Abstract:
Tea subsector in Kenya is very critical to the overall economy. It is one of the major foreign exchange earners and supports 10 % of the Kenyan population. The viability of the tea subsector however has been under threat in the recent past. The subsector has experienced declining margins due to the double impact of rising cost of production and drop in global tea prices. The main driver of the cost of production in tea business is the wage bill as the tea crop is largely labour intensive. Since innovation has been identified as one of the vehicles that make organizations achieve competitiveness, the tea industry in Kenya has identified a type of process innovation which is comparatively cheaper such as mechanized tea harvesting technology to mitigate the high labour cost. The perplexing thing however is that the uptake of this technology is low despite its cost advantages. This study therefore provided an opportunity to empirically test the theoretical basis of this contradiction. It also sought to identify the drivers of this type of innovation in the tea subsector of Kenya by establishing how it