The Impact of Good Governance on Sustainable Performance - Presentation 5 28.5.2024.pptx

This paper examines the relationship between good governance practices and sustainable performance in the public sector organizations. The study highlights the key mechanisms through which good governance can enhance efficiency, accountability, and transparency in public organizations, leading to improved sustainable outcomes.
With increasing competition in today’s global market, the firms have to look to the modern strategic manners, in order to gain sustainable organization and competitive advantage. Sustainable organization performance is an emerging and innovative managerial tool which can be used as a strategic weapon to gain competitiveness and to promote the firms environmental and financial performance simultaneously. The aim of the research was to examine impact of good corporate governance principles on sustainable performance in the Kenyan public sector organizations. The study found out how the following good governance principles influences sustainable performance in the Kenyan public sector organizations; good governance principles, risk management practices and practical recommendations for good governance. A mixed research design was used in this study.
The focused on the public organizations in Kenya classified as Constitutional Commissions and Independent Offices, County Government, Departments, Ministries, Private Sector and State Corporations. The target population for this study comprised of 384 employees of the Kenyan Public Organizations. The study adopted a random sampling technique in selecting the sample, with a sample size of 384 employees from afore mentioned organizations. Data was collected mainly through questionnaires administered in google forms.
Descriptive statistics were used in this study aided by STATA version 14 to compute percentages of respondents’ answers. Inferential statistics using ordered logistic regression were applied to examine the relationship between research variables. Tables and charts were used to present the analyzed results. The study findings revealed that good governance principles have an impact to the sustainable organization performance in the Kenyan public sector. The study recommends that the public organization should embrace good governance principles in carrying out their operations and further study to be done in this regard to determine why some parameters of good governance were statistically insignificant.
 

1. The Impact of Good Governance on Sustainable Performance in the Kenyan Public Sector   Senior Management Course (SMC 419)/ 2024 GROUP FIVE   A Research Project Submitted in Partial Fulfillment of the Requirement for the Award of a Certificate in Senior Management Course in Kenya School of Government, Lower Kabete Campus.

2. Introduction Research conducted globally, by McCollum (2006) highlights governance's pivotal role in regulatory compliance, sustainability, and corporate performance enhancement. In addition, Motter (2015) critiques governance structures for favoring narrow interests often at the expense of the common good and long-term sustainability. Regionally, Mashingaidze (2014) sheds light on the repercussions of weak governance, particularly in regions like Africa, where it exacerbates risks for investors and impedes economic growth. Poor governance not only deters foreign investment but also undermines public sector stability. Problem Statement: The narrative then shifts to the deteriorating corporate governance scenario in Kenya, evidenced by scandals and financial instability among state-owned enterprises ( Mang'unyi , 2017; Muriithi , 2016). The gravity of the situation is underscored by the substantial financial requirements projected for these enterprises (CBK, 2022).Attention is drawn to specific entities like Kenya Power Lighting Company, Kenya Railways Corporation, and others facing operational challenges (National Treasury Report, 2022). Furthermore, the link between corporate governance and business performance is explored through studies conducted on Kenyan banks ( Mang'unyi , 2017; Muriithi , 2016; Otieno, 2017; Matengo , 2015).

3. Objectives and Research Questions Objectives To analyze the impact of ethical decision-making, transparency, and accountability on the sustainable performance of the Public Sector. To assess the effectiveness of risk management practices in ensuring sustainable performance of the Public Sector.  To provide practical recommendations to improve sustainable performance of the Public Sector Research Questions What has been the effect of ethical decision-making, transparency, and accountability on the sustainable performance of the Public Sector? What is the effectiveness of risk management practices in ensuring sustainable performance of the Public Sector? What are the practical recommendations that can be provided to enhance good governance and sustainable performance in the public sector?

4. Justification and Scope Justification Studies discussed have shown the relationship between good governance and performance in the public sector. However, the studies have not shown to what extend. This study clearly estimates the level of influence good governance have on sustainable performance. This research establishes and estimates the level of influence a good governance system has on sustainable performance which other relevant works and the reviewed studies didn't elucidate. Scope The research spans a short period, spanning 6 th May to 31 st May 2024. The study was confined to the public and a few private sector organizations targeted by the members represented in Senior Management Class (SMC) 419 of 2024. The research targeted a sample of 384 participants.

5. Assumptions and Limitations Assumptions That the public organizations in Kenya had embraced good governance mechanisms, with the establishment of various oversight authorities within the government to ensure sustainable performance. That the qualitative survey study method would provide the research team with an in-depth understanding of how good governance impacts, the sustainable performance of the organization. That we would not get less than 200 accommodating research participants willing to answer all questions with integrity and reliability to understand the Kenyan public sector perspective on good governance, and sustainable performance. That there are ample documents to contribute sufficient data to explain how relatively good governance impacts sustainable performance in an organization. Limitations Fear of victimization was a key flaw in this study, Incomplete responses Sampling bias

6. Theoretical Framework The theories discussed in the research include Institutional Theory, Resource Dependence Theory and Stakeholder Theory which play crucial roles. Among these theories, Stakeholder Theory has the most significant impact on good governance in Kenya due to its focus on inclusivity, transparency, and accountability, which are critical for addressing the country’s unique governance challenges. Stakeholder Theory Emphasizes that organizations including governments should consider the interests and well-being of all their stakeholders. Stakeholders in this context are individuals or groups that are affected by the organization's actions.

