CHALLENGES OF STRATEGY IMPLEMENTATION FACING AUDIT

FIRMS IN NAIROBI, KENYA

BY

EDNA CHIRU POLLE

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF

THE REQUIREMENTS FOR THE AWARD OF THE MASTER OF

BUSINESS ADMINISTRATION DEGREE, SCHOOL OF BUSINESS,

UNIVERSITY OF NAIROBI

November 2012

DECLARATION

I declare that this is my original work and has not been presented for a degree in any other

University

Date.....

Edna Chiru Polle

D61/71288/2008

This project has been submitted for examination with my approval as the University supervisor

Date.... t l .

Dr. Justus Munyoki

Senior Lecturer

Department of Business Administration

University of Nairobi

ii

DEDICATION

This project is dedicated to my parents,Mr& Mrs Nathaniel Ziro Polle who gave all they could to

make my education possible.

iii

ACKNOWLEDGEMENTS

I would like to first and foremost thank the Almighty God for enabling me to come this far. for

the gift of life, strength and endurance. Indeed, it has been a very long journey.

Secondly, 1 would like to thank my dear husband, Peter Omenge Magati for his love,

encouragement, support and his prayers.

Finally, I would like to appreciate my supervisor, Dr. Justus M. Munyoki for his guidance and

the invaluable advice that he gave me while I was doing this research.

IV

TABLE OF CONTENTS

Declaration.................................................................................................................................................ii

Dedication.................................................................................................................................................iii

Acknowledgements..................................................................................................................................iv

Table of Contents......................................................................................................................................v

List of Tables.......................................................................................................................................... vii

Abstract...................................................................................................................................................viii

CHAPTER ONE: INTRODUCTION........................................................................................... - 1 -

1.1 Background of the study..........................................................................................................- 1 -

1.1.1 The Concept of Strategy................................................................................................ - 2 -

1.1,2Challenges of Strategy Implementation...................................................................... -3 -

1.1 .SAudit Firms in Nairobi, K enya................................................................................... - 4 -

1.2 The Research Problem..............................................................................................................- 6 -

1.3 Objectives of the Study........................................................................................................... - 7 -

1.4 Value of the Study...................................................................................................................- 7 -

CHAPTER TWO: LITERATURE REVIEW.............................................................................- 9 -

2.1 Introduction..............................................................................................................................- 9 -

2.2 Concept of strategy Implementation...................................................................... - 9 -

2.4 Challenges of Strategy Implementation............................................... .'............................- 12 -

2.5 Confronting Implementation Challenges.......................................................................... - 16 -

CHAPTER THREE: RESEARCH METHODOLOGY........................................................ - 21 -

3.1 Introduction..................................................................•........................................................- 2 1 -

3.2 Research Design.................................................................................................................. - 21 -

3.5 Data Collection..................................................................................................................... - 2 3 -

3.6 Data Analysis........................................................................................................................ - 2 3 -

CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION...................................- 24 -

4.1 Introduction........................................................................................................................... - 2 4 -

4.2 Strategy Implementation challenges...................................................................................- 24 -

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS.......... - 35 -

5.1 Summary..................................................................................................................................- 3 5 -

v

5.2 Conclusions of the study......................................................................................................- 35 -

5.3 Limitations of the study.......................................................................................................- 36 -

5.4 Recommendations................................................................................................................ - 36 -

5.4.1 Recommendations with policy implications............................................................. - 36 -

5.4.2 Recommendations for Further Research.................................................................. - 37 -

REFERENCES................................................................................................................................. - 3 8 -

APPENDIX 1: QUESTIONNAIRE.............................................................................................- 43 -

APPENDIX 2: LIST OF AUDIT FIRMS IN NAIROBI......................................................... - 47 -

VI

LIST OF TABLES

Table 4. 1: Recent decisions implemented..................................................................................................- 25

Table 4.2 : Time taken in implementation..................................................................................................- 26

Table 4.3: Political factors impacting implementation.............................................................................. - 26

Table 4.4: Co-ordination was not sufficiently effective............................................................................. - 27

Table 4.5: Competing activities distracted from implementing decision..................................................- 28

Table 4.6: Capabilities of employees involved.......................................................................................... - 28

Table 4.7: Training and instruction given to employees............................................................................ - 29

Table 4.8: Uncontrollable factors in the external environment................................................................. - 29

Table 4.9: Leadership provided by partners and directors.........................................................................- 30

Table 4.10: Key implementation tasks and activities................................................................................ - 31

Table 4.11: Technological systems used to monitor and implement strategies.......................................- 31

Table 4.12: Level of understanding of goals.............................................................................................. - 32

Table 4.13: Role of key formulators in the implementation...................... s.'...........................................- 33

Table 4.14: Feeling of ownership among the employees......................................................................... - 33

Table 4.15: Level of financial resources....................................................................................................- 34

vii

ABSTRACT

1 his study sought to find out responses by audit firms as to the challenges they face in

implementing strategy. The objectives of the study were to determine the challenges of

strategy implementation facing audit firms in Nairobi and to establish the responses of

audit firms to strategy implementation challenges. The study used descriptive design in

its methodology and adopted a cross sectional survey approach where the units to be

studied were audit firms in Nairobi. The population of the study was 619 audit firms. A

sample of 60 audit firms was randomly selected, representing 10% of the target

population. Data was analysed using descriptive statistics using means and frequencies.

The study found that there are several challenges facing audit firms in the implementation

of strategy, mostly due to insufficient financial resources and that the audit firms are not

only technical efficient but have also embraced technology in their operations.

viii

CHAPTER ONE: INTRODUCTION

1.1 Background of the study

Strategy is a pattern for an organization to achieve their objectives and goals Porter

(1980). Strategy implementation happens to be a more challenging and delicate task than

that of strategy formulation. Unlike strategy formulation, strategists cannot afford to be

abstract or desk-work oriented in implementation. Delicate and sensitive issues are

involved in strategy implementation such as resource mobilization, restructuring, culture

changes, technological changes, process changes, policy and leadership changes. Where

implementation is not effectively managed, the strategic plan may amount to being a

mere “White elephant" and nothing more. Alexander ( 1985)claims that the overwhelming

majority of the literature has been on the formulation side of the strategy and only “lip

service has been given to the other side of the coin, namely strategy implementation”.

These studies, though increasing in numbers, are few and considered less “glamorous”

than those on strategy formulation Atkinson (2006).'On the other hand, problems with

implementation continue unabated. This signals the need for balancing strategic planning

with implementation based strategies and studies.

Audit firms in Kenya are faced with various challenges emanating from the external and

internal environment such competition, Socio-cultural changes, technological changes,

economic challenges, systems and structures and inadequate resources. These challenges

pose a serious threat to such organizations. This therefore calls for better strategies that

capture the industry dynamics and that are premised on radical changes reminiscent of

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the industry for swift responses may such occasions arise and more importantly the

implementation of the identified strategies.Although numerous studies acknowledge that

strategies frequently fail not because of inadequate strategy formulation, but because of

insufficient implementation, strategy implementation has received less research attention

than strategy formulation especially with regards to audit firms. There have been studies

on strategies in audit firms that have been done in Kenya like competitive strategies

adopted by the audit firms Nyakang'o(2007)and Strategic planning practices in audit

firms Karanja(2008). None of the studies done on audit firms was looking at Strategy

implementation in audit firms; this is an area that should receive deserving attention from

researchers.

1.1.1 The Concept of Strategy

According to Johnson & Scholes (1999)understanding the strategic position of an

organization and considering the strategic choices open to it are of little value unless the

strategy managers wish to follow can be turned into action. Strategies are a critical

element in organizational functioning but whereas most organizations have good

strategies, successful implementation remains a major challenge. Strategy

implementation is a very critical issue in the success of any organization since without

proper strategy implementation even the most superior strategy is useless. Aosa(1992)

states that once strategies have been developed they need to be implemented; they are of

no value unless they are effectively translated into action. Mintzberg(1987)states that

strategy implementation is an internal operations driver activity involving organizing,

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Budgeting, motivating, culture building, supervising and leading to make the strategy

work as intended.From the scholars noted earlier, it would be in order to state that

implementing strategy involves creating fit between the way things are done and what it

takes for effective strategy execution. Kiruthi (2001)noted that poor implementation of an

appropriate strategy may cause that strategy to fail. This means that strategy should be

effectively operationalized and institutionalized in the organization for effective

implementation.

1.1.2 Challenges of Strategy Implementation

To be competitive, companies must develop good strategies and appropriately realign the

organizational structure, systems, leadership behavior and human resource polices.

However between ideal strategic alignment and implementation lie many challenges.

Many managers believe that a well-conceived strategy that is communicated to the

organization equals implementation.Alexander (1985) points out that there are many

problems which over half of the companies experience frequently, such as the involved

employees have insufficient capabilities to perform their jobs, lower level employees are

inadequately trained and departmental managers provide inadequate leadership and

direction. These are the most frequent strategy implementation problems in relation to

human resources. Line level employees may use delay or prevent attempts toward change

that they find particularly threatening.

