Socio-Economic Factors Affecting Human Resource Management in Kenya

The Socio-Economic Factors Affecting Human Resource Management in Kenya depends on the values of management of any organization. Acceptance and implementation of organizational change ensures that employee relations management is developed.

The business environment in which employers operate is constantly changing. It is important for employees to be aware of the specific shifts in employee relations policies resulting from such changes. They should also monitor the external environment to anticipate possible changes and developments. The Socio-Economic Factors Affecting Human Resource Management in Kenya has been continuously changing over the last two decades.

The Socio-Economic Factors Affecting Human Resource Management in Kenya

Kenya faces various Socio-Economic Affecting Human Resource Management in Kenya that has adverse effects in management. They include;

·         Education,

·         HIV/AIDS,

·         Work Life Balance,

·         Workforce Diversity

Education as one of the Socio-Economic Factors Affecting Human Resource Management in Kenya

Education is one of the Socio-Economic Factors Affecting Human Resource Management in Kenya. There has been an emphasis on the importance of education that leads to improvement of the standards of living in the country. As a result of upgrading of the education sector the elite employees are very clear on what their rights are and hence the employers challenge is to ensure they comply with the law.

They risk being sued by their employees if their needs are not met. Development of human capital and expertise of firm’s workers is crucial to management. The interest in employment is moving away from manual and clerical work to knowledgeable workers who resist commands that they feel are unfair.

 HIV/AIDS as one of the Socio-Economic Factors Affecting Human Resource Management in Kenya

HIV/AIDS is also one of the Socio-Economic Factors Affecting Human Resource Management in Kenya. This pandemic is one of the most disturbing developments in the social arena. This has had effect on all aspects of the society including the economy. The effects of HIV/AIDS on the organization include death of employees and the cost of medical care.

Human Resource Management has a growing involvement of the law now than before. The issues include laws of hiring, firing, equal opportunities and conduct of industrial relations. The effect of these laws is that there is more need to follow the law to avoid legal suits and costs associated. For example a firm cannot simply fire nor discriminate against employees with HIV/AIDS without attracting legal action against management.

Work Life Balance as one of the Socio-Economic Factors Affecting Human Resource Management in Kenya

Work Life Balance is one of the Socio-Economic Factors Affecting Human Resource Management in Kenya. Many organizations are forced to develop flexible working programs due to recognition of the importance of the work life balance. The law also protects employees such that an employee is entitled to at least 1 rest day in a week and in cases where they work beyond normal working hours they are to be paid overtime for their services.

Workforce Diversity as one of the Socio-Economic Factors Affecting Human Resource Management in Kenya

Workforce Diversity is the last but not the least of the Socio-Economic Factors Affecting Human Resource Management in Kenya. The workforce is becoming very diverse. More women, minority group members and older workers are entering the work place. This changes effective management and it is very important to management as it affects employee relations in the industry.

Greater female employment gives rise to new career conflict. Marriage ties can undermine the organization and business intelligence. Worries about the family may affect performance. Disciplinary action may result from this inactive performance at the workplace. Many older employees are likely to remain in employment due to termination of traditional benefit plans.

Economic Changes in Relation to Socio-Economic Factors Affecting Human Resource Management in Kenya

The economic environment in relation to Socio-Economic Factors Affecting Human Resource Management in Kenya is influenced by the macro-economic policies. Government policies are usually in respect to the levels of employment, inflation, taxation and interest rates.

Exchange rates have an effect on employee relations in Kenya. This is because they have an impact on the relative balance of bargaining power between the buyers and sellers of labor services. In a period of high inflation, high levels of taxation and high interest rates, the stability of business in Kenya is threatened. This leads to higher levels of unemployment and a consequent reduction in employment conditions. When individuals are at work, a less favorable economic climate will impact on the relative balance of bargaining power. The government’s economic and legal policies have major implications for the outcome of employee relations behavior in Kenya.

The relative bargaining power of the employer is weakened and that of the employee is strengthened when economic policies are directed towards the creation of full employment and the maximizing of economic growth. Government policies give the highest priority to reducing inflation by lowering household and corporate spending in the homes and also reducing public expenditure.

