Effect of Financial Controls on Organizational Performance of Selected County Governments in Western Kenya

Abstract

As a result of partial definition of strategies and operating plan, many organizations do not manage their strategies. This is due to the lack of a strong framework to coordinate employees, the operational process and the organizational objectives. The purpose of the study was to determine the effect of financial controls on organizational performance in selected county governments in Western Kenya. The study was anchored on the following three theories: Control Theory, Resource Based Theory and Levers of Control Theory. Across-sectional survey design was used. Stratified sampling was applied to segment the population into various strata of workers, and thereafter, a simple random sampling method was used to pick a sample size of 390 employees from the target population of 6049, 6549 and 3611 employees in Bungoma County, Kakamega County and Busia County respectively. Data was collected using structured questionnaires that was thereafter analysed with an aid of Statistical Package for Social Science (SPSS) software. Based on the analysis, the findings were: there was positive, strong and significant associations between financial controls, on the organizational performance of selected County Governments (R=0.890, p≤0.05). It was concluded that R-square value of 0.792 implied that 79.2% of the corresponding change in the dependent variable (performance) could be predicted by financial controls, the recommendations of the study were: the government organizations should adopt financial evaluation strategies that could help cut down on the unnecessary wastage of funds. The findings of this study would be of significance to the organizational management, as these could help them in making informed decisions for the management and thereby improving the overall performance of the county government that ensure sustainability in the face of global competition.