Challenges in strategy implementation can arise from sources internal or external sources.

Hie internal sources to the organization are behavioral challenges such as resistance to

change; inadequacy of resources such as inadequate funds, equipment and

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facilities,human resources skills and experience; and inappropriate systems of structure,

culture, leadership, policies, support and reward.Strategy implementation challenges are

also found in sources external to the organization such as Macro-environmental forces

which are usually include economic forces, political-legal forces, social-cultural forces,

technological forces and ecological forces; Industry forces is yet another external source

of challenge, here efforts to implement strategy can be greatly impaired by powerful

buyers, powerful suppliers and stiff rivalry from competitors; operating environmental

forces arising from pressure from stakeholders like customers, government and

shareholders can impose challenges that could impair strategy implementation.

1.1.3 Audit Firms in Nairobi, Kenya

The auditing industry is very competitive and due to increased competition, the firms

have placed emphasis on corporate strategy. As per the Institute of Certified Public

Accountants of Kenya (1CPAK) the number of registered audit firms operating in

Nairobi. Kenya as at September 201 lwas 619.The audit industry in Nairobi, Kenya is

dominated by four (the Big 4) auditing firms, all of which have international

backgrounds. The four firms are the auditors of practically all the publically traded

companies in Kenya. The difference in their strategies development and implementation

is that whereas local audit firms independently develop and 'implement their own

strategies, the Big 4 more often than nothave their-strategies developed and implemented

following global firm wide guidance and standards.

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According to Marx(2011), external auditing has evolved from routine checking of the

books of accounts to a vital part of the governance process of companies. Factors such as

the volume of transactions, information technology, globalization and the constant

increase in the complexity and number of laws, regulations and standards governing

entities and their auditors have all impacted drastically on the evolving role of the

registered auditing profession. The corporate collapses, business failures and fraudulent

financial reporting scandals of the late 1990s and early 2000s led to a very turbulent time

and resulted in a credibility crisis for the auditing profession Marx(2011). A further

consequence was the interventions by governments, regulators and the auditing

profession itself, which have given rise to various and onerous new laws, regulations and

standards that govern financial reporting and the auditing thereof.

Generally, the challenges that audit firms face are fraudulent financial reporting and audit

failures, new legislation, regulation and standards, audit costs and audit fees, staff

training, transformation and retention, auditor independence and the provision of non­

audit services, the audit expectation gap and auditor litigation. This has forced audit firms

to come up with new strategies to counter these challenges. However, the problem has

been on implementation, whereas as the challenges facing audit firms and recent

development in the audit industry affects all audit firms there is a risk of the Big four

auditing firms domination of the audit market this is due to their size, the extent of

knowledge and information sharing implicit in their global network and the resultant

economies of scale.

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1.2 The Research Problem

Strategy implementation and execution is one of the fundamental criteria in a company’s

success Brown & Eisenhardt (1998). Good conceptual planning would not result in good

outcomes if implementation and execution is weak and unpractical

Tuominen(2000).Organisations are good at formulating strategies but the actual

implementation of these strategies is a major problem leading to many strategic plans

being abandoned mid-stream despite resources being spent in their formulation.

Hrebiniak(2006) established that organizational leaders like managers and directors know

more about strategy formulation and very little on implementation. Kiruthi (2001) noted

that poor implementation of an appropriate strategy may cause that strategy to fail.

All organizations including audit firms need to know the challenges of strategy

implementation and know how to counter these challenges in order to achieve success in

their strategic plans.Al-Ghamdi (1999)states that there are several benefits of Strategy

^implementation including it will aid in identifying the implementation problems, coming * *

up with solutions to the problems, it may signal a need to formulate strategic plans that

are more easily implementable, this could also help in identifying facilitative mechanisms

and solutions that reduce challenges to implementation of strategies and finally it will

provide guidelines on how to cope and counter with implementation challenges

Strategy implementation has continued to receive increasing attention in literature e.g.

Bourgeois LU & Brodwin (1984); Alexander(1991); Grundy (1998); Noble(1999); Beer

& Eisenstat (2000). Audit firms have attracted scholars exampleMuragu (1981)conducted

a study on the need and scope of independent audit while Njoroge(1993) on the other

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hand conducted a study on the usefulness of auditor's report in investment decisions.

Nyakang’o (2007) conducted a study on the competitive strategies adopted by audit firms

in Nairobi;Karanja(2008) conducted a study on the strategic planning practices in audit

firms in Nairobiand concluded that well-developed strategic planning

practices are ways that can lead audit firms to acquire and sustain a competitive

advantagewhile Kimami (2008)researched on the response strategies of small and

medium audit firms in Nairobi to regulatory changes affecting the audit industry,

however not much has been written in relation to audit firms and the actual

implementation of these strategies and challenges of implementation. This research

therefore sought to determine the challenges of strategy implementation facing audit

firms in Nairobi, Kenya.

The research question addressed was: What are the challenges of strategy implementation

facing audit firms in Nairobi. Kenya?

1.3 Objectives of the Study

i) To determine the challenges of strategy implementation facing audit firms in

Nairobi, Kenya.

ii) To establish the responses o f audit firms to strategy implementation challenges.

1.4 Value of the Study

The findingsof this research will be useful to various stake holders in the audit industry.

The study will be invaluable to the stakeholders in audit firms’ findings herein will

provide them with information on the challenges faced during strategy implementation.

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Audit partners, managers, policy makers and strategic planners will be informed on how

to counter different challenges of strategy implementation so as to ensure greater profit

margins, survival and growth.

Audit firms will also benefit by assessing, evaluating and reviewing their strategic

implementation practices as tools for competitiveness in the face of the changing business

environment.

This study will contribute to the body of knowledge on strategy implementation

challenges faced by organizations and will be used by academicians as a basis for further

research.

The study will also stimulate future scholars to further research on how to counter

challenges faced by organizations in strategy implementation.

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CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter highlights the challenges that organisations face when implementing

strategies and the responses that are adopted by the companies. How organisations can

confront the implementation challenges is also brought into light in this section.

There are different definitions of strategy by different authors and scholars. The concept

of strategy means its content and substance. Like many other concepts in the field of

management, there is no agreed all-embracing definition of strategy. Porter(1980) views

strategy as defining the business of an organization. Strategy has been defined by

Mintzberg & Quinn (1991)as a plan, ploy, pattern, position and perspective.

In his definition, Ansoff(1987) describes strategy as a rule for decision making. He seeks

to differentiate policy and strategy. He indicates that while policy is a general decision

that is always made in the same way whenever the same circumstances arise, strategy

applies similar principles blit allows different decisions as the circumstances differ. This

definition is all inclusive as it captures and takes into consideration the changing

environment.David(2003) states that strategic management is thinking through the overall

mission of a> business.

2.2 Concept of strategy Implementation

Pearce& Robinson (2005), strategic implementation is defined as a set of decisions and

actions that result in the formulation and implementation of long-term plans designed to

achieve organizational objectives.

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Its purpose is to complete the transition from strategic planning to strategic management

by incorporating adopted strategies throughout the relevant system as emphasized by

Kimeli (2008).Strategy implementation is one of the important components of the

strategic planning process Njagi (2010). Chandler (1962)defined strategy implementation

as the determination of the basic long term goals and objectives of an enterprise and the

adoption of action and the allocation of resources necessary for carrying out these goals.

This means that strategy implementation is about managing new opportunities. The

strategy that is chosen should be one that optimizes the resources available in order to

achieve organizational goals and objectives. Strategy Implementation has also been

defined as “the process that turns strategies and plans into actions to accomplish

objectives” Pride & Ferrell(2003). It addresses who, where, whom and how to carry out

strategic implementation process successfully Kotler (2010).

According to David(2003)both managers and employees should be involved in the

implementation decision and adequate communication between all parties is important

for successful implementation. Elements that require consideration during the

implementation process include annual objectives, policies, resource allocation,

management of conflict, organization structure, managing resistance to change and

organizational culture. In developing policies during the implementation process,

methods, procedures, rules and administrative practices are established. David (2003)

further states that, strategies which are implemented within an organization should

support the culture associated with the firm.

- 1 0 -

The proposed strategy should preserve,emphasize and enhance the culture, in accordance

with the culture supporting the proposed strategy.Conflict management also plays an

integral role within the implementation process. According to David (2003), the human

element of strategic implementation plays a key role in successful implementation and

involves both managers and employees of the organization. Both parties should directly

participate in implementation decisions and communication plays a key role in ensuring

that this occurs.David (2003).Business performance is influenced by this human element

of strategic implementation. Through providing performance incentives to employees

during the implementation phase, it is suggested that business performance will be

positively influenced.

Miller (1992) reports that organizations fail to implement more than 70% of their new

strategic initiatives. Given the significance of this area, the focus in the field of strategic

management has now shifted from the formulation of strategy to its implementation.

