Title: The Effect Of Decision Support On The Financial Performance Of Businesses In Baidoa, Somalia
Authors: Suleiman Abdifatah Abdinor, Mohamed Aden Hassan, Mustafe Mohamud Abdillahi (PhD)
Volume: 10
Issue: 2
Pages: 129-142
Publication Date: 2026/02/28
Abstract:
This study investigated the effect of Decision Support Systems (DSS) on the financial performance of businesses in the fragile economic context of Baidoa, Somalia, using the Caafi Water Supply Company as a case study. Grounded in the Contingency Theory of Management Accounting and Transaction Cost Economics (TCE), the research employed a quantitative, correlational cross-sectional design. Data were collected via structured questionnaires from 92 management and staff, achieving an 88.46% response rate. Descriptive statistics revealed a high level of DSS implementation, particularly in financial modelling and sensitivity analysis, and a moderate perception of financial performance. Pearson correlation (r = .510, p = .000) and linear regression analysis (? = .310, p = .000) confirmed a statistically significant positive relationship, leading to the rejection of the null hypothesis. The findings validated the theoretical frameworks, demonstrating that formalized decision-support practices serve as a critical contingent adaptation and an effective transaction cost-reducing mechanism. The study concluded that investing in managerial information systems is fundamental for enhancing financial sustainability in post-conflict economies and provided practical recommendations for businesses and policymakers.