Assessement of Firm Size on Performance of Deposit Taking Saccos in Nairobi County, Kenya
Sagwa, Evans Vidija
Kembu, Appolonius Shitiabai
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The Cooperative Movement in Kenya is responsible for about 45% of Gross Domestic Product (GDP) and 31% of national savings and deposits. Deposit Taking Savings and Credit Cooperative Organization [SACCO] (DTSs) have enabled Cooperative societies to diversify their products and services in a market that is highly competitive. Those who patronize the services of DTSs have options of accessing similar services from other service providers like commercial banks and non-banking financial institutions that may enjoy economies of scale due to their size. However, some of the DTSs may be small in size which makes it difficult for them to leverage on size for a wider coverage of their catchment market. Guided by the Resource Based View (RBV) as the theoretical framework, this study examines firm size as an important influencing factor on organization performance. The study adopted a descriptive design of a survey of 42 DTSs in Nairobi County, Kenya. The target respondents were Chief Executive Officers and Human Resource Managers in the DTSs. Data was collected from 39 respondents using a questionnaire that was tested for reliability and validity. Data was analyzed using descriptive and statistical techniques. Cross tabulation of the number of employees and organizational performance was done. Chi-square tests were also conducted and the findings of the study indicate that the DTSs with the highest number of employees performed higher than those with fewer employees. These findings suggest that organizations should pay more attention to firm size and leverage on the optimum size for competitiveness in the market.