Hussey (1998); Lorange (1998).There are some commonly used models and frameworks

such asStrength Weakness Opportunities and Threats (SWOT), Industry structure

analysis and generic strategies for researchers and practicing managers, in the areas of

strategy analysis and formulation in strategic management. By contrast, there is no agreed • •

upon and dominant frame work in strategy implementation. Concerning this,

Alexander ( 1991) has stated that: the key reason why implementation fails is that

practicing executives, managers and supervisors do not have practical, yet theoretically

sound, models to guide their actions during implementation without adequate models,

-11 -

they try to implement strategies without a good understanding of the multiple factors that

must be addressed, often simultaneously, to make implementation work.Noble (1999) has

further noted that: there is a significant need for detailed and comprehensive conceptual

models related to strategy implementation. To date, implementation research has been

fairly fragmented due to a lack of clear models on which to build. He argues that if a

firm's strategy is implemented well, several benefits will be delivered by an organization.

These benefits include proper utilization of both financial and human resources and thus

enhance organizational growth, development of efficient systems that will enhance

organizational growth, development of efficient systems that will enhance coordination

and would guarantee achievement of organizations goals and set targets, increased

organizational impact due to improved organizational performance and also enable the

organization have a clear focus and direction in its growth path and in the process attract

competent and resourceful human resource base.

2.4 Challenges of Strategy Implementation

There are many organizational characteristics which impede strategy implementation.

The challenges that occur during the implementation process are important areas of

research because even with the best strategy will be ineffective if not implemented

successfully as indicated by Kithinji(2005).Downes (2001)states that the kinds of

execution obstacles most companies run into fall into two categories: problems internal to

the company and problems generated by outside forces in its industry. These internal and

external issues are affected by the extent of flexibility companies have to launch strategic

initiatives successfully.If the existing culture in antagonistic to a proposed strategy then it

should be identified and changed.

-12 -

People can be captured by their collective experiences rooted in the past success and

organizational and institutional norms Johnson & Scholes ( 1999). Culture may be a

factor that drives strategy rather than the other way round Kasmi(2002).Another factor

that may impede strategy implementation is the organization's structure. Although an

organization's structure may be appropriate for past strategies, it may require significant

change to be suited to new and different business strategies Kessler & Kelly

(2000).Symptoms of an ineffective organizational structure include too many levels of

management, too many meetings attended by too many people, too much attention being

directed towards solving interdepartmental conflicts, too large a span of control and too

many unachieved objectives David (2003).Changes in structure should not be expected to

make a bad strategy good, or make bad managers good, or to make bad products sell

Chandler (1962).

Johnson & Scholes( 1999) points out the assumption top management can plan strategy

implementation at the top then cascade down through the organization is not tenable. It

should be recognized that how top managers conceive strategies are not the same as how

those lower down in the organization conceive of them. Therefore there needs to be ways

’of relating the strategic direction to the everyday realities of people in the organization. It

is therefore vital that middle managers are engaged-with and committed to such strategies

so that they can perform this translation process Kasmi (2002).

A number of factors commonly prohibit effective resource allocation. These include an

over protection of resources, too great an emphasis on short run financial criteria,

organizational politics, vague strategy targets, a reluctance to take risks and a lack of

-13 -

sufficient knowledge David (2003). All organizations have at least four types of

resources that can be used to achieve desired objectives. They are; financial resources,

physical resources, human resources and technological resources Thompson (1990)

Managers need to consider the importance of frequent and open communication before,

during and after the major planning activities occur. Informal organizational

communication process (the grapevine) will continue to operate at full tilt during the

planning process and will often carry incorrect and unsubstantiated information

throughout the organization. This was an unsettling and disruptive effect on day to day

operations Kessler & Kelly ( 2000)

Speculand (2009)argues that people can only adopt a strategy if they know and

understand it. He further explains that leaders need to explain the objectives of the new

strategy so as to obtain buy in. staff members should also know the new actions and

behavior they must take to implement the strategy. Speculand also points out that regular

communication about success, best practices^ and lessons learnt throughout the

implementation can help a new strategy succeed.

DeLisi (2001)found that four factors particularly hamper or destroy strategy

implementation. These are ineffective senior management, top-down or laissez-faire

senior management style, unclear strategies and conflicting priorities and poor

coordination across functional boundaries. Moreover, DeLisi’s research also revealed

several other potential reasons for the failures in strategy implementation. These included

the lack of knowledge of strategy and the strategy process, no commitment to the plan,

the plan was not communicated effectively, people are not measured or rewarded for

- 14-

executing the plan, the plan is too abstract, people cannot relate it to their work, people

are not held accountable for execution, senior management does not pay attention to the

plan,rein forcers, such as culture, structure, processes, IT systems, management systems

and human resource systems, are not considered, and/or act as inhibitors, people are

driven by short-term results. Johnson ( 2002) in his survey found that the five top

reasons why strategic plans fail are related to motivation and personal ownership,

communications, no plan behind the idea, passive management, and leadership. Ram

Charan (2003) in his research on implementation problems notes that “ignoring to

anticipate future problems” hinders successful strategy implementation.

Hrebiniak (2005) recognized the difficulty of strategy implementation and the reward

from doing that correctly. He discussed various factors that can lead to incorrect

implementation of any strategy similar to those already discussed in the above literature

discussion. Additionally, Hrebiniak’s research survey of 400 managers contributed to the

identification of additional factors that may cause obstacles to successful strategy

implementation included:

Lack feelings of "ownership" of a strategy or implementation plans among key

employees, not having guidelines or a model to guide strategy- execution efforts, lack of

understanding of the role of organizational structure and design in the execution process,

inability to generate "buy-in" or agreement on critical execution steps or actions, lack of

incentives or inappropriate incentives to support execution objectives; insufficient

financial resources to execute the strategy.Brannen (2005)survey based study concluded

that in order to improve implementation certain issues have to be tackled. These include

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inadequate or unavailable resources, poor communication of the strategy to the

organization, ill-defined action plans, ill-defined accountabilities, and

organizational/cultural barriers. Brannen's survey unearthed another significant obstacle

to effective strategy implementation namely, “failing to Empower or give people more

freedom and authority to execute." Welbourne (2005)observations of items on “what’s

getting in the way of implementation” points to “habit and past experience reflects on

new strategy" as another factor that could affect strategy implementation.

2.5 Confronting Implementation Challenges

King and Anderson cited Kotter & Schlesinger (1979)that there are six strategies

overcoming the resistance: communication, participation, facilitation, negotiation,

manipulation and coercion.Facilitation is a key strategy in confronting implementation

challenges. Many organizations still believe that their success depends largely on the

commitment of their employeesEmshoff (1994).Dowd ( 1998)citedthat managers must

provide support during the implementation/change process. Making one available,%

providing adequate information, being positive, actively listening and showing personal

interest and respect are strategies that managers can use to help minimize the frustration

of those coping with change.

Participation is yet another way of confronting implementation challenges. Employees

should be involved in decision making and new program development. It is one of the

best methods of handling resistance, simply because that employee’s involvement in the

stage of a change process significantly influences the eventual outcome. Change has a

significant impact on the work that people do, will have a significant impact on their self-

- 1 6 -

esteemCarnall (1990). People will feel better about a decision in which they played a

part, because they experience a sense of ownership that are likely to creatively change

aspects of their organizations to soive problem and to exert extra effort to develop their

products or services Dirks, Cummings, & Pierce (1996). Thus their self-esteem will be

enhanced to a certain height and they will not show resistance to change any more, even

they will feel angry at others who disagree with the change process they participate in.

Communication is the key to the survivors understanding the new corporate strategy and

their accurate interpretation of the organizations goals and objectives. Managers should

let staff know of bad news rather than manipulate it into good news. Effectively

communicating the change process aids in maintaining positive staff morale during the

changeSherer (1997).The time to take stock of senior management support is when a

business plan is about to be implemented. Many organizations hit a road block along the

way because middle managers do not have sufficient authority to make adjustments

especially those essential to successful implementation. Senior management support is

integral to successful adoption of effective business planning activities Kessler & Kelly

(2000)

Negotiations with individuals involved and the forces imposing the change can minimize

resistance to change. When this is a possible, individual involved in the change will feel

they have some control and be more likely to view the change as palatable. Providing as

many avenues as possible for staff to provide input, help make decisions, and have some

control over matters that affect them facilitates change. Furthermore, spreading the

- 1 7 -

change out over time can also reduce the trauma of change. Time can allow the individual

to move through a grief process slowly and experience it less intensely Dowd (1998).

