Journal of Economics and Business
ISSN 2615-3726 (Online)
ISSN 2621-5667 (Print)
Published: 03 February 2020
The Moderating Role of the Legal Environment on the Relationship between TMT Characteristics and Organizational Performance in a Regulatory Setting in Kenya
Joseph O. Oketch, James M. Kilika, Godfrey M. Kinyua
Kenyatta University, Nairobi
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Keywords: Top Management Team Characteristics, Legal Environment, Independent Regulatory Agencies, Organizational Performance
The legal environments of regulatory agencies are key predictors of their organizational performance as they influence how the regulatory agencies are created, their mandates, sources of funding and reporting frameworks. Reporting frameworks include the nature of the relationships between the regulatory agencies and the policy makers, political actors, the legislature, the executive, judicial processes, regulated entities and the public. The specific objective of the study was to establish the moderating effect of the legal environment on the relationship between top management team characteristics and organizational performance of the independent regulatory agencies in Kenya. To achieve this objective, the study adopted descriptive cross-sectional research design. The target population of the study was all the twenty-three state regulatory agencies currently existing in Kenya. Due to the uniqueness of each independent regulatory agency and the distinct roles played by each top management team member in their organization, the study adopted a census survey of all the top management team members in all the twenty three state regulatory agencies in order to capture the required information. Primary data was gathered using structured questionnaire administered through drop and pick later method. Descriptive statistics was then used to summarize the survey data into percentages, frequencies, means and standard deviations. Whisman and McClelland model was used to test for the moderation. The findings of the study showed that legal environment has significant moderating effect on the relationship between top management team characteristics and performance of the independent regulatory agencies in Kenya The study recommends that the independent regulatory agencies should have stable funding mechanism so as not to rely on the parent ministries or exchequer support for them to be financially independent in executing their mandates. Lastly the study recommends for judicial system to recognize and support the work of the independent regulatory agencies in enforcement of the laws and regulations for their sectors or sub-sectors.
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