INFLUENCE OF MACRO-ENVIRONMENTAL FACTORS ON ORGANIZATIONAL PERFORMANCE OF AIRLINES: A CASE STUDY KENYA AIRWAYS LTD
Abstract
The airline business depends on the wellbeing of international trade and the stability of the environment in which they operate. Kenya Airways should take great interest in the macro-environmental forces of its markets both locally and internationally (KQ Annual Report, 2014). Statistics indicate that Kenya Airways posted $290m loss in the 2014/2015 financial year and this was largely attributed to change in the macro-environmental forces. The effect of macro-environmental forces on the organisational performance of the airline industry especially in Kenya has received little attention in academic research. This study sought to establish the influence of macro-environmental factors on organisational performance of Kenya Airways. This study adopted descriptive research design and was limited to two financial years, April 2013 to March 2015 due to resource constraints. The target population of this study was 245 staff working in Kenya Airways Finance department. Stratified random sampling was used to select 74 respondents. Most staff members were involved in the change management process and the selection will be considered as representative of the population. The researcher used a questionnaire as primary data collection instrument. The questionnaires were tried out. Content analysis and descriptive analysis was employed. Data was grouped into frequency distribution tables to indicate variable values and number of occurrences in terms of frequency. Tables and other graphical presentations were used to present the data collected for ease of understanding and analysis. In addition, a multiple regression was used. The study established that political and legal factors affect the organisational performance of Kenya Airways Limited. The study found that economic factors on organisational performance of Kenya Airways Limited. The study revealed that technological factors affects organisational performance of Kenya Airways Limited. The study found that social factors affect the organisational performance of Kenya Airways Limited. The study recommends that there is need for the government to develop policy framework that will protect local industries from political and legal influence. The study recommends that there is need for government and various policy makers to put in place policies that will improve the economic condition surrounding the airline industries. There is need for the management of Kenya Airways to adopt modern technologies in the airline industries; this will help in making them competitive and thus improving their performance. There is need for the management of Kenya Airways to align their product and service in line with the changes in social environment; this will help to improve their performance.
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