Finally according to King & Anderson (1979), using some manipulation and coercion

strategies can identify and overcome potential sources of resistance as well and make the

organization survive and thrive

Despite the importance of strategy implementation, some managers mistake the

implementation of strategy as an afterthought, Grundy (1998). Studies undertaken by

Alexander (1991)most strategic literature is on strategy formulation and this they argued,

is an indicator of the emphasis placed in the formulation phase in strategic planning. To

overcome and improve challenges in strategy implementation, Stark (2009)

suggestedfivesteps tobe undertaken. The first step is to get sufficient partner buy-in.In

conducting strategic planning, firm leaders and partners involved in the process need to

develop a strong understanding of the business imperative behind the chosen strategy and

the need for change in order to achieve partner goals. However, partners removed from

the process may struggle to identify with the goals and strategies outlined by firm leaders.

These partners may not see a need for change, and without understanding the background

and rationale for the’chosen strategy, these partners may never buy-in to strategic plan

and, as a result, will passively or actively interfere with the implementation process.

The second step to be undertaken to overcome and improve challenges in strategy

implementation as stated by Stark (2009)is sufficient leadership attention. Too often, firm

leaders view the strategy development process as a linear or finite initiative. After

- 1 8 -

undergoing a resource intensive strategic planning process, the firm's Managing Partner

and Executive Committee members may find themselves jumping back into billable work

or immersing themselves in other firm matters, mistakenly believing that writing the plan

was the majority of the work involved. Within weeks of finalizing the plan, strategies

start to collect dust, partners lose interest, and eventually, months pass with little or no

reference to the plan or real action from firm leaders to move forward with

implementation.

The third step as stated by Stark (2009) is ensuring effective leadership. Leading strategy

implementation requires a balancing act, the ability to work closely with partners in order

to build cohesion and support for the firm’s strategy, while maintaining the objectivity

required in making difficult decisions. Strategy implementation frequently fails due to

weak leadership, evidenced by firm leaders unable or unwilling to carry out the difficult

decisions agreed upon in the plan. To compound the problem, partners within the firm

often fail to hold leaders accountable for driving implementation, which ultimately leads

to a loss of both the firm's investment in the strategy development process as well as the

opportunities associated with establishing differentiation in the market and gaining a

competitive advantage.

The next step as stated by Stark (2009) is to ensure that time is taken to ensure weak or

inappropriate strategy is avoided. During the course of strategic planning, the lack of a

realistic and honest assessment of the firm will lead to the development of a weak,

inappropriate or potentially unachievable strategy. A weak strategy may also result from

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overly aspirational or unrealistic firm leaders or partners who adopt an ill-fitting strategy

with respect to the firm’s current position or market competition. Without a viable

strategy, firms struggle to take actions to effectively implement the plan identified.

The fifth and last step in overcoming and improving challenges in strategy

implementation as stated by Stark(2009) is to counter Resistance to change. The

difficulty of driving significant change in an industry rooted in autonomy and individual

behaviors is not to be underestimated. More often than not. executing on strategy requires

adopting a change in approach and new ways of doing things. In the context of firms, this

translates to convincing the management of the firm, and in particular partners, that

change is needed and that the chosen approach is the right one.

Stark (2009) stated that in ensuring the successful implementation of the firm’s strategy,

firm leaders must take early and aggressive action to institutionalize the strategy within

the firm. The Managing Partner, Chair, and other key leaders must demonstrate visible

ownership of the firm’s strategy, communicating clearly with other partners about the

details, value and importance of the strategy to the firm. Members of management should

also seek input and support from key opinion leaders and rainmakers early-on and request

their help in championing the strategy to other partners within the firm. Over time, such

actions will assist in generating buy-in among partners, leading to greater overall support

for the strategic plan and the changes inherent in its execution.

- 20-

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

This chapter outlines the overall methodology that wasused in the study. This includes

the research design, population of the study, sample frame, data collection methods,

research procedures and data analysis and presentation.

3.2 Research Design

A descriptive cross sectional survey approach was adopted. Generally, a survey may

focus on opinions or factual information depending on its purpose, and must involve

administering structured questions to individuals (Kothari, 1990) “Questionnaires are

commonly used to obtain important information about the population. Each item in the

questionnaire is developed to address a specific objective, research question or hypothesis

of the study” Mugenda&Mugenda (2003)

Surveys allow the collection of large amount of data from a sizable population in a cost

effective way. It allows one to collect quantitative data which can be analyzed

quantitatively using descriptive and inferential statistics Saunders(2007). Since the

objective of this study was to seek answers to specific questions from a large number of

respondents as to finding out the challenges facing audit firms when implementing

strategies, a sample survey approach was more appropriate

- 2 1 -

3.3 Population of the Study

The population of the study was audit firms in Nairobi registered by the Institute of

Certified Public Accountants of Kenya (1CPAK). They are currently 819 audit firms in

Kenya, out of which 619 are based in Nairobi.

The study collected data from 60 audit firms in Nairobi. All the firms selected were

established and have been in existence for more than 3 years. This is because the

management is more stable and the firms have a reliable clientele base. Also, since the

researcher had to use a combination of random, clustered and purposeful sampling

technique, sample selection bias was overcome.

3.4 Sample Design

The research selected the firms randomly from the Institute of Certified Public

Accountants of Kenya (ICPAK) register. However, the big Four firms were purposefully

selected since being market leaders, most of the other firms tend to emulate them. The

researcher felt that this "enabled the research overcome sample selection bias.

The sample included 60 audit firms operating in Nairobi. This represented 10% of the

target population. This included al I large firms which are 6 in number, while the rest were

randomly selected.

- 22 -

3.5 Data Collection

To get a robust data for this research, the researcher used both primary and secondary

data. The primary data was collected directly from the field in their original state using

the research questionnaires. This set of data was collected strictly on variables directly

relevant to the research objectives. Secondary data on the other hand, was collected from

the Institute of Certified Public Accountants of Kenya (ICPAK) data base and any

relevant fact data base on accountants in Kenya.

The respondents were the managing partners, senior managers, managers and head of

strategy and operations since they have better understanding of strategy implementation

and are conversant with the challenges facing implementation of strategy as well as their

involvement in strategy formulation to implementation. The drop and pick method was

used to deliver questionnaires to audit firms

3.6 Data Analysis

The data collected was analyzed using descriptive statistics. This involved the use of

percentages, mean scores and standard deviation. Frequency tables were used for

arranging data obtained to facilitate working out percentages in order to address the

objective of the study. Percentages revealed the proportions of different attributes that

were being studied for relative comparison. Rank ordering was used in ranking the

different attribute/variables in order of their representation equally to address the

objective of the study.

- 23 -

CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION

4.1 Introduction

This chapter presents analysis and findings of the study on Audit firms in Nairobi. The

objective of this study was to determine the challenges of strategy implementation facing

audit firms in Nairobi. It also sought to establish the responses of audit firms to strategy

implementation challenges. The data was analysed using descriptive statistics by use of

frequency tables and percentages as shown in the following sections.Out of the 60 firms

selected 17 did not respond; eitherthey declined to participate in the study or did not fill

in the questionnaire thus they are not included in the analysis and findings. The response

rate was therefore 72%.Most of the firms interviewed (90 per cent) were found to have

been in existence for less than 10 years and employed less than 50 persons while 10 per

cent of the firms had more than 200 employees but less than 500 in their payroll. This

showed that auditing profession has gained more prominence in the last 10 years but little

number of employees in most of the firms sampled was an indicator of stagnation of the

firms in the business.,

4.2 Strategy Implementation challenges• •

This section looks at implementation challenges that audit firms face. The questionnaire

mentioned some of the problems that the audit firms face and asked the respondents to

categorize them into problems they frequently face, always faced, never faced,

occasionally or seldom faced. The respondents were also asked to mention any other

problem that they face that was not indicated by the researcher. Tabled.1 to Table 4.15

indicates the strategic implementation challenges as viewed by the respondents.

- 24 -

Audit firms are faced with numerous challenges when implementing their strategies. In

order to find out the strategies employed by the audit firms, the research sought to find

out the recent management decision that were implemented by the firm in order to sustain

its operations. The respondents were asked several questions on recent strategic decision

which may have been implemented in their firm. Table 4.1 indicates the recent strategic

decisions as viewed by the respondents.

Table 4.1: Recent decisions implemented

Recent decisions implemented Frequency(x) Percent {x-mean(16)}A2

Introduction of a new service 38 40 484

Open and start up a new branch 8 8 64

Expansion of operations 25 26 81

Discontinue a service from a market 5 5 121

Acquisition and mergers 13 14 9

Change the strategy in an operational 7 7 81

Total 96 100 840

The question attracted 96 responses mainly due to the fact that many of the firms had

implemented more than one strategy in their operations. Out of these responses, 40 per

cent of the responses involved the introduction on a new service in its operations

followed by expansion of operations due to growth of business. The other significant

response was the acquisition and mergers with other similar firms so as to remain afloat

and increase their competitiveness in the marker at 14 per cent. The standard deviation

was 2.98

- 2 5 -

Table 4.2 represents the time taken to implement the decisions taken compared to the

time estimated to take.

