show the response
from the respondents according to the different variables in form of tables.
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The findings of this study suggest that in determining how allocation of resources
affected performance of IGU’s majority of the respondents agreed that funds allocated to
the various votes do not sufficiently meet the needs of the IGU’s. It was noted that
internal controls have a great effect on the reliability of financial reports. In investigating
the management capacity effect on performance of IGU’s respondents strongly believe
management styles influence performance of IGU’s. Respondents agree that employee
attitude can have a positive or negative influence on the performance of the units. It was
found that all the independent variables have a significant influence on the dependent
variable.
It was concluded that performance of income generating units in public universities is
majorly influenced by funds available and the work culture of the employees due to the
high response rate on the two variables.
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TABLE OF CONTENTS
DECLARATION……………………………………………………………………........i
ACKNOWLEDGEMENT……………………………………………………………....ii
ABSTRACT……………………………………………………………………………..iii
LIST OF TABLES………………………………………………………………............vi
LIST OF FIGURES…………………………………………………………………....viii
ACRONYMS……………………………………………………………………….…....ix
CHAPTER ONE……………………………………………………………………....x
INTRODUCTION……………………………………………………………….............1
1.1 Background of the study……………………………………………………....11.2 Statement of the problem………………………………………………….......41.3 General Objective…………………………………………………………......51.4 Specific Objective………………………………………………………….....51.5 Research Questions…………………………………………………………...61.6 Justification of the study……………………………………………………...61.7 Scope of the study………………………………………………………….....71.8 Limitation of the Study…………………………………….……………….....7
CHAPTER TWO………………………………………………………………………...8
LITERATURE REVIEW……………………………………………………………….8
2.1 Introduction…………………………………………………………………...82.3 Conceptual framework……………………………………………………....112.3.1 Performance of Income Generating Units…………………………..……….122.3.2 Allocation of Resources……………………………………………………....122.3.3 Internal Controls……………………………………………………………..142.3.4 Management Capacity…………………………………………………….....162.3.5 Work Culture…………………………………………………………….......172.4 Critique of the Existing Literature Relevant to the Study…………………...192.5 Summary…………………………………………………………………......192.6 Research Gaps…………………………………………………………….....19
CHAPTER THREE……………………………………………………………........…20
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METHODOLOGY………………………………………………………………….....20
3.1 Introduction………………………………………………………………....203.2 Research Design……………………………………………………………..203.3 Population…………………………………………………………………....203.4 Sampling Frame……………………………………………………………...213.5 Sample and Sampling Technique…………………………………………....213.6 Research Instruments………………………………………………………...233.7 Data Collection……………………………………………………………....233.9 Data Processing, Analysis and Presentation of Findings………………........24
CHAPTER FOUR………………………………………………………………...........25
DATA PRESENTATION, ANALYSIS AND INTERPRETATION………………..25
4.2 Respondent Demographics………..………………….....…….......................254.3 Allocation of resources………………...………………………………….....304.4 Internal controls on the performance of income generating units...………....324.5 Management Capacity………………………………………………..…......344.6 Culture on the performance of income generating units……………………..36
CHAPTER FIVE……………………………………………….....................................38
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION……...38
5.1 Introduction…………………………………………………………..……....385.2 Summary of Findings…………………………………………………..…….385.3 Conclusions……………………………………………………………..…....395.4 Recommendations……………………………………………………..……..405.5 Suggestions for further Research……………………………………..……..42
REFERENCES……………………………………………………….…………………43
APPENDICES…………………………………………………………………………..46
LETTER TO RESPONDENTS…………….………………………………………46INTERVIEW GUIDE……………………………………………………………...47QUESTIONNAIRE………………………………………………………………..49WORK PLAN……………………………………………………………………...55BUDGET…………………………………………………………………………...57
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LIST OF TABLES
Table 3.1 Target Population ………………………………………………………..…21
Table 3.2 Sample Size …………………………………………………………………22
Table 4.1 Gender ………………………………………………………………………26
Table 4.2 Age bracket…………………………………………………………………27
Table 4.3 Level of Education …………………………………………………………28
Table 4.4 Years of service with employer……………………………………………..29
Table 4.5 Allocation of resources……………………………………………………...30
Table 4.5 Budget fund and planning effect on performance………………………… 32
Table 4.6 Internal controls…………………………………………………………....33
Table 4.7 Fund allocation and performance………………………………………….33
Table 4.8 Management capacity………………………………………………………34
Table 4.9 Manager and decision making……………………………………………..35
Table 4.10 Culture and performance……………………………………………………36
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LIST OF FIGURES
Figure 2.1 Conceptual framework…………………………………………………….11
Figure 4.1 Response Rate……………………………………………………………..25
Figure 4.2 Respondent’s age bracket……………………………………………….....26
Figure 4.3 Level of education……………………………………………………….. 28
Figure 4.4 Distribution of respondent’s year of service……………………………….30
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ACRONYMS
MIOME - Mombasa Institute of Muslim Education
TUM - Technical University of Mombasa
MTI - Mombasa Technical Institute
IGU - Income Generating Unit
PC - Pure consultancies
SBPU - Specialist-Based Production Units General Production Units GPU
MIIP - Module II Programmes
SWSC - Seminars, Workshops and Short Courses
AICPA - American Institute of Certified Public Accountants
UNES - University of Nairobi Enterprises and Services
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DEFINITION OF TERMS
Accountability The obligation of an individual or organization to account for its
activities, accept responsibility for them, and to disclose the results in a
transparent manner.
Budgets An estimation of the revenue and expenses over a specified future period
of time. A budget is a microeconomic concept that shows the tradeoff
made when one good is exchanged for another.
Compliance The act of conforming, acquiescing, or yielding. An employee whose
responsibilities include ensuring that the company complies with its
outside regulatory requirements and internal policies.
Diversification A risk management technique that mixes a wide variety of investments
within a portfolio. The rationale behind this technique contends that a
portfolio of different kinds of investments will, on average, yield higher
returns and pose a lower risk than any individual investment found
within the portfolio.
Forecasting A planning tool that helps management in its attempts to cope with the
uncertainty of the future, relying mainly on data from the past and
present and analysis of trends.
Organizations culture The values and behaviors that contribute to the unique social and
psychological environment of an organization.
Reliability Is the ability of a person or system to perform and maintain its functions
in routine circumstances, as well as hostile or unexpected circumstances.
.Requisition Written order or a formal demand by the user(s) of a good or service(which is not made available without a specific request) to theorganization's purchase (or stores) department
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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Income generating units comprise of units that are a means for gaining or increasing
income. They have been sort as a means of livelihood not just in organizations but even
so in community development areas. According to Bruce (1998), income Generating
Activities serve as a cushion/support kitty for funds received such as Constituency
Development Funds where there are restrictions that control the utilization of these funds,
for instance it is stipulated that Constituency Development Funds’ money should be
utilized only on purchasing component materials of the project and cannot be used to pay
off debts of any kind, transport or labor charges.
Most African higher education institutions rely greatly on the state for funding as well as
for policy-making as far as the public sector are concerned. However, most states do not
apportion a sufficient amount of their financial resources to the education sector. From
the little provision that is made for education, the greater portion is assigned to basic and
secondary education, (Bloom, 2005).
Odebiyi and Aina et al (1999), the inadequate funding of the Universities and other
tertiary institutions has had calamitous effect on teaching and research and universities
themselves have been forced to embark on income generating projects in order to source
for funds. Therefore, the available revenue is spent on capital projects, administration,
teaching and research and students welfare. Capital Projects and salaries reportedly take a
bulk of the total revenue while teaching and students’ welfare tend to be given less
priority.
