Case Study Dahabshiil Bank and International Bank of Somalia in Mogadishu Somamalia 43 (2024)

JAMHURIYA UNIVERSITY OF SCIENCE AND TECHNOLOGY (JUST)

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OF BUSINESS AND SOCIAL SCIENCE

Volume: 2, Number: 1 (2017)

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TABLE OF CONTENTS

BARRIERS TO E-COMMERCE DEVELOPMENT OF SMES IN MOGADISHU, SOMALIA 1

CHALLENGES AND SUCCESS FACTORS FACED BY SOMALI WOMEN ENTREPRENEURS IN MOGADISHU 10

THE EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN MOGADISHU RESTAURANTS 21

THE IMPACT OF EMPLOYEE REWARDS ON ORGANISATIONAL PERFORMANCE, A CASE STUDY OF PREMIER BANK IN MOGADISHU-SOMALIA 30

THE IMPACT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 36

THE EFFECT OF MICROFINANCE ON POVERTY REDUCTION: CASE STUDY DAHABSHIIL BANK AND INTERNATIONAL BANK OF SOMALIA IN MOGADISHU SOMAMALIA 43

THE RELATIONSHIP BETWEEN SERVICE INNOVATION AND CUSTOMER SATISFACTION OF BANKS IN MOGDISHO 49

BARRIERS TO E-COMMERCE DEVELOPMENT OF SMEs IN MOGADISHU, SOMALIA

Bashir Omar1 Yahye Mohamed Ali2, Abdisalam Ahmed3, Mohamed Ahmed Hussein4 1, 2, 3,4, FACULTY OF ECONOMICS AND MANAGEMENT Jamhuriya University of Science and Technology (JUST), Mogadishu-Somalia [emailprotected] , [emailprotected], [emailprotected], 3 [emailprotected]

Abstract As the world turns to go digital in every aspect of live, the purchasing means of people have dramatically changed. That is why the internet-based business known as e-commerce is the future market and hence our community should be part of that growing business world. The aim of this study is to find and identify why Somali businesses are out in the picture of e- commerce and what are the factors holding SMEs from pursuing e-commerce. The methodology used was quantitative research technique to extend our understanding of existing barriers as we conduct a primary data using questionnaire as a method of data collecting. As the results of hundred respondents to our questionnaire shows, 42% say that is very important to implement e-commerce in their businesses because they see it as an opportunity to grow their businesses and also will help them go international market because when you go online, you go global. And also 72% of our respondents say that they are planning to join the e-commerce world. The overall result of the research shows that there is a growing need of e-commerce for businesses in Somalia especially in Mogadishu, as it is an opportunity for them to increase the customer base of their products/services and a greater method to generate more revenue. Keywords: Barriers, e-commerce development, e-commerce in Mogadishu. 1.0 Introduction In the recent years, the world has introduced a new way of making business through computer technology known as E-commerce which makes businesses easy to conduct, profitable and enabling customers reach businesses through clicks regardless of their location in the globe. This new model of business has got the attention of many researchersand everyone in the economic field eyeing on this new global revolution of making business, however, most of the SMEs in Somali, especially in Mogadishudid not introduce the e-commerce technology yet because of the existence of many barriers. Organization for Economic Co-operation and Development (OECD) defines e-commerce as: “the sale or purchase of goods or services, conducted over computer networks by methods designed for the purpose of receiving or placing of orders. The goods or services are ordered by those methods, but the payment and the ultimate delivery of the goods or services do not have to

1 be conducted online. An e-commerce transaction can be between enterprises, households, individuals, governments, and other public or private organizations. To be included are orders made over the web, extranet or electronic data interchange. The type is defined by the method of placing the order. To be excluded are orders made by telephone calls, facsimile or manually typed e-mail.” OECD (2013)

According to Nielsen (2014), E-commerce is big business and getting bigger every day, it is also transforming the global business landscape at an extraordinary speed. The first ecommerce transaction on a commercial website was recorded only 21 years ago, in 1995, and involved the sale of a broken laser pointer on AuctionWeb, the predecessor of eBay, for US$ 14.83 Waxman, O. B. (2015), in 2013; global business-to-consumer (B2C) e-commerce sales were valued at US$ 1.2 trillion3 (UNCTAD, 2015).

A report released by the Forest Research Group (2001) estimated that 2000 world e- commercewill increase $657 billion revenue into $6.8 trillion. And now this number is up to $18 trillion. Literature also reveals that there is great optimism about the e-commerce market in Africa (Holmberg, 2016). And Somalia is one of those countries which also many opportunities are present. With a growing middle class Sub-Saharan Africa has become a new destination for investments, and the rising disposable income comes an increased demand for consumer products and possibilities to use internet Dutta (Geiger et al., 2015).

According to UNCTAD (2015).,By 2018, the African e-commerce market is estimated to grow with approximately US$ 50 billion from just US$ 8 billion in 2013, and by 2025, e-commerce is predicted to account for 10 per cent of retail sales in Africa’s largest economies. So, foreign companies and local entrepreneurs have increasingly started to target the e-commerce sector in Africa International (Trade Centre, 2015).

Previous research has shown that several barriers delay firms from adopting e-commerce into their business models, Meltzer (2014), the International Trade Centre, ITC (2015) and Holmberg (2016) are examples of scholars who have listed e-commerce barriers in their research.Flowing is a table listing the barriers discovered by those researchers.

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Table 1 E-commerce Barriers

Meltzer ITC Holmberg, 2016 This paper

Market Access Legal and fiscal International export Internet Restrictions and Trade requirements of import and trade barriers penetration Logistics markets, and government commitment Limited Internet Access The digital divide , Lack of internet Credit card connectivity and access access and use Penetration to ICT Trade Logistics Infrastructural Barriers The delivery Delivery and international infrastructure Infrastructure logistics Access to International Financial Barriers Payment systems Payment Systems Lack of trust in online Consumer Trust Trust in e-commerce vendors and Dispute Settlement Source: Meltzer, 2014, ITC, 2015, Holmberg, 2016, this paper, 2017

1.1 CONCEPTUAL FRAME WORK IV Barriers DV

Transaction barriers: E-commerce development of 1. Pre-transaction:- Internet penetration Small and Transaction:- Credit card Penetration 2. Medium 3. Post-transaction:- Delivery Infrastructure Enterprises

2.0 Methodology This section explains how the study made. Like research design, research population, sample size, research instruments and data analysis. 2.1 Research Design The research design is in the form of a descriptive research design; According to Dr. Y.P. Aggarwal (2008) descriptive research is dedicated to the gathering of information about prevailing conditions or situations for the purpose of description and interpretation.

This design was chosen to identify and describe the existing barriers which affecting SMEs to develop e-commerce market and meet the objectives.

3 2.2 Research Population Our target population of the research was some specific small and medium enterprises in Mogadishu, Somalia and the sample population of the research consists of 100 executives of SMEs which are more popular, well-known and have more customers in Mogadishu. 2.3 Sample Size Our respondents were 80 as we used The Solvent’s formula of determining the sample size because it the most widely used formula of sample size which isn = N / (1 + N e2). 퐍 ퟏퟎퟎ ퟏퟎퟎ 퐧 = 퐧 = 퐧 = 퐧 = ퟖퟎ ퟏ + 퐍퐞ퟐ ퟏ + ퟏퟎퟎ ퟎ. ퟎퟓퟐ ퟏ. ퟐퟓ

2.4 Data Analysis In this study, we used Quantitative data analyses, because the research instrument of this study was questionnaire, the descriptive analysis also measures central tendencies such as mean and measures of description such as standard deviation to describe a group of subject. Statistical package for social science (SPSS) version 16.0 was used to analyze the data and we were given meaningful interpretation to prove our findings. 3.0 Findings 3.1 Summary of demographic and SMEs findings The finding of this study or research led the researchers to draw this conclusion and picture some of the results that we have obtained from our respondents. As they showed in chapter four, we questioned both genders (male and female), but the male gender is the dominant in our finding, because 57.5% of our respondents were male, while female role in our findings show that it is 32.5% which shows that the male gender is more popular or dominant in SMEs in Mogadishu than its opposite gender female.

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Female 33% Male 67%

Fig. 1 Gender of the respondents

And educationally respondents mostly were 70% degree level alongside with 53.8% have studied business field, and 16.2% also have business related, while the remaining (30%) respondents were other fields like Engineering, IT and etc. Mostly respondents of the study were small enterprises with 58.8%, while 35% were medium enterprises, but 67.5% of SMEs don’t use e-commerce while 32.5% were already been on it. Thus our findings illustrated the reply of the question Do you plan to join the E-commerce? Was 76.2% say yes because they are planning to join the e-commerce and 23.8 say no they not plan yet. The study found 65% of the respondents perceived the e-commerce as opportunity, 17% of the respondents perceived it as challenge, 6.2% of the respondents perceived it as threat, 2.5% of the respondents perceived as ambiguous and 8.8% no position. Thus this result appointed us a huge positive outcome how SMEs likely ready to implement e-commerce in their enterprises.

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9% 3% Opportunity 6%

Challenge

17% Threat 65%

Ambiguous

Do not know

Fig. 2 Companies’ perception of E-commerce

3.2 Findings about E-commerce Barriers First questions that related per-transaction or internet penetration barriers of E-commerce development reveals that the respondents reply gave mean rang 3.40 and Std. deviation 1.223, the range of level contributed that the respondent reply is “Good” because it shows that both people and SMEs use internet but low in the term of commercial and trading in the internet, with less society awareness of online trading. Second questions related in-transaction or payment system barriers of E-commerce development indicates that the respondents reply gave mean rang 3.49 and std. deviation 1.234, the range of level contributed that the respondent reply is “Very Good”, this result means the payment system in the internet when buying or selling is unknown for the reason of limited use of banking portal by SMEs, lack of credit cards or other e-money services and Consumers' less access to bank account, thus the sum of this barriers of payment system makes the online market hard to develop. Final third questions related post-transaction or delivery infrastructure barriers of e-commerce development which means when online trade occur customer need to deliver its products and there are some barriers block that delivery like; lack of correct street names and signage in the city and villages and poor GPS system because GPS needs to mark and level houses, main streets and main places like mosques, schools, public places to recognize easily customers location, this work needs government plan to solve it. Thus the respondents reply of this barriers gave mean rang 3.55 and std. deviation 1.223, means this barriers are important to solve to develop e- commerce.