Our article in Business Training in Kenya refers.

Conclusion on the Socio-Economic Factors Affecting Human Resource Management in Kenya

Education, HIV/AIDS, Work Life Balance and Workforce Diversity are some of the Socio-Economic Factors Affecting Human Resource Management in Kenya

AUDITORS’ LIABILITY

Introduction

The auditor has the responsibility to express an opinion as to the truth, fairness and compliance of the accounts to the legislation. An auditor is therefore held liable if he expresses an opinion which does not reflect the actual accounts

Auditors’ liability fall into three categories. They include:

  Liability to his client under the law of contract 

  Liability to third parties under the law of tort under common law

   Liability under civil and criminal law 

Under the law of contract, the auditor has a duty to report to the client on all the accounts and financial statements examined by him during the Annual General Meeting. The auditor is under a contract to apply the requirements of auditing standards in the course of the audit and if he fails and writes an improper audit report he will be sued for any damages incurred by the company and users of the financial statements. This is because an auditor usually has a contract with the company as a whole and not with individual members. However action by third parties against the auditor is likely to succeed.

Issues against the auditor can arise due to the following issues and circumstances:

  If an auditor prepares false financial reports when he knows or ought to know that they are intended to be shown and relied upon by third parties even if the identity of the third party is not disclosed and action may be brought successfully against the auditor.

 If the auditor gives references for example regarding the client’s creditworthiness or an assurance as to the client’s capacity to carry out the terms of the contract and it turns out that the client did not measure up to those requirements.

Third parties can only claim damages from auditors if they can prove that

    They suffered financial losses after relying solely on the auditor’s report.

    The auditor performed or wrote his report recklessly knowing that it will be used by third parties.

The companies act provides that officers of the company may be liable for financial damage in respect of civil offences of breach of trust that is where the officers have misused their positions for purposes of personal gain. Criminal liability arises where the auditor willfully makes a materially false statement in any report or assists the management to make false reports. Further the Act provides that if the auditor publishes or concerns in publishing a written statement or account which to his knowledge is misleading or may be misleading, false or deceptive and with a particular intention to deceive shareholders, the auditor in this regard may be liable for imprisonment.

Minimizing Auditor’s Liability

Auditors and accountants can minimize their potential liability for professional negligence in several ways. They include;

 By using the requirements of auditing standards and audit guidelines when carrying out all audits for example audit standards require proper planning, controlling, recording and reviewing of audit work.

By agreeing their duties and responsibilities in the engagement letter. The engagement letter spells out the terms of auditing and what you are supposed to do. It includes the statutory provisions. The purpose of this is to reduce the expectation gap

By defining in the audit report the precise work undertaken, the work not undertaken and any limitations to the work. This is so that any third parties will have knowledge of the responsibility that was accepted by the auditor for the work done.

By stating in the engagement letter the purpose of the purpose for which the audit report has been prepared and that the client should not use it for any other purpose apart from that for which it was prepared.

By advising the client in the engagement letter of the need to obtain permission to use the name of the accountant/auditor and withholding permission in appropriate cases.

By identifying the authorized recipients of audit reports in the engagement and also in the audit report.

By registering the audit firms as limited liability companies. The essence of such a plan is to protect partners from effects of litigations.

By instituting high quality control procedures in the audit firm through proper recruitment and training procedures.

By use of standard audit manuals, sending out audit staff for career development activities to gather new knowledge.

By taking professional indemnity cover to transfer liability to the insurance people if any by paying premiums.

By not being negligent in the course of duty. Being very careful while conducting audits.

Auditors and audit firms should only take work that they can do or undertake with competence.

Arguments for extension of auditors’ liability

Third parties do rely on the integrity of audited accounts and would seem right that that a legal liability should reflect that.

Professional men are paid and should therefore be held accountable

If the liability is not extended the public may perceive that the auditor is liable to no one that there is no need for the auditor to exercise skill and care and therefore the accounts are not reliable and thus auditors are of no benefit.