Over the past ten years public corporations have continuously received less financial
allocation by the Government than the estimated expenditure as forecasted by the
institution. According to Kiamba (2003), the government made it clear that it will no
longer be able to fully finance public universities. A notable observation in the Kenya
1994/1998 development plan was that “the central thrust of the new policies is to rely on
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market forces to mobilize resources for growth and development with the role of the
Government increasingly confined to providing an effective regulatory framework and
essential public infrastructure and social services. The Government will limit direct
participation in many sectors and instead promote private sector activity”. As a result
most public universities had to explore other means of generating income to finance the
university programmes. The income generating activities, currently being undertaken by
universities in Africa, can be generally classified in two groups, namely; teaching
(parallel degree) programs and non-teaching income generating activities.
Technical University of Mombasa (TUM) is one of the National Polytechnics recently
elevated to status of University in Kenya. It encompasses the many benefits of a small
university in the nation's Island city bordering the great Indian Ocean. For several
decades TUM has been offering technical education to students pursuing professional
courses in the various fields Engineering, Applied Sciences and Business studies
culminating in the recent elevation to University status giving it the opportunity to offer
Degree programs currently under the tutelage of Jomo Kenyatta University of Agriculture
and Technology.
The origin of the Mombasa Polytechnic can be traced back to the late 1940’s as a
consequence of the consultations pioneered by Sir Philip Mitchell in 1948 between The
Aga Khan, the sultan of Zanzibar, The Secretary of State for the colonies, Sir Bernard
Reilly and H.M. Treasury, Mombasa Institute of Muslim Education (M.I.O.M.E) was
founded from capital raised by means of gifts of £100,000 from Sultan of Zanzibar. A
further £50,000 was raised by the Bohora Community of East Africa at the insistence of
Doctor Sayedna Taher Saifuddin , the high priest of the community. On 22nd June 1948,
the then Governor of Kenya signed the charter bringing the Mombasa Institute of Muslim
Education into being to be managed by board governors. On its inception, M.I.O.M.E
was charged with the prime objective of providing adequate technical education to
Muslim students of East Africa.
It was on this basis that in 1966 M.I.O.M.E became Mombasa Technical Institute (M.T.I)
and started to admit any qualified Kenyan regardless of their religious backgrounds.
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M.T.I became The Mombasa Polytechnic in 1972, this being the second National
Polytechnic. Since then, the Polytechnic has expanded its operations in all directions and
dimensions.
By 1985, The Polytechnic had five fully-fledged departments namely; Business Studies,
Electrical and Electronics Engineering, Building and Civil Engineering, Mechanical
Engineering and Applied Sciences.On the 23rd August 2007, the Mombasa Polytechnic
was upgraded to become the Technical University of Mombasa under the legal notice no.
160 as a constituent college of the Jomo Kenyatta University of Agriculture and
Technology so as to be a degree awarding institution.
Technical University of Mombasa is famous for its hands on graduates with a touch of
creativity and innovation, this comes out clearly whenever they participated in
technological exhibitions and other related events where its students always come out
tops a good example is the National Robot Contest where for two years in row they have
been tops trouncing even the better equipped and well established institutions of higher
learning. TUM offers academic programmes at the undergraduate, Diploma and
Certificate levels with strong focus on technological, scientific and vocational areas of
study. As a University College TUM boasts of three campuses, the main campus which is
based in the coastal city of Mombasa Island, Lamu Satellite campus and Ukunda
Campus. The TUM has got three faculties vis Faculty of Engineering and Technology,
Applied and Health Sciences, and the third one is the Business and Social Studies faculty.
It also has two Directorates that is the Directorate of Information Technology
Communication Services, and the Directorate of Research. TUM's over sixty departments
offer a variety of degree, higher Diploma, Diploma and Certificate courses.
As an institution of higher learning under the Ministry of Higher Education, Science and
Technology, Technical University of Mombasa is currently undergoing a transition from
a National Polytechnic to a University through the mentorship of Jomo Kenyatta
University of Agriculture and Technology. Income generating units have been a great
source of income for the University since it started its transition due to high demand of
funds for operational purposes.
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The university has employed more staff to facilitate the increased demand by its clients
hence increasing the expenses of the University. The income generating units have
played a major role in the growth and development of the institution. There are various
factors that determine the performance of these income generating units in the institution.
This paper will explore the various factors that determine the performance of IGU’s.
There are four main units that the university has set up in which three are mainly in the
hospitality field: the Kiziwi Guest House, Catering Unit and the Training restaurant and
the Module II programme. These units are separately managed and all funds generated
channeled to one central account.
The researcher will therefore seek to analyze the said factors influencing the performance
of the income generating units. This will assist the management in decision making and
eventually realize better returns.
1.2 Statement of the Problem
Universities in developed countries have shown that significant funds can be generated
through income generating units. This has been possible through the use of university
facilities and expertise to generate more funds. Whereas the potentials for income
generation through innovation and inventions are there for most universities in African
countries, these have not been adequately utilized and full realization of these potentials
may not be possible due to several bottlenecks (Ogada, 2000). The management of
income generating units has been difficult due to various factors hence affecting its
performance.
Technical University of Mombasa which is situated at the coast has taken much interest
in the hotel industry. It is currently running a hotel and restaurant and a catering unit.
These two main units have been a source of income to the university since it
accommodates people from different parts of the country. However the units have been
facing challenges which have affected its growth and development. Allocation of
resources has been a great battle within the institution whereby most resources realized
are not necessarily ploughed back into the business hence operations are not efficiently
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met. Due to low funding by the government most of the resources are allocated to
university development and very little is allocated to the IGU’s.
Internal controls put in place are not adhered to hence the operations of the unit are
interfered due to high management override which has affected the overall performance
of the units. The unit being part of the university and a public corporation has played a
big role in influencing the performance of the employees. The organizational culture has
a great impact on the performance of the IGU’s. Work culture in public corporations has
been a challenge in achieving organizational goals. Employees are not result oriented and
working without targets has made it quite difficult to meet the competitive edge. This is
due to negligence by the staff since they believe that whether there is production or not
they are still entitled to remunerations. This notion has brought about conflict of interest
and highly affected the unit’s performance.
On the other hand management has a mandate to oversee the operations of the income
generating units. This may be in their docket but without the necessary capacity and
ability it is becoming a challenge for the management to make the necessary decisions in
the operations of the income generating units.
It is for this reasons the researcher seeks to explore the factors and look at possible ways
of improving operations and performance of IGU’s in public corporations.
The purpose of this study therefore was to investigate the effects of these factors on the
performance of income generating units in public universities. These factors contribute
numerously to the income of the universities hence with this critical study it will help
improve the performance of the IGU’s.
1.3 General Objective
The general objective of the study is to analyze the factors influencing the performance of
income generating units in public universities.
1.4 Specific Objective
The specific objectives of the study are:
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i. To investigate the effect of allocation of resources on performance of income
generating units at the Technical University of Mombasa.
ii. To evaluate the effect of internal controls on the performance of income
generating units at the Technical University of Mombasa.
iii. To investigate the effect of management capacity on the performance of income
generating units at the Technical University of Mombasa.
iv. To examine the effect of work culture on the performance of income generating
units at the Technical University of Mombasa.
1.5 Research Questions
This study will be motivated by the following questions:
i. How does the allocation of resources at the Technical University of Mombasa
affect the performance of its income generating units?
ii. What is the effect of internal controls on the performance of income generating
units at the Technical University of Mombasa?
iii. How does the management capacity of the Technical University of Mombasa
affect the performance of its income generating units?
iv. What is the effect of work culture on the performance of income generating units
at the Technical University of Mombasa?
1.6 Justification of the study
Based on the problem stated, it is realized that various aspects on the operations of
income generating units have not been explored to have a clear understanding on the
variance between the operations in public corporations unlike private ones. This research
will therefore enlighten the readers on how the stated factors can be used effectively to
improve the performance of the income generating units. The parties that will benefit
from the study are as follows:
i. The Top Management at the Technical University of Mombasa who shall use the
study findings in policy formulation and review.
ii. The Managers in the different income generating units.
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iii. Other institutions operating the income generating units can apply what has been
recommended
iv. It will assist future researchers in the field of study.
1.7 Scope of the study
The study is to be undertaken at the Technical University of Mombasa this being my
target population. Information will be gathered through the use of questionnaires and
interview. The extent of the study is confined within the stated objectives.
