Professional Documents
Culture Documents
COUNCILS
AUGUST, 2003
1
DECLARATION
This research project is my original work and has not been presented for
a degree or diploma in any University.
2
DEDICATION
3
ACKNOWLEDGEMENTS
Foremost, I am grateful to God for his care and assistance. I would like to
take this opportunity to thank the following people for their assistance,
which gave value to this project.
• Mr. Simon Kamau
• Mr. Saruni Ole Kudate, Deputy Town Clerk Kikuyu
• Mr. Martin Mukuria
• Mr. Joseph Karanja
• Mr. Kiruri
• Mr. Danson Kahura
• Mr. Amos Otuma
I register my profound gratitude and sincere acknowledgements to my
informants, my fellow students who have assisted me in diverse
capabilities. I appreciate the efforts of Martin Mukuria who inspired me
to begin this course.
I also express my indebtedness and special gratitude to Mr. Evans Vidija
Sagwa who was my supervisor. His insightful criticism, scholarly
comments, academic challenges and constructive dialogue were an
invaluable inspiration in the completion and quality of this project.
4
ABSTRACT
Much precaution was applied to ensure that the respondents did not
introduce biasness in the research so as to come up with valid findings
and know the situation as it is on the ground. The findings were analyzed
in pie charts, graphs and tables. Recommendations were given to promote
efficiency in the council and for better provision of services.
5
TABLE OF CONTENTS
PAGE PAGE NO
Title Page ……………………………………………… (i)
Declaration ……………………………………………. (ii)
Dedication …………………………………………….. (iii)
Acknowledgements …………………………………… (iv)
Abstract ………………………………………………. (v)
Table of contents ……………………………………… (vi)
List of tables…………………………………………… (viii)
CHAPTER ONE – INTRODUCTION
6
3.0 Research Methodology ……………………………… 24
3.1 Research Design …………………………………….. 24
3.2 Sources of Data ……………………………………… 24
3.3Target Population…………………………………….. 24
3.4 Sampling Design ……………………………………. 25
3.5 Instruments of Data Collection ……………………... 25
3.6 Data Collection Procedure ………………………….. 27
3.7 Data Analysis Procedure ……………………………. 27
BIBLIOGRAPHY ……………………………………………. 47
APPENDICES:
Appendix I Questionnaire I……………….. …….. 48
Appendix II Questionnaire II……………………... 50
Appendix III Questionnaire III ……………………. 52
Appendix IV Time Plan ……………………………. 55
Appendix V Budget Plan ………………………….. 56
7
LIST OF TABLES
8
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
Within the Republic of Kenya, for many years, there have been
unlicensed businesses operating with the members of the public
being aware of their existence. Some members of the public have
been customers of unlicensed businesses knowingly or
unknowingly. Out of the revenue collected, the Councils
Authorities are supposed to spend some of the amount on cleaning
the environment through garbage collection, provision of basic
infrastructure like water resources, roads and markets, and also
save some amount which can be used in future intended projects
like construction of schools, hospitals, sanitations and security
provisions.
9
had to cultivate a good relationship with members of the public so
that they can help them know the businesses existing illegally so
that appropriate action can be taken. Councils ought to ensure that
they put in place measures that help it earn the revenue it is
supposed to earn and closely monitor businesses to attain the best
results, and a realistic projection of its financial obligations and
services to its residents.
10
b) To establish the kind of customers this businesses target
and their social status.
c) To find out ways of ensuring that this kind of businesses
do not have room for existence in future.
Consumers
In most cases, consumers are often faced by problems of buying
substandard goods, imitated and defected products. The findings of
this study will create awareness of the unlicensed businesses
existence and educate them on their effects. They will also be able
to know the best places to shop their items.
Businessmen.
With the knowledge attained concerning unlicensed businesses and
substandard products by the genuine businessmen, it will help
them supply to consumers the products that are from licensed
businesses and that are up to the set standards. It will also enable
them to exercise extreme caution especially when buying products
to ensure they attain those that are of high quality and
performance.
Councils
Unlicensed businesses are a threat to efficiency of the Councils.
The Councils will benefit from the result because they will get
information that will help them in tackling the problem and putting
11
measures in place to prevent such businesses from operating in
future. The revenue collection would be greatly improved and
security and environmental pollutions manageable.
