Effect of Ownership Structure and Corporate Governance on Performance of Large Supermarkets in Nairobi County

Abstract

Firms with good corporate governance provide transparent disclosures and are friendly to stakeholders, including investors, customers, employees and the society. Despite divergence of findings in previous studies on corporate governance, ownership structure, and organizational performance, there is apparent consensus among scholars that ownership structure is a key determinant of organizational performance, with corporate governance differences confounding this relationship. The study attempted to answer the research question: What is the effect of ownership structure and corporate governance on firm performance of large supermarkets in Nairobi County? The study used descriptive survey design and was guided by both agency and stewardship theories. The study used linear regression to determine the influence of corporate governance and ownership structure on organizational performance in the supermarkets in Nairobi County. The study determined none of the corporate governance dimensions, except the internal governance statistically influenced organizational performance. Ownership structure, was also found to be statistically insignificant with respect to its influence on organizational performance. The study, however, proposes further research on the moderating and mediating influences on the relationship among the study variables since this was not part of the study scope. Key Words: Corporate Governance; Organizational Performance