1.8 Limitation of the Study
During the study, the following limitations were encountered:
The major limitation encountered by the researcher was inadequate financial resources. It
was very expensive to get internet access for purposes of the research, print several
copies of the research, use of airtime and transport costs to get in touch with the
supervisor.
The researcher encountered problems of limited time as the research was to be taken in a
short period which limits time for doing a wider research so as to submit the report on
time. However the researcher over came this limitation by carrying out the research
across all the departments and management levels in the organization to enable a
generalization of the study findings.
The respondents were reluctant in giving information fearing that the information asked
may be used to intimidate them or print a negative image about them. The researcher
handled this problem by carrying with her an introduction letter from the University in
order to assure the respondents that the information they give will be treated with
confidentiality and it will be used purely for academic purposes.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter will present the conceptual framework, related literature on the allocation of
resources for income generating units, the management capacity in running the operations
of the income generating units, performance contracting in public corporations and the
effect of internal controls on performance of income generating units.
2.1.1 Categories of Income Generating Units
According to Kiamba (2003), at present the following major categories of IncomeGenerating Units have been recognized based on the value of respective input by theparticipants (members of staff) and the University:
a) Pure consultancies (PC): In this category the investment is greater on the part of the
participants than it is on the part of the University due to the high intellectual input from the
participants.
b) Specialist-Based Production Units (SBPU): This category includes production units whose
survival requires specialized or technical human resources at the teaching departments. It is
assumed that the initial and any subsequent physical and material investments have been or
are to be provided by the University
c) General Production Units (GPU): This category includes income generating activities
which are artisan-based without heavy dependence on specialized human resources of a
professional nature.
Ideally the cost of employment is met as part of production cost.
d) Module II Programmes (MIIP): These programmes, also referred to as “Parallel
Programmes”, refer to the academic programmes in which the registered students are
privately sponsored and therefore paying full tuition fees as distinct from the “Regular” or
“Module I” Programmes in which students are sponsored by the Government under a some
cost-sharing arrangement in where about 80% of the tuition fees is paid by the Government.
It was clear early in the initiation of the programmes that there was need to consider this as a
special category in the distribution formula largely because the Service Providers (those
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members of staff directly teaching the academic programmes) involved spread across the
entire University.
e) Seminars, Workshops and Short Courses (SWSC): This category includes Workshops
and Seminars conducted by the various units and/or individuals in which the corporate
name of the University is used. Also included in this category are short certificate courses
whose duration does not exceed three months.
2.2 Theoritical Framework
2.2.1 Financing Universities in Other African Countries
The financing of higher education is an area of discussion all over the world. In Africa, it
has become a major problem for Governments because of limited financial resources
coupled with urgent and competing demands. In the past decades numerous reports
dealing with this issue have been presented.
At a Senior Policy Workshop on the theme "Resource Mobilisation and Financing of
African Universities" from 2 to 6 December, 1991 in Accra, Ghana, Professor Sawyer
(1991, p. 5) observed that drastic reduction of financial outlay to Universities had several
adverse effects. These included lowering of standards of research and teaching; insecurity
for University staff; lack of freedom to innovate and explore new areas; and reduction of
indigenous knowledge generation.
At the same workshop the participants also observed that the Universities in Africa
remain by and large in the hands of the state. Unlike the earlier decades following
independence when Universities were major beneficiaries of government support, recent
trends suggest a steady decline in such support. Studies indicate that capital and recurrent
funding to African Universities has declined substantially in real terms and were
inadequate to meet the needs of the universities. Funding levels to the universities in
1988/89 was around 50% of the real value of 1980/81.
During the 1980's, the capacity of African Governments to finance public services fell
sharply (Saints 1992, p. 8). By 1990 the income per person in Africa as measured in
constant 1980 US Dollars, was 20% lower than it was in 1980. Government expenditures
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on education suffered accordingly. Although the average share of governmental budgets
allocated to the education sector increased slightly from 16.3 to 16.6 percent between
1980 and 1990, it declined to 15.2 percent during the following decade. Saint (1992)
further says that in per capita expenditure terms, this decline was even more precipitous.
Public spending on education in Africa, measured in constant US Dollars per person,
plunged by 55% over 1980-86, even as it increased in all other regions of the world
except Latin America (Woodhall 1991, p. 14).
Governments' commitment to education is reflected in education expenditures as a
proportion of GNP. Here a similar pattern is apparent. On average, this share increased
from 3.4% in 1970 to 4.3% in 1980, but slid back to 4.0 by 1988. Here it should be
remembered that GNP was also falling at the same time, thus accentuating this negative
trend.
The Government allocations to education have remained as high as they have in the face
of sharply constricted possibilities in witness to the high priority that the Governments
attach to investment in education. The countries of Sub-Saharan Africa have, over the
past two decades, consistently favoured education often at the expense of military
expenditures (Saint 1992, p. 10).
In its 1988 policy paper, Education in Sub Saharan Africa, the World Bank expressed
concern with higher education's rising share of education budgets and prescribed that "the
share of stagnant real public education cannot expand further and in some cases may have
to contract". To achieve this goal, it proposed savings through improvements in
efficiency, increases in private contributions, and constraints on the growth of output.
Since this report was released, progress in these latter areas has been spotty. As a result,
the predicted budget cuts have materialised.
Higher education's share of nation education budgets initially increased as real education
spending fell in the early 1980s. It grew from an average 15.5 percent during 1970-74
to18.3 in 1975-79 and 19.1 percent in 1980-84. It then gave ground with its average share
for 1985-88 declining to 17.6 percent. As a result, higher education expenditures as a
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portion of education budgets were lower at the end of the 1980s than they had been a
decade earlier, Sherman (1989).
2.3 Conceptual Framework
Figure 2.1 Conceptual framework
Independent Variable Dependent Variable
Source: Researcher (2012)
The above diagram illustrates the conceptual framework of the study. This conceptual
framework has been adopted from previous work of Blumerg 1982, with some
modification to suit the case of income generating units at the Technical University of
Mombasa. In the course of study the researcher seeks to investigate the relationship
between the stated independent variables and the dependent variable.
Allocation ofResources
Performance of IncomeGenerating Units
Internal Controls
ManagementCapacity
Work Culture
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2.3.1 Performance of Income Generating Units
In times of financial crisis and tight public budgets the pressure on universities and
research institutions to find new funding sources is rising. Public funding for universities
and research institutions is decreasing. At the same time, competition between
universities is increasing and they become more commercially orientated. Every
institution needs to define its own strategy for altering its income sources apart from
public funding. Several options such as cooperating with industry or funding are
available. Commercialization of research can also be a major factor in this regard. Higher
education and research institutions are required to prove that their research has an impact
outside their institution and that it is of interest for industry. Both the institutions research
status and reputation is more and more dependent on research commercialization.
Therefore, it is ever more important to ensure its success in order to attract students,
researchers, private companies and external partners – who in turn contribute to the
institution’s overall income generation themselves again. Furthermore, universities,
faculties and institutes act in their own interest when increasing knowledge and
technology income as they assure a high quality of their research and raise their own
budgets.
However, the diversification of income streams is a very complex process. It involves
various different units that need to collaborate. This affects also staff that is not used to
deal with private funding and business co-operations including researchers. They are
required to turn to business and launch spin-out companies while still having to fulfill
their core tasks and ensuring quality of teaching and research. In addition, the
institutions’ funding models have become more risky as the budget cannot be foreseen
and planned for many years anymore.
2.3.2 Allocation of Resources
According to the economic glossary, Allocation of resources is the process of dividing up
and distributing available, limited resources to competing, alternative uses that satisfy
unlimited wants and needs. Choices have to be made. These choices, these decisions are
the resource allocation process. Ogada (2000) states that, following the launching of the
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Economic Reforms of 1996 - 1998: Policy Framework Paper, the Kenyan Government’s
position on financing of Education is that the public expenditure is to concentrate on
primary and secondary education. This implies that the funds available for university
education has been reduced and Kenyan universities have been urged to put in place
strategies which can enable them generate income using internal resources to finance the
shortfalls. All public universities have been facing this crisis of resource allocation due
to limited funds provided by the government such that allocating these little resources
becomes a challenge. The management of the university has to make difficult choices on
what project is to be allocated what amount and hence interfering with the growth of the
income generating units.