6 4.0 Conclusion Some of the biggest problems or barriers of starting online business in Mogadishu, Somalia are these factors that we detailed below: The internet penetration It’s estimated that nearly 2.5 billion people throughout the world have internet access which is expected to rise up to 5 billion users. But in Mogadishu, Somalia it had less internet access over the years but since 2011, there has been extraordinary competition in the internet industry in Somalia. While speaking internet penetration or internet access in the developing countries, only 7% of African households have internet access in their homes when compared to 33% of Asian households with internet access, International Telecommunication Union (ITU) (2013). Payment system and credit card penetration Because of poor banking system and credit card use in many parts of Somalia especially in Mogadishu and lack of technology and internet literacy could also be part of the problem. With proper banking system comes proper use of credit cards and all payment systems, and since those have been missing for the last two and half decades there were no chances of getting into the online industry. But now it seems that the need of credit cards is disappearing because some Somali banks such as Premier Bank in Mogadishu have introduced Master Card, so people can now purchase things through online. The delivery infrastructure As much as internet and banking are important, so as proper delivery infrastructure when you want to operate online businesses, because when someone buys something from the web, you need to be able to deliver to that buyer what s/he bought, and in Mogadishu or the entire country that delivery system has been away since early 1991 just like any other government infrastructure. Because there are no proper street names or homes with numbers, it is very challenging and difficult to run an online business (e-commerce) in Mogadishu, Somalia. 5.0 Recommendation for Future Work The researchers of the study would like to give the following recommendations:

• A strong online marketing platform is missing, that can move Somalia online market to solve most of the barriers we discussed. • The issue of payments is essential. Here however, online marketing platforms targeting markets with low credit card penetration need to make sure that they offer other forms of payment methods such as mobile payments to increase the chance of expansion in the country. Moreover, synchronizing existing payment methods with mobile money options could also become profitable in the longer run. • Improve delivery services: increased coordination with government officials to provide a good delivery and solve the existing problem of missing numbers of houses, improvements in road and infrastructure would also improve the delivery system.

7 • As we mentioned e-commerce take parts the globalization which is to trade far from your home land with different customers and your product will be global. Thus spotlight, attention and media publicity to increase public awareness to push customers and society to make use of e-commerce is recommended.

5.1 Further Research Finally the findings from this study make several contributions to the current literature. Firstly, barriers to e-commerce development were tested in the Mogadishu, Somalia market and the results of the research can be compared with other developing countries. Secondly, this research makes bigger our knowledge of the Mogadishu e-commerce market and might serve as a base for future studies in this field, so we would suggest the future researchers to emphasis areas such like: 1- E-commerce and economic growth. 2- E-commerce support of modern market. 3- All other barriers of e-commerce development and adoption.

References DUTTA, S., GEIGER, T. and LANVIN, B. (2015). The Global Information Technology Report 2015: ICTs for Inclusive Growth. Geneva, Switzerland: World Economic Forum. Holmberg, S. (2016). E-commerce in Sub-Saharan Africa: overcoming barriers to succeed in an online environment. Copenhagen: Copenhagen Business School. https://stats.oecd.org/glossary/detail.asp?ID=4721 International Trade Center ITC. ( 2015). International e-commerce in Africa: the way forward. Geneva: ITC. MELTZER, J. (2014). Supporting the internet as a platform for international trade: opportunities for small and medium-sized enterprises and developing countries. 69. Washington DC: Brookings Institute. Nielsen. (2014). E-COMMERCE: EVOLUTION OR REVOLUTION IN THE FAST-MOVING CONSUMER GOODS WORLD? OECD. (2013). Glossary of statistical Terms. Retrieved from The Forest Research Group (March 2001) ‘Structure and macro-level impacts of electronic commerce: from technological infrastructure to electronic marketplaces’. FRG. UNCTAD. (2015b). Information Economy Report 2015. Geneva: United Nations. UNCTAD. 2015. Information Economy Report 2015. Waxman, O. B. (2015, September 2). This is the first item ever sold on eBay. Retrieved from TIME: http://time.com/4018841/first-item-sold-listed-ebay

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CHALLENGES AND SUCCESS FACTORS FACED BY SOMALI WOMEN ENTREPRENEURS IN MOGADISHU Mohamed Ahmed, Mohamad Bashiir, Hanad Abdi, Hassan Abdulkadir, Farhan Mohamud FACULTY OF ECONOMICS AND MANAGEMENT Jamhuriya University of Science and Technology (JUST), Mogadishu-Somalia Emails: [emailprotected], [emailprotected], [emailprotected], [emailprotected]

Abstract This study explored the challenges and success factors faced by Somali Women Entrepreneurs in Mogadishu-Somalia. Data collection method used was questionnaires which were distributed to 150 women entrepreneurs in Mogadishu. The findings from the study have shown that women entrepreneurs who meet these success factors mostly succeed to run their businesses and these success factors are: Family Support, Work experience & Training, Internal motivation & Personal Attributes and Financial & fund Support. It is also discovered that they can meet challenges that every women entrepreneur may face such: Work-family conflict, Lack of access to information, Lack of financial support and Lack of education. The study therefore recommends government to promote entrepreneurial education and financial institutions to provide the necessary support for women entrepreneurs in Mogadishu-Somalia. On the basis of this study some suggestions are also given to encourage spirit of women entrepreneurs to become a successful entrepreneur. Keywords: Challenges, Success Factors, women Entrepreneurs.

1.0 Introduction Entrepreneurship has become an important element for growth and development of most countries, especially after the financial crisis and economic downturn (Sowmya et al., 2010). Entrepreneurship is also claimed as the major driver of economy in the developed and developing countries (Ramadani et al., 2015; Hisrich et al., 2006). For it major contribution to the public prosperity and economic growth, entrepreneurship curriculum area is growing rapidly in business schools around the world. This indicates that a lot of countries have emphasized and promoted entrepreneurship to support their economy. The opportunity to create profit and being their own employer has attracted many people to be entrepreneurs (Rose et al., 2006).

10 According to (Nelson J., 2011)., women entrepreneurs differ in many ways in terms of age, religion, ethnicity, wealth, education, literacy, marital status, social status, experience and socio- economic position. They also differ in terms of their motivation to start and develop businesses Female entrepreneurship has attracted increasing attention in recent years in light of concrete evidence of the importance of new business creation for economic growth and development However, globally women who choose to pursue entrepreneurial ventures have had limited representation in the different industries including but not limited to construction industry, this limited representation of women entrepreneurial activities limits their contribution to economic development (Wangle, 2009; Verwey, 2005; Worrall et al., 2008). A study by Karim (2001) established that financial problems were the most common problems faced by women entrepreneurs in Bangladesh and inadequate financing was ranked first. A variety of studies (Boden and Nucci, 2000; Du Rietz and Henrekson, 2000; Watson, 2003) found out that women were more likely to discontinue their businesses although not because of business failure but because of financial constraints.

According to (Phillips, Moos & Nieman 2014), running a business is very risky for any entrepreneur, even more so for women entrepreneurs who not only have to survive in a male- dominated environment but also often lack the education and training in this field. In a study conducted by Orford, Wood, Fischer, Herrington and Segal (2003) on the main obstacles faced by several South African entrepreneurs, the results of which indicated that the most recurrent weakness is lack of education and training among entrepreneurs.

In their studies of entrepreneurship in India, (Indarti and Langenberg, 2005) pointed out that eagerness in information seeking is one of the major entrepreneurial characteristics. Information seeking refers to the frequency of contact that an individual makes with various sources of information.

Maysami et al. (1999) found that the work- home conflict – the tension caused by the dual responsibility of managing a business and maintaining a family to be the main stumbling block for female business owners. McGowan et al. (2012) found that women’s firms were at a commercial disadvantage due to pressures on women to combine family responsibilities with an entrepreneurial career: failure to achieve an appropriate balance created high levels of stress and held back economic growth of the enterprise.

According to Brindley (2005), the main source of support and assistance for female entrepreneurs during a startup phase came from family and friends i.e. trusted sources of help that the women had previously experienced. Thus, family and close friends play a very important part in ensuring the emotional stability of women entrepreneurs. As mentioned by Hisrich (2008) the family support is extremely important and very much contribute to the molding of entrepreneurship interest especially to start up any new business venturing. A woman who is internally motivated to start a business that she is interested in will first and foremost put in more effort and time in order to make it a success (Robinson, 2001). Orhan and Scott (2001) reported that women entrepreneurs in developed countries were motivated by the need for achievement.

11 2.0 Methods and materials This section presents the research design, research population, research instrument, data collection procedure, reliability and validity of the instrument, data analysis and the sampling technique. 2.1 Research Design

A descriptive survey research design was be employed in the study to assess the challenges and success factors faced by Somali women entrepreneurs in Mogadishu. The reason for using this design is to achieve the objective of the study. It enables to describe the profile of the persons, event or situations faced by Somali women entrepreneurs in Micro and Small Entrepreneurs as they exist.

2.2 Research Population

This study was conducted among Somali women entrepreneurs in Mogadishu. Women entrepreneurs who work in many sectors, such as: Jewelry, petroleum, furniture, fashions, beauty salons and etc.

2.4 Sample Size

The sample of the study is 150 individuals. This sample size is based on findings from the literature so choosing of this sample size was guided by literature.

2.5 Sampling Procedure

In our study we used non probability sampling techniques. Its main purpose is to select a representative sample.

2.6 Research Instrument

In this study questionnaire was used as a tool for collecting the data required to address and accomplish research objectives. The researcher preferred this method because it was the most appropriate method.

2.7 Validity and Reliability of the Data

A pilot test was conducted on four respondents from units of the population to examine clarity and meaningfulness of the questionnaire. Feedback from the pilot study was incorporated into the questionnaires that was used to gather data for this research.

2.8 Data Analysis

Descriptive statistical measures such as central tendencies and measures of dispersion was used to analyse close ended questions. The results was presented in tables, after the data was tabulated and analysed using frequencies, percentages, mean scores and standard deviation measures with the

12 help of SPSS computer software application. Cross-tabulation analysis was also applied to originate any relationships between the Dependent and independent variables.

2.9 Ethical Considerations.

We intended to conduct an ethically sound research by following the rules and regulations of Jamhuriya University and other internationally known procedures. 3.0 Data presentation, analysis and interpretation 3.1 Bio information of the respondent The majority of the respondents are within the age category of 20-30 years (28%) and also 30-40 years (28%), followed by those under the category of 40-50 years (19.3%).The remaining 12.7% are above 50 and 12% of the respondents are under the age category of under20 years.

50 42 42 40 29 30 18 19 20 10 0 under 20 20-30 30-40 40-50 above 50

Figure 4.1.1 Age of the respondents

Table 4.1.4 Occupation

Frequency Percent Valid Percent Cumulative Percent

Gold 34 22.7 22.7 22.7 Petroleum 25 16.7 16.7 39.3 Furniture 22 14.7 14.7 54.0 Fashion 28 18.7 18.7 72.7 Beauty salon 28 18.7 18.7 91.3 Other 13 8.7 8.7 100.0

Total 150 100.0 100.0

13 The maturity of the respondents which are 34 respondents within the occupation of gold that represents 22.7%, followed by 28 respondents within the business of fashion that represents 18.7% and similarly another 28 respondents within the beauty salon that represents 18.7%, 25of respondents are petroleum that represents 16.7%, 22of the respondents are furniture that represents 14.7%, and the remaining 13respondents are within the other jobs that represents 8.7%.