When the company suffers losses from fraud and theft occasioned by auditors’ negligence then current existing legal remedy of the company against the auditor is appropriate. However if the directors overstate the assets and the auditor fails to discover this then the company does not suffer losses. However the shareholder(s) or potential shareholders may suffer loss and it is just right that they should be able to recover from the auditors.

Arguments against the extension of auditor’s liability

  Practical difficulties in deciding whether the accounts were relied upon at the time of that particular financial loss. This might present a gold mine for lawyers.

  It is unreasonable and unrealistic to say auditors have liability in an indeterminate amount for an indeterminate time and to an indeterminate class of persons.

Audit fees would have been so high if full liability for investment decisions are taken on by auditors.

Insurance cover for professional indemnity would be even more difficult and expensive to obtain.

The work required on an audit would need to be greatly extended to an enormous cost which on a welfare economic stand point will be a misuse of scarce resources.

The company pays the auditor and consequently expects to recover if the company loses as a result of the auditor’s negligence. However investors do not pay the auditor and should not expect to recover.

The legal responsibility of producing accounts rests with the directors and it should seem inequitable if the liability arising out of incorrect accounts was transferred to auditors.

The current legal framework sees the purpose of preparing and auditing accounts as assisting shareholders in assessing the stewardship of directors not in assisting investors in their investment decisions.

Business Training in Kenya has more information on this topic.

Conclusion

Auditors are therefore required due diligence and care when carrying out audit work. Auditors’ profession require that they should also ensure his independence is not interfered with in any way

Writing Process

Writing Process requires conscious mental effort and varies from speech. Writing is a process that is not linear it keeps moving back and far. Writing can be permanent and have use of punctuation. It can also use non verbal language.

Steps Involved in Writing Process

The steps involved in Writing Process include;

·         Prewriting stage

·         Writing

·         Revision

·         Editing

·         Publishing

Prewriting Stage

Prewriting stage is also called planning stage. It is the first stage in Writing Process. The writer talks to other people brain storms and share ideas. He or she also reads more about the area of higher writing.

Listening skill is important in this stage of Writing Process. During this stage the writer comes up with as many ideas as possible i.e. the writer is inspired. There is thinking involved in free writing.

Writing

Writing is the second stage of the Writing Process. It is also called drafting. It involves putting your ideas on paper and letting them flow. Spaces are left to be filled later and concentration is required avoid distraction. An outline is written under an order of information in general plan used by writers to gather thoughts so that they can clearly to be laid out in an essay or a book.

Advantages of an outline in Writing Process

·         Ensures efficiency and focused

·         All pieces of information are present in a logical and clear manner

·         Identifies and eliminated potential area of weakness and lack of focus on paper

Order of an outline in Writing Process

·         Subdivide the topics by a system of numbers and letters

·         Each heading or sub heading must have two parts

·         Avoid the most common subheadings e.g. introduction conclusion, body

·         Consistency of work coherence/ flow of ideas

·         A thesis statement

Revision

Revision is the third step in Writing Process. It is making something better bring out sense that there is the beginning body, end of a document. It involves removing of some section and writing new paragraphs.

Involves the AR3 method

·         A Addition

·         R Re arranging

·         R Removing

·         R Replacing

Editing

Editing or proofreading is the fourth step in the Writing Process. One should re read and anticipate the readers response. While editing you check precisely the language used, ensure there is no reputation

Ensure you have clear thoughts and check grammar spelling and punctuation.

Make sure changes are made in the work especially in sentence length verb tense capitalization, pronoun personality i.e1^st, 2nd, 3rd pronoun personality.

Publishing

This is the last but not the least stage in the Writing Process. It is making something to be known and to encourage reluctant writers and instill self confidence in them promote positive attitude towards literature and any other of writing.

Business Training in Kenya has more information.

Conclusion on Writing Process

Writing Process involves the following stages; Prewriting stage, Writing, Revision, Editing and Publishing.