Financial regulations governing the operation of most public corporations are
cumbersome, each financial transactions requires several stages. Particularly the
processing of payment and purchase are so tedious that they cannot stimulate the business
activities of the units and some units have lost customers for not delivering services in
time. This has occurred due to poor allocation of funds such that most of the vote heads
are exhausted before the financial year is half way thus all financial transactions needing
approval for processing.
Getange et al., (2005) lack of sufficient funding is a major challenge especially
considering the fact that some of the public corporations initiate new units and expand
existing ones. Therefore they depended on funds from other vote heads. This dependency
has had a great influence on the performance of the income generating units.
The European University Association et al (2008) explains that inadequate funding
modalities may have a negative effect and create powerful disincentives for universities
to seek additional funding sources. An excessive administrative burden and uncertainty
associated with these sources – whether public or private – is one hurdle, which is
especially relevant in the context of competitive funding schemes. The Association
suggests the simplification of administrative processes and requirements associated with
funding programmes .Simplification of rules will ensure that both financial and human
14
resources are released for the primary objectives of excellent teaching and research. This
should be underpinned by proportionate accountability measures as well as consistent
rules and terminology across programmes.
Many governments have tried to square the circle through tighter management, but
management cannot make up for lack of resources. Ajayi et al., (1996) “…funds available
to run higher education institutions in Africa are grossly inadequate, making them subsist
on a ‘starvation diet’.” They insist that the contraction of resources to the universities,
coupled with an increase in demand, constitutes the most critical problem and greatest
challenge of Africa’s higher education. Indeed, the unavailability of enough financial
resources has led to the inability to sustain growth of enrolment and improve quality
Nigel Thrift, Vice-Chancellor of the University of Warwick, stressed that income
generation and diversification helps the academic enterprise, rather than hindering it.
Knowledge transfer, commercial operations, public-private partnerships and
philanthropic giving are four main areas of diversified income for his institution. It also
helps the university to reduce dependency towards public authorities in relation to its
internal management. He outlined three key success factors to income diversification – a
flat management structure, an entrepreneurial attitude and an outward looking mindset.
2.3.3 Internal Controls
Internal control is a process designed to provide reasonable assurance regarding the
achievement of objectives in the following categories:
I. Effectiveness and efficiency of operations
II. Reliability of financial reporting
III. Compliance with applicable laws and regulations
According to Whittington (2004), one of the important reasons of financial fraud is the
failure of internal control and the lack of related information disclosure. Effective internal
15
control system can ensure the truthfulness and reliability of financial information.
Information disclosure can contribute to the constant improvement of internal control,
offering data for decision making to information users. The establishment and effective
implementation of internal control system can assure the corporate continuing operating
and developing healthily. The quality of internal control disclosure reflects the situation
of the system, which is vital to regulators and investors.
Ogada(2000) states that although business units have been established in various
departments, IGUs have been operating without clear and comprehensive guidelines
being in place, to govern the day to day operations of the units.
From the reference guide for managing University Business Practices, University
employees use a variety of information systems: mainframe computers, local area and
wide area networks of minicomputers and personal computers, single-user workstations
and personal computers, telephone systems, video conference systems, etc. The need for
internal control over these systems depends on the criticality and confidentiality of the
information and the complexity of the applications that reside on the systems. There are
basically two categories of controls over information systems: General Controls and
Application Controls.
I. General Controls
General controls apply to entire information systems and to all the applications that reside
on the systems.
II. Application Controls
Application controls apply to computer application systems and include input controls
(e.g., edit checks), processing controls (e.g., record counts), and output controls (e.g.,
error listings), they are specific to individual applications.
Statement on Auditing Standards issued by the American Institute of Certified Public
Accountants (AICPA) stipulates that the purpose of internal control in reliability of
financial reporting is generating monthly financial statements that are accurate and
complete. Effective and efficient operations ensure that the University can continuously
16
progress toward its mission with limited setbacks. Compliance with applicable laws and
regulations will help the University avoid fines, penalties, unrecorded liabilities, and
reputational damage.
2.3.4 Management Capacity
Managerial capacity refers to the specialized financial and managerial expertise to
finance, develop, manage and operate infrastructure assets (Sommerfield, 1995).
Results-based management is currently being instilled into the Public Service
through performance contracts. A performance contract is an agreement between
two parties that clearly specifies their mutual performance obligations, intentions
and responsibilities. Simply stated, a performance contract comprises the two major
components of determination of mutually agreed performance targets and review
and evaluation of periodical and terminal performance. The two components also
constitute the hub of an implementable strategic plan.
According to the UNES Strategic Plan (2005-2010), it was formulated in such a way
that it reflects the key elements of results-(performance-) based management, namely the
mission, objectives, performance criteria and indicators, and targets. This has greatly
influenced the performance of their IGU’s. With a result based management the
management capacity and abilities are maintained at high standard hence promoting good
governance and performance of the IGU’s.
One major prerequisite to be met is necessary skills and expertise that is needed in the
institution in the shape of professional leadership and management. Income
diversification needs skilled management at all levels of the institution and may require
new staff profiles, such as professional research administrators and fundraisers. These
need to be included in the design of the university’s strategy and must operate within
adapted structures. Leadership may also need to take on new tasks, especially in relation
to fundraising. It is clear that to engage philanthropists with the university, the leadership
must be committed to these activities. Therefore it is crucial that training and support
17
programmes are provided for the different levels of leadership in the university
(European University Association conference, 2008).
2.3.5 Work Culture
Culture in an organization evolves out of collective perceptions of employees on various
aspects of the organizational work life. It is shaped through their day-to-day experiences
while dealing with various facets of the organizational realities such as its goals and
objectives, policies and practices, leadership, structure, work design, technology adopted,
people, dominant modes of communication, motivational and reward mechanisms,
working conditions, etc. It provides dynamic interface to the employees in the
organization in the form psychologically meaningful and behaviorally pertinent
perceptions, which impels them to think, feel and act in consistently similar ways
(Schneider, 1975). Numerous studies have shown organizational culture as undisputedly
a major contributing factor for changing employees’ attitudes and behavior towards
superior job performance and satisfaction. Several measured aspects of culture such as
communication flow, decision-making practices, relationship with colleagues, work
design and supervisory support have shown significant positive relationship with many
out come variables like organizations’ financial performance (Dennison, 1990; Ryan,
Schmit & Johnson, 1996; Kangis &Williams, 2000) employees’, productivity and
satisfaction (Schneider et al., 1998; Rogg, et al., 2001).
University staffs, just like most other civil servants have civil service work culture of low
productivity, insensitivity to deadlines and quality of service, etc. This culture is not
conducive for efficient and profitable to business operations. During a workshop with
managers from industries, pointed out that the civil service culture and bureaucracy are
the two major impediments to doing business with universities (Ogada, 2000).
For Pettigrew (1979), organizational culture consists of "a system of public and collective
meanings accepted by a given group over a certain period of time. This system of terms,
forms, categories and images interpret for people their own situations". However, for
Schein (1992), organizational culture is to be understood as "the pattern of shared basic
18
assumptions that a given group has invented, discovered, or developed in learning to cope
with its problems of external adaptation and internal integration -- a pattern of
assumptions that has worked well enough to be considered valid and, therefore, to be
taught to new members as the correct way to perceive, think and feel in relation to those
problems". According to Trice and Beyer (1993), culture involves conceptions, norms
and values that are inculcated during the life of an organization.
Nevertheless, according to Riley (1983), although theoretical conceptions on
organizational culture are polarized with regard to the two perspectives mentioned above,
empirical studies in this area have opted for the integration of both conceptions.