3.2 Challenges faced by women entrepreneurs

50

50 42 45 40 35 30 23 25 17 18 20 15 10 5 0 SD DA N A SA

Figure 4.3.1 Work- family conflicts

The majority of our respondents which is 50 members representing 33.3% strongly believed that work-family conflict will influence the mood and attitude of women entrepreneurs and 42 other members representing 28% agreed with the idea that work-family conflicts will influence women’s performance while 23 members representing 15.3% had no opinion about the issue citing neutrality and 18 members representing 12% and 17 members representing 11.3% disagreed and strongly disagreed respectively.

Table 4.3.2 Lack of access to information

Frequency Percent Valid Percent Cumulative Percent

SD 12 8.0 8.0 8.0 DA 22 14.7 14.7 22.7 N 35 23.3 23.3 46.0 A 55 36.7 36.7 82.7 SA 26 17.3 17.3 100.0

Total 150 100.0 100.0

14 The above table shows that the majority of our respondents which is 55 members representing 36.7% agreed that Lack of access to information is one factor affecting women’s decision to get into business and 26other members representing 17.3% strongly believed with the idea that lack of information is one of the factors that affect women’s decisions to start new business, while 35 members representing 23.3% had no opinion about the issue citing neutrality and 22 members representing 14.7% and 12 members representing 8% disagreed and strongly disagreed respectively.

60 54 56 50 40 30 18 21 20 10 1 0

SD DA N A SA

Figure 4.3.3 Lack of capital

The above figure shows that the majority of our respondents which is 56 members representing 37.3% strongly believed that Larger numbers of women do not have much needed financial independence and 54 other members representing 36% agreed with the idea that almost women entrepreneurs do not get much financial needed, while 21 members representing 14% had no opinion about the issue citing neutrality and 18 members representing 12% and 1 member representing 0.7% disagreed and strongly disagreed respectively.

15 Table 4.3.4 lack of education

Frequency Percent Valid Percent Cumulative Percent

SD 22 14.7 14.7 14.7 DA 24 16.0 16.0 30.7 N 41 27.3 27.3 58.0 A 32 21.3 21.3 79.3 SA 31 20.7 20.7 100.0

Total 150 100.0 100.0

The above table shows that the majority of our respondents which is 41 members representing 27.3% had no opinion about problems faced by women entrepreneurs in Mogadishu are lack of education,32members representing 21.3% agreed with the idea that lack of education is one of the problems that face women entrepreneurs in Mogadishu, also31 other members representing 20.7% strongly believed that lack of education is one of the problems that may face women entrepreneurs in Mogadishu and 24 members representing 16% and 22 members representing 14.7% disagreed and strongly disagreed respectively.

3.3 Success factors faced by women entrepreneurs

64 SA

48 A

16 N

10 DA

12 SD

0 10 20 30 40 50 60 70

Figure 4.4.1 Family support

16 Table 4.4.2 Internal motivation and Personal Attributes

Frequency Percent Valid Percent Cumulative Percent

SD 15 10.0 10.0 10.0 DA 24 16.0 16.0 26.0 N 30 20.0 20.0 46.0 A 57 38.0 38.0 84.0 SA 24 16.0 16.0 100.0

Total 150 100.0 100.0

The above table shows that the majority of our respondents which is 57 members representing 38% agreed that internal motivation and personal attributes is one of the success factor that face women entrepreneurs and 30 members representing 20% had no opinion about the issue citing neutrality,24 members representing 16% strongly believed with the idea that internal motivation and personal attributes is one of the success factor that face women entrepreneurs, while 24 members representing 16% and 15 members representing 10% disagreed and strongly disagreed respectively.

48 49

50 28 40 18 30 7 20

10

0 SD DA N A SA

Figure 4.4.3 Work Experience trainings

The above figure shows that the majority of our respondents which is 49 members representing 32.7% agreed that they have experience in business ownership and access to different business trainings while 48 members representing 32% had no opinion about the issue citing neutrality and 18other members representing 12% strongly believed with the idea that they have experience in business ownership and access to different business trainings, and 28 members representing 18.7% and 7 members representing 4.7% disagreed and strongly disagreed respectively.

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Table 4.4.4 Access to loan and finance

Frequency Percent Valid Percent Cumulative Percent

SD 4 2.7 2.7 2.7 DA 2 1.3 1.3 4.0 N 20 13.3 13.3 17.3 A 53 35.3 35.3 52.7 SA 71 47.3 47.3 100.0

Total 150 100.0 100.0

Figure 4.4.4 Access to loan and finance

The majority of our respondents which is 71 members representing 47.3% strongly believed that they have access to loan and finance and 53 other members representing 35.3% agreed with the idea that they have access to loan and finance, while 20 members representing 13.3% had no opinion about the issue citing neutrality and 2 members representing 1.3% and 4 member representing 2.7% disagreed and strongly disagreed respectively.

4. 0 Conclusion & Discussion ✓ Most of the respondent women entrepreneurs are under the age category of 20-40 years (56%), marital status of the respondents are married (37.3%), educational level of the respondents are illiterate or had no formal education (27.92%) with a occupation of gold (22.7%). ✓ Majority of the respondents have their own business (93.3%); most of the respondents acquire the necessary skill for running their business from experience (32%); and the legal ownership establishment of their enterprises is in the form of sole proprietorship (36%). The main sources of startup fund for majority of the respondents are personal savings and family support (66.6%). Moreover, majority of the respondents initiated and started their business with their self (34%). ✓ The majority of the respondents are strongly believed that work-family conflict will influence the mood and attitude of women entrepreneurs (33.3%), (36.7%) agreed that Lack of access to information is one factor affecting women’s decision to get into business, (37.3%) strongly believed that Larger numbers of women do not have much needed financial independence and (27.3%) had no opinion about problems faced by women entrepreneurs in Mogadishu are lack of education. ✓ The majority of the respondents strongly believed that family support is very important for women entrepreneurs (42.7%), (38%) agreed that internal motivation and personal attributes is one of the success factors that may face women entrepreneurs, (32.7%) agreed that they have experience in business ownership and access to different business trainings and (47.3%) strongly believed that they have access to loan and finance.

18 4.1 Recommendations

To the women entrepreneurs

Women entrepreneurs should raise confidence, empower themselves through entrepreneurial education, which is one of the initiatives that can be designed to enhance skills and knowledge in entrepreneurship. To the Government They should emphasize on entrepreneurship education in institutions of learning. To the financial institutions They must come forward to support and motivate Women Entrepreneurs to start the business. To the researchers Influence of other factors that were found to play a role in entrepreneurial success of women groups such as leadership styles of leaders of women groups, age and marital status of group members as well as the educational background of the members.

19 References Boden, B.J. and Nucci, A.R. (2000), “On the survival prospects of men's and women's new business ventures”, Journal of Business Venturing, 15(4), pp.347-362.

Du Rietz, A. and Henrekson M. (2000), “Testing the female underperformance hypothesis”, Small Business Economics, 14(1), pp. 1-10.

Ramadani, V., Hisrich, R.D., Gerguri, S. (2015), Female entrepreneurs in transition economies: Insights from Albania, Macedonia and Kosovo. World Review and Entrepreneurship, Management and Sustainable Development, 11(4), 391-413.

Verwey, I. (2005). A comparative analysis between SA and USA women entrepreneurs in construction. PhD diss. University of Pretoria.

Wangle, M.A. (2009). Perceptions of traits of women in construction. MSc diss. University of Florida.

Watson, J. (2003), “Failure rates for female-controlled businesses: Are they any different”? Journal of Small Business Management, 41(3), pp. 262-277.

Worrall, L., Harris, K., Thomas, A., Stewart, R., Jessop, S. and Platten, A., (2008). Organizational cultures: Retention and progression barriers to women in the UK construction industry. International Journal of Communities, 8(3): 31–40.

20 THE EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN MOGADISHU RESTAURANTS Abdiaziz Ahmed Ibrahim1, Isse Abdirahman Ali2, Muktar Mohamed Farah3, Abdirizak 4 Hashi Hassan 1, 2, 3,4, FACULTY OF ECONOMICS AND MANAGEMENT Jamhuriya University of Science and Technology (JUST), Mogadishu-Somalia Emails: [emailprotected], [emailprotected], 3 4 [emailprotected] , [emailprotected]

Abstract

The study shows that there is a substantial effect that service quality on customer satisfaction in Mogadishu restaurants, our objective of this study was to identify, assurance, and tangibility of service quality on customer satisfaction. We used quantitative method to accomplish goals of the study. It also used descriptive and inferential statistics in analyzing data and interpreting actual result in details to identify the effect of service quality on customer satisfaction in Mogadishu restaurants.

The sample of our research study was one hundred twenty questionnaires (120). These questionnaires were relevant to the study topic. The main findings of this research study according to the objectives indicate that there is a strong relationship between the two variables of our research study.

This study recommended to be made further research to the food quality and customer satisfaction in future to get information about that topic to be useful our society.

Keywords: service quality, customer satisfaction, food quality and SERVQUAL mode

1.0 Introduction

Customer satisfaction is a subject that has a great interest of organization and researchers alike, the objective is to achieve profit maximization and minimizing costs that leads to the business to successful in market share and sustainable competition to get a consumer satisfaction and loyalty for service you provide.(Portela&thanassouilis, 2005)

The definition Service quality has also been defined by Czepiel (1990) as customer perception of how well service meets or exceeds their expectations Service quality is commonly noted as a critical prerequisite and determinant of competitiveness for establishing and sustaining satisfying relationships with customers.

Today the world has made rapid change in growth of business environment these changes allows market competition to innovate of business environment and get service quality to satisfy on their consumers, this idea which to focus on customer satisfaction begun early time Adam Smith in 18th century, the customer satisfaction is main factors which organizations focus on to adapt in

21 a market competition. It has direct influence service quality from service provider toward consumer expectations in needs and wants and actual service you get offer to the customers than you have feedback from consumers your service quality and their level satisfaction. (Portela&thanassouilis, 2005)

In world context of service quality on customer satisfaction has facing multidimensional challenges and demand of globalization in their service they are making to re-engineer their systems to improve service quality on customer satisfaction and remain in competitive market of the business environment. (Yasin et al., 2004)

Market oriented organization believe without service quality on customer satisfaction business companies of the world can’t survival in market with in long term of the improvement of the organization so the 100 percent of their mission is to satisfy their consumers across borders of the global to earn a credit and increase their share of market and profitability.(Nguen et al., 2016)

1.1 Restaurants Service Quality In modern times, efficient and professional catering and restaurant services are must focus for every Event, celebration or party. Whether it is a birth day celebration, wedding catering, anniversary party, social, traditional, corporate or political event - quality and delicious food serving is a must to complete the event. Restaurant and catering can be demanding work that will require a lot of stamina and inner strength. Business/ employees should also possess the ability to work under stress. Firm success depends solely on its reputation; it is good to be daringly careful with the jobs it takes up. Strive to provide a high quality, superior service at all times. Never let qualities be diminished maintain the standards for repute and references promise.(Jones, 2011)