Table 4.2 : Time taken in implementation

Took more time than originally allocated

Frequency (x) Percentage(% )

{x-mean(9)}A2

Never 3 7 36Seldom 18 42 81Occasionally 16 37 49Frequently 6 14 9Always 0 0 81

43 100 256

The audit firms felt that their allocation of more time than is allocated to the strategies

they employ rarely is an impediment as 42 per cent of the respondents disagreed with the

statement. However occasionally this was an impediment as 37 per cent sighted this as a

reason. Only 14 per cent sighted this as a factor with 7 per cent feeling that is has never

been an impediment. The standard deviation as computed in the table 4.2 is 2.46.

Table 4.3 shows the responses the firms had on whether political factors have an

influence in the implementation of decisions

Table 4.3: Political factors impacting implementation

External political factors had impact on implementation

Frequency (x) Percentage (%) {x-mean(9)}A2

Never 15 35 36Seldom 12 28 9Occasionally 0 0 81Frequently 16 37 49Always 0 0 81

43 100 256

- 2 6 -

63 per cent of the respondents found this as either rarely an impediment or never an

impediment. Only 37 per cent found this as an impediment. The huge response on this as

not an impediment can be attributed to the fact that audit services are usually statutory

and would be needed regardless of the political heat in the country. The standard

deviation as computed in the table 4.3 is 2.46.

Table 4.4 shows the responses on whether co-ordination from the management on the

decisions was effective

Table 4.4: Co-ordination was not sufficiently effective

Co-ordination was not sufficiently effective

Frequency(x)

Percentage(%)

{x-mean(9)}A2

Never 3 7 36Seldom 22 51 169Occasionally 15 35 36Frequently 3 7 36Always 0 0 81

43 100 358

58 per cent of the respondent found this as a’-'non-issue while 35 per cent identified it as

an issue in strategy implementation as seen above.The standard deviation as computed in

the table 4.4 is 2.92.

Table 4.5 represents the responses on whether competing activities distracted attention

from implementing decisions

- 27 -

Table 4.5: Competing activities distracted from implementing decision

Competing activities distracted attention from implementing decision

Frequency(x)

Percentage (%) {x-mean(9)}A2

Never 9 21 0Seldom 19 43 100Occasionally 9 21 0Frequently 3 7 36Always 3 7 36

43 100 172

Audit firms from this research are seen to be organized since 64 per cent sighted this as

an impediment while only 21 per cent found it as an occasional impediment. Only 7 per

cent identified it as a constant impediment. The standard deviation as computed in the 4.5

table is 2.02.

The responses on the capabilities of employees involved are summarized in table 4.6.

Table 4.6: Capabilities of employees involved

Capabilities of Employees involved were insufficient

Frequency(x)

Percentage(%)

{x-mean(9)}A2

Never 6 14 9Seldom 31 71 484Occasionally 3 7 36Frequently 0 0 81Always 3 7 36

43 100 637

Accountancy is one of the professions where the enrollment rates are high. This was

confirmed in the response where 71 per cent found this to be a non-issue in strategy

implementation.The standard deviation as computed in table4.6 is 3.89.

- 28-

Table 4.7 shows the summary of the adequacy of training and instructions given to

employees of the audit firms.

Table 4.7: Training and instruction given to employees

Training and instruction given to lower employees were inadequate

Frequency Percentage (%) {X-mean (9)}A2

Never 0 0 0Seldom 24 56 225Occasionally 16 37 49Frequently 3 7 36Always 0 0 81

43 100 391

Training to the staff was also seen as sufficient with 56 per cent finding it as a non-issue.

However 37 per cent found this as an impediment and this can be attributed to the fact

that students who find employment in these firms have more theoretical and less practical

experience. The standard deviation as computed in table 4.7 is 3.05.

Table 4.8 shows the perception on 1tow uncontrollable external factors influence the

success of implementation of strategies.

Table 4.8: Uncontrollable factors in the external environment

Uncontrollable factors in the external environment hindered

Frequency(x)

Percentage (%) {X-mean (9)}A2

Never 0 0 0Seldom 28 64 361Occasionally 6 14 9Frequently 9 21 0Always 0 0 81

43 100 451

- 29-

The external environment was rarely seen as an impediment with 64 per cent saying it

never affects their strategy implementation.The standard deviation as computed in table

4.8 is 3.

Table 4.9 shows the extent of Leadership of audit firms may influence audit firms’ in

their strategy implementation.

Table 4.9: Leadership provided by partners and directors

Leadership provided by partners and directors were inadequate

Frequency(x)

Percentage (%) {X-mean (9)}A2

Never 25 57 256Seldom 9 21 0Occasionally 6 14 9Frequently 3 7 36Always 0 0 81

43 100 382

The leadership skills provided in the audit firms were seen as adequate with 79 per cent

confirming this. This can be attributed to the mandatory continuous trainings that are

required of from auditors some of which are offered by the Institute of Certified Public

Accountants of Kenya (ICPAK) to all its members.The standard deviation as computed in

table 4.9 is 3.02.

Table 4.10 shows the extent of key implementation tasks and activities were defined and

their influence to strategy implementation.The audit firms were asked if they felt the

activities that were to be done in the implementation were sufficiently defined. The

results are summarized in table 4.10

- 3 0 -

Table 4.10: Key implementation tasks and activities

Key implementation tasks and activities were not sufficiently defined

Frequency Percentage (%) {X-mean (9)}A2

Never 19 43 100Seldom 6 14 9Occasionally 9 21 0Frequently 9 21 0Always 0 0 81

43 100 190

57 per cent of the respondents said that the tasks and activities are always well defined

and 21 percent said it is an impediment with another 21 per cent saying it is a frequent

impediment.The standard deviation as computed in table 4.10 is 2.13.

Audit firms require the usage of computers and relevant software packages in

performance of services to their clients. Table 4.1 1 sought to show whether this was

adequate.

Table 4.11: Technological systems used to monitor and implement strategies

Technological systems used to monitor and implement strategies were inadequate

Frequencv(x)

Percentage (%) {X-mean (9)}A2

Never 25 57 256Seldom 6 14 9Occasionally 6 14 9Frequently 3 7 36Always 3 7 36

43 100 346

- 31 -

The results confirmed that technological systems used to monitor and implement

strategies were not a major impediment with 71 per cent of the audit firms showing that

this was not an impediment. The standard deviation as computed in table 4.1 1 is 2.87.

Table 4.12 shows the level of understanding of goals before implementation

Table 4.12: Level of understanding of goals

Overall goals not understood

Frequency(x)

Percentage (%) {X-mean (9)}A2

Never 19 44 100Seldom 6 14 9Occasionally 12 28 9frequently 3 7 36Always 3 7 36

43 100 190

Occasionally the level of understanding of goals was seen as an impediment with 28 per

cent of the respondents confirming this. However, 58 per cent of the respondents found

that goals are usually understood.The standard deviation as computed in table 4.12 is

2.13.

Table 4.12 shows the role of key formulators in implementation on whether they played

an active role in the implementation process.

- 32 -

Table 4.13: Role of key formulators in the implementation

Key formulators didn't play active role in implementation

Frequency(x)

Percentage (%) {X-mean (9)}A2

Never 25 58 256Seldom 3 7 36Occasionally 3 7 36Frequently 12 28 9Always 0 0 81

43 100 418

As seen in table 4.13, 65 per cent o f the respondents said that this is either never or

seldom an impediment.The standard deviation as computed in table 4.13 is 3.16.

Feeling of ownership among employees is important for the implementation of the

strategy. Table 4.14 shows how this faired in the audit firms.

Table 4.14: Feeling of ownership among the employees

Lack of ownership feelings among employees

Frequency(x)

Percentage (%) {X-mean (9)}A2

Never 22 51 169Seldom 12 28 9Occasionally 3 7 36Frequently 0 0 81Always 6 14 9

43 100 304

79 per cent said that is was not an impediment.The standard deviation as computed in

table 4.14 is 2.69.

- 33 -

Financial resources are important if the strategies are to be successful. The table 4.15

shows the summary of the adequacy of the resources

Table 4.15: Level of financial resources

Insufficient financial resources Frequency

(x) Percentage (%)

{X-mean (9)}A2

Never 6 14 9Seldom 6 14 9Occasionally 22 51 169Frequently 9 21 0Always 0 0 81

43 100 268

While the other impediments were seen as not impediments in strategy implementation,

resources seem to rank the highest as an impediment in strategy implementation with 72

respondents sighting this as either a frequent or occasional impediment. This shows that

operating in this field could be quite expensive hence the few workers per firm other than

the big 6 firms who have more than 200 employees and dominating the industry.The

standard deviation as computed in table 4.15 is 2.53.

- 3 4 -

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

15.1 Summary

This study showed that auditing profession has gained more prominence in the last 10

years but the little number of employees in most of the firms sampled was an indicator of

stagnation of the firms in the business.

