Influence of Operational Risk Management on Performance of Real Estate Firms in Nairobi County, Kenya

Abstract

This study examined the influence of influence of operational risk management on performance of real estate firms in Nairobi County. The study was anchored on agency theory, stakeholder theory, financial economic theory and new institutional economics theory. A descriptive survey design was adopted by the study. The target population comprised of the 80 licensed firms by the Nairobi County Government which had been in business for over three years with focus on real estate agent officers. From the population of 80 real estate firms, samples of 66 firms were selected. Stratified random sampling technique was used by the study to arrive at the sample size. Questionnaire was used as data collection instrument. Data collected were quantitative in nature. Quantitative data were analyzed by both descriptive and inferential statistics. Statistical Package for the Social Sciences (SPSS) version 26 helped the researcher to code and analyze the data. Further, correlation analysis was conducted to examine whether there is an association between operational risk management and performance of real estate firms. The results were summarized in frequencies and percentages. The study findings revealed a positive relationship between operational risk management and performance of real estate firms (β = .122, p = .000<.05). The study recommended that: sound mechanisms for real estate firms to be put in place to increase the performance, the firms to aim at reducing the possibility of deferred maintenance, the firms to reduce risk of rising expenses to keep the real estate operational, reduce the possibility that the installed technology may negatively influence the core business process and ensure that they reduce health and safety related incident performance risk. In addition, firm managers to assign tasks associated with marketing to third parties, such as brokerage organizations to reduce cost.