Quality, physical and environment (ambience) and employee service For this study, it was possible to measure the physical environment and employee service using the SERVQUAL instrument as it contains relevant dimensions covering these constructs. Ryu et al. (2012) highlighted the importance of food quality as a measure of customer satisfaction in the restaurant industry. As a result, five aspects of food quality were adopted from Ryu et al. (2012), namely: the food is fresh, the food is delicious, the food is nutritious, there is a variety of menu items and the smell of the food is enticing. Qin and Prybutok (2009) Explored the potential dimensions of service quality and examined the relationships between service quality, food quality, perceived value, customer satisfaction and behavioral intentions in fast-food restaurants and pointed out that food quality has a positive and direct influence on customer satisfaction (Donkon S. A et al., 2012)

This project study we investigate restaurant service quality have used three main dimensions of service quality: food quality, physical environment (ambience) and employee service, for this study, it was possible to measure the physical environment and employee service using the SERVQUAL instrument as it contains relevant dimensions covering these constructs and highlighted the importance of food quality as a measure of customer satisfaction in the restaurant industry. As a result, five aspects of food quality were adopted and the food is fresh, the food is delicious, the food is nutritious, there is a variety of menu items and the smell of the food is enticing. Qin and Prybutok (2009) explored the potential dimensions of service quality and

22 examined the relationships between service quality, food quality, perceived value, customer satisfaction and behavioral intentions in fast-food restaurants and pointed out that food quality has a positive and direct influence of customer satisfaction.(Al-tit, 2015)

1.2 SERVQUAL Model

Service quality is one of the important attributes of service providers as they regard measuring the service quality from consumers’ perspective as a top priority construct. Service quality is an indispensable factor for customer satisfaction, cost reduction, customer loyalty, customer relationship and retention, profitability and so on. Many have suggested that quality results from a comparison of perceived performance with expected performance based on the so-called “disconfirmation theory”. Indeed, this notion was the basis for the SERVQUAL model, which views service quality as the gap between the expected level of service and customer perceptions of the level received.

Berry, Parasuraman and Zeithaml (1988) are the creators of this instrument that is used to measure the customer perceptions of service quality. Therefore, the evaluation of service quality results from comparing the perception about received services with the prior expectations of what those services should provide.(Parasuman et al., 1985)

1.3 Theoretical Literature Review This section we give a brief on overview of theories used by researchers to describe the effect of service quality on customer satisfaction these theories relevant our study because it describes the main variables of our research project that is service quality and customer satisfaction, let us discuss to identify the effect of service quality on customer satisfaction in our study which was widely accepted as definition use researchers or authors.

Customer satisfaction is conceptualized as a consumer judgment incorporating cognitive and affective evaluations after their use or consumption experience. Second, the expectation, an antecedent frequently proposed in marketing literature is analyzed with reference to consumer satisfaction and future behavior. An analysis of the expectation–satisfaction relationship first requires a review of the function of expectations in consumer satisfaction judgments (Oliver, 1997)

The definitions of Service quality vary only in wording but typically involve determining whether perceived service delivery meets, exceeds or fails to meet customer expectations as customer perception of how well a service meets or exceeds their expectations Service quality is commonly noted as a critical prerequisite and determinant of competitiveness for establishing and sustaining satisfying relationships with customers. Previous studying suggests that service quality is an important indicator of customer satisfaction; Attention to service quality can make an organization different from other organizations and gain a lasting competitive advantage (Boshoff & Gray, 2004)

23 1.4 Conceptual Literature Review The aim on this section is to summarize the idea from past literatures and bring the contributions that have this study on the area of the effect of service quality on customer satisfaction in Mogadishu restaurants

The general idea from the past literature is that there is a relationship between customers Satisfaction and service quality; also, that service quality could be evaluated with the use Of five service quality dimensions and the most useable is the SERVQUAL scale Following the two clarifications about the different views of customer satisfaction of a Customer of either being transaction-specific or cumulative my theoretical frame work treats customer satisfaction as Transaction-specific.

Thus, customers in this paper are those who consume the services, Satisfaction denotes customer’s desire to maintain a business relationship with the Organization and it is also the feelings of the customers towards the services provided to Them by the organizations; while customer satisfaction in this study is the pleasures Obtained by customers for the services provided to them by the employees of the Organizations.(Solomon, 2011)

Responsiveness Assurance Service Customer Empathy quality satisfaction

Figure 2.1: The relationship of service quality on customer satisfaction for this study Source: (Solomon, 2011)

2.0 Methodology 2.1 Research design A research design is overall plan for conducting research, were used quantitative method to accomplish goals for the study. It also used descriptive and inferential statistics in analyzing data and interpreting actual result in details to identify the effect of service quality on customer satisfaction in Mogadishu restaurants.

2.2 Population of the study Our target population of the study in the research project is the customers who live in Somalia Particularly the capital city of Mogadishu which at least once month eat out of the home. Those used restaurants services and accessible to understanding our study project, and target number of population is unknown.

2.3 Sample Size The sample of our research study is one hundred twenty customers (120) in cited (Tran Van Quyet, et al., 2015). This questionnaire was relevant the topic on the project study and has

24 specific knowledge and understanding of this research. The sample size were used based on finding from literature because our target population is very huge, so our choosing this sample size it could make reliable information from this research finds.

2.4 Sampling techniques The sampling techniques are non-probability sampling techniques used as the technique for the research project. This method was selected o enable to elicit vital and quality information from respondents who have reasonable knowledge about the issue under investigation and were in position to provide the information needed for the study.

2.5 Research instrument The instrument was used for the research study were questionnaires methods. This was used as a tool to collect a selected data from respondents. The researchers were preferred to this approach because is an appropriate method to collect data from respondents.

2.5.1 Data sources The project study data sources are primary methods used. Primary data were used from sampled customers of restaurants in Mogadishu area through Questionnaires. We selected this approach to achieve our research objectives and get solutions research problem statement.

2.6 Validity and reliability of data Validity is concerns testing the quality of what it was intended doing. Validity will checked The reliability of the research instruments is concerned with the degree to which the research instrument gives the same result under similar conditions.

2.7 Data collection Procedure First, the researchers were requested from Jamhuriya University academic office a data collection letter by submitting researcher’s names and topic of study and their program. After, receiving data collection letter, the researchers will meet the people in their selected sample to get relevant information about their study.

2.8 Data Analysis

This study was used a descriptive statistical measures such as central tendencies and measures of dispersion was used to analyze close ended questions. The results were presented in tables, after data were tabulated and analyzed using frequencies, percentages, mean scores and standard deviation measures with the help of SPSS computer software application.

The researchers carried out a quantitative research and this involved some quantitative analyses with the use of statistical tools (descriptive). There are several software packages for the analysis of quantitative data, some of which are broader in scope and user friendly like the SPSS. And we agreed on to use the Statistical Product for Social Solutions (SPSS)

25

3.0 Interpretation and discussion 3.1 Background of respondents

The most of respondents 89 in frequency column represents 74.2 percent of respondents were male mostly males more than female in eating out the house in Mogadishu area according to the culture and 25.8 remains is female. The analysis proves that males more than females in eating out house and shows that there is big difference which is 74.2 percent.

100 89 90

80 74.2

70

60

50 male

40 female 31 30 25.8

20

10

0 1 2

3.2 Age level of respondents

This table show that66 represent of 55 percent of respondents between 20-25 years, 29 represent of 24.2 percent of respondents between 26-30 years, 7 represent of 5.8 percent of respondents between 31-35 years, 2 represent of 1.7 percent of respondents between 36-40 years, 11 represent of 9.2 percent of respondents between 41-45 years, 5 represent of 4.2 percent of respondents between 46 above years. This analysis shows that the group between 20-25 years is the majority which the most people we met in our data collection.

26 70 66

60

50

40 Series1 29 30 55 Series2 20 11 24.2 7 10 5 2 5.8 1.7 9.2 4.2 0 20-25 yrs 26-30 yrs 31-35 yrs 36-40 yrs 41-45 yrs 46 Above

3.3 The service quality has a direct impact to the customer satisfaction

This figure shows that 62 members of our respondents that represent 51.7% were rated as strong agree, 28 members of our respondents that represent 23.3% were rated as an agree, while 14 persons of respondent that 11.7% were rated as disagree, and last 16 members of our respondents which represent 13.3% were rated as strong disagree. The analysis recognized that the service quality has a direct impact to the customer satisfaction which has many dimensions which we can investigate the rate has reached.

70 62 60 51.7 50

40 Series1 28 30 23.3 Series2 16 20 14 11.7 13.3 10

0 strong agree agree disagree strong disagree

27 3.4 Discussion The previous literature review result that there is a positive relationship the service quality with customers satisfaction in our case study the findings were got that a relationship between the service quality on customer satisfaction in Mogadishu restaurants and have strong agree our respondents to the variables impacts with each other, in the role of assurance of customer satisfaction our respondents were show that they have very strong agree and satisfied it, in responsiveness of customer satisfaction the respondents result that they are ordering to make change how restaurants responding to the customers, in tangibility of customer satisfaction result of respondents that they have satisfied to follow standards written in appendix in all our research projects result that there a positive relationship with variables of the research objectives. 4.0 Conclusion and Recommendation 4.1 Conclusions Our research project investigated the effect of service quality on customer satisfaction in Mogadishu restaurants which located Benadir region we have taken as a sample one hundred twenty questionnaire that contains the objectives of our research report and that indicated the important research study also has a positive direct relationship with variables of our research project, the design of our project used was a descriptive in using a questionnaire tools in closed ended. And relationship between the two variables of our research study is high positive relationship which shows the significance level is high in our research study. The main findings of our research study according to the objectives in responsiveness of customer satisfaction our respondents’ result that they are ordering to make change how restaurants responding to the customers, in tangibility of customer satisfaction result of respondents that they have satisfied the method have done services from restaurants 4.2 Recommendations areas for further study ➢ The effect of service quality on customer satisfaction case study whole country. ➢ The impact of food quality and customer satisfaction. ➢ The impact of service quality on customer retention case study in banking.

28 References

Al-tit, A. A. (2015). the effect of service & food quality on customer satisfaction and hence Customer retention. Asian Social science of journal . Boshoff & Gray. (2004). the effect of service quality on customer satisfaction in utility industry. International Journal of Business and Management , 204. Czepiel, JA.A.(1990) “service encounter and service relationships” Journal for business research, vol. 20, p.13-20 Donkon S. A et al. (2012). customer satisfaction and perceptions about food services on the university for development studies campus, Ghana . African journal of food science , 217. Jones. (2011). impact of service quality on customer satisfaction. management and marketing journal , 344. Nguen et al. (2016). the relationship of service quality and customer satisfaction and loalty in Vietnamese banking sector. journal of competitiveness , 103. Oliver. (1997). the enfuelance of service quality on custome satisfaction. INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS , 1150-1151. Parasuman et al. (1985). realationship between service quality and customer satisfaction. Portela&thanassouilis. (2005). service qulaity and customer satisfaction. European journal of business and management , 123. Parasuraman, Zeithaml & Berry. (1988). effect of service quality on customer satisfaction and loyalty. international business and management invention , 30-31. Solomon. (2011). the relationship between service quality and customer satisfaction. Umea school of business , 6. Yasin et al. (2004). service quality and customers satisfaction. University of GAVLE , 2.

