4 Working Capital Management and Organizational Performance in Selected Telecommunication Companies In Bosaso, Puntland, Somalia

Abstract This dissertation is entitled “working capital management and organizational performance is selected telecommunication companies in Bosaso, Somalia”. The study was carried out based on four specific objectives. The first major objective of this study was profile of respondents in which the study indicates that male dominate (71.4%) female (28.6%) in the three organizations staff, the study also revealed that 49.6% which is the very majority of the employees in the sample were aged below 40 years; 48.1% were 40-59 years old; 2.3% were 60 and above years old. The study shows that selected telecommunication companies, which was established mid 1990s in 200, employed a great number of academicians (46.6%). This is an indication of that selected telecommunication companies attracted and retained highly educated employees who are likely to perform their duties well. In second objective, the study shows that, on the overall, the level of working capital management (as to: cash management, receivable management, inventory management, ) is good (grand mean = 2.67) and in third objective the study indicates that the level of organizational performance was found to be good (grand mean = 2.75). The last objective of the study was to determine whether there is a significant relationship between the level of working capital management and level of organizational performance in selected telecommunication in Somalia. The study used Pearson Linear Correlation Coefficient to measure and describe the relationship between the two variables of the study and to test the null hypothesis. The study also uses regression analysis to rank the effect of the three working capital components have on organizational performance. The level of working capital management was found to be positively and significantly correlated with the level organizational performance (sig. < 0.05 and r-value = 0.417). Based on the findings of the study the following conclusions are drawn: According to the analysis the average mean of level of working capital management is 2.68, which showed that majority of the respondents agreed that the level of working capital management is good because the mean is in between 2.37- 2.93. As indicated in the analysis of chapter four, the average mean of the level of Organisational performance of the selected telecommunication companies is 2.75, this indicated that majority of the respondents agreed that the organizational performance of the telecommunication companies is good according to the average mean which lays in between 2.98-2,41.This study used descriptive survey design and correlation research design. Descriptive in that data collected used to describe a phenomenon; correlation in that it is interested in relating receivable management , cash management , inventory management , to organizational performance. It recommends that there is all employees should be given training in the maintaining the inventory of the organization and control system of all telecommunication companies in Somalia and to carry out their daily work to maximize their performance. The owners of the telecommunication should invest in the technological improvement to keep their business competitive in the market and maintain market sharing to other telecommunication companies in the market, The telecommunication companies should maintain sales volume to the market that the telecommunication companies sharing their competitive in the market.

 TABLE OF CONTENTS

Declaration A

Declaration B

Approval Sheet iii

Dedication iv

Acknowledgment v

Table of Contents vi

Abstract viii

CHAPTER Page

ONE THE PROBLEM AND ITS SCOPE 1

Background of the Study 1

Statement of the Problem 3

Purpose of the Study 4

Objectives of the Study 4

Research Questions 6

Null Hypothesis 6

Scope of the study 7

Significance of the Study 8

Operational Definitions of key terms 9

TWO REVIEW OF RELATED LITERATURE 11

Concepts, Ideas and Opinions from Authors/Experts 11

Working capital management 11

Cash management 13

Inventory management 15

Accounting receivable management 18

Organizational performance 20

Theoretical prospective 22

Related study 23

THREE METHODOLOGY 24

Research Design 24

Research Population 24

Sample Size 25

Sampling Procedure 26

Research Instrument 27

Validity and Reliability of the Instrument 28

Data Gathering Procedures 30

Data Analysis 31

Ethical Considerations 32

Limitations of the Study 32

FOUR DATA PRESENTATION, INTERPRETAITION AND

ANALYSIS 34

Profile of the respondent 35

The extent of working capital management 37

The level of organizational performance 44

Correlation in working capital management and organizational 46

Regression Analysis of The Variables 47

Five FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS 49

Introduction 49

Summary of Findings 49

Conclusion 52

Recommendations 53

Suggestions for Further Research 53

REFERENCES 54

Appendices

Appendix IA Transmittal Letter 58

Appendix lB Transmittal Letter for Respondents 59

Appendix II Clearance from Ethics Committee 60

Appendix III Informed Consent 61

Appendix Table of CCV 62

Appendix Table of CCR 63

Appendix IVA Face Sheet: Profile of Respondent 64

Appendix 1VB Questionnaire to determine the extent of

Working capital management 65

Appendix 1VC Questionnaire to determine the level of

Of organizational performance 68

Researcher~s Curriculum Vitae 70