Consequently, Alvesson (1993), though acknowledging Smircich’s reference (1983) as
being crucial to regulate the study area in organizational culture, comments that it has not
exhausted the various analyses made possible by a particular theory.
Public corporations emphasis is on valuing a centralized and authoritarian system of
authority that makes it difficult to increase professional development and to acknowledge
the human element (rigid hierarchical power structure). In as much as the public
companies emphasize individual competence and efficiency as a way to achieve the
highly desired personal objectives, they implicitly stimulate the necessity of "passing
over" colleagues who have longed for similar objectives (competitive professionalism).
Such values manifest themselves through practices that aim at the implementation of
interpersonal communication strategies and decision-making tactics that enhance the
aforementioned power structure. In other words, the culture of the public companies that
have taken part in this research can be fundamentally defined by valuing authority and
competition, detrimental to the human element and to interpersonal relations, as a means
of climbing the hierarchy (Heleena, 2000).
This in turn has led to a conflict of interest and decline in performance of income
generating units in public corporations. There is no vigilance on the part of the employee
therefore low productivity in the market is experienced.
19
2.4 Critique of the Existing Literature Relevant to the Study.
There are many studies relating to the Income Generating Units in corporations, but very
few have looked in to the area of the issues surrounding the IGU’s performance
specifically in public corporations. However, the myriad of articles, journals, web
publications, and books on Income generating units formed the foundation for my
research. This study helped theoretically and empirically in providing answers to the
research problems and therefore getting meaningful conclusions.
2.5 Summary
The various studies explored in this area have had a focus on operations generally in
income generating units. It is further realized that less information is found on specific
areas concerning work culture since most corporations are privatized hence have their
organizational culture concentrating on the customers’ needs.
Most studies have dwelt on the issue of allocation of resources though no definite
solution has been found as to how resources may be allocated in public corporations to
improve its performance.
2.6 Research Gaps
Based on the literature presented by the research, the study has not been fully exhausted
to meet the need in the market. Most public universities are still facing challenges in
these areas since most of the studies identified have been looking at factors generally
affecting income generating units in organizations. The researcher will take time to
explore the issues relating particularly to public universities.
20
CHAPTER THREE
METHODOLOGY
3.1 Introduction
This chapter presents the methods that were used to conduct the study. It specifically
dealt with the research design, sampling frame, sample and sampling technique, the
research instruments, data collection procedures and data analysis techniques. This
research was conducted at the Technical University of Mombasa because of its
accessibility to the researcher.
3.2 Research Design
The study took a descriptive approach as it explained the factors influencing operations
of income generating units in public universities. Descriptive research was used to obtain
information concerning the current status of the phenomena to describe "what exists"
with respect to variables or conditions in a situation (Key, 1997). The study also used
quantitative design since the researcher aimed at determining the relationship between the
independent variables and the dependent variable. Purposive sampling is the use of cases
that have the required information with respect to the objectives of the study (Mugenda
and Mugenda, 2003).
3.3 Population
The target population comprised of the management board members who included: the
University Principal, the University Enterprise Manager, the Finance officer, Deputy
Principal Administration Finance and planning, Registrar administration and planning. It
also included the respective unit managers and staff in the respective income generating
units. From the statistics obtained at the university Human Resource department there are
a three main categories as presented below:
21
Table 3.1 Target Population
CATEGORY POPULATION % OF TARGET
POPULATION
Board Members 12 17%
Unit Managers 6 9%
Other staff 50 74%
Total 68 100%
3.4 Sampling Frame
According to Bennet 1993, a sampling frame is the set of source materials from which
the sample is selected. The definition also encompasses the purpose of sampling frames,
which is to provide a means for choosing the particular members of the target population
that are to be interviewed in the survey.
3.5 Sample and Sampling Technique
Ross (2005) argues that sampling in research is generally conducted in order to permit the
detailed study of part, rather than the whole, of a population. The information derived
from the resulting sample is customarily employed to develop useful generalizations
about the population. These generalizations may be in the form of estimates of one or
more characteristics associated with the population, or they may be concerned with
estimates of the strength of relationships between characteristics within the population.
Purposive sampling technique was used to interview the management board and the unit
managers since they are already known to the researcher whereas for the other staff,
simple random sampling technique was used. A simple random sample is a subset of
22
individuals chosen from a larger set. In this case each individual is chosen randomly and
entirely by chance, hence this reduces biasness of the researcher.
Table 3.2 Sample Size
CATEGORY SAMPLE SIZE SAMPLE FRAME
Board Members 6 16%
Unit Managers 4 10%
Other staff 40 74%
Total 50 100%
Justification of sample size
Where:
N is the sample size of the single study group,
σ is the assumed SD for the group,
zcrit value (95% level of confidence)
D is the total width of the expected CI.
N = 4*16.27(1.96)2
5N = 50
The above formula illustrates the justification of the sample size for the study. This
formula has been adopted from previous work of Pagano 2000, to suit the case of income
generating units at the Technical University of Mombasa.
23
3.6 Research Instruments
The study employed the use of questionnaire as the main instrument for carrying out the
survey as well as interviews to the keys respondents since they were in a position to give
further clarification to any detailed information needed. Structured questions in an
interview guide were used to gather the required information from the key respondents
who include the University Principal, Deputy Principal, the Registrar, the Finance officer
and the University Enterprise Manager. From preliminary investigations done all the
respondents in the target population had adequate educational background hence in a
position to respond to questionnaires’ favorably. Therefore questionnaires’ were also
used collect the necessary data from the staffs that were randomly identified amidst the
total population.
3.7 Data Collection
The study used both primary and secondary data. Primary data was collected directly
from the University employees through the use of questionnaires and interviews were
conducted especially to senior staff like the management board. Secondary data included
information from documents such as brochures, strategic plans, charters, legislations,
statutes and journals obtained from the university. The researcher dropped the
questionnaires physically at the respondents’ place of work. The researcher left the
questionnaires with the respondents and picked them up later. Each questionnaire was
coded and only the researcher knew which person responded. The coding technique is
only used for the purpose of matching returned, completed questionnaires with those
delivered to the respondents.
3.8 Pilot Testing
The researcher carried out a pilot study to pretest the validity and reliability of data that
was to be collected using the questionnaire and interview guide. According to Key
(1997), validity can be defined as the degree to which a test measures what it is supposed
to measure. On the other hand reliability of a research instrument concerns the extent to
which the instrument yields the same results on repeated trials. Although unreliability is
always present to a certain extent, there will generally be a good deal of consistency in
24
the results of a quality instrument gathered at different times. The tendency toward
consistency found in repeated measurements is referred to as reliability (Carmines &
Zeller, 1979).
The researcher selected a pilot group of 3 individuals from the target sample of the staff
working in the TUM to test the reliability of the research instrument. The pilot study was
allowed for pre-testing of the research instrument. The clarity of the instrument items to
the respondents was necessary so as to enhance the instrument’s validity and reliability.
The aim was to correct inconsistencies arising from the instruments, which were to
ensure that they measure what is intended. The pilot data was not included in the actual
study.
3.9 Data Processing, Analysis and Presentation of Findings
Quantitative data collected was analyzed with the Statistical Package for Social Sciences
(SPSS). SPSS is commonly used in survey research and deployment especially of
statistical analysis. Data analysis was also done using regression analysis to analyze the
relationship between the independent and dependent variables. Regression analysis is a
statistical measure that attempts to determine the strength of the relationship between one
dependent variable (usually denoted by Y) and a series of other changing variables
(known as independent variables). Regression is often used to determine how many
specific factors for example the price of a commodity; interest rates, particular industries
or sectors influence the price movement of an asset.
The findings of the study have been presented in pie charts, distribution graphs, diagrams
and frequency polygons to clearly show the response from the respondents according to
the different variables. The variables used in the study are the reference points used in
order for the researcher to find out if the objectives are achieved from conducting the
study.