29 THE IMPACT OF EMPLOYEE REWARDS ON ORGANISATIONAL PERFORMANCE, A CASE STUDY OF PREMIER BANK IN MOGADISHU-SOMALIA

Mowlid Aden1, Muktar Salah Mohamed2, Ifrah Hassan Mohamed3, Zuhur Esse Farah4 1,2,3,4, FACULTY OF ECONOMICS AND BUSINESS MANAGEMENT Jamhuriya University of Science and Technology (JUST) Mogadishu-Somalia [emailprotected], [emailprotected], [emailprotected], 4 [emailprotected]

Abstract

This research study focused on the impact of employee rewards on organizational performance in the work environments in Somalia. Researchers particularlycollected the data by using questionnaires from 100 employees and managers of Premier Bank in Mogadishu-Somalia to find outwhether rewards can lead to higher performance and better job satisfaction, Based on a critical review of published literature.The research also investigated how different types of reward systems affect the performance and attempt to establish which type of reward systems are more beneficial to the company in question and in the current business climate it operates The research found that majority of employees strongly agreed that reward and performance depend on each other and it is important to establish a rewarding system to enhance the overall organizational performance.

Keyword: Employee rewards, organizational performance.

1.0 Introduction In the early years, employee rewards were no popular but starting from 1980 until 1990 up till now becoming more popularize and all the organizations understand the impact of employee rewards, when you reward your employees the productivity of the organization increases, reward is force or factor that the managers now believe it is a leading drive that can lead the strategic plan of the organization to succeed (Armstrong and Brown, 2005). Today managers or employers reward their employees because competitive in the marketplace to win the competitive advantage of the market, most of the employees those gave reward work honestly and think to produce more outcome with high quality. Employee rewarding is to motivate and encourage for the organizational performance, rewarding employees is not only to give money but also may give him or her some else which is valuable while reward divided into two parts; extrinsic and intrinsic reward or also can call financial and non-financial rewards that offer to the employees by looking at their performance in the

30 organizations, so these rewards paying is going to motivate the employees and to increase the productivity of the organization (Hong Lu, et al. 2005). Intrinsic reward and non-monetary rewards are some of rewards those the employees provide for their performance but these rewards are non-monetary reward that means the employees provide what they have right to their tasks that related financial systems, they only give some other valuable which can attract their attention and make satisfaction to their performance, these rewards include like certificates, and some other thing that the employees would motivate their moral and to increase the organizational outcome, because when the managers of the organizations their employees good and effectively rewards to their employees these motivation can change the outcome of the organization to increase or raise up the that the organization was produced ( Kallerberg ,1977). Extrinsic rewards are the rewards those are related to the other rewards provide the employees, these rewards are external reward that give the employees, as we now the employees provide salaries and wages these are rights for their performance but the extra reward provide the employees called extrinsic reward to motivate and make encouragement to the employees, since the employees produce more outcomes and also can bring more ideas that can enhance the organizations strategy, when motivated the employees they come up with new ways that can develop and make improvement the organizational performances that rewarding the employees is very important (Malhotra et al., 2007). 2.0 Methodology 2.1 Research methodology and research design In this study we have used descriptive research by distributing questioners to the employees and managers of PREMIER BANK in Mogadishu-Somalia, this design includes analyzing the relationship between reward and organizational performance in our research we shall use descriptive statistics; research design will use the overall plan or strategy for conducting a research. 2.2 Research population Our target population is toward to visit and share questionnaires to the employees of PREMIER BANK employees of 100 populations in Mogadishu-Somalia. 2.3 sample size Sample size of our study is 100 individuals; these individuals were relevant people who have specific knowledge and understanding of the nature of research topic 2.4 Sampling procedure In our study we used non probability sampling stratified. This technique is used to select a sample without bias from the target accessible population. Its main purpose is to select a representative sample. 2.5 Research instrument It is a basic data collection of the research that is questionnaire to collect primary data by which the researcher asking questions to the participants to answer or respond your questions and then

31 you are analyzing and filtering your data by using instruments and software to get a pure and a quality data (Mathers,Fox & Hunn, 2009).

2.6 Data analysis descriptive statistics frequency & percentage Descriptive research gives us a general comprehension to the conditions that we are in what is occurring like how the research is occurring, and developing, how the research is trending according the current situations, descriptive statistical measures such as central tendencies and measures of dispersion was used to analyze close ended questions (Burns and Grove ,2003). 2.7 Ethical considerations We conducted an ethically sound research by following the rules and regulations of Jamhuriya University of Science & Technology and other internationally known procedures. Our intention was to guarantee anonymity to each participant of this project and to seek permission if needed, while informing our participants that they have the complete right to refuse any publication of their identity. 3.0 Data presentation and interpretation 4.1 Demographics Data According to this first section of demographic Data the respondents gage different respondents as they differ in their age, education, gender, and their work experience although they are participated our Data collection they are categorized two category which are male and female, during our research we were targeting the employees of PREMIER BANK in Mogadishu which one of the service companies in Somalia. Table 4.1 Ages of the respondents

Age status Age Frequency Percent Valid Percent Cumulative Percent 20-25 37 37.0 37.0 37.0 26-31 34 34.0 34.0 71.0 32-37 19 19.0 19.0 90.0 38+ 10 10.0 10.0 100.0 Total 100 100.0 100.0

This table shows and tells us the age status of our respondents all of them but the majority and most large ages told that the age of the respondents between 20-25 were 37 percentages of the total respondents as represented in this table, 26-31 were 34 percentages of the total respondents ages between 32-37were 19 percentages of the total respondents and the above 38 were 10 percentages of the total respondents.

32

Figure 4.1 shows the age status of the res

Table 4.2.1 Influences of attributes

The productivity increasing when the employees rewarded Category Frequenc Percent Valid Cumulative y Percent Percent Strong agree 65 65.0 65.0 65.0 Agree 26 26.0 26.0 91.0 Neutral 5 5.0 5.0 96.0 Disagree 1 1.0 1.0 97.0 Strong disagree 3 3.0 3.0 100.0 Total 100 100.0 100.0

It was the first respondent that we met during our data collection we asked the question and they respond the question scored of mean and percentage of 65 % strongly agreed productivity increasing when the employee rewarded, while the second respondent was 26 % of the respondents agreed increasing productivity for employee rewards when we asked them the question, the third question to the respondent asked has 5% of the respondents, the respondents some of them who strong disagreed were 3% while at the end disagree was only 1% of the asked questions respondents, however it explains us that the employees do the work well when they rewarded because most of the respondents strongly agreed 65% that the performance increase when the employees satisfied or rewarded. 5.0 Conclusion and Recommendations 5.1 The findings of the study, discussions and interpretation Since the study was investigating the impact of rewards on organizational performance according to the Premier Bank, most respondents strongly agreed that the reward the performance are dependent variables because they mostly agreed that the employee rewarding is important for the enhancements of the organizational performance.

33 Employees respondents 65 % strongly agreed productivity increasing when the employee rewarded, while the second respondent was 26 % of the respondents agreed increasing productivity for employee rewards when we asked them the question, the third question to the respondent asked has 5% of the respondents, the respondents some of them who strong disagreed were 3% while at the end disagree was only 1% of the asked questions respondents. 5.2 Comparing and contrast to previous studies In contrasting and comparing the previous studies we were investigating the impact of employee reward on organizational performance, employee rewarding is necessary to every organization that is going to develop its production units and organizational performance because employees have been declared that they produce high outcome and get motivation to work sincerely and think to produce more outcome per day but when they did not reward they become thankless to enhance the organizational performance as we examined reward is important to any organization because during our research we noticed that we asked the question and they respond the question scored of mean and percentage of 65 % strongly agreed productivity increasing when the employee rewarded, while the second respondent was 26 % of the respondents agreed increasing productivity for employee rewards when we asked them the question (Sutherland, 2004; Shoaib et al., 2009). 5.3 Recommendations of the study ✓ To the organizations According to this research it was to examine and investigate the impact of employee reward on organizational which was the main purpose we were being doing this research to know performance and reward influence, ✓ To the private firms We recommended all the different types of the firms like: manufactures, and merchandise and specially service companies to more aware of the employee’s compensations and to make communications with them. ✓ To the public firms So we also urge that the public and business firms may be those produce goods like tangible and intangible may consider and aware of the importance of the employees, more you keep aware of the employee’s needs.

5.4 Suggestion for further research recommendations 1. The effect of employee reward on organizational economic growth 2. The relationship between organizational performance and economic development 3. The productivity of rewarded employees and the firm’s development 4. The influences of non-monetary employees on organizational productivity 5. Factors can motivate employees’ performance and firm’s business unit’s growth

34 References

Armstrong, M., & Murlis, H. (1991). Reward management. London: Kogan Page Ltd. Hong Lu, While, E., & Barriball, L. (2005). Job Satisfaction among nurses: in India. International Journal of Research in IT & Management, 1(1), pp. 39-50. Kallerberg, A. (1977). Work values and job rewards: A theory of job satisfaction. American Sociological Review , 42 (1), 124-143. Malhotra, N., Budhwar, P., & Prowse, P. (2007). Linking rewards to commitment: An empirical investiatin of four UK call centres. Internatinal Journal of Human Resource Management, 18(12), 2095–2017. htt://dx.doi. org/10.1080/09585190701695267 Mathers, N., Fox, N., &Hunn, A. (2009).Surveys and questionnaires. Sutherland, M.M. (2004). Factors affecting the retention of Knowledge Workers. The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561 -568.

35 THE IMPACT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE Jamal Mohamud1, Hussein Hajji2, Abdukadir Mohamed3, Mohamed Abdirahman4, 1,2,3,4, FACULTY OF ECONOMICS AND MANAGEMENT Jamhuriya University of Science and Technology (JUST), Mogadishu-Somalia [emailprotected], [emailprotected] , [emailprotected] , [emailprotected],

Abstract The subject of this study is to examine the impact of Strategic Human Resource Management on Organizational Performance. The researchers selected some Private Hospitals such as Mogadishu Volintary Hospital, Somali Sudanese Specialist Hospital, Dar Al- Shifa Specialist Hospital, Sulub General Hospital, Al-Huda Specialist Hospital and Guleed Hospital in Mogadishu-Somalia. The objectives of the study included the impact of strategic Human Resource Management on Organizational performance and to examine the factors that determine employee recruitment and retention. The researchers established the study using quantitative research methods and also the study used descriptive design to understand the impact between variables specifically non-probability sampling area purposive sampling. A questionnaire was asked 150 include employees and managers at some private Hospitals in Mogadishu Somalia. The response rate of return was 149 participants who answered questionnaire. Findings were significantly positive impact of strategic Human Resource Management on Organizational Performance. The recommendation of this study was to provide that some private Hospitals should reinforce the strategic plan of employees which would give them the chance to use their HRM and techniques available in helping their institutions in making more effective decisions.