The study indicates that the challenges faced by the small and large audit firms in Nairobi

a very similar. All firms’ studies were found to be facing one strategy implementation

challenge or another stating that their greatest challenge when implementing strategy is

insufficient financial resources

5.2 Conclusions of the study

The analysis of data of the audit industry shows that the firms are not only technical

efficient but have also embraced technology in their operations. Audit firms face

challenges when implementing strategy mostly due to insufficient financial resources.

Most firms among other things offer management consultancies and this is shown from

their own management practices from allocation of duties and strives to complete • •

assignments. However it is not clear why despite this positives shown by this research the

firms are employing few persons save for the six top audit firms. This is puzzling

considering that audit is a statutory requirement for all firms in the country. Further

research should be done on the continuous dominance of the top audit firms and reasons

why there are only 619 registered audit firms by the Institute of Certified Public

Accountants of Kenya (1CPAK) against thousands of C.P.A finalists in the country.

- 3 5 -

5.3 Limitations of the study

Top management individuals of some of the targeted firms declined completely to

complete the questionnaire citing firm policy. Consequently, they were left out of this

study. Some questionnaires were never returned back and some questions in the

questionnaire were unanswered

5.4 Recommendations

This part represents the recommendations made for policy and practice and for further

research

5.4.1 Recommendations with policy implications

This study found out that the main challenge that audit firms faced in strategy

implementation was inadequate financial resources. It is therefore recommended that the

Government and standards governing entities and regulators example 1CPAK try to assist

in reducing the audit costs by coming up with policies of harmonizingthe various and

onerous new laws, regulations and standards that govern financial reporting and the

auditing thereof.

«

Secondly the government needs to restructure the financial management bill. Whilst there

are positives in the Financial Management bill in the management of auditing in Kenya, it

does away with the statutory audit of Small and Medium Enterprises. This will affect the

cash flow and business prospects of audit firms. The research found that audit firms are

facing problems in financing their business and this is further shown by the low

employment rates in these firms. The Institute of Certified Public Accountants of Kenya

- 3 6 -

(1CPAK) should take this into consideration and champion the needs of accountants from

this end.

5.4.2Reeommendations for Further Research

This study found that audit firms are currently undertaking various initiatives in response

to the implementation of strategy challenges It will be advisable for one to study the

response strategies to implementation challenges.

The population of this research was limited to Nairobi only it is therefore also

recommended that further research is done to other areas in Kenya.

- 37 -

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APPENDIX 1: QUESTIONNAIRE

The auditing industry in Kenya is very competitive and due to increased competition

from both small and big auditing firms, the firms have placed emphasis on corporate

strategy. According to the Institute of Certified Public Accountants (ICPAK), over 80 per

cent of the audit firms are located in Nairobi. They are currently 819 audit firms in

Kenya. Thenumbers of registered audit firms operating in Nairobi, Kenya are 619. This

study is geared towards identifying the challenges facing your firm during strategy

implementation and responses being taken to address them.

I would be grateful if you could spare a few minutes of your time to provide your input

by answering the questions in this questionnaire.

This instrument consists of two parts. The first is a description of the person’s and

company background. The Second presents some questions about the types of strategic

decisions and the different challenges faced in implementing these decisions. Your

assistance in answering these questions will contribute significantly to the success of this

research.

1 would like to assure you that this research is purely for academic purposes. Your

responses will be treated with extreme confidentiality.

PART A: GENERAL INFORMATION

1. Respondent’s designation...........................................................................................

2. Length o f service in the company.

a) < 10 □ b) 10 - 20D c ) 2 1 - 3 0 D d) over 30 _

3. Respondent’s department............................................................................................

a) < 10 □ b) 10 - 20D c ) 2 1 - 3 0 D d) over 30 □

4. No. of employees

a) 10 - 50 □ b) 50 -200 □ c) 200 - 500 □ d) over 500 □

- 4 3 -

5. Years of existence in Kenya

a ) < 1 0 n b) 10- 20 c) 21 - 30 □ d) over 30 □

6. Ownership/Network of the firm (Majority shareholder)

a)LocalE3 b) Foreign □

PART B: CHALLENGES AND RESPONSES

Please select a recent strategic decision which has been implemented in your firm about which you had a great deal of personal knowledge.

(1) Which one of the following decisions has been executed recently?

1. ( ) Introduce a new service

2. ( ) Open and start up a new branch

3. ( ) Expand Operations to enter a new market

4. ( ) Discontinue a service from a market

5. ( ) Acquirg or merge with another firm

6. ( ) Change-the strategy in an operational department

7. ( ) Other (please specify)______________________

- 4 4 -

(2)Please evaluate the extent to which the following challenges influenced the implementation of the strategic decision.

Please use the five-point scale as shown below.

Strategy implementation challenges NeverSeldomOccasion- FrequentlyAlwaysnally

1. Took more time than originally allocated ( ) ( ) ( ) ( ) (

2. External political factors had impact on ( ) ( ) ( ) ( ) (

Implementation.

3. Co-ordination was not sufficiently ( ) ( ) ( ) ( )( )

effective

4. Competing activities distracted attention ( ) ( ) ( ) ( ) ( )

from implementing this decision

5. Capabilities of employees involved were ( ) ( ) ( ) ( ) ( )

insufficient

6. Training and instruction given to lower ( ) ( ) ( ) ( ) ( )

level employees were inadequate

7. Uncontrollable factors in the external ( )( ) ( ‘ ) ( ) ( )

environment had an adverse impact on Implementation

8. Leadership and direction provided by ( . ) ( ) ( ) ( ) ( )

partners and directors were inadequate

9. Key implementation tasks and activities ( ) ( ) ( ) ( ) ( )

were not sufficiently defined

10.Technological systems used to monitor ( ) ( ) ( ) ( ) ( )

and implement strategies were inadequate

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Potential strategy implementation challenges Never Seldom Occasion- Frequently Always nally

11. Overall goals were not sufficiently well ( ) ( ) ( ) ( ) ( )

understood by employees.

12. Key formulators of the strategic decision ( ) ( ) ( ) ( ) ( )

did not play an active role in implementation.

13.Lack of feelings of "ownership" o f ( ) ( ) ( ) ( ) ( )

a strategy or implementation plans among key employees

14. Insufficient financial resources ( ) ( ) ( ) ( ) ( )

and other internal resources to execute the strategy.

(3) Please evaluate the overall success of the strategy implementation process of the five-point scale where 1 is "low success", 5 is "very successful".

1. Achieved the initial goals of the decision 1 2 3 4 5

2. Achieved the financial results expected 1 2 3 4 5

3. Was carried out within the resources 1 2 3 4 5

initially budgeted.• •

(4) Any other comments?

Thank you for taking your time to complete this questionnaire

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APPENDIX 2: LIST OF AUDIT FIRMS IN NAIROBI

A) Fist of Large Audit firms in Nairobi, Kenya.

1 Deloitte &Touche2 Ernst & Young3 Grant Thornton4 KPMG5 PKF Kenya6 PricewaterhouseCoopers

B) List of Medium and Small Sized Audit firms in Nairobi, Kenya.

1 AAC Kenya (Formerly Abdulwahid Aboo & Co.)

307 Erastus & Co. Certified Public Accountants

2 Alexander Grant & Associates 308 Eric Ngari & Company3 Alexander McDonald & Scott 309 Eshwar Rao & Associates4 Ashwin Brothers 310 Eusebio Isaac and Associates5 Avinash Shah Bhatti & Company 311 Fujan and Associates6 Baker Tilly Merali's 312 G. W. Joseph & Company7 BDO East Africa 313 Gachuna & Associates8 Bett & Associates 314 Geoffe & Associates9 Bhatt Shah & Co. 315 Gitari Gituhia & Company10 Carr Stanyer Gitau & Co. 316 Githuku Mwangi & Kabia11 Chege Muchunguzi Mwangi & Company 3f7 Gituara, Kairo & Associates12 Chengoni and Company 318 H. W. Gichohi & Co13 CPJ & Associates 319 Henriks & G Company14 Crowe Horwath East Africa 320 I. F. Chanzu & Company15 D. K. Wambua & Associates 321 J. W. Muigai & Associates16 Dan & Anderson Associates 322 Jonnels and Company (Formerly

Muthiani and Company)17 DMG Peter and Associates (Formerly DMG

Associates)323 Josiah Njenga & Associates

18 Devani - Devani & Company 324 Kamanda & Cheluget Co19 DMC Associates 325 Kamau and Awuondo20 Daniel & Simon Associates 326 Kangethe & Associates21 DMK Muathe & Associates 327 Karanja Kamanu & Company22 Edwin Associates 328 D’Souza & Company23 Kariru & Associates 329 N S K Associates24 Karwamba and Mwangi Assciates 330 Nabangi Wachiye & Associates

