The Influence of corporate governance on the organisation culture in the automotive companies in Kenya

A Thesis submitted in partial fulfillment of the requirements for the Degree of Master of Commerce at Strathmore UniversityGood corporate governance mechanisms are important for the success of any business. However, with the rising cases of corporate failures, reduction of shareholder value and misappropriation, corporate governance has emerged to be an issue of great concern to potential investors and other stakeholders. The fundamental arguments among the various stakeholders is on the board’s ability to discharge its delegated mandate and steer the company in the right direction. This research study largely contributes to the business literature with the primary objective being to analyze the influence of corporate governance on the organization culture in the Kenyan automotive companies. The specific objectives were to establish the extent which ownership structure, board behavior, CEO tenure influenced organization culture. The target population was 32 companies within the automotive sector in Kenya, focusing on the Board members and senior executives who formed part of the board. The research study adopted descriptive research design, with descriptive statistics, multiple regression analysis and univariate analysis being used for data analysis. Three important corporate governance variables such as ownership structure, board behavior and Chief executive officer’s tenure were examined. Organization culture was also analyzed using the glue that holds the organization together. From the respondents who formed part of the research study, it was established that corporate governance had an influence on the organization culture of the various companies in the automotive sector in Kenya. However, ownership structure as a corporate governance mechanism had a major influence on organization culture compared to board behavior and CEO tenure. It was also identified that the automotive companies in Kenya strongly agreed that productivity and results was the glue that held the organization together; this was largely influenced by their governance structures and the business environment