Government
Through legislations the government will be able to formulate
ways of dealing with unlicensed businesses and the offenders of
the law who lie in that category. Loss of revenue will be put under
control.
Investors
The investors will benefit when unlicensed businesses are
eliminated because they will be sure that there will be no
counterfeiting of their products. This will go a long way in helping
acquire the revenue they deserve and the consumers will have the
right perception of their products.
Society
When the councils are efficient, they are able to create a condusive
environment for investors and the society at large. The society will
benefit from the good services that the Councils will offer and
from investors who may invest in the area through improvement of
infrastructure and through employment.
Research
The findings of the study will also contribute much to the available
literature, which can further be used in future research references.
12
1.4 Research Questions/Hypothesis /Objectives of the Study.
13
1.5 Scope and Limitations of the Study
(b) Limitations.
There are some factors that limited the progress of the study. They
included: -
Respondents
The researcher had a difficult time when gathering information
from the respondents. Some of them might have not fully provided
the required data due to fear of intimidation. Some of the
respondents ignored the most sensitive questions while others did
not fill all the questions in the questionnaire.
Finance
The study involved traveling to various areas to gather
information. It also involved preparation and distribution of
questionnaires. After information gathering, arrangement and
analysis of data and the preparation of the final report was
required. Large sums of money were required which were not
14
available since the amount financing the project had to be properly
budgeted to sustain all the requirements up to its completion.
Data sources
There was lack of documented information in some areas required
to be studied and most information to be gathered was from the
respondents. Some of the respondents may have introduced
biasness in the study if they gave incorrect information. Also in
some areas the data sources were scarce and this might have
affected the study since the project had a time limit.
Time
The project was carried out within a period of six months. The
time might not have been sufficient for exhaustive investigation
and survey.
15
e) That where Councils have eliminated unlicensed
businesses there is improved efficiency and a good
relationship with members of the public developed.
f) That efficiency is achieved where an organization clearly
defines its objectives and works towards the realization
and achievement of their intentions through working
together and all members of the organization feeling
responsible at their level of operation.
Unlicensed Businesses
Any business operating without a valid license from the government.
It may take place in two ways: either it may have acquired a license
initially but after it expired, it was never renewed or it may have
never acquired a license because the owner does not want to acquire
one or the business is not legal according to the law therefore cannot
be licensed.
Town Councils
These are elected governing bodies of towns. They have the power to
make by laws, rules, regulations and decisions for towns and
enforcements.
16
Council Askaris
They are people who are employed and trained by the Council to
undertake, among other duties, apprehension of people who in their
course of business break the by laws made by the Council.
Hawkers
Individuals who carry out their businesses on temporary or moveable
structures. They carry out their businesses on pavements in the
streets, at the roadsides and in undeveloped government or public
utility land.
Kiosks
These are business structures similar to constructed shops, which deal
with various items depending on the objectives of the owner, but
usually have few items and are small-scale businesses.
17
Interviews were carried out with the Kikuyu Town Council governing
body and with some of the employees in that organization. Also
interviews were conducted with members of the public who are the
main customers of the items supplied by various businesses.
Where possible, some of the customers of unlicensed businesses were
observed as they purchased various items without fear or hesitations.
The responses that were received from Kikuyu Town Council
governing body, members of the public and owners of unlicensed
businesses were analyzed through editing, coding and tabulation
methods. The findings and recommendations were done based on the
data that was analyzed. Recommendations were given to benefit the
parties involved and for further research.
18
CHAPTER TWO
2.0`LITERATURE REVIEW
The researcher reviewed literature related to the research as
follows: -
19
2.2 Provision of Services
The service received by individuals from the Council goes a long
way in creating a perception in individuals about the Council.
Whether the perception is good or bad depends on the kind of
services they get. In a newspaper supplement in the Daily Nation
of May, 6,2003, the City Council of Nairobi Town Clerk, Mr. Jack
Mbugua noted that “…. The major changes undertaken are to de-
congest the paying halls, and to ensure that the pay-in counters are
well marked……………. The revenue collection has also
improved”.
