Page 1 of 43
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 01 Issue 11
December 2015
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 400
An evaluation of the effectiveness of E-business in the
financial performance of Ketepa.
Nickson Moseti Ongaki, Dr. Samwel Makori Bosire, Dr. Dorcas Kemunto Oirere &
Dr. Esnath Kerubo Bosire
Jomo Kenyatta University of Agriculture and Technology P.O Box 62000 Nairobi, Kenya
E-mail: nickson.moseti@gmail.com
CHAPTER ONE
1.0 Introduction
This chapter aims to present the
background of the study, the purpose of
the study, the objectives of the study,
significance and the conceptual
framework of the study.
1.1 Background of the study
The Kenya Tea Packers Limited
(KETEPA) was registered as a Private
Company in September 1977 and started
operations in January 1978. The
company was required by law to serve
the local market only. The law was
changed in 1992 which allowed export
of tea. KETEPA now exports packed tea
to several destinations around the world.
The Head office and Packing Factory is
located in Kericho about 270 km West
of Nairobi.
Ketepa is owned by the tea Farmers of
Kenya through the Kenya Tea
Development Agency Limited (KTDA)
and the Kenya Tea Growers Association
(KTGA). The Kenya Tea Development
Agency is the majority shareholder
representing over 450,000 small scale
tea farmers spread all over the country.
These farmers own over 60 Tea
Processing Factories countrywide and
produce over 60% of all the Kenyan Tea.
Other major shareholders include
Brooke Bond Kenya Limited (Unilever
Tea), James Finlay, Williamson Tea and
Eastern Produce(EPK) among others
who together own 38 tea processing
factories and produce about 40% of the
tea produced in Kenya.
Electronic business is the buying and
selling or exchange of products, services
and information collaborating with
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e-ISSN: 2395-0463
Volume 01 Issue 11
December 2015
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 401
business partners and conducting
electronic transactions via computer
networks, including the internet, within
an organization. E-business has evolved
and developed through application of
technology towards automation of
business transactions and workflow. E- business first developed in the early
1970,s with innovations such Electronic
Funds Transfers (EFT), Electronic Data
Interchange (EDI) and Inter
Organizational Systems (IOS) which
eventually developed into E-business.
A business exists for a primary purpose
of generating profit through buying.
Selling and exchange of goods and
services and it is the profit that concerns
the business. The profit and loss account
or the income statement is then used to
measure and report how much profit the
business has generated over a given
financial period and this therefore will
reflect the financial performance of the
organization. (Eddie MacClenny etal
2003).
Financial performance is the true worth
of a business and can be measured
through interpreting the account through
the ratio analysis i.e. the profitability
ratios which include, return on capital,
return on investment and profit margin.
(John J. Wild 2007).
Financial performance of Ketepa has
been declining from one accounting
period to another. This could probably
be because Ketepa has not been using E- business concept to market, or exchange
goods and services.
1.2 Statement of the problem
Ketepa has been facing a problem of
lack of uniformity in a manner in which
the periodic profit is measured and the
financial position of the organization
presented is showing a decline in
performance. This decline in their
performance has made it made it
difficult to compare and evaluate the
financial results of the company. This
has therefore inevitably affected the
image of the company which made the
researcher interested in investigating the
effectiveness of E-business in the
financial performance of Ketepa.
1.3 Purpose of the study
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Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 01 Issue 11
December 2015
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 402
The purpose of the study seeks to find out
the effectiveness of E-business in the
financial performance of Ketepa.
1.4 Objectives of the study
(i) To establish the effectiveness and
efficiency of E-business in
Ketepa.
(ii) To establish the level of financial
performance of Ketepa.
(iii)To establish the relationship between
the organizational performance and
the effectiveness of E-business.
1.5 Research questions
(i) How effective is E-business in
the business affairs of Ketepa?
(ii) What is the financial
performance level of Ketepa?
(iii) What is the relationship between
E-business and financial
performance of Ketepa?
1.6 Scope of the study
Geographical scope: the
research was carried out in
Kericho district, Rift Valley
province (along Kericho –
Nakuru highway) where the
Ketepa head office is located. It
is about 5km from Kericho town
situated at a Center called
Brooke.
Subject scope: the content of
this research covers the
effectiveness of E-business in the
financial performance of Ketepa.
Time scope: this research mainly
focused on the application of E- business and how this affects the
financial performance of Ketepa
covering the financial years 2005
to 2011.
1.7 Significance of the study
The managers may use the
outcomes of the study for
purpose of grading themselves in
the wider market, most
experienced through the use of
E-business concept in their
business affairs in order to
improve their performance.
It benefits the shareholders in
deciding whether to continue
investing in the company or not,
depending on the published