25
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION4.1.1 Introduction
This chapter discusses the analysis of data collected from respondents. It involves
scrutinizing the acquired information from the survey and making inferences. The
findings are represented based on the objectives of the study as presented in section 1.4;
these are presented in the form of tables and others graphs showing frequencies and
percentages. The results are then discussed in relation to the existing literature on
findings of the related studies.
4.2 Respondent Demographics
In this section the researcher sought to establish the demographics of the respondent’s in
terms of gender, age, level of education and years of service. This being a sample study,
all the views from respondents were merged.
4.2.1 Respondent’s Organization
A sample size of 50 respondents was selected for inclusion in the study. As shown in
figure 4.1, a sample of 50 (100 percent) respondents was involved in the process of data
collection. The response rate was 48 (96 percent) respondents who filled and returned the
questionnaire while 2 (4 percent) were non-response, this therefore means that response
was good.
Figure 4.1: Response Rate
4.2.2 Respondent’s age
bracket
0
20
40
60
80
100
120
ExpectedResponent's
Responses NonResponses(Number)
Series1Series2
26
Section ABackground Information
Table 4.1 Gender
In the above table 4.1 the researcher wanted to know the gender for the respondents.
From the finding majority of respondents were male with the frequency of 35 out of a
total of 45 and a 73percent response rate. The responses for female were 13 with 27%
response rate, therefore from the analyses above most of the respondent were male. The
bar graph below shows the percentages of the response rate:
Figure 4.2 Respondent’s age bracket
Y – No. of respondents
X – Type of certificate
Frequency Percent ValidPercent
CumulativePercent
Valid Male 35 73 73 73
Female 13 27 27 100
Total 48 100 100
27
The Table 4.1 shows the Respondent’s distribution by age. Out of the 48 respondents 4
(8.3 percent) had between 20 to 25 years of age, 18 (37.5 percent) between 26 to 35 years
21 respondents( 43.8 percent) were between 36 to 45 years and 5 respondents(10.4
percent) were over 45 years. The analyses above shows that majority of the respondents
in TUM are at the age of 36 to 45 years.
Table 4.2 age bracket
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid 20-25
years4 8.3 8.3 8.3
26-35
years18 37.5 37.5 45.8
36-45
years21 43.8 43.8 89.6
46-55
years5 10.4 10.4 100.0
Total 48 100.0 100.0
4.2.3 Level of education.
28
Figure 4.3 Level of education
Y – No. of respondents
X – Type of certificate
Table 4.3 shows the respondents analysis on the level of education. Out of the 48
respondents 5 (10.4 percent) had PhD qualification, 22 (45.8 percent) had a masters
degree, 17(35.4 percent) had bachelors degree and 4(8.3 percent) had certificate. The
analyses above shows that most of the respondents have studied upto the masters degree
level.
Table 4.3 Level of Education
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid PhD 5 10.4 10.4 10.4
Masters 22 45.8 45.8 56.3
Bachelors 17 35.4 35.4 91.7
Certificate 4 8.3 8.3 100.0
Total 48 100.0 100.0
29
4.2.4 Respondent’s years of service with their employer
The table 4.4 shows the years of service by the same employer. Out the 48 respondents
10 (21percent) respondents had served below 1 year, 26 (54 percent) had served for 1 to 5
years, and 12 (25 percent) had served for more than 5 years.
Table 4.4 Years of service with employer
Frequency Percent ValidPercent
Cumulativepercent
0-1 years 10 21 21 212-5 years 26 54 54 755-10 years 12 25 25 100
48 100 100
Based on the table above, majority of the respondents 54 percent have served for more
than 1 year but not less than 5 years while 25 percent have served for more than 5 years.
This therefore indicates that a majority of the respondents had served for almost five year
hence their views were current and factual.
30
Figure 4.4 Distribution of respondent’s year of service
Y – No. of years
X - Number of respondents
SECTION B
4.3 Allocation of resources
The respondents were requested to investigate the effect of allocation of resources on
performance of income generating units at the Technical University of Mombasa using
the 4-point Likert scale. The questionnaire comprised 3 options which the respondents
were required to rate. The options for allocation of resources elements were captioned as
in the table 4.4 below.
31
Table 4.5 Allocation of resources
N Mean
Std.
Deviation
Economic factors such as inflation affect allocation of
resources in IGU48 1.6042 0.49420
Continuous monitoring and evaluation of IGUs influences
its performance48 1.5208 0.50485
Funds allocated to the various votes do not sufficiently
meet the needs of the IGU,48 1.60 0.494
Valid N (listwise) 48 1.575
From table 4.5 the results obtained from the survey on the respondents level of agreement
on effect of allocation of resources on performance of income generating units show that
the average mean response was 1.57 which implies a level of agreement given the scale
range from 4 to 1, 4 being strongly Agree while 1 being too low.
Means for each questions ranged from 1.6 to 1.5 .Table 4.5 indicates that Economic
factors such as inflation affect allocation of resources in IGU and Funds allocated to the
various votes do not sufficiently meet the needs of the IGU, were ranked highest with a
means 1.6 while Continuous monitoring and evaluation of IGUs influences its
performance was ranked the lowest.
The above table shows that according to the respondents economic factors affect
allocation of resources while continuous monitoring and evaluation hardly has and effect
on the IGU’s performance.
4.3.1 Budget and Fund allocation
The respondents were requested to rate the extent to which budgeted fund and planning
and forecasting affects performance of IGU’s planning and forecasting.
32
Table 4.5 Budget fund and planning effect on performance.
N Mean
Std.
Deviation
To what extent do budgeted funds affects the performance
of IGUS48 1.7292 0.44909
To what extent does planning and forecasting of both
revenues and expenses affect performance of IGU's? Tick
the appropriate.
48 1.38 0.489
Valid N (listwise) 48 1.5546
From table 4.5 the results obtained from the survey on the respondents level of agreement
on the extent to which budgeted funds and planning affects performance of IGU’s.
Means for each questions ranged from 1.7 to 1.3 .Table 4.5 indicates that effects of
budgeted funds performance of IGUS was ranked highest.
This means that according to the respondents budgets have a great influence on the
performance of IGU’s while planning and forecasting does not strongly affect its
performance.
4.4 Internal controls on the performance of income generating units
The second analysis provides information on the effect of internal controls on the
performance of income generating units at the Technical University of Mombasa. The
respondents were requested to rate the options internal control using the 4-point Likert
scale. The questionnaire comprised 3 options which the respondents were required to
rate. The options for internal control elements were captioned as in the table 4.6 below.
33
Table 4.6 Internal controls
N Mean
Std.
Deviation
Employees accountability determines perfromance of
IGUs48 2.3542 1.02084
The internal controls ensures reliability of financial
reporting which are accuratev and complete48 1.9167 .79448
Weak internal controls affect performance of IGUs48 1.1250 .33422
Valid N (listwise) 48 1.7986
From table 4.6 the results obtained from the survey on the respondents level of agreement
on quality internal control elements show that the average mean response was 1.79 which
implies a level of agreement given the scale range from 4 to 1, 4 being strongly Agree
while 1 being a low level of agreement. Means for each questions ranged from 2.3 to 1.9.
Table 4.6 indicates that Employees accountability determines performance of IGUs and
internal controls ensures reliability of financial reporting which are accurate and
complete was ranked the highest with individual means of 2.3 and 1.9 respectively. While
Weak internal controls affect performance of IGUs was ranked the lowest.
This means that the respondents agree that accountability of employees influence
performance of IGU’s and internal controls ensure reliability of financial reporting. On
the other hand the respondents disagree that weak controls affect performance of the
units.
Table 4.7 Fund allocation and performance
Frequency PercentValidPercent
CumulativePercent
Valid Disagree 19 39.6 39.6 39.6StronglyAgree 29 60.4 60.4 100Total 48 100 100
34
Table 4.7 shows the analysis on whether funds allocated to the various votes sufficiently
meet the needs of the IGU. The analysis shows that 19 respondents (39.6 percent) had a
too low perception on the effect, while 29 respondents (60.4 %) agreed that funds
allocated to the various votes do not sufficiently meet the needs of the IGU.
