Privatization and performance of Public corporations listed in the Nairobi stock exchange

Abstract

Public corporations have been criticized for inefficiency and mismanagement. They are characterized by widespread misuse of funds due to lack of proper internal management and Government interferences. Due to this, some of the public corporations have either been privatized or commercialized. Today, varying degrees of success with privatization of public corporations has been noted in some while failures for diverse reasons have been reported in others. Therefore, this project researched on privatization and performance in listed public corporations. The aim was to find out whether the privatization has improved the performance of public corporation. The study was a census survey. The survey was appropriate as it enables researcher to obtain information from broad category of firms which was important for comparison purposes. The target population was public corporations that were privatized and listed in the Nairobi Stock Exchange. Both primary and secondary data were used in this study. Primary data was corrected through structured questionnaire. Descriptive statistics such as percentages, frequency tables, mean scores, standard deviation and cross- tabulation were used to analyze the data. This was then interpreted to show the relationship between the privatization and performance. The empirical results show that appropriat.e policies were taken before privatization \ strategy was implemented and the goals for privatization were also set. Further, the results show that majority of the public corporations\vere privatized through initial public offer. It was difficulty to relate privatization with the performance in public corporation as it was not possible to get all the financial data before and after privatization. However, performance indicators such as market share, gross profit, total costs, total sales, total output, motivation, staff turnover, quality services, staff training and customer satisfaction were used to measure public corporation performance before and after privatization. The study established that after privatization, public corporations listed in the Nairobi Stock Exchange perform better than before. The study recommends the need to emphasis on setting privatization goals and formulating appropriate policies before implementing privatization strategy