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25 Keah & Co. 331 Nitin Pandya & Co.26 Khalid & Company 332 Njenga K. Ngungi & Company27 Kimani Kerretts & Co. 333 Njuguna Kioi & Associates28 Kimeu Muchungu & Co. 334 Nyabena & Karani Company29 King'ang'i Kamau & Co. 335 Nyagari & Associates30 Kosieyo and Partners 336 Nyaosi and Associates31 Kungu & Company 337 Ochieng Onyango & Associates32 Kuria Aling & Associates 338 Omanwa & Associates33 Larry Rang and Company 339 Omwenga Onyancha & Co.34 M. S. Shah & Co. 340 Ongiti & Associates35 MAG Associates 341 Osoro & Co.36 Maina Itote & Kimathi 342 Patel Shah Joshi & Associates37 Maingi & Associates 343 PK & Partners38 Maingi Mawioo & Associates 344 PSK Associates39 Makeni Mutua & Associates 345 RSM Ashvir40 Malinda & Associates 346 Sella Philip and Associates41 Manohar Lall & Rai 347 Shah & Associates42 Maritimes Associates 348 Shah & Shah43 Martin Coombs Shah & Company 349 Shah Patel & Company44 Masinde & Associates 350 Solomon George & Company45 Matengo Githae & Associates 351 Sunil Davda & Company46 Mawji Sennik & Company 352 Thomas and Associates47 Mazars Certified Public Accountants

(Kenya) formerly KOKA Koimburi & Co.353 Thumbi Nganga & Associates

48 Mbabuh Ochami & Associates 354 UHY Kenya49 Mbaya & Associates 355 V. A. Patel & Company50 MGI A'dam & Associates 356 Victor Mutisya & Company '51 MGK Associates 357 VSC Kenya52 Muchekehu Nyakang’o & Co. 358 Wachira Irungu & Associates53 Mugo & Company 359 Wachira N. Associates54 Mugo Dominic & Co. 360 Waithaka Kiarie Mbaya & Company55 Mugo Waweru & Associates 361 Wambugu Njenga & Associates56 Mungai & Associates 362 Henry Smith & Wilson (CPA)57 A M Shah & Sons 363 Bhupendra R Vora & Company58 A. K. Wachira & Associates 364 Billsmithi and Company59 A. P. Davies 365 Birenge & Associates60 A. Taibjee & Associates 366 Bironga & Associates61 A.K. Siele & Associates 367 Bitta and Associates62 A.M Shah & Sons 368 C M Maingi & Company63 Abdullhamid and Company 369 Caleb Maina and Associates64 Aboka Aloyo & Associates 370 Catherine Mwangi & Associates

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65 Achode & Company 371 Cephas & Associates66 Adera & Associates 372 Charles & Co.67 Adrec & Co. 373 Charles Otieno & Associates68 Aggrey & Company 374 Chubi & Associates69 Agoro & Associates 375 Ciugu and Associates70 Agutu & Associates 376 Clyde & Associates71 Alex and Partners 377 Costa Luis & Co.72 Alexander Richard & Associates 378 Cyrus & Company73 Alfred Kithusi & Associates 379 D. G. Njoroge & Company74 Alkam & Associates 380 D. N. Waweru & Associates75 AML Associates 381 Dan & Associates76 Amoswilson & Associates 382 Daniel & Daniels Company77 Anand P.Thacker & Co. 383 Daniel Mwangi and Associates78 Apollo & Associates 384 Daniel Wilson Associates79 Articson & Associates 385 David White & Co.80 Ashabhai Purshottam Patel & Co. 386 Denis & Associates81 Ashar & Company 387 Dhadhialla & Associates82 Ashvin Ranpara & Company 388 Dhanoa & Associates83 Asola & Associates 389 Dhulia & Co.84 Athman Errey & Company 390 Diccon Wilcock85 Auta & Associates 391 Dida and Associates86 Awiti & Associates 392 Donald Mark & Associates87 B. C. Patel & Co. 393 DS Ouma and Associates88 B. O. Omolo & Company 394 E.K.V & Associates89 Bakul Kothari & Company 395 Egon Weisz & Company90 Bariu & Associates 396 Elijah & Co. Associates91 Barmao & Company 397 Ernest Muguku Muriu92 Bassan Khanna Saini Associates 398 Esther Muchemi & Co.93 Bell Associates 399 F. M. Kamau & Associates94 Benconsult & Associates 400 Felix Mumo & Company95 Benson & Associates 401 Firozali Kassam & Associates96 Bernard Mulandi & Company 402 Fitzgerald & Associates97 Bhari & Associates 403 Francis Kieti & Associates98 G G Joshua and Associates 404 Hitesh Pisavadia & Company99 G S Evans & Associates 405 Hudson & Associates100 G. C. Patel & Company 406 Ignatius and Company101 Gachanga & Associates 407 Iminza Nyamute and Associates102 Gachau Maina and Company 408 Inoti and Company103 Gacheru & Company 409 J G Nyamu & Associates104 Gachoka and Associates 410 J. K. Njenga & Associates105 Gad Wekesa & Associates 411 J. M. Gathaiya & Company

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106 Gagani & Company 412 J. M. Okondo and Company107 Gakoi & Associates 413 J. N. Matheka & Associates108 Gathinji Mwathi & Company 414 J. N. Thindi and Company109 Gathitu & Company 415 J.G Bailey & Associates110 Gathura Nduati & Co. 416 Jac & Associates - CPA111 Gathuthi & Company 417 Jaidev Nanji & Co.112 Gatimu & Co. 418 Jam Martins Gachuhi & Company113 Gatonye Mwangi & Associates 419 James Aggrey & Associates114 Gatumo & Associates 420 James Nyaga & Associates115 Gekan & Associates 421 Jessie & Associates116 George Kinyanjui & Associate 422 Jmwati & Associates117 Ghedia & Company 423 John Chege and Associates118 Gichure & Associates 424 John G Naftali119 Gichuru M & Company 425 Joseph Wambua & Associates120 Gikuru Kazibwe & Co. 426 Josephat Waititu & Associates CPA121 Gitari Muriuki & Associates 427 Josiah Ongaro & Associates122 Githae & Co. 428 Joy Vipinchandra Bhatt & Company123 Githere Associates & Co. 429 K. Njoroge & Company124 Githiga Mwangi & Associates 430 K. Sultan & Co.125 Githitu & Co. 431 Kabuya & Associates126 Githongo & Company 432 Kago Mukunya & Associates127 Gituara and Associates 433 Kaigoya & Associates128 Gordhanbhai Chaturbhai Patel & Company 434 Kairo & Associates129 Gordon and Associates 435 Kamani and Associates130 ^Green Horse Associates 436 Kamau and Associates,.131 ^Gurno and Associates 437 Kamau David & Associates132 (juto and Associates 438 Kamau Njoroge & Associates133 H. Haria and Company 439 Kamdar & Associates134 H. P. Rana 440 Kamotho Karuru & Co.135 Halifax Associates 441 Kamuru & Associates136 Handa Associates 442 Kantilai & Partners137 Harris and Associates 443 Kanubhai & Co.138 Harrison & Associates ,444 Karimi & Associates139 Hasmukh Joshi & Associates 445 Kariuki Kagondu & Associates140 Kartik Vipinchandra Bhatt & Company 446 KM Rop & Associates141 Kassim Bharadia & Co. 447 Knjuguna and Company142 Katambo and Company 448 Kogi Kiburi & Compnay143 Kavili & Company 449 Komu & Associates144 Kayen Njuguna & Associates 451 Kothari & Company145 Kepher Franklin & Associates 452 Kubia and Company146 Khoya & Company 453 Kungu & Company

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147 Kiage and Associates 454 Kuria Aling & Associates148 Kibanya & Company 455 Kyalo & Associates149 Kibe & Associates 456 Kyengo & Associates150 Kibiego Kiptum & Co. 457 L. Mundi & Co.151 Kiboi Wawero & Associates 458 L. O. Ondong152 Kibuchi and Associates 459 Labchey & Associates153 Kigathi & Associates 460 Lawrence & Associates154 Kigo Njenga & Company 461 Lawrence Tykon Maingi155 Kigundu & Company 462 Leonard Associates156 Kigundu Mwangi & Associates 463 Lilian Muthoni & Associates157 Kiguru & Associates 464 Lishenga & Co. Associates158 Kihunyu Mungai & Associates 465 Litali & Associates159 Kiige & Associates 466 Lobonyo & Associates160 Kilaka And Associates 467 Lugalia & Associates161 Kililo & Associates 468 M G N Njunge and Co162 Kimani and Associates 469 M K Mwangi Certified Public