Therefore fund allocation directly had an influence on the performance of the IGU’s.
4.5 Management Capacity.
The respondents were requested to rate the effect of management capacity on the
performance of income generating units at the Technical University of Mombasa using
the 4-point Likert scale. The questionnaire comprised 3 options which the respondents
were required to rate. The options for management elements were captioned as in the
table 4.8 below.
Table 4.8 Management capacity.
N Mean
Std.
Deviation
Technical knowhow contributes largely to the performance
of IGUs48 1.6250 .70334
The duties and responsibilities to personnel match their
experience and capabilities48 1.7292 .67602
Do management style influence performance of IGUs 48 1.6042 .70679
Valid N (listwise) 48 1.6528
From table 4.8 the results obtained from the survey on the respondents level of agreement
on management capacity elements show that the average mean response was 1.65 which
implies a level of agreement given the scale range from 4 to 1, 4 being strongly Agree
while 1 being a too low level of agreement. The analysis in table 4.8 shows that duties
and responsibilities to personnel match their experience and capabilities and Technical
knowhow contributes largely to the performance of IGUs was ranked the highest with
35
individual means of 1.72 and 1.62 respectively, while management style influencing
performance of IGUs was ranked lowest.
This shows that in the respondents view technical knowhow is very important in overall
development of IGU’s thus ranked highest while management style lowly influencing its
performance.
Table 4.9 Manager and decision making.
N Mean
Std.
Deviation
To what extent do managers involve the rest of the team
players in decision making process48 2.6458 1.02084
To what extent does experience influence the decision
making in the management of IGUs48 1.3542 .48332
Valid N (listwise) 48 2
From table 4.8 the results obtained from the survey on the respondents level of agreement
on the extent mangers involve members in decision making and the extent experience
influence decision making show that the average mean response was 2 which implies a
level of agreement given the scale range from 4 to 1, 4 being strongly Agree while 1
being low level of agreement.
Means for each question ranged from 2.6 to 1.3. Table 4.8 shows that the extent
managers involve the rest of the team players in decision making process was ranked
highest with an acceptance level of 2.6 while the extent of experience influence in
decision making in the management of IGUs was ranked the lowest with a mean of 1.35.
The above findings show that managers in the IGU’s involve their team members in
decision making processes hence influencing its performance. However the respondents
don’t agree that experience can influence performance of IGU’s
36
4.6 Culture on the performance of income generating units.
The respondents were requested to examine the effect of work culture on the performance
of income generating units at the Technical University of Mombasa using 4-point Likert
scale. The questionnaire comprised 3 options which the respondents were required to
rate. The options were captioned as in the table 4.10 below.
Table 4.10 Culture and performance
N Mean
Std.
Deviation
Do employees adhere to the code of ethics on service
delivery in the university48 1.8958 .62704
Does staff working attitude affects performance of IGUs 48 1.3542 .48332
Does bureaucratic form of organization affect performance
of IGUcs48 1.6042 .49420
Valid N (listwise) 48 1.6181
The analysis in table 4.10 show that the average mean response was 1.61 which implies a
level of agreement given the scale range from 4 to 1, 4 being strongly Agree while 1
being a low level of agreement.
This indicates that respondents agree that employee adhere to the code of ethics on
service delivery and that staff working attitude does not affect performance of IGU’s. It
further indicates that the bureaucratic form of organization has an influence on the
performance of the units.
The university operates on a standard budget which has equally distributed the funds to
the various votes hence a procurement plan is drawn to facilitate efficient acquisition of
materials. All materials purchased are through a clear procurement procedure outlined by
the supplies department. Individual departments make requisition for materials and send
to the central stores where they get the necessary materials. If the materials are not
available in the central stores, the supplies officer can make local purchase order from the
37
existing pre-qualified suppliers whereby they procure the products which are then
received in the presence of the chairperson of the department requesting for the materials.
Thereafter the payment process is initiated after the necessary documents have been
presented by the supplier to the central stores.
38
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION ANDRECOMMENDATIONS
5.1 Introduction
This chapter discusses summary of findings in relations to the research objectives. It also
draws the conclusions, recommendations and suggested areas for further study.
5.2 Summary of Findings
The research study sought to evaluate the factors determining performance of income
generating units in public universities, specifically the study explored the research
objectives provided in chapter one.
The study employed descriptive data analysis. The sample under study comprised 48
respondents. The study used primary and secondary data that was collected using
questionnaire that was served on the respondents and findings presented using tables.
The first part of the objective was to investigate the effect of allocation of resources on
performance of income generating units at the Technical University of Mombasa.
Majority of the respondents agreed that allocation of resources had a high effect on
performance of income generating units. There was a high level of acceptance that
Economic factors such as inflation affect allocation of resources in IGU and Funds
allocated to the various votes do not sufficiently meet the needs of the IGU.
The second part of analysis was to evaluate the effect of internal controls on the
performance of income generating units at the Technical University of Mombasa.
Majority of the respondents agreed that employees’ accountability determines
performance of IGUs and internal controls ensures reliability of financial reporting which
are accurate and complete. There was a level of acceptance that funds allocated to the
various votes sufficiently meet the needs of the IGU.
39
The third part of the analysis was to investigate the effect of management capacity on the
performance of income generating units at the Technical University of Mombasa. There
was a high level of acceptance that duties and responsibilities to personnel matching their
experience and capabilities and Technical knowhow contributes largely to the
performance of IGUs. Majority of the respondents rated high managers involving the rest
of the team players in decision making process.
The last part of the analysis was to examine the effect of work culture on the performance
of income generating units at the Technical University of Mombasa. Majority of the
respondents rated highly employee’s adherence to the code of ethics on service delivery
in the university, while staff working attitude affects performance of IGUs was rated the
least.
5.3 Conclusions
The broad research questions relating factors determining performance of income
generating units in public universities, was studied and the finding analyzed so as to draw
conclusions.
In investigating the effect of allocation of resources on performance of income generating
units at the university, economic factors affect the allocation of resources. With the
fluctuation of prices the institution is forced to adjust its expenses to meet the increased
rates which in turn affect how funds are allocated. Although forecasting is made and
budgets are prepared they cannot be observed due to the fluctuating prices in the market.
This therefore easily renders votes not sufficiently meeting the IGU’s needs.
Internal controls are put in place to prevent inappropriateness of officers when reporting
financial statements to the relevant bodies. Controls assist staff to be accountable for
every transaction made hence encourage reliability of the institutions reports. It was also
noted that poor record keeping provides for a loophole in to lack of proper records on
both expenditure and income of the institution.
40
Management capacity plays a vital role in directing the institution towards meeting its
objectives. Managers being assigned specific duties should have the necessary technical
knowhow needed to run operations in the field. This will enhance performance of the
institution. Management styles used in executing duties also influence how the units
perform. Bureaucratic form of management may not be effective for an organization
operating in a turbulent environment. It was noted that managers also need to involve
their team members in decision making so as to appreciate any ideas and thought that can
be of positive influence to the institution.
Lastly organizational work culture determines how well staff can respond to any form of
change or new venture. Performing work evaluation continuously will assist in
maintaining high standards in the institution. Staff can only work with a positive attitude
when they are motivated and encouraged. It was noted that work attitude directly affects
service delivery eventually affecting the performance of the institution hence staff need to
acquire the necessary skill to be able to address clientele efficiently.
In conclusion it is apparent that performance of income generating units is a vital area for
public universities considering they are provided very few funds. If closely supervised
they can be used as an alternative source of fund to substitute for the insufficient funds. A
lot of caution needs to be taken into account when running the units to realize profits as
much as possible.
5.4 Recommendations
Based on the findings realized during the research the following recommendations should
be considered as the institution work towards meeting its institutional objectives.
a) Work organization
There is need to allocate duties and responsibilities to staff according to their area
of expertise to maximize on their asset base.
b) Investing in people and skills
Human capital is the best asset an organization or institution can ever have.