Women Access to Training in Kenya

Women Access to Training in Kenya has been a subject of discussion in various forums in Kenya. The problems women face in accessing training are varied and of great importance because if they are dealt with then business women will prosper. Women Entrepreneurs in Kenya are the key to economic growth because they are generating employment. But women-owned businesses could contribute more than what they are doing today. A growing amount of research shows that countries that fail to address gender barriers are losing out on significant economic growth. Without increased attention to the gender dimensions of economic development, Kenya is therefore unlikely to meet its growth targets. This therefore demonstrates that addressing gender barriers in Kenya could generate significant economic growth for the country. The Kenyan government recognizes that Women Access to Training in Kenya have not been on an equal footing when it comes to their access to opportunities and assets but it has yet to effectively address the barriers facing women in business.

Obstacles Hindering Women Access to Training in Kenya

The obstacles hindering Women Accessing Economic Opportunities in Kenya occur in the business environment and they tend to have a disproportionate effect on Women. The challenges include;

• Discrimination,
• Lack of Education,
• Inadequate Finance,
• Poor Access to Justice.
• Managing Employees,
• Lack of Property Rights,
• Dealing with the City Council,

Discrimination as one of the Obstacles Hindering Women Access to Training in Kenya
One of the obstacles hindering Women Access to Training in Kenya is discrimination. Even when women entrepreneurs do approach banks for financing, they tend to face discrimination. Women report that bank officials tend to ignore them in meetings and prefer speaking to their husbands or male business partners. The fact that banks engage in gender bias prevents many women from even approaching them. Some women get so discouraged that they do not bother to seek bank financing and turn instead to informal savings groups.

Lack of Education as one of the Obstacles Hindering Women Access to Training in Kenya

Lack of Education is one of the obstacles hindering Women Access to Training in Kenya. Lower education levels puts women entrepreneurs in Kenya at a disadvantage compared to men. While the gender gap in primary education in Kenya has decreased in recent years, the gap remains high at secondary and tertiary education levels. Lower education does not emphasize entrepreneurship skills. It decreases the chances that women will have the knowledge needed to excel in business, and thereby contribute to the country's overall economic growth.

Inadequate Finance as one of the Obstacles Hindering Women Access to Training in Kenya

One of the obstacles hindering Women Access to Training in Kenya is access to finance is an issue is because of requirements of collateral. In Kenya only 1% of women own property and that makes it very difficult for women to provide collateral for banks. We have to look for different instruments to address access to finance issues for women, like mentoring them, helping them prepare proposals for bank funding, and even providing a guarantee for the banks.

Poor Access to Justice as one of the Obstacles Hindering Women Access to Training in Kenya
Access to justice is one of the obstacles hindering Women Access to Training in Kenya. It is essential for ensuring smooth business operations, and it spans issues such as enforcing contracts and employment disputes. Yet Women Access to Training in Kenya have difficulties when accessing justice. Using the formal courts in Kenya can be costly, complex, and time consuming for entrepreneurs. Dealing with the complicated and often corrupt bureaucracy is another reason for avoiding the process because women are burdened with their multiple responsibilities in the household and at work and  do not have the know-how to navigate the government process
Managing Employees as one of the Obstacles Hindering Women Access to Training in Kenya
Managing employees is one of the obstacles hindering Women Access to Training in Kenya. Finding and retaining good employees is essential for the success of a business, but can be difficult for women entrepreneurs in Kenya. Since women-owned businesses tend to be smaller, they are often less likely to provide job security and retain good talent. Some women find that they are not taken seriously by their employees, especially in non-traditional sectors, and they have to make a special effort to win their respect.

Lack of Property Rights as one of the Obstacles Hindering Women Access to Training in Kenya

 Lack of Property Rights is one of the obstacles hindering Women Access to Training in Kenya. It prevents business women from expanding their businesses.  Women accept that they should not own property themselves. The propensity is that it should be jointly owned. This lack of land and property is a significant barrier for Kenyan businesswomen. It translates directly into women's inability to access bank financing needed for their business.