Keywords: Strategic human resource management, Organizational performance. 1.0 Introduction Strategic Human Resource Management is the planned pattern of human resource deployment and activities intended to enable the organization to meet organizational goals and objectives (Noe et al. 2007). In other words, the definition of SHRM represented by the degree of participation in core decision-making and partnership undertaken by Human Resource Management departments, and the specificity and formality that Human Resource Management departments require in planning and implementing, all of that, to ensure that firm human capital contributes to achieving firm business goals. (Noe et al. 2007). Strategic Human Resource Management is a process that involves the use of overarching approaches to the development of Human Resource strategies, which are integrated vertically

36 with the business strategy and horizontally with one another. These strategies define intentions and plans related to the overall organizational considerations, such as organizational effectiveness, and to more specific aspects of people management, such as; resourcing, learning and development, reward and employee relations. Strategic Human Resource Management focuses on actions that differentiate the firm from its competitors (Purcell, 1999). It is suggested by Hendry and Pettigrew (1986) that it has seven meanings: ▪ The use of planning; ▪ a coherent approach to the design and management of personnel; ▪ Systems based on an employment policy and workforce strategy; ▪ Often underpinned by a “philosophy”; ▪ Matching Human Resource Management activities and policies to some explicit business strategy; ▪ seeing the people of the organization as a strategic resource; ▪ Achievement of competitive advantage (Armstrong, 2006). Strategic Human Resource Management has a clear focus on implementing strategic change and growing the skill base of the organization to ensure that the organization can compete effectively in the future (Holbeche, 2004). SHRM facilitates the development of a human capital that meets the requirements of business competitive strategy, so that organizational goals and mission will be achieved (Guest, 1987). Human Resource Management involves the management of the human resources needed by an organization and also being certain that human resource is acquired and maintained for purposes of promoting the organization’s vision, strategy and objectives. In other words, HRM focuses on securing, maintaining, and utilizing an effective work force, which organizations require for both their short and long term survival in the market. In order for HRM to achieve its organizational objectives, managers should perform a number of basic functions which represent what is often referred to as the management process. It is worth noting that in the existing management literature, HRM functions have been differently classified by different researchers despite the fact that they all serve the same purpose of making available effective human resources. The basic functions being referred to above are human resource planning, organizing, staffing, leading, and controlling. In relation to the above and a focus in this study are Briscoe’s (1995, 19) core HRM functions namely staffing, training and development, performance appraisal, compensation and benefits, and finally union and employee relations and health and safety.

Human resources can be an organization’s largest and most difficult to-control expense, but it can also be central ingredients affecting organizational performance (Pfeffer, 1998). Thus, a key task for researchers has been to understand how human resources can be managed to maximize productivity and enhance creativity while controlling costs. Rising to this challenge is a body of research labelled strategic human resource management (SHRM), which is devoted to understanding how human re source management practices affect organization-wide outcomes (Ferris, Hochwarter, Buckley, Harrell Cook, & Frink, 1999; MacMillan&Schuler, 1985). HRM discipline has witnessed a great deal of change over the past 25 years. These changes represent two major transformations. The first is the transformation from being the field of personnel management to being the field of human resource management. The second is the transformation from being the field of human resource management to being the field of strategic human resource management. (Schuler, Randall S., Jackson 2007) The first transformation

37 incorporated helped the recognition that people are an important asset in organizations and can be managed systematically. The second transformation has built on the proceeding knowledge base of the discipline. This transformation is based upon the recognition that, in addition to coordinating human resource policies and practices with each other, they need to be linked with the needs of the organization. Given that these needs are reflected in the strategies of the firm, this transformation of “human resource management” came to be known as “strategic human resource management”. Strategic human resource management is based upon the recognition that organizations can be more effective if their human resources are managed with human resource policies and practices that deliver the right number of people with the appropriate behaviors, the needed competencies and the necessary level of motivation to the organization. (Schuler, Randall S., Jackson 2007) Organizational performance is described as an organization’s ability to acquire and utilize its scarce resources and valuables or expeditiously as possible in the pursuit of its operational goals (Griffin, 2006). Organizational performance concept Campbell’s (1999) theory defines performance as behavior or action relevant to the attainment of an organization’s goals that can be scaled, that is, measured. Moreover, job performance is defined as what one is paid to do, or what one should be paid to do. The theory states that the measurement options, be they ratings from a supervisor, peer, or self, a simulated work sample, or hard criteria (e.g. tallying revenue generated, costs saved, customer complaints, or some variant of a computerized performance assessment) besides being valid, reliable, and not deficient should be free of contamination from sources of variation that are not under the control of the individual (e.g. differences in technology impacting a person’s performance). Situational enhancers or constraints, if not taken into account in an appraisal, can contaminate the mean, variance, or both with regard to an individual’s performance. Observation and interpretation hold the key to the establishment of effective criteria. Yet, an ongoing problem in appraising people is the lack of reliability in the observation of their behavior (Ronan and Prien 1971). This unreliability is largely attributed to well-known rating errors such as “first impressions”, “halo”, and “similar-tome”. Lifson (1953) found that up to one-third of performance measurement variance is due to ratter differences despite the fact that the observers had considerable experience in observing and evaluating people in the workplace. Lance (1994) corroborated this finding. Experience, however, is not a substitute for training. To solve the problem regarding lack of reliability, an observer must be trained. In this section, training programs that have been shown to be effective are described, and the necessity of taking context into account is explained (Boxall, Purcell and Wright, 2007) 1.1 Relationships between strategic human resource management and organizational performance The theoretical and empirical work on the added value of HRM/SHRM, also known as the HRM-performance link or HRM and performance debate, demonstrates the significant effects of HRM on organizational performance. Nevertheless, there remains a need for additional studies to support and sustain the HRM-performance link, and there is also a need for more empirical work from different angles. This section illustrates and explains the nature of the linkage between HRM and organizational performance. Recent researches on HRM show strong and positive relationship between HRM practices and organizational performance (Carlson, Upton, and Seaman, 2006; Collins & Smith, 2006). Therefore, it is vital for managers to have a better

38 understanding of the role of HRM in order to create successful organizational performance. Since the notion of the HRM-performance link has emerged, two research streams have been developed to examine the relationship between HRM and performance. The first is based on the direct relationship between individual HR practices and/or bundles or systems of practices and organizational performance. The second research stream is based on the indirect relationship between individual HR practices and/or bundles of practices and organizational performance (Wright and Gardner, 2003). Figure 1.1 Conceptual framework

IV Strategic Human Resource Management

Recruitmen Organizational t Performance Retention

2.0 Research Methodology

2.1 Research design

The research was used Descriptive design approach to achieve and accomplish the research objectives, because it is easy to validate and provide evidence the trueness and accuracy of the objectives. Survey method was used in this study to acquire data and to provide numeric descriptions of some parts of Hospitals and to describe their opinion of the impact of Strategic Human Resource Management on Organizational Performance. Survey is research strategy that is used to present oriented methodology used to investigate population by selected samples to analyses and discover occurrence (Oso & onen, 2008). This study was used and conducted primary data and questionnaire as a tool of data collection. The purpose of researchers was selected this tool, because of that the tool considers issues such as economy of the design, rapid data collection and ability to understand a population from part of it. Survey design is suitable for extensive research.

2.2 Data analysis techniques

39 Data is analyzed and processed electronically by using statistical package of social science (SPSS.Version 16.0) and in use descriptive analysis technique (Mean and Standard Deviation) to measure degree and analyze the impact of Strategic Human Resource Management on Organizational Performance in some Private Hospitals Descriptive analysis “is the use of measures of central tendencies such as means, mode, and median, and measures of dispersion such as range, deviation, quartile, standard deviation and variance to describe a group of objects” (Oso &Onen, 2008, p.93). In the questionnaire each selected one to five scale for where, 1= strongly disagree, 2=disagree; 3= neutral 4= agree; 5= strongly agree The following table presents the mean range and its interpretation

Table 3.3 Interpretation Table

Mean range Description Interpretation

1.8-2.6 Disagree Poor

2.6-3.4 Neutral Fair

3.4-4.2 Agree Good

4.2-5.0 Strongly Agree Very good

3.0 Interpretation and discussion

3.1 Discussions The main purpose of this study is to investigate the impact of strategic human resource management on organizational performance Private Hospitals in Mogadishu. This study shows that the Recruitment and Retention have strong effect on Organizational Performance. This means, if the Private Hospitals make Good Strategic Human Resource Management can attract more customers and that may lead to increase the revenue, profitability, as well as salary of the employee. Finally, the researchers found that the Recruitment and Retention have an effect on Organizational performance. This indicates that the strategic human resource management (Recruitment & Retention) has good relationship with organizational performance. This means that the strategic human resource management is better for Private Hospitals according to the researcher’s data collection. Strategic Human Resource Management is the planned pattern of human resource deployment and activities intended to enable the organization to meet organizational goals and objectives (Noe et al. 2007). How valid is the strategic management of human resources in the achievements of organizational performance? Is important SHRM in terms of its impact on organizational performance? Some of the goals are recruitment and retention, to increasing the number of customers, increasing the market percentage, increasing service and improve the quality.

40 These organizations do not have a genuine business strategy and human resource management. These organizations to strategically manage their human resources pay attention in: Recruitment and selection of appropriate staff and retention employee. In short, organizational performance has changed through strategic management of human resources management. This makes possible the achievement of organizational performance objectives. It also enables the organization to be competitive. SHRM is a very important tool that ensures the continuity of the organization. 4.0 Conclusion and recommendation

4.1 Conclusion

All the findings that was discussed showed that Structure strategy human resource management on organizational performance especially Private Hospitals in Mogadishu is an essential step in making the Private hospitals in Mogadishu-Somalia a more services organizations that is able to bring basic competitive advantages and increase economic development for the business institutions that helps if they make effective strategic its supports to get employee retention and profit maximization. In order to find effective employee retention, there must be to get human resource strategy, the effective organization’s performance and service quality. That is very helpful to sustain employee long-term and that leads to come the organization success. This study examined the impact of strategy human resource management on organizational performance private Hospitals. It was projected to determine the impact of strategy human resource management on organizational performance private Hospitals in Mogadishu- Somalia as first objective indicated. It was also aimed the factors that determine Employee recruitment and retention. 4.2 Recommendations The following major recommendations are suggested for Private Hospitals in Mogadishu: - v The findings in this study present an important suggestions and directions for the Private Hospitals in Mogadishu. It’s recommended that the private Hospitals should reinforce the strategic plan of employees which would give them the chance to use their HRM and techniques available in helping their institutions in making more effective decisions, and it’s recommended that managers must think of releasing employees' potential and competencies which will create more commitment and ownership of their jobs at work. This encourages managers to minimize their efforts in direction, supervision, and follow up through strategic planning v The researchers recommended Private Hospitals to keep their Resources especially their Employees whose are the backbone of the Organization. v The researchers recommended Private Hospitals to build strategy in terms of Human resource management which may lead to increase revenue and profitability of the organization.

Reference

41 Armstrong, M. (2006). A Handbook of Human resource management practice. 10th edition. Cambridge University Press.

Boxall, P., Purcell, J. & Wright, P. (2007). The Oxford handbook of Human resource management. Purcell, J. and Kinnie, N., HRM and Business Performance, (pp. 533-551). Oxford University press.

