Response strategies to change in the environment by financial audit firms in Nairobi, Kenya

Abstract

Pearce and Robinson (1997) defined strategic responses as the set of decisions and actions that result in the formalization and implementation of plans designed to achieve a firm’s objectives. Therefore it is a reaction to what is happening in the economic environment of organizations. This study investigated response strategies to changes in the environment of financial audit firms in Nairobi, Kenya. The objective of the study was to establish the response strategies adopted by the financial audit firms in Nairobi, Kenya to changes in the environment. Cross sectional survey was undertaken focusing on the management of financial audit firms in Nairobi. The study utilized a standard questionnaire to collect primary data from thirty (30) financial audit firms. However, only twenty five (25) of the respondent firms completed the questionnaire. The data was then analyzed and the findings presented using tables giving descriptive statistics including frequencies, mean and percentages. The research findings indicated that the financial audit firms considered corporate, business and operational level responses to environmental changes. Based on the study, it is recommended that the management of financial audit firms should continue considering response strategies to environmental changes at the strategic planning level and implement both the corporate and business level responses at the strategic management level. Operational level responses should be implemented at the middle and line management levels in order to ensure that the entire organization works towards ensuring that its internal resources are efficiently utilized at each management level and within each strategic business unit.