This follows that the customers will be able to easily identify the
counters and pay their bills and taxes comfortably and
conveniently. The customers will have a good perception of the
Council and will see an improvement to the right direction. The
quality of service received is what determines people’s loyalties
and satisfaction. Whenever the services expected are received and
to the satisfaction of the people, good communication is achieved
such that whenever there is a problem hindering the provision of
the services, people will understand and will not complain. When
individuals are satisfied they become advocates of the organization
through their comments.
21
2.4 Consumer Protection
The government has supported and also put in place measures to
protect consumers from being exploited by the producers and
retailers. The kind of protection given is divided into two
categories: -
1) Regulations- this are prescribed by the status and
administered by the central government and the local government.
2) Activities initiated and directed by voluntary
organizations to exert pressure on manufactures and
distributors to remedy defects or redress genuine
complains, improved trade practices and standards,
and initiate legal action for redress.
Consumer protection plays an important role in the society. Most
consumers are not aware of their rights. Those who know their
rights and they are infringed, do not know the proceedings to
follow, or, they are not willing to spend their resources in terms of
time and finance on law suits. It therefore follows that it is
important for the government to take action to protect consumers.
The basic functions of consumer protection are: -
a) To protect consumers against sale of goods of
poor quality.
b) Protect consumers from being sold products
that do not indicate ingredients used in
manufacturing a product.
22
c) Protect consumers from being provided with
services that are of inadequate nature.
d) Protect consumers from being sold items that
are of the right weight and measures.
e) Protection from the failure of retailers or
producers to uphold conditions set out or
implied in contracts, executed for goods and
services.
This protection keeps the producers on their toes because they
know they have to follow the laid down procedures. Since they
know the remedy, they try and observe the law and this ensures
that the consumers get the best (Samuelson and Nordhaus, 1995).
24
of rage or hostility are directed against the person or
object that is felt to be the cause of frustrations.
b) Rationalizing – means making excuses such as blaming
25
2.7 Economic Conditions
Development is brought about by the growth of the economy.
When the economic situation of a country is registering good
performance, people’s standards of living improve and they
become independent. In a developed economy people are assured
of the basic needs, therefore they get a chance to plan their future
and their way of survival. On the contrast, in the case of a poor
performing economy, things are usually negative people standards
of living are low and poverty is evident. The rate of unemployment
is very high and some of those employed get little pay that just
enables them to survive but they cannot do anything beyond that to
better their lives. In such a case, insecurity increases and people
tend to break the law in order to survive. People usually in such
circumstances, would do anything or do any kind of business in
order to get money. This leads to an increase in theft, corruption,
violence, increase in the black market and sale of illegal items. It
also leads to increase in small illegal businesses like sale of illicit
drugs and illicit brews, loss of self-esteem and degrading of human
value.
26
2.8 Political (Legal Environment)
Political - legal environment has direct economic impact on
business firms. The government can play a supportive role to
encourage business enterprise and regulative role to control
business enterprises in the interest of public good. For example, the
Local, State and Central Government can undertake many steps to
encourage or protect business enterprises through tariffs, tax
incentives, low interest loans, granting free land, providing
adequate transport, power and communication, investing in basic
and heavy industries, invest heavily in basic research, granting tax
incentives to develop industries in under developed areas,
protecting industries from undue foreign competition and
enforcing the various regulations regarding practicing of business.
27
functions by enacting legislation to control and regulate the
business enterprises in the national and public interest (Berndhardt,
1978).
28
social problems such as environmental pollution, community
housing, basic infrastructure, education, and secure atmosphere
(Koontz and Weihrich, 1984).
29
2.11 The Problem of Corruption
The huge dimensions of the problem of corruption on African
Nations are reflected in the following observations of Nigerian
society made more than ten years ago by Mr. A. Tokunboh,
permanent secretary, Federal Ministry of Establishments.
Blunt and Popoola (1985), observe that where there are conditions
of extreme inequality, absolute poverty, and widespread lack of
basic need satisfaction, the incentive to corrupt whatever official
purposes formal work organizations are agreed to have is almost
irresistible.
30
Corruption can be fought through ensuring that desired rewards are
clearly and consistently made contingent upon behaviour directed
at satisfying organizational, as opposed to purely personal
objectives. (Blunt and Popoola, 1985).