Carlson, D.S., Upton, N., and Seaman, S. (2006), ‗The Impact of Human Resource Practices and Compensation Design on Performance: An Analysis of Familyowned SMEs,‘ Journal of Small Business Management, 44, 531–543.

Griffin. (2006). EFFECT OF STRATEGIC ISSUE MANAGEMENT ON

Guest, D. E. (1987).Human Resource Management and Industrial Relations. Journal of Management Studies, 24 (5), 503-521.

Holbeche, L. (2004). How to make work more meaningful. Personnel Today, 26. Janssens, M., & Steyaert, C. (2009). HRM and Performance: A Plea for Reflexivity in HRM Studies. Journal of Management Studies, 46 (1), 143-155. (2008).

Lance, C. E. (1994). Test of a latent structure of performance ratings derived from Wherry‘s (1952) theory of ratings. Journal of Management, 20, 757–771.

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Pfeffer, J. (1998) . The Human Equation: Building Profits by Putting People First, Boston, MA: Harvard Business School Press.

Purcell, J. (1999). High commitment management and the link with contingent workers: implications for strategic human resource management. Research in Personnel and Human Resources Management.

R. Noe, J. Hollenbeck, B. Gerhart, and P. Wright (2007) Human Resources Kampala, Makerere university printer Ronan, W. W. & Prien, E. P. (1971). Perspectives on the measurement of human performance. New York: Appleton-Century-Croft.

Schuler, Randall S., Jackson, Susan E., (2007). Strategic Human Resource Management, Blackwell Publishing, USA, , p.xiii Technology.

Wright, P.M., & Gardner, T. (2003). The human resource-firm performance relationship: Methodological and theoretical challenges. In D. Holman, T.D. Wall, C.W. Clegg, P. Sparrow, & A. Howard (eds). The new workplace: A guide to the human impact of modern working practices. London: John Wiley & Sons.

42 THE EFFECT OF MICROFINANCE ON POVERTY REDUCTION: CASE STUDY DAHABSHIIL BANK AND INTERNATIONAL BANK OF SOMALIA IN MOGADISHU SOMAMALIA Jamaal Mohamed1, Mohamed Omar2, Abdifatah Mohamed3, Najmo Adan4, Ali 5 Abdirahman 1,2,3,4,5, FACULTY OF ECONOMIC AND MANAGEMENT Jamhuriya University of Science and Technology (JUST), Mogadishu-Somalia [emailprotected],[emailprotected], [emailprotected], 4 5 [emailprotected] , Cali tahliil [emailprotected]

Abstract: The main purpose of this study was to investigate the Effect of Microfinance on poverty in Mogadishu: case study Dahabshiil Bank and international Bank of Somalia (IBS). The objective of study was to find out the effect of microcredit on poverty reduction and to determine the influence micro-saving on poverty reduction. This because many have hailed microfinance as an effect means of assisting the poor people especially farmers by providing them with the credit faculties to start economic enterprises as well as improving their livelihoods however, there are The finding in this study revealed that the micro credit have impacted the activities and lives of beneficiaries in several positive ways as follows owning valuable assets household expenditure on basic needs incomes from farm and off-farm activities and house ownership toilets and utilities the research design studies was descriptive deign it was described this studied uses quantitative approach such as a questionnaire and data analysis procedure such as statistic and the target population of this study was sixty employees of Dahabshiil Bank International (DBI) and International Bank of Somalia (IBS) in Mogadishu, Somalia by using the non-probability sampling also technique to participate in this study The researchers used Slovene’s formula, and also frequencies analysis was made using Statistical Package for social science SPSS version 20.0 to present the data analyses. The researcher found that the two types of microfinance play a vital role on poverty reduction, the level of Micro-credit on poverty reduction was A good as indicated the mean is3.47. And also the level of micro saving on poverty reduction was a good as indicated the mean is 3.41. Keywords: Microfinance, Microcredit, Poverty Reduction 1.0 Introduction In South Asia, the microfinance has developed out of experiments, but the best-known start was in Bangladesh in 1976, when Muhammad Yunus set up the Grameen Bank on the suburbs of Chittagong University campus in the village of Jobra. According to Nanor (2008) in Africa, 1980s it was first time micro-credit movement spread and this program became stronger in 1990s.in Somalia Sa‟id Foundation started its micro-credit

43 program in 1993, in Mogadishu, and SA‟ID received its first substantial capital injection from Oxfam America in 1996 (SA‟ID report, 2005). Salam Somali Bank also launched microfinance program to help the poor people in Mogadishu since 2010 (Salam Somali Bank Website, 2011). Microfinance is the provision of financial services such as credit (loans), savings, micro leasing, micro-insurance and payment transfers to economically active poor and low income households to enable them engage in income generating activities or expand/grow their small businesses (Irobi, 2008). According to Robinson (2001), microfinance defined as the provision of loans, savings and other basic financial services to the poor people and low-income groups. According to Otero (1999), Microfinance is the provision of financial services to low income poor and very poor self-employed people, these financial services include savings and credit but can also include other financial services such as insurance, transfer of payment services and remittances. Microfinance is not the only solution to global poverty and neither is education, health nor economic growth. Global poverty has gotten no one single solution. Its solution must take account of a broad array of empowering interventions, when effectively run and targeted at the very poor, can serve as one powerful tool used in reducing Global poverty. Professor Yunus also wrote that Microcredit is not a miracle cure that can do away with poverty in one fell swoop. It can end poverty for many and reduce its severity for others. Combined with other innovative programs that unleash the potential of people, microcredit can be used as an essential tool to achieve a poverty- free world (Chowdhury, 2009). 1.1 Review of microfinance and poverty reduction MF is the provision of a broad range of financial services such as deposits, loans, savings, payment services, money transfers, and insurance to the poor and low-income households and their microenterprises who are excluded from the formal financial systems (ADB, 2000). Microfinance (MF) has evolved as an economic development approach intended to benefit the low-income part of a given society (both women and men). According to the World Bank definition, the term refers to provision of financial services including saving and credit to the poor. Micro finance banks are institutions that are established to provide financial services to the active poor. Microfinance Institutions, (MFIs) can be non-governmental organizations (NGOs), saving and loan cooperatives, credit unions, government banks, commercial banks, or non-bank financial institutions (Ledgerwood 1999). Microfinance gives access to financial and non-financial services to low-income people, who wish to access money for starting or developing an income generation activity (Ojo, 2009). Microfinance came into being from the appreciation that micro-entrepreneurs and some poorer clients can be bankable, that is they can repay, both the principal and interest, on time and also make savings, provided financial services are tailored to suit their needs (Khan& Rahaman 2007). When loans are provided to the very poor, the borrowers may not be able to use the loans effectively because they lack opportunities for profitable self-employment and because the risks involved in using the credit may be unacceptably high (Hulme & Mosley, 1996).

44 The problem of poverty is more deep-rooted with several interlocked characteristics in developing countries. Poverty alleviation has remained a very complex and critical concern among third world countries for a long time. It has been at the top of the agenda for policy makers and development workers. Thus, a large number of governmental, non-governmental organizations and international funding agencies all over the world have been engaged in attacking poverty using several strategies and instruments (Rao and Bavaiah, 2005). The approach to reduce poverty has evolved over the past 50 years in response to understanding of the complexity of development. In the 1950‟s and 1960‟s, many scholars considered large investments in physical capital and infrastructure as the primary means of development. In the 1970‟s the shift of emphasis grew that physical capital was not enough for development but also health and education were important not only in their own right but also to promote growth in the incomes of poor people. In 1980‟s another shift of Emphasis was developed on improving economic management and allowing greater role for market forces, promoting labor-intensive growth through economic openness and Investment in infrastructure, and providing basic services to poor people in health and Education. In 1990‟s the paradigm shift moved towards improving governance and institutions to address poverty with consisting of three ways to attack poverty, promoting opportunity, facilitating empowerment and enhancing security (WB, 2001). The overall economic growth and equity are crucial in the effort of reducing poverty. In this situation the role of the state is greater to support the buildup of human, land and infrastructure assets that poor people own or to which they have access. Strengthening the participation of the society, particularly the poor, in political process and in decision making, removing the social and instructional barriers that resulted from distinctions of gender, ethnicity and social status and also establishing sound and responsive institutions are important to bring the overall growth and benefit to the poor. Reducing vulnerability to either natural or man-made hazards enhances the well-being of the people and encourages investment. 1.2 Micro-credit: It is recognized that people living in poverty are innately capable of working their way out of poverty with dignity, and can demonstrate creative potentials to improve their situation when an enabling environment and the right opportunity exists. It has been noted that in many countries of the world, micro-credit programs, provide access to small capitals to people living in poverty. The phenomenon of poverty was felt and observed more during the decade of 1990s, as the overall growth slowed down. While the slower economic growth contributed to poverty, the Trickle-down effectǁ once thought to improve living conditions, did not reach the lowest level owing largely to lack of accessibility of institutions, unjust and Non-poor policies (Waheed, 2001).

1.3 Micro-savings: The availability of deposit services, sometimes purely stand-alone savings accounts, but often linked to credit, either as a compulsory condition of having a loan, or sometimes part of a combined

45 intervention in which a group saves, and then members are allowed to borrow from their shared savings resource. The types of micro-savings services thus vary, are offered by various types of providers, and function both as protection to ameliorate the impact of shocks and promotion to build an asset base (Hulme et al, 2009). 2.0 Methodology 2.1. Research Design and Target Population In this study, descriptive analysis study design was applied. Descriptive analysis study design is a type of research study design for the purposes of collecting data for answering specific research questions (Albright, 2005) this study design was descriptive cross-sectional study because it was easy to use as the information collected from respondents will not require to be reinvestigated over a period of time. This study was conducted among some microfinance institutions in Mogadishu. The researcher selected a number of organizations such as Dahabshiil Bank, and International Bank of Somalia. The researcher selected those institutions because they are the main institutions that provide microfinance programs in Mogadishu. The sample size of this study would be 60 of respondents. 2.2 Sampling Procedure Sampling in this study was be purposive sampling technique which is a part of non-probability sampling and also the questionnaire contained three sections, namely demographic information, i.e. gender, age, level of education and experience. 2.3 Data analysis Data processing is the method of separating unwanted data from the data that was used in data analysis (Amin, 2005) this was done through editing of the data to check for accuracy, consistency, legibility and comprehensiveness. Quantitative data analyses will be conducted this study, because the research instrument of this study is questioner, descriptive statistical conducted in this study, because it can utilize our objectives, descriptive analysis will be used to measure central tendencies such as mean and measures of description such as standard deviation to describe a group of subject. The data was put into the computer and also analyze using a computer program called Statistical Program for Social Sciences (SPSS). The following mean ranges and descriptions were used to interpret responses.