Accountants163 Kimani Kiarie & Co. 470 M. A. Namayi Associates164 Kimani Ngingo & Co 471 M. K. Mazrui & Associates165 Kimotho K and Associates 472 M. N. Nyakang'o & Associates166 Kimuhu & Company 473 Maarifa & Associates167 Kimutai Bett & Company 474 Mabuka & Co.168 King'ori Kimani & Company 475 Machirah Associates169 Kinyanjui & Associates 476 Magara and Associates170 Kinyanjui Njuguna & Associates 477 Mahendra M. Shah171 Kinyori & Associates 478 Maina D. Chege & Associates172 Kioi & Associates 479 Maina Kagigite & Associates173 Kioko and Associates 480 Maina Kimani & Associates174 Kiragu Njiru & Co. 481 Maina Kinyua & Co.175 Kiraita & Associates 482 Maina Muthui & Associates176 Kiran C. Patel & Company 483 Maina Mwangi & Company177 Kirit Shah & Co. 484 Maina Wanjohi & Associates178 Kirti Parmar & Associates 485 Makau Mutisya & Associates179 Kirugu & Associates 486 Makonnen & Company180 Kirunga & Associates 487 Manjlai and Company181 Manubhai Bhailalbhai Patel 488 Muinde & Company182 Mariara Kigotho & Associates 489 Muiru Kandia & Co183 Maringa Mwaura & Associates 490 Muita Njoroge Associates184 Mariu & Associates 491 Muiyuro & Associates185 Mark David & Co. 492 Mukiri and Company186 Mark Mbwayo and Associates 493 Muli Sylvanus & Associates

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187 Martin & Associates. 494 Mulji & Associates188 Masambu and Associates 495 Mungai Ngugi & Associates189 Masinde & Wekesa Associates 496 Mungai Ngure & Co.190 Massawa & Company 497 Mungai Wainaina & Company191 Matengo & Associates 498 Munywoki and Associates192 Mathara & Associates 499 Murage & Associates193 Mathenge & Associates 500 Mureithi Wachira & Associates194 Matheri Gichu & Associates 501 Muriithi & Associates195 Mawioo & Associates 502 Murugu and Company196 Mbai and Company 503 Musumba Okwoku & Associates197 Mbai Ndeteni & Associates 504 Mutahi Maranga & Associates198 Mbaki & Associates 505 Mutemi & Company199 Mbiyu Kagiri & Company 506 Mutero & Associates200 Mbugua Leonard & Associates 507 Muthengi & Associates201 Mbugua Njuguna & Associates 508 Muticia & Co.202 Mbuthia & Associates 509 Mutua & Company203 Mchunguzi and Company 510 Mutune & Associates204 Mehta Shah & Associates 511 Muturi Kihara & Associates205 Mella - Aling & Associates 512 Muturi Ndungu & Associates206 Menya and Associates 513 Mututa & Associates207 Methu & Associates 514 Mwangi Bien and Company208 Mike Kiswili & Company 515 Mwangi Gathimba & Associates209 Mithi Wanjohi & Assocates 516 Mwangi Gathuya & Associates210 Mitoko and Company 517 Mwangi Githinji & Partners21], MK Eliud & Associates 518 Mwangi Wandetto and Associates212 Moffat Mbue & Associates 519 Mwangola Mvot& Associates213' Moses Mungai Kioi & Associates 520 Mwaniki Ireri & Co214 Mosop & Associates 521 Mwaniki-Kahuro & Associates215 Mucheru Njeri And Associates 522 Mwaura W. and Associates216 Muchiri & Associates 523 Mwencha and Associates217 Muchungi & Associates 524 Mwendwa Jacinta & Company218 Muema & Associates 525 Mwengei & Associates219 Mugo-Mungai & Co. 526 Mwirigi Wa Mugambi & Associates220 Mugwang'a and Associates 527 Mwithiga and Associates221 Muhammed Loo & Associates 528 N Kungu and Company222 N M Kaburu & Associates 529 Njeri Thandi & Company223 N. H. Sheikh & Co. 530 Njeru Nyaga & Co.224 N.M Kaburu & Associates 531 Njoka Mwangi & Associates225 Nafisa Alibhai & Company 532 Njoro & Associates226 Naivasha & Associates 533 Njoroge Karanja & Associates227 Nalin Shah & Co. 534 Njoroge Kibebe and Associates

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228 Namisi & Associates 535 Njoru and Associates229 Nangira and Associates 536 Njue Mugo & Co. Associates230 Ndambuki & Associates 537 Nthigah and Company231 Ndegwa & Partners 538 Nuthu Kimani & Co.232 Ndegwa Wambugu & Co. 539 Nyabena and Company233 Ndei Mwangi & Company 540 Nyaga - Mugo & Company234 Nderitu Mairo & Co. 541 Nyaga Associates & Co.235 Ndettei & Associates 542 Nyambari & Associates236 Ndiangui Nguyo & Company 543 Nyambega & Associates237 Ndicu and Company 544 Nyamosi & Associates238 Ndii and Company 545 Nyandiko and Associates239 Ndirangu Mwangi & Associates 546 Nyasae & Associates240 Ndoigo & Associates 547 Nyenge & Company241 Nduaki & Associates 548 Nyerere Opala & Co.242 Ndungi Mungai & Company 549 Obusubiri and Associates243 Ndungu Kamiti and Company 550 Obwocha and Associates Co.244 Nelson Njuguna Mwaura & Associates 551 Ochieng Ager & Associates245 Nganga Mwangi & Company 552 Ochieno Wanga & Company246 Ngari & Associates 553 Odalo K. S. & Company247 Ngei S. K. & Company 554 Odhiambo Ochieng & Company248 Ngelin & Co. 555 Odundo & Associates249 Ng'ethe & Associates 556 Ogola-Luke & Associates250 Ngigi and Partners 557 Ogugu and Associates251 Ngugi Wainaina & Associates 558 Okoko Odhiambo & Associates252 Ngui & Associates 559 Okungu and Associates253 Ngumunu & Associates 560 Okwara & Associates254 Ngwili & Co. CPA(K) 561 Oloo M. A. & Associates255 Njagi & Associates 562 Omato & Company256 Njagi Isaac & Associates 563 Ombongi Jacob Ogechi & Associates257 Njaramba & Associates 564 Ondako Maina & Associates258 Njathi & Associates 565 Ondong & Associates259 Njehia & Associates 566 Ooko-Mokaya & Company260 Njenga Kamau & Associates 567 Opembe and Associates261 Njenga Karori & Associates 568 Orwa & Company Associates262 Oscar & Company 569 Shilasi & Company Associates263 Otieno Aboka & Company 570 Shirish Shah & Co.264 Otieno and Associates 571 Siero & Associates265 Otieno Oboge & Co. 572 Silas Yimbo266 Owala and Associates 573 Silvester Namsando & Associates267 Owino & Associates 574 Simiyu Toywa & Co.268 Oyugi & Associates 575 Sir Robert & Company

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269 P N C H A L & C O . 576 Stephen & Associates270 P.G. Wahome & Company 577 Sulsha & Associates271 P.M. Ngare & Associates 578 Swaly & Co.272 Pam & Associates 579 Tela Alusala & Company273 Parkash Associates 580 Terry Kiarie & Associates274 Patel & Patel 581 Thangaru and Associates275 Patel & Patels 582 Thethy And Associates276 Peter & Associates 583 Theuri Ndegwa & Associates277 Peter Githae & Associates 584 Thoithi & Associates278 Peter Njuki & Associates 585 TM Mutunga & Company279 Peterson Associates 586 Umuro Wario & Associates280 Philip Kamuru & Associates 587 Upin Vasani & Company281 Philip Mutuku and Company 588 V. J. Ruparelia & Co.282 PMK Associates 589 VC Karani & Associates283 PMR Associates 590 Victor Osewe & Associates284 R K Gatu & Company 591 Vijay & Associates285 Rajni Shah & Company 592 Vipin Shah & Associates286 Raman Patel & Co. 593 W. Gouder & Co.287 Richards & Associates 594 Wachira Karite & Co.288 Rimui Mwaura & Co. 595 Waghela Associates289 Ronalds & Associates 596 Waheire & Co.290 Rosalynn & Associates 597 Wainaina Wanyoike & Associates291 Rosemary Njogu and Assciates 598 Wakanyi Wokabi & Company292 Rugendo and Associates 599 Walwa & Co.293 S. M. Gachoki & Co. 600 Wamai Nyaga & Company294 S. M. Hinson 601 Wambugu Wangai & Company295 S. M. Solanki & Co. 602 Wambui &'Company296 S. PNegandhi & Company 603 Wamutu and Associates297 S. S. Channa Associates 604 Wamwanga & Associates298 Saipar Associates 605 Wandegwa & Company299 Samto & Associates 606 Wangeci Mwangi & Co.300 Sesi & Associates 607 Wangigi James & Associates301 Shantilal Gala & Co. 608 Wanja Muthaura & Associates302 Wanyasa & Company 609 William L. Wachira & Co.303 Wanyeki & Associates 610 Wokabi & Company304 Wanyika & Associates 611 Z. K. Kariuki & Associates305 Warutumo Wambugu and Company 612 Zablon Abuga and Associates306 Waweru DJM Associates 613 Zaver Patel & Co

Institute of Certified Public Accountants of Kenya (ICPAK) register - 2011

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