31
CHAPTER THREE
Questionnaire
The researcher chose the questionnaire as instruments because they
gave the respondents ample time to think over in a more relaxed
manner in answering the questions. It was a cheap means of
collecting data and provides unbiased data on the study. It was also
33
an important instrument because some of the information that was
private or in cases where respondents may have been shy to answer
questions, while using the questionnaire they were relaxed.
Interview Guides
This instrument was aimed at the governing body of Kikuyu Town
Council, which is concerned in making decisions, approving
expenditure and monitoring the performance of activities aimed at
providing the required services. Interview guides helped in
providing unbiased information and a chance to ask questions or
for clarification was available. The researcher was able to control
the order of questions that were presented to the subject. Interview
guides were advantageous since the researcher could note verbal
and non-verbal responses.
Observation
This instrument was used in observing customers of unlicensed
businesses as they carried out their purchasing normally. This
instrument was important because there was minimal distortion of
information by respondent.
34
3.6 Data Collection Procedure
The researcher designed three questionnaires. One was aimed at
the governing body of the Kikuyu Town Council, the other to
owners of small businesses and the other to the residents in Kikuyu
area. This enabled the researcher to obtain information on how the
Council and residents felt about unlicensed businesses and on the
other hand, know the views of owners of small businesses. The
researcher carried out personal interviews with members of the
governing body of Kikuyu Town Council since they were the
people who were well versed with the operations of the Council.
The researcher also observed customers as they purchased from
unlicensed business. The personal interviews combined with the
questionnaires formed the ingredients that provided crucial
information and data since they were important tools of gathering
data. The data collected from interviews and questionnaires was
summarized and recommendations given.
35
CHAPTER FOUR
4.04 DATA ANALYSIS AND FINDINGS
n this chapter, findings are presented based on the questionnaires
administered and the interviews conducted to meet the objectives
of the study. Three types of questionnaires were used in gathering
information. A total of sixty (60) questionnaires were issued to
customers of businesses around Kikuyu area but only forty eight
(48) were duly filled and returned. Another type fifty (50)
questionnaires were distributed to small business traders but only
forty-two (42) were duly filled and returned. Lastly, one type of
questionnaire was presented to the Kikuyu Town Council, duly
filled and returned. The responses were properly checked to ensure
that they were accurately answered and the data well interpretated
by the respondents. The responses were systematically organized
in a manner that facilitated analysis. To permit quantitative
analysis, data was coded to specific categories and in a numerical
form. On collection of data from the customers, small business
traders and the Kikuyu Town Council, the researcher synthesized
and analyzed them through editing, coding and tabulation methods,
and drew import recommendations. Shown below is data analyzed
as for the responses from the questionnaires.
36
4.1.1 Customers Perception of Small Businesses Around Kikuyu
Area
Purchase 45
Do not purchase 3
TOTAL 48
Table 4.0(a) Purchase from Small Business Operators (n=48)
Do not purchase
from sm all
businesses
satisfaction
achieved
satisfaction
not achieved
39
Importance of Unlicensed No. of Customers
Businesses
Are important to the society 16
Are not important to the society 30
Not sure 2
TOTAL 48
Table 4.0(d) Importance of Unlicensed Businesses (n = 48)
From the analysis done sixteen customers felt that unlicensed
businesses are important to the society, thirty felt they are not
important to the society and two members of the society indicated
they were not sure whether they are important. Below is the
representation of the analysis on a pie chart.
Are important
to the society
Are not
im portant to
the society
Not sure
40
Type of Action No. of Out of 48
Customers Customers
Reduce corruption 26 48
Review tax rate 22 48
Apprehend law offenders 17 48
Improve human relationship 16 48
Conduct regular checks 19 48
Have well trained inspectors 14 48
Put stiff penalties to the operators 15 48
Table 4.0(e) Prevention of Unlicensed Businesses (n=48)
According to the analysis, the suggestions given by the customers
on the action that the Council should take were as follows:
Twenty six customers indicated that they should reduce corruption,
twenty two indicated that they should review tax rates, seventeen
indicated they should apprehend law offenders, sixteen indicated
they should improve human relationship, nineteen indicated they
should conduct regular checks, fourteen indicated they should have
well trained inspectors and fifteen indicated they should apply stiff
penalties to the operators.
41
(a) Period of Operations
Table 4.01(f) shows the period in which small business traders
have been in operation.