3.0 Data Analysis and Interpretation 3.1 Major findings of the study

46 This study investigates the role of microfinance on poverty reduction in Mogadishu: case study in Dahabshiil bank of international and international bank of Somalia. (IBS). The researchers used to survey the role of microfinance of two types: micro credit and micro saving on poverty reduction so that the researcher found that the two type of Microfinance plays a vital part on poverty reduction, while the two type are a little influence in each to the poverty reduction. Due to the micro saving goes by developing, small business and allowing entrepreneurs to star new business in order to expand their small business. Micro saving is considered to be important increase development of small business. While micro credit is based to help poor people to engage in employment projects income, where by poor family are rewarded or recognized to get self- employed. Finally, the result shows that the two types of microfinance, micro credit and micro saving have positive role on poverty reduction according to the unique important because micro credit is considered to be important increases development of small business, while micro saving focuses and allowing entrepreneurs to star new business to expand their small business. 4.0 Conclusion and recommendations 4.1 Conclusions Generally, it has been observed that, microfinance reduce poverty that has changed the life of poor people in a positive way. Microfinance ‘clients have increased their incomes, increased the capital invested and therefore expanded their businesses. These are indicators of achievements in their business activities. To large extent microfinance operation in Somalia has brought about positive changes in the standard of living of people who access their services. Although some of the clients have not benefited, it could also help households to increase their income and assets and help them increase consumption expenditure and develop savings habits. Than after the development of micro finance banks the poor people receive better assistance of fund. 4.2 Recommendations. Based on the findings, the following recommendations are given: ➢ The government ensures microeconomic stability low of inflation, stable exchange rate sound financial sectors and other since it is important for poverty reduction effectiveness of microfinance. ➢ Findings of the study suggest that specialized financial promotion institution has been playing important role towards expanding the outreach performance of its service. ➢ Micro finance banks are providing services in the rural areas which are nearby to the outskirts of the cities but their need arising to strengthen the network of micro finance banks and to establish tem in the remote areas too. 4.3 Areas for further study

47 ➢ The role of microfinance on economic growth ➢ The role of microfinance on reduction un employment rate

Reference: Asian Development Bank, A. (2000). Finance for the Poor: Microfinance development Strategy. Manila: ADB.S. Manila: ADB.S. Albright (2005). From the Special Issue Edition: Managing in the information age. Journal of Management, May, 27(3): 233-234 Amin. (2005). The Art and Practice of the Learning(3rd Ed.). Jossy-Bass. Berenbach, S. and Guzman, D. (1994).th1e Solidarity Group Experience Worldwide.The New World of Microenterprise Finance, edited by M. Otero and E. Rhyne. Kumarian,West hatforf CT: 119-139. Ahmed Mohamed Dahir,Ahmed Tall(2015) .The role of Microfinance Institutions on Poverty reduction A Case Study in Mogadishu. Ledgrewood. (1999). Microfinance Handbook sustainable banking with the poor, Washington DC. Morduch, J. and Haley, B. (2002). Analysis of the Effects of Microfinance on Poverty Reduction: NYU Wagner Working Paper No. 1014. Nguyen., S. a. (2003). Community Capacity Building for Poverty Reduction in the Mekong Delta of Vietnam."Dissertation in. Fulfilment of the Requirements of the Ph. D. in Public. Nanor, Michael Ayertey (2008), “Microfinance and Its Impact on Selected Districts in Eastern Region of Ghana”, Faculty of Social Sciences, College of Art and Social Sciences, Ghana Ojo.O, (2009). Impact of Microfinance on Entrepreneurial Development: The Case of Nigeria, the International Conference on Economics and Administration, FAA, Bucharest, 14th November 2009. Otero, M.(1999); Bringing Development Back into Microfinance, This paper is based on a talk delivered by the author at the conference, „New Development Finance‟, held Nat the Goethe University in Frankfurt, September 1999. Robinson, M. (2001). The Microfinance Revolution: Sustainable Financial for the poor. Sumer, A. (20007). “Meaning versus measurement: why do ´economic indicators of poverty still predominate?” Development in Practice, vol. 17, no. 1, pp. Waheed, S. (2001). Analysis of Issues on Micro Credit – The Case of Two Villages .13.

48 THE RELATIONSHIP BETWEEN SERVICE INNOVATION AND CUSTOMER SATISFACTION OF BANKS IN MOGDISHO Mohamed Ali Mohamed1, Rahma hajji Ali2, Madiino Ali Culusow3 1, 2,3, FACULTY OF ECONOMICS AND MANAGEMENT’ Jamhuriya University of Science and Technology (JUST), Mogadishu-Somalia 1 2 3 [emailprotected] ,[emailprotected] , [emailprotected]

Abstract This study empirically examines the relationship between service innovation and customer satisfaction. Costumers of Three banks (International bank of Somalia, Dahabshiil, and Premier bank) in Mogadishu Somalia were taken sample of the study. Self-designed questionnaire was used for data collection. 100 questionnaires were distributed and 81 were returned. The data was analyzed using the techniques of rank correlation coefficient and multiple regression analysis. All the findings were tested at 0.34 and 0.50 level of non-significance.

Accepted the Null hypothesis which means that the service innovation has a positive relationship with the customer satisfaction in selected banks in Mogadishu, Somalia and rejected the alternative hypothesis, but this relationship is not significant meaning that the researchers could not conclude that the higher level in service innovation gives higher level of customer satisfaction. Thus, the results suggested that the higher service innovation does not mean the higher customer satisfaction of the banks in Mogadishu, Somalia.

Keywords: Service Innovation, Customer Satisfaction.

1.0 Introduction “The service sector encompasses a wide variety of activities and markets ranging from consumer services such as hotels and banks to business services such as IT and legal and large-scale public sector services such as health and education. The usage of technology is equally diverse; personal services like hairdressing involve basic technologies, while financial services are more knowledge-intensive and use advanced information technologies. As a result of this diversity, innovation in services involves transformation in a variety of aspects ranging from how the service is designed and developed to how it is delivered and managed (Miles., 2005), (Miles, 2010); (Trott, 2012).The dynamic capabilities required to sustain service innovation has been an area of recent research. (F, 2002),Identifies the creation of business networks, technological capability, customer engagement and knowledge management as the building blocks of service innovation (Pavlou PA, 2011),Outline the importance of intra-organizational communication between teams across different organizational units as being critical to service innovation. (Agarwal R, 2014), (Agarwal, 2009), Provide empirical evidence that innovation in services is made possible not only through technical capabilities; rather it is the contribution of soft skills such as collaboration and relationship management that enable the realization of such innovation. In addition, dynamic capabilities such as entrepreneurial alertness, evolutionary learning,

49 collaborative agility, collaborative innovative capacity and customer engagement contribute to a firm’s ability to deliver elevated service offerings. (Tsekouras G, 2011), reiterate the importance of inter-organizational collaboration and knowledge-sharing to build dynamic capabilities for service innovation. According to de (U, 2011),other than service-design and delivery factors, the strategic alignment between organizational resources and capabilities and the new service offerings is a critical aspect of service innovation strategy. (den Hertog P, 2010), adopt a dynamic capability view to develop a six- Dimensional framework for service innovation strategy: 1. signaling user needs and promising technological options—identifying unmet user needs, dominant trends and new technology configurations; 2. Conceptualizing—codifying the fuzzy types of service innovations by creating service blueprints; 3. (un-)bundling capability—making smart service combinations; 4. co-producing and orchestrating—organizing and acting in open service systems; 5. scaling and stretching—diffusing service innovation through branding and communicating service offerings; and Learning—adapting service innovation processes. 2.0 Research Design and Methodology

The study will be conducted through descriptive design. The researchers use this approach in order to describe and to describe the relationship between service innovations on customer satisfaction, using information gained from the questionnaire. This design is selected for this study because it is effective, less cost and easily accessible for collecting information from the target population. The explanatory design used to establish the relationship between the independent and dependent variable through quantifiable results. The framework of the study

Finger 1.1 Conceptual Model of Study

Development of New service Quality of service New service

New technologies

Customer satisfaction Delivery system or provision of new service

59 3.0 Data analysis and interpretation

3.1 Analysis

The second research question asked if there was any relationship of service innovation for the customer satisfaction. To answer this question, a correlation analysis was conducted using SPSS and findings are shown below. Table: 1.1

Service innovation Customer Satisfaction

Service Pearson 1 0.738

Innovation Correlation

Sig. (2-tailed) 0.34

N 81 81

Customer Pearson 0.738 1

Satisfaction Correlation

Sig. (2-tailed) 0.34

N 81 81

In this Table, the calculation value of the correlation is indicated as 0.738 and the sig. value of this research is given by 0.34 Since the sig value is greater than 0.50 the researchers accepted the Null hypothesis which means that the service innovation has a positive relationship with the customer satisfaction in selected banks in Mogadishu, Somalia and rejected the alternative hypothesis, but this relationship is not significant meaning that the researchers could not conclude that the higher level in service innovation gives higher level of customer satisfaction. Thus, the results suggested that the higher service innovation does not mean the higher customer satisfaction of the banks in Mogadishu, Somalia. The study therefore qualified the Null hypothesis that says there is no significant relationship between service innovation and customer satisfaction in of selected banks in Mogadishu, Somalia, and disqualified the alternative hypothesis that says there is a significant relationship between service innovation and customer satisfaction of selected banks in Mogadishu, Somalia.

51 5.1 Recommendation

The researchers have argued in this report that there is a positive significant relationship between service innovation and customer satisfaction. The study has shown that new technology and new service lead to efficiency and effectiveness of service innovation banks in Mogadishu, Somalia. To improve the customer satisfaction, maintain market competence, and gain competitive advantage, a bank should realize and fulfill his quality service. Since the service innovation is only the factors utilize the other entire bank resource and drive the track of banks’ performance improvements as well as a competitive advantage for the bank Reference

Agarwal R, S. W. (2014). The incremental effects of dynamic capability building on service innovation in collaborative service organizations. J Manag Org , , 19(5):521–543. Agarwal, R. S. (2009). Dynamic capability building in service value networks for achieving service innovation. . Decis Sci,, 40(3):431–475. den Hertog P, d. A. (2010). Capabilities for managing service innovation: . towards a conceptual framework. J Serv Manag ,, 21(4):490–514. F, K. (2002). Innovation as the core competency of service organization: the role of technology knowledge and Networks. . . Eur J Innov Manag,, 5(1):18–26. Miles, I. (2010). Service innovation. In:. In Maglio PP (ed). In r. i. economy., Handbook of service science: (p. pp 511). New York: Springer. Miles., I. (2005). Innovation in services. In. In N. R. (eds), handbook of innovation. fa*gerberg J, Mowery DC,: Oxford University Press, Oxford,., (p. pp 433). :. Pavlou PA, E. S. (2011). Understanding the elusive black box of dynamic capabilities. Trott, P. (2012). Innovation management and new product development,. England: : 5th edn. Pearson Education, Essex,. Tsekouras G, P. E. (2011). . Innovation and dynamic capabilities in a traditional service sector: . evidence from shipping companies. .Baltic J Manag,, 6(3):320–341. U, D. B. (2011). Innovative versus incremental new business services: different keys for achieving success. . J Prod Innov Manag,, 18(3):169–187.

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Case Study Dahabshiil Bank and International Bank of Somalia in Mogadishu Somamalia 43 (2024)
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