Strategy Practices of Stockbrokers in Kenya

Abstract

The business environment is constantly changing. Fundamental changes have taken place in the Kenyan business environment in the last ten years. These changes have subjected the stockbrokers and indeed other organizations operating in Kenya to increased complexities. This study sought to establish the strategies adopted by stockbrokers in this very dynamic environment. This study had one main objective: To establish strategy practices of stockbrokers in Kenya. Data was collected through a questionnaire personally administered. Both closed and open-ended questions were used. Data was collected from 13 stockbrokers out of the 18 registered at the NSE. The data was tabulated and then classified into sub-samples according to common characteristics. The respondents were then coded. Basic statistical analysis such as frequency distribution means medians, modes, and percentages, simple and cross tabulations, proportions and percentages were used. In addition, measure of both central tendency and spread was used to compare certain characteristics of the stockbrokers. A content analysis was also carried out. The results indicated that stockbrokers in Kenya, have informal strategy practices which can be attributed to the small sizes of their organizations, the nature of their operations and the limited number of their products. They are basically under the control of single individuals where strategic evaluation is informal, intuitive and limited. Their survival is highly threatened by a hostile turbulent business environment characterized by a non-performing economy, a depressed market and lack of investor confidence. As a result two clear distinctions of stockbrokers emerge: those that have taken drastic cost cutting measures, ventured into new products and regions and those that have taken a wait-and-see attitude hoping that the economy will take an upward trend soon and save them from closing their businesses