Period of Operation No. of Small Business
Traders
Less than a month Nil
1 month to 3 months 6
3 months to 6 months 9
6 months to 12 months 12
Over a year 15
TOTAL 42
Table 4.01 (f) Period of Operation (n = 42)
From the above analysis fifteen business traders indicated they
had operated their businesses for over a year, twelve indicated they
had operated in the period between 6 months to 12 months, nine
indicated they had operated in the period between 3 months and 6
months, six indicated they had operated in the period between
1month and 3 months while none had operated for less than a
month according to the analysis.
42
More than 100 but less than 150 9
More than 150 5
TOTAL 42
Table 4.0 (g) Rate of Customers Served (n = 42)
According to the analysis done, small business traders who serve
less than 50 costumers in a day were seventeen, those who serve a
number of customers ranging between 50 and 100 were eleven,
those who serve a number of customers between 100 and 150 were
nine and those who serve more than 150 in a day were five.
25
20
No. of small 15
business
traders 10
5
0
A B C D E F G
major problems encountered
A – financial constraints
B- high license fee
C - poor inaccessible roads
D – monopoly of business
E- low profit margin
F – unpaid debts
G – slow moving stock
(d) Services Received
Table 4.0(i) shows the responses received regarding the services
offered by Kikuyu Town Council to small business traders.
44
Very dissatisfied 11
TOTAL 42
Table 4.0(i) Rating of Services Received
From the analysis of the responses received, eleven small business
traders indicated they were very dissatisfied with the services
offered by the Kikuyu Town Council, seventeen indicated they
were dissatisfied, nine indicated they were satisfied and five
indicated they were very satisfied. Below is the analysis
represented on a pie chart.
very satisfied
satisfied
dissatisfied
very
dissatisfied
45
• The Council regulates small businesses through
ensuring that all business people intending to start
small businesses apply to the Council for
consideration.
• The challenges encountered by the Council in
controlling small businesses are that owners of small
businesses hardly follow the laid down procedures
hence it becomes very hard to control them.
• Unlicensed businesses affect the operations of the
Council through; denial of revenue, lack of a
functional budget and wastage of physical, time and
human resources in pursuit of offenders.
• The Council does not have adequate personnel to deal
with unlicensed businesses and to deal with this
problem the Council is employing more personnel.
• Services offered to the residents of Kikuyu area
include: maintenance of roads, cleaning of trading
centres and markets, providing clean water and a
sewerage system.
• The council is of the view that the residents are
satisfied with the services they receive and they are
not satisfied with existence of small businesses.
• The Council conducts surveys to establish where
unlicensed businesses are after every three months.
• The residents do not volunteer information about
existence unlicensed businesses.
46
• The main reasons leading to growth of unlicensed
businesses are; poverty, ignorance, lack of education
and lack of unemployment.
• Measures taken to deal with unlicensed businesses
include; operators are arrested and charged, their
wares impounded and they are fined.
• The Council experiences very much political
interference.
• The individuals intending to start businesses should
accept to pay for licenses, apply for requisitions of
their businesses and inform the Council of illegal
operators.
Further analysis from the three types of questionnaires indicated
the following comments of the parties involved: -
1. Some small businesses create problems because
they are not regularly monitored by the Council
therefore not maintaining the required standards
and are not well planned and located in the
right places.
2. Poverty is the main reason leading to the high
growth rate of unlicensed businesses within the
society.
3. Influential people should not be allowed to
bend the law to suit their needs through taking
advantage of their positions.
4. Some Council employees take advantage of
those who are not aware of the license charges
and charge them higher than required.
47
5. The Council should sometimes offer incentives
like tax holidays to enable businesses perform
better, as a way of supporting them.
6. The Council can be assisted with outside
financing especially with equipments and donor
funds projects to enable it deal with unlicensed
businesses.
CHAPTER FIVE
49
• Majority of the small business traders indicated they had
operated their businesses for a period of over a year.
• Most of the small business traders indicated they liked
and enjoyed their businesses despite how their status
• A few small business traders indicated they did not like
their businesses and they gave the following reasons that
made them dislike their businesses: -
1. They work a lot but earn very little profit,
2. Their jobs are prone to various risks,
3. Some of their jobs are difficult,
4. Some jobs bring stress,
5. Some of their jobs are seasonal.
• Most of the small business traders indicated they serve less
than fifty customers in a day.
