BUDGETARY CONTROL AND FINANCIAL PERFORMANCE OF STATE-OWNED SUGAR MANUFACTURING FIRMS IN KENYA
Abstract
The study aimed to determine the influence of budgetary control and the financial performance of state-owned sugar manufacturing firms in Kenya, with specific objectives focusing on the influence of budget planning, budget implementation, budget monitoring, and budget control on financial performance. The study was guided by budgetary control theory, accounting theory, stewardship theory, and incremental budgeting theory. A descriptive survey research design was adopted, targeting 57 respondents, including finance managers, internal audit managers, and heads of accounts from 19 state-owned corporations in Nairobi County. The study employed a census sampling technique, ensuring all relevant respondents were included. Primary data was collected through a well-designed questionnaire, while secondary data was obtained from audited financial statements to measure financial performance. Piloting was conducted to test the validity (using content and construct validity) and reliability (using Cronbach's alpha). Quantitative data was analyzed using both descriptive and inferential statistics. Descriptive analysis, including measures of central tendency and dispersion, was used to summarize the data. Inferential analysis, including correlation analysis and multiple linear regression, was applied to test hypotheses. Prior to regression analysis, the study ensured the assumptions of linear regression were met. The findings were presented in tables and models. The results reveal that budget planning, budget implementation, budget control and budget monitoring playing a crucial role in enhancing the financial performance of State-Owned Sugar Manufacturing Firms in Kenya. The study concluded that there is significant influence of budgetary control on Financial Performance of State-Owned Sugar Manufacturing Firms in Kenya in Kenya. The study recommended that State-Owned Sugar Manufacturing Firms in Kenya should prioritize robust budget planning processes. This involves engaging relevant departments early in the planning phase, utilizing historical financial data, and aligning budget allocations with organizational goals. Firms must enforce strict budgetary controls to maintain financial discipline and mitigate the risk of financial mismanagement. This involves establishing clear expenditure limits for departments, conducting regular internal audits, and ensuring compliance with budgetary guidelines.
Key Words: Budget Planning, Budget Implementation, Budget Monitoring, Budget Control
CITATION: Nyaega, O. M., & Miroga, J., Otinga, H. (2025). Budgetary control and financial performance of state-owned sugar manufacturing firms in Kenya. The Strategic Journal of Business & Change Management, 12 (2), 334 – 256. http://dx.doi.org/10.61426/sjbcm.v12i1.3209
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DOI: http://dx.doi.org/10.61426/sjbcm.v12i2.3209
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