Evaluation of communication strategies at the Nairobi Stock Exchange

Abstract

The study was a census of all the 18 active stock broking firms which are members of the Nairobi Stock Exchange. Out of the 18 respondents considered, only 12 firms responded contributing to a response rate of 67%. The objectives of the study were to determine whether the broking firms have specific communication strategies and to establish the effectiveness of these strategies in educating investors. Mail system of questionnaire administration was used and descriptive statistics such as mean scores and percentages were used to analyze data. The study found that the staff of broking firms are aware about mission statement of their broking firms to a small extent (1.67), implying that they are incapable of communicating the firm's business to customers. It was revealed that broking firms do not have strategic plans and there are no documented communication strategies. 67% of the respondents operate using only short term plans implying that they rely on ad hoc communication plans. It was also found that communication influences to a large extent adaptability and flexibility (3.7), control initiatives by managers (3.7), and diverts attention from operational issues (3.7). Factors that determine success in stock broking trade include integrity, speed of order execution, and professionalism. The study recommends that brokerage firm's staff be educated about the firm's mission statement and they should be involved in formulating and implementing communication strategies. It is further recommended that firms engage communication experts to assist them in developing long term communication strategies.