• Most of the small business traders indicated that they were
dissatisfied with the services offered by the Council.
5.2 Recommendations
51
• The Council should improve human relationship with
members of the society, which will help in ensuring that
members of the society are volunteering important
information to the Council Authorities.
• The management of the Council should ensure that it has a
well-trained staff at all levels of operations who are able to
handle and solve issues in the right way.
• The Council should relocate all the business traders who are
operating along the road reserves and offer an alternative
area where they will not be a threat to security and will be
possible to monitor and license them efficiency.
• Hawking should be prohibited and alternative location to
conduct business offered in an orderly and suitable
arrangement. The places can have a fence round it and
hawkers can pay on entry.
• The management of the Council should simplify the
procedures and processes involved in acquiring a license so
as to make it easier for businessmen including renewal
invitation by posting notices to traders.
53
The research recommends that the Kikuyu Town Council should form a
research team to carry out the following: -
• The importance of educating business operators,
• The role of close interaction between the Council and the society,
• Deliver of services by the Council to the operators,
• The Council’s role in customer satisfaction,
• The role of the society in elimination of unlicensed businesses.
In conclusion all factors put into consideration; the research shows that
the existence of unlicensed businesses has a negative effect on efficiency
of the Council. The Council Authority have been trying to eliminate them
but for it to be possible, it is important to consider the recommendations
given in this research, apply effective measures and put in place licensing
mechanisms to avoid negative impact reflected by the current procedures
which result to huge losses of revenue collection.
BIBLIOGRAPHY
1. Aina S. : (1982) International Review of
Administrative Science
XLVIII, 70-6.
2. Benhardt Kenneth L. : (1978) cases in Marketing
Management,
54
IRWIN, Boston, USA.
3. Blunt P. and Popoola O. : (1985)Personnel Management in
Africa,Longman Inc, New
York.
4. Caiden, G.E and Caiden M.S : (1977) Public Administration
Review 37, 301-9.
5. Cole G.A. :(1999) Management EALBS,
London.
6. Daily Nation, May 6 2003, :Mayor welcomes Delegates to the
UN- HABITAT Governing
Council, Nation media Group
Limited, Nairobi.
7.Hill C.W.L and Jones R.G. :(2001) Strategic Management
Theory, Houghton Mifflin Co,
Boston N.Y 5th E.
8. Koontz O’ P. and Weihrich : (1984) Management,Mc Graw-
Hill, New York.
QUESTIONNAIRE
ON
EVALUATION OF THE PERCEPTION OF CUSTOMERS ON
SMALL BUSINESSES AROUND THE KIKUYU AREA
1. Do you purchase items from small business operators?
(Tick One)
56
Yes
No
2. Why do you buy from small business operators?
i.
ii.
iii.
iv.
v.
3. Do their products satisfy your needs like other products?
Yes
No
4. What is your feeling about small business in the society?
APPENDIX II
QUESTIONNAIRE
ON
EVALUATION OF THE VIEWS OF SMALL BUSINESS
TRADERS WITHIN KIKUYU AREA
58
2. For how long have you operated this business?
59
v
vi
7. What problems do you encounter in applying for license?
i
ii
iii
iv
v
vi
8. How do you feel from service you get from the Council?
(Tick One) Very satisfied
Satisfied
Dissatisfied
Very dissatisfied
APPENDIX III
QUESTIONNAIRE
ON
EVALUATION OF THE VIEWS OF KIKUYU TOWN COUNCIL.
1. What are the departments in Kikuyu Town Council?
i)
ii)
iii)
iv)
60
(v)
ACTIVITY PERIOD
63
Preparation and submission of the proposal March – May
Questionnaire development and data May
collection
Data analysis May - June
Report writing and typing June – July
Printing, binding and project submission July August
APPENDIX V
BUDGET PLAN
PROJECT PROPOSAL
ITEM AMOUNT (KSHS)
Stationery 900
Photocopying, typing & binding 2,500
Overhead expenses 600
Transport 1,200
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TOTAL 5,200
MAIN PROJECT
ITEM AMOUNT (KSHS)
Stationery 2,400
Photocopying typing printing 4,500
binding
Data collection 1,300
Overhead expenses 1,100
Transport 1,700
TOTAL 11,000
65