Discrimination as one of the Obstacles Hindering Women Access to Training in Kenya
One of the obstacles hindering Women Access to Training in Kenya is discrimination. Even when women entrepreneurs do approach banks for financing, they tend to face discrimination. Women report that bank officials tend to ignore them in meetings and prefer speaking to their husbands or male business partners. The fact that banks engage in gender bias prevents many women from even approaching them. Some women get so discouraged that they do not bother to seek bank financing and turn instead to informal savings groups.
City Council as one of the Obstacles Hindering Women Access to Training in Kenya
City Council has proved to be one of the obstacles hindering Women Access to Training in Kenya. The licenses are too many and the cost too much. Being a woman seems to exaggerate that fact since most women are harassed by the city council officials when they come to inspect the business premises. Moreover, women may be less likely to meet and negotiate bribes with the predominantly male council officials. Business licensing is an issue for many women entrepreneurs who perceive the process as lengthy and complex.
Business Training in Kenya has more information.

Conclusion on the Obstacles Hindering Women Access to Training in Kenya

City Council officials should refrain from harassing women who are in business.
Women Entrepreneurs in Kenya need to go for training programs in order to know how to run their businesses well.
Business women in Kenya should be taught on the value of being independent. This will stimulate them to do things on their own like acquiring property.
Micro finance institutions should portray a non gender based environment in order to stimulate Women Entrepreneurs in Kenya to do business with them.
With the information provided above one is able to understand more about obstacles hindering Women Access to Training in Kenya

Merchandised Trade

Merchandised Trade can also be referred to as the mercantilist approach. The theory of international trade emerged in England. In the first century trade practices were referred to as merchandised trade or mercantilism. In this period a country’s wealth was measured by the amount of gold or silver stocks the country had accumulated. This was because gold and silver were used in international trade settlements. When a country exported goods it receded payment in gold and silver and when it imported it paid for them using gold and silver. Mercantilists who engaged in the Merchandised Trade believed that it was in their country’s interest to maintain a trade surplus by exporting more than it imported. A trade surplus led to gold flowing out of the country.

Supportive Policies of the Merchandised Trade

The supportive policies of the Merchandised Trade explains that the mercantilists supported policies to limit import using tamits and quotas and encouraged export using subsidies. Under this system if a country had a surplus in the balance of payment, i.e. it exported more than it imported, the resulting inflow of gold and silver would the domestic money supply and lead to an increase in price or inflation. Similarly if the country had deficit in its balance of payment i.e. imports more than exports there would be a gold and silver outflow. There would be a rise in exports in market structure leading to a decline in price and inflation. This means that if one of the two countries. Prices in the deficit country would fall, leading to increased exports while prices in the surplus country would increase, leading to a fall in exports. This process of adjustment was expected to continue until the exports were equal to imports and there was a balance of trade in each country. This process was called self – adjustment.

Weakness of the Merchandised Trade

The weakness of the Merchandised Trade was that it viewed trade as a zero – sum game. In this kind of game, one person gained and the other lost. This means that a gain by the country result to a loss in a country. It was left to Adam Smith and Ricardo David to ensure that trade is a five zero sum game for a situation where all trading countries can benefit from the production and exchange of goods and service but mercantilist doctrine of gaining a surplus in trade. Jarl Kagelstan a director of the Finland Ministry of Finance in the Merchandised Trade observed that in most trade negotiation countries, both industrialized and developing countries have been to press for trade liberalization in areas where their own comparative advantages are strongest and to resist liberalization in areas where they are less competitive and fear that imports would replace domestic production. He attributes this strategy by negotiating countries to a mercantilist belief held by politicians of most countries. This belief equates political power to economic power with the balance of payment surplus so that trade strategy of most countries is designed to simultaneously boost exports while at the some time limiting imports.

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Conclusion on the Merchandised Trade

The Merchandised Trade has helped evolve the previous old age systems of trade to the more modernized systems of trade that we have today. This is possible due to the development of Merchandised Trade

Business Law: Sources of Business Law

Law refers to a set of roles and principles that govern a contract of affairs in a given communication. It is a general role of external human action and forced by a sovereign political authority. Law is also a body of principles recognized and applied by state in the administration of justice role of human contact imposed and enforced among the members of a given state

Sources of Business Law

Business Law has different sources. They include;

·         Mercantile/Commercial Law,

·         English Law,

Mercantile/Commercial Law

Mercantile/Commercial law is one of the Sources of Business Law. It is the branch of law that comprises law concerning trade industry and commerce. It includes law relating to contracts like sale of goods partnership companies, negotiable instruments, insurance, insolvency carriage of goods and arbitration.