Nurturing and advancing staff and their skills through on-the-job training to
41
advance their studies will also enhance the institutions human capital which they
can use to advance their services.
c) Innovation and use of technology
The institution needs to embrace higher levels of technology to be able to connect
with other clientele to enhance production of the IGU’s. With technology they
can be able to make access to services available to a vast number of individuals
throughout the country.
d) A productive workplace culture
An institutions workplace culture determines how efficient they operate and hence
their returns. Motivating employees and involving them in decision making
processes will assist in improving performance of IGU’s
e) Leadership and management capability
The institution should ensure that the personnel assigned major responsibilities
have the necessary capabilities to lead the team assign to. They should take good
approaches to management of staff to ensure high productivity from staff.
f) Cost benefit analysis
The management needs to do a cost benefit analysis for any new venture in the
future to ensure viability of a project so as to ensure funds wasted in setting up
projects that have very little returns.
g) The managers should ensure clear and correct record keeping is exercised to
facilitate efficient financial preparation of reports.
h) Management should ensure that the respective units operate within the budget and
funds allocated to avoid overdrawing their votes.
42
5.5 Suggestions for further Research
This study has implications for future research. The limitations already discussed may
justify further research. The first limitation is related with the predictive validity of the
results, and these limitations can be addressed principally, replicating this research in
different organizations, and with different stakeholders. Preferably, new studies should be
conducted in private, government and not for profit organizations to see if the results can
be extended to them.
43
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46
APPENDICES
LETTER TO RESPONDENTS
MBA STUDENTSchool of Human Resource DevelopmentJKUATMsa CBD Campus
To Respondent,thro'The Principal,
Dear Sir/Madam,
RE: RESEARCH QUESTIONNAIRE
I am a student of MBA-Finance Option degree at JKUAT Mombasa Campus. In partialfulfillment of the course, I am required to carry out a research project.
The subject of my research is factors determining performance of income generating units inpublic universities: A case study of TUM.
You have been selected to participate in the study as a respondent. The information you provideshall be treated entirely for academic purposes and shall be held with high confidentiality.
Your cooperation will be highly appreciated.
Yours sincerely,
Agnes Nyamvula TsumaHD-C005-0360/2010
47
INTERVIEW GUIDE
1. What is your age bracket?
………………………………………………………………………………….
2. What is your education level?
………………………………………………………………………………….
………………………………………………………………………………….
3. Give your job title
………………………………………………………………………………….
4. How long have you worked at TUM?
………………………………………………………………………………….
5. What is your role in the management of the income generating units in the
University?
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
6. How does the university council influence the performance of income generating
units at TUM?
…………………………………………………………………………………….
……………………………………………………………………………….
………………………………………………………………………………….
48
7. What criterion is used in allocation of resources and how does it influence
performance of income generating units?
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
8. Does the institution have internal controls and what is their effect on performance of
income generating units?
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
9. How does management capacity influence decision making process and performance
of income generating units?
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
10. How has the Universities work culture affected the performance of income generating
units?
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
………………………………………………………………………………….
49
QUESTIONNAIRE
The questionnaire is designed to collect data on performance of Income generating Units in
public Universities. Please provide information that is truthful and as accurate as possible. Your
responses will be treated with utmost confidentiality. Fill in blank spaces provided or tick
appropriately. Thank you for your cooperation.
SECTION A
Background Information
1. What is your gender? Tick the appropriate.
Male Female
2. What is your age bracket? Tick the appropriate.
20-25 years ……………..
26-35 years ……………..
36-45 years ……………..
46-55 years ……………..
Over 55 years …………..3. What is your Level of Education? Tick the appropriate.
PHD ………………
Masters ……………
Bachelors…………..
Diploma ……………
Certificate ………….
4. How long have you worked in this institution? Tick the appropriate.
0-1 Year …………….
2-5 years …………...
5-10 years ...…………..
50
5. Which department do you work?
…………………………………………………………………………..
…………………………………………………………………………..
SECTION B
Allocation of Resources
6. Economic factors such as inflation affect allocation of resources in IGU’s. Tick theappropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
7. To what extent do budgeted funds affect the performance of IGU’s? Tick theappropriate
Too high ……………
High ……………
Low ……………
Too Low ……………
8. Continuous monitoring and evaluation of IGU’s influences its performance? Tick theappropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
9. To what extent does planning and forecasting of both revenues and expenses affectperformance of IGU’s? Tick the appropriate.
Too high ……………
High ……………
51
Low ……………
Too Low ……………
10. Funds allocated to the various votes do not sufficiently meet the needs of the IGU’s.Tick the appropriate
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
Internal Controls
11. Weak internal controls affect performance of IGU’s. Tick the appropriate
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
12. To what extent does record keeping affect performance of IGU’s? Tick theappropriate
Too high ……………
High ……………
Low ……………
Too Low ……………
13. Employee’s accountability determines performance of IGU’s. tick the appropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
52
Too Low ……………
14. The internal controls ensure reliability of financial reporting which are accurate andcomplete. Tick the appropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
15. What procedure is followed in the acquisition of materials?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Management Capacity
16. Technical knowhow contributes largely to the performance of IGU’s. Tick theappropriate
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
17. The duties and responsibilities to personnel match their experience and capabilities.Tick the appropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
18. Do management styles influence performance of IGU’s? Tick the appropriate.
Strongly agree ……………
Agree ……………
53
Disagree ……………
Too Low ……………
19. To what extent do managers involve the rest of the team players in decision makingprocesses? Tick the appropriate.
Too high ……………
High ……………
Low ……………
Too Low ……………
20. To what extent does experience influence the decision making in the management ofIGU’s? Tick the appropriate.
Too high ……………
High ……………
Low ……………
Too Low ……………
Work Culture
21. To what extent does performance evaluation of personnel influence performance ofIGU’s?
Too high ……………
High ……………
Low ……………
Too Low ……………
22. Do employees adhere to the code of ethics on service delivery in the university? Tickthe appropriate
Strongly agree ……………
54
Agree ……………
Disagree ……………
Too Low ……………
23. How prompt are staff responses to correspondences needed by clients? Tick theappropriate.
Very Fast ……………
Fast ……………
Slow ……………
Very Slow ……………
24. Does staff working attitude affect performance of IGU’s? Tick the appropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
25. Does the bureaucratic form of organization affect performance of IGU”s? Tick theappropriate.
Strongly agree ……………
Agree ……………
Disagree ……………
Too Low ……………
55
WORK PLAN
MONTH DATE ACTIVITY ACTION BY
MAY
2013
12th – 16thPreparation of research topics for selectionand approval.
Researcher
19th – 21st Approval of three selected topics for bythe supervisor.
Supervisor
22nd – 30th Collecting relevant information andpreparation of chapter 1 and 2
Researcher
JUNE
2013
2nd – 5th Forwarding chapter 1 and 2 to supervisorand correcting errors of chapter 1 and 2
ResearcherAnd Supervisor
10th – 16th Preparation of chapter 3 and forwarding tosupervisor for correction
ResearcherAnd Supervisor
17th – 20th Correction of research proposal chapter 1-3
Researcher
23rd – 27th Preparation of questionnaire, work planand budget and submission.
Researcher
JULY
2013
1st – 11th Making corrections and forwardingManuscripts to supervisor
Researcher
14th –22nd Preparation of presentation slides anddefending of proposal
Researcher
23rd – 28th Correction of proposal and forward ofcorrected manuscripts.
Researcher
AUGUST
2013
1st – 9th Data collection and analysis Researcher
12th – 23rd Preparation of chapter 4 and 5 andforwarding to supervisor for correctionand approval.
Researcher andSupervisor
26th – 30th Making Corrections forwardingmanuscripts and preparation forpresentation
Researcher
SEPTEMBER 2nd – 6th Presentation of project Researcher
56
OCTOBER2013
16th – 30th Making corrections and forwardingmanuscripts to supervisor for approval
Researcher andSupervisor
APRIL 2014 15TH – 29TH Forward final paper. Researcher