FACTORS THAT AFFECT RELATIVE PRODUCT QUALITY OF THE SMES IN THE KENYAN APPAREL INDUSTRY BY CAROL WANJIRU KOMU UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA SUMMER 2017 FACTORS THAT AFFECT RELATIVE PRODUCT QUALITY OF THE SMES IN THE KENYAN APPAREL INDUSTRY BY CAROL WANJIRU KOMU A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA) UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA SUMMER 2017 STUDENT’S DECLARATION I, the undersigned, declare that this is my original work and has not been submitted to any other college, institution, or university other than the United States International University in Nairobi for academic credit. Signed: ________________________ Date: _______________________ Carol Wanjiru Komu (ID: 637843) This project has been presented for examination with my approval as the appointed supervisor. Signed: ________________________ Date: _______________________ Professor Scott Bellows Sign: _____________________________ Date________________________________ Dean, Chandaria School of Business ii COPYRIGHT All the rights reserved. No part of this report may be photocopied, recorded or otherwise reproduced, stored in a retrieval system or transmitted in any electronic or mechanical means without prior permission of the copyright owner. Carol Wanjiru Komu. Copyright © 2017 iii ABSTRACT The purpose of the study was to establish the factors that affect product quality of the SMEs in the Kenyan Apparel Industry. The study was guided by the following research questions: How does a quality department affect apparel relative product quality? How does employee training affect the apparel relative product quality? And how does a set operating procedure affect the apparel relative product quality? The study took up the approach of a descriptive survey. This aided in recognition of the factors that affect the relative product quality in the SME sector of the KAI. The target population of the study was on KAI SMEs in Nairobi. It will focus particularly on the owners or those in management of these SMEs. From the KAM and AFDAK directories, there are 800 in number. A stratified random sampling technique was used. From the population of 800 and by use of the rule of thumb a 20% sample size was considered, so our sample was made of 160 companies and the target was the owners or those in management of the company. A total of 160 questionnaires were distributed to small and medium enterprises and only 119 questionnaires were filled and returned giving a response rate of 74.7%, which was considered sufficient for the study. Once the descriptive statistics was applied on the collected data, the results were summarized on different tools such as charts, graphs and tables this allowed the researcher to investigate and draw conclusions on the relationships that existed between the independent and dependent variables in question. The first objective sought to establish the effects of quality department on the clothing quality. The findings revealed that there was a high extent of autonomy of the quality department (freedom to run the department as they find fit), and high extent was also experienced when quality department coordinates with other departments. Most respondents also noted to a high extent that there was visible quality department and quality department has access to the top management. The findings established that there was a positive relationship between quality of clothing and quality department (r=0.127, p>0.05). The second objective sought to establish the impact of the employee training on the clothing quality. The finding revealed that to a medium extent there are available resources for employee training and top management is committed to employee training. iv However, to a low extent it was revealed that quality achievement training is given to management and specific technical skill training is given to every employee. The findings established that there was a positive relationship between quality of clothing and employee training (r=0.254, p<0.05). The third objective sought to establish the impact of a standard operating procedure on the clothing quality. The findings revealed that to a high extent there was a thorough final inspection of the clothes and incoming raw material, as well as clarity of work and process instructions given to employees. There was also a high extent of continuous self- inspection. The findings established that there was a positive relationship between quality of clothing and a standard operating procedure (r=-0.073, p>0.05). The study concluded that there exists a high extent of autonomy of the quality department and coordination with other departments. There is also a high coordination between the quality department and the top management to ensure operational efficiency. It was also concluded that the firms have ample resources for employee training, and this is fostered by the top management commitment to ensure employees are well trained. It was also inferred that due to high cost associated with correcting errors there is a vast clarity of work and process instructions given to employees as a standard operation procedure accompanied by continuous self- inspection to minimizes the chance of employee error. It was recommended that there should be a continuous autonomy of the quality department (freedom to run the department as they find fit) as well as coordination with other departments to ensure quality is maintained. It was also recommended that the sector needs to ensure that available resources for employee training are effectively used this should be supported by top management to ensure its effectiveness. It was also recommended that the firms should maintain a continuous thorough inspection of the clothes and incoming raw material to ensure the quality of the outputs is not compromised. Further studies need to be undertaken in other sectors so as to be able to generalize the findings. There is a need to undertake a research in the same industry in order to establish what causes the 94% variation in quality of clothing. v ACKNOWLEDGEMENT I would like to give thanks to God for the guidance he has accorded me up to this level of my master’s program. I also give special thanks to my family for the support and to my supervisor Prof. Scott Bellows, for the guidance throughout this research project. vi DEDICATION I would like to dedicate this research project to my father, mother and sister for all the motivation and support they offered me throughout the course. vii TABLE OF CONTENT STUDENT’S DECLARATION ........................................................................................ ii COPYRIGHT ................................................................................................................... iii ABSTRACT ....................................................................................................................... iv ACKNOWLEDGEMENT ................................................................................................ vi DEDICATION.................................................................................................................. vii LIST OF TABLES ............................................................................................................. x LIST OF FIGURES .......................................................................................................... xi ABBREVIATONS AND ACRONYMS ......................................................................... xii CHAPTER ONE ................................................................................................................ 1 1.0 INTRODUCTION........................................................................................................ 1 1.1 Background of the Problem ........................................................................................... 1 1.2. Statement of the problem .............................................................................................. 7 1.3 Purpose of the study ....................................................................................................... 8 1.5 Importance of the Study ................................................................................................. 9 1.6 Scope of the Study ......................................................................................................... 9 1.7 Definition of Terms...................................................................................................... 10 1.8 Chapter summary ......................................................................................................... 11 CHAPTER TWO ............................................................................................................. 12 2.0 LITERATURE REVIEW ......................................................................................... 12 2.1 Introduction .................................................................................................................. 12 2.2 Effect of Quality Department on Relative Product Quality ......................................... 12 2.3 Effects of Employee Training on Relative Product Quality ........................................ 20 2.4 Effect of a Set Standard Operating Procedure on Relative Product Quality ............... 27 2.5 Chapter Summary ........................................................................................................ 34 CHAPTER THREE ......................................................................................................... 35 3.0 RESEARCH METHODOLOGY ............................................................................. 35 3.1 Introduction .................................................................................................................. 35 3.2 Research Design........................................................................................................... 35 viii 3.3 Population and Sampling Design ................................................................................. 36 3.4 Data CollectionMethods .............................................................................................. 37 3.5 Research Procedure ...................................................................................................... 38 3.6 Data Analysis ............................................................................................................... 39 3.7 Chapter Summary ........................................................................................................ 39 CHAPTER FOUR ............................................................................................................ 40 4.0 RESULTS AND FINDINGS ..................................................................................... 40 4.1 Introduction .................................................................................................................. 40 4.2 Demography ................................................................................................................. 40 4.3 Effects of Quality Department on The Clothing Quality ............................................. 44 4.4 Impact of The Employee Training on The Quality Of Clothing ................................. 45 4.5 Impact ofthe Operating Procedure On the Quality Of Clothing .................................. 46 4.6 Relative Clothing Quality ............................................................................................ 47 4.7 Inferential Statistics ..................................................................................................... 48 4.8 Chapter Summary ........................................................................................................ 51 CHAPTER FIVE ............................................................................................................. 52 5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ...................... 52 5.1 Introduction ................................................................................................................ 52 5.2 Summary ...................................................................................................................... 52 5.3 Discussion .................................................................................................................... 54 5.4 Conclusion ................................................................................................................... 59 5.5 Recommendation ......................................................................................................... 60 REFERENCES ................................................................................................................. 62 APPENDIX I: QUESTIONNAIRE ................................................................................ 68 ix