7. Empirical Framework According to Lewis (2020) the role of ethical leadership, values-based culture, and integrity frameworks promotes ethical behavior and organizational accountability. These findings resonate with experiences across various countries, where ethical governance has emerged as a key priority in addressing corruption, promoting social justice, and fostering public trust (OECD, 2017). Nyamongo et al. (2018) and Mukendi et al. (2022) examines the impact of ethical decision-making in public sector performance in Kenya. It highlights the role of ethical leadership, codes of conduct, and whistleblower protection mechanisms in fostering organizational trust, employee morale and stakeholder confidence. A study by Kamau and Muturi (2024) delves deeper into specific ethical practices within Kenya’s public sector, such as conflict of interest policies and anti-corruption measures.

8. Methodology, Research Design, Tools, Ethical Considerations Methodology Mixed Methods Approach which combined both qualitative and quantitative methods. This provided a comprehensive view of the impact of good governance on sustainable performance in the public sector. Research Design Descriptive Research Design was used to collect data at one point in time which is suitable for in-depth study of phenomena. Surveys described current beliefs, customs and attitudes of the respondents . Tools Data Collection involved self-administered semi-structured questionnaires which was administered electronic ally .

9. Methodology, Research Design, tools, Ethical Considerations cont … Data Analysis Techniques Where the cumulative probability for the category, is the threshold for the category, are the regression coefficients, are the predictor variables, and k is the number of predictors. In particular; where is the constant and the regression coefficients while whereby is transparency, Accountability, Ethical Decision Making, Risk Management practices, training and workshops, strengthening policies and procedures and implementing whistleblower mechanism The numerator on the right side determines the location of the model. The denominator of the equation specifies the scale. They are coefficients for the scale component and are 7 predictor variables for the scale component (chosen from the same set of variables as the x’s). The scale component accounts for differences in variability for different values of the predictor variables.  

10. Data Analysis - Descriptive Statistics

11. Data Analysis - Summary Ordered logistic regression Number o f observations = 243 Lr chi2(7) = 254.04 Prob > chi2 =0 Log likelihood = -752.49787 Pseudo r2 = 0.1444 Organization sustainable performance (economic, social, and environmental aspects). Coef. Std. Err. Z P>z [95% conf.Interval] Risk management practices 0.818488 .1739215 4.71 0.00 0.477608 1.159367 Good Governance Parameters- Ethical Decision-making 0.228976 .2014524 1.14 0.256 -0.16586 0.6238158 Good Governance Parameters Transparency 0.140907 .2335035 0.60 0.546 -0.31675 0.5985654 Good Governance Parameters Accountability 0.210221 .228888 0.92 0.358 -0.23839 0.6588335 Practical recommendation to Good Governance - Training and workshop 0.296836 .1385617 2.14 0.032 0.02526 0.5684117 Practical recommendation for Good Governance Strengthening policies 0.509272 .1732583 2.94 0.003 0.169693 0.8488524 Practical recommendation for Good Governance Implementing whistleblower 0.323417 .1287304 2.51 0.012 0.07111 0.5757238 Risk management practices significantly impact performance. Good governance practices like ethical decision-making show no statistical significance. A one-unit increase in risk management practices correlates with an 82% performance increase. Practical recommendations such as training and policy strengthening positively influence performance. The model is statistically significant (p < 0.05). Findings provide actionable insights for organizational performance

12. Data Analysis - Summary Ordered logistic regression Number o f observations = 243 Lr chi2(7) = 254.04 Prob > chi2 =0 Log likelihood = -752.49787 Pseudo r2 = 0.1444 Organisation sustainable performance (economic, social, and environmental aspects) Coef. Std. Err. Z P>z [95% conf.Interval] Risk management practices 0.818488 .1739215 4.71 0.00 0.477608 1.159367 Good Governance Parameters- Ethical Decision-making 0.228976 .2014524 1.14 0.256 -0.16586 0.6238158 Good Governance Parameters Transparency 0.140907 .2335035 0.60 0.546 -0.31675 0.5985654 Good Governance Parameters Accountability 0.210221 .228888 0.92 0.358 -0.23839 0.6588335 Practical recommendation to Good Governance - Training and workshop 0.296836 .1385617 2.14 0.032 0.02526 0.5684117 Practical recommendation for Good Governance Strengthening policies 0.509272 .1732583 2.94 0.003 0.169693 0.8488524 Practical recommendation for Good Governance Implementing whistleblower 0.323417 .1287304 2.51 0.012 0.07111 0.5757238 Risk management practices significantly impact performance. Good governance practices like ethical decision-making show no statistical significance. A one-unit increase in risk management practices correlates with an 82% performance increase. Practical recommendations such as training and policy strengthening positively influence performance. The model is statistically significant (p < 0.05). Findings provide actionable insights for organizational performance

13. Research Findings and Discussion Research Findings There is a positive correlation between good governance and sustainable performance. Discussion Implications for policy and practice in the Kenyan public sector. Importance of strengthening governance frameworks.

14. Summary Conclusion and Recommendations Conclusion Good governance enhances sustainable performance in the public sector. Need for continuous improvement in governance practices. Risk management principles and practical recommendations for enhancing good governance principles are statistically significant. Recommendations Implementing comprehensive governance frameworks. Regular training on ethical decision-making and risk management. More studies to be carried out to establish why good governance principles were statistically insignificant.

15. Thank You! Question and Answers Group 5 – Team James M. Resa Dennis Peter Maingi Bernadette Nzomo Samuel M. Kithinji Joyce Nduta Kimemia Gerald Cheruiyot Misky Mohamed Ali Peris Nyambura Kimotho Anne Alucky Justus Wangia Wechuli Ferdinand Chiloli Kiwanuka Supervisor : Dr. Anthony Kamakia