English Law

This is the second of the Sources of Business Law. The bulk of the Kenya commercial law is based in the English mercantile law, which is the principle source of common law of England. English Law as one of the Sources of Business Law is divided into six different subsections. They include;

·         Common Law,

·         Equity,

·         Maritime Usages,

·         Case Law,

·         Statute Law,

·         Customs and Usages.

Common Law

Common Law as one of the Sources of Business Law refers to a system of law based upon English customs usages and traditions, which were developed over centuries by the English coups. It is written and its principles are applied. Whenever disputed of similar nature arrives. This practice is known as deciding cases by precedence.

Equity

  Equity as one of the Sources of Business Law also refers to the branch of English law, that developed separately from the common law. It is based on concepts of justice developed by the judges whose judgment became precedents.

Maritime Usages

This is another of the Sources of Business Law. Maritime usages were based on customs and usages among traders developed during the 14^th and 15^th Century.

Case Law

Case Law is referred to as one of the Sources of Business Law. It is what has been added in a earlier case and is binding is a later case and is binding in a similar case.

Statute Law

Statute law as one of the Sources of Business Law is in this accordance with laws passed by parliament and they include sales of goods at companies act etc.

Customs and Usages

Customs and usages are the last but not least of the Sources of Business Law. This are habits established long ago and constantly put into practice so that they become binding to the practicing parties entering into contract.

Our article in Business Training in Kenya has more information on the same.

Conclusion on the Sources of Business Law

Sources of Business Law include Mercantile Law and English Law which is later divided into six subsections and they include; Common Law, Equity, Maritime Usages, Case Law, Statute Law and Customs and Usages.

Strategic Management

Strategic Management is the art and science of formulating, implementing and evaluating cross functional decisions that enables an organization to achieve its objectives. Business Training in Kenya has more articles

Classification of Strategic Management

Strategic Management is classified into three stages that is;

·         Strategic formulation,

·         Strategic implementation,

·         Strategic evaluation.

               

Strategic formulating

This is the first step of Strategic Management. It  includes developing a business mission, identifying an organization external opportunities and threats determining internal strength and weaknesses, establishing long term objectives, generating alternative strategies and choosing a particular strategy to pursue.

·         Mission which identifies the scoop of an organization operation in product and market turns.

·         External opportunities and threats are factors beyond the control of an organization like economic, social, political, technological and competitive trends.

·         Internal strengths and weakness are controllable activities within an organization. They include information, operations, research and development, marketing and finances.

·         Long term objectives should be challenging, measurable, achievable, reasonable and clear.

·         Strategy is the means by which long term objectives will be achieved. They include geographical expansion, product development, market penetration, diversification, retrenchments, acquisitions, joint ventures.

Strategic implementation

Strategic implementation is another step of Strategic Management. This requires an organization to establish annual objectives, policies, resource allocation so that strategies can be executed. This is an action stage. It involves formulating the following;

·         Objective should be established at the cooperate level and functional level in large organizations.

·         Policies are a guide to decision making and repetitive or recurrent situations.

·         Resource allocation is a central management activity that allows for strategy, implementation or execution. It enables resources to be allocated according to priorities, established by annual objectives.

Strategic evaluation

Strategic evaluation is the last but not least step of Strategic Management. This monitors the results of formulation and implementation of activities. It includes measuring individual and organization performance and taking corrective actions when necessary. All strategies are subject to future modification because external and internal factors are constantly changing. The three fundamental strategy evaluation activities are;

·         Reviewing external and internal factors that are the basis for carrying strategies.

·         Measuring performance of done work.

·         Taking corrective action when needed.

Conclusion on Strategic Management

Strategy formulation implementation and evaluation activities occur in three levels of management, corporate levels, strategic business, and functional levels thus they are of great importance for every organization.