The effects of an organization’s reputation on the internal stakeholders of firms in Kenya. A case study of Uwezo, Daraja and Remu small and medium sized organizations

Abstract

The purpose of this study was to investigate the effects of an organization’s reputation on employees, shareholders, and trustees as internal stakeholders of small and medium sized organizations in Kenya. The study specifically aimed at determining the effects of organizational leadership on internal stakeholders, assessing the effects of staff relationships on internal stakeholders, and examining the effects of communication strategies on internal stakeholders. The study was anchored on the stakeholder theory propounded by Edward Freeman in 1984 and used a descriptive survey research design. In particular, the researcher targeted 90 employees, 36 trustees, and 72 shareholders from Uwezo, Daraja, and Remu microfinance banks. A sample size of 66 comprising 30 employees, 12 trustees, and 24 shareholders was selected through stratified and simple random sampling techniques. Questionnaires and interviews were used to collect data. Since the instruments yielded both qualitative and quantitative data, analysis was done quantitatively from structured questions and qualitatively from unstructured questions. Quantitative data was entered into a secure database for analysis by use of the Statistical Packages for the Social Sciences (SPSS) to yield descriptive information in form of percentages that were presented in tables. The qualitative data was analyzed thematically and presented in themes based on the objectives of the study. The findings revealed that reputation of microfinance institutions indicated through leadership, staff relationships and communication strategies had both negative and positive effects on performance and retention of employees, willingness to invest among shareholders and promotion of service delivery among trustees. The study recommends that communication strategies be redesigned for responsive exchange of information internally.