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Working capital management practices and operational performance of selected supermarkets with national network

Author

Listed:
  • Hellen W. Wanyoike

    (School of Business, Laikipia University, Kenya)

  • Samuel O. Onyuma

    (School of Business, Laikipia University, Kenya)

  • James N. Kung’u

    (School of Business, Laikipia University, Kenya)

Abstract

This paper examined the effect of working capital management practices on the operational performance of selected supermarkets with the national network in Kenya focusing on inventory and creditors’ management as well as receivables and liquidity practices. The paper was pegged on Agency Theory, Iceberg Theory of Money Management and Cash Management Theory. Guided by descriptive research design, 52 branch managers were sampled from four major supermarkets using both the stratified and random sampling methods. Data were analyzed using both descriptive and inferential statistical analysis. Findings revealed that inventory and creditors management practices had a very low effect on the operational performance of supermarkets in Kenya. The study, therefore, recommends that supermarkets should introduce a system where managers are fully equipped with working capital management skills. This should be done continuously to prevent the occurrence of severe liquidity challenges which have witnessed in the past. Key Words: Working Capital Management; Operational Performance; National Network; Kenya

Suggested Citation

  • Hellen W. Wanyoike & Samuel O. Onyuma & James N. Kung’u, 2021. "Working capital management practices and operational performance of selected supermarkets with national network," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(2), pages 72-85, March.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:2:p:72-85
    DOI: 10.20525/ijrbs.v10i2.994
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    References listed on IDEAS

    as
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    3. Karl V. Lins & Henri Servaes & Ane Tamayo, 2017. "Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis," Journal of Finance, American Finance Association, vol. 72(4), pages 1785-1824, August.
    4. András Danis, 2017. "Do Empty Creditors Matter? Evidence from Distressed Exchange Offers," Management Science, INFORMS, vol. 63(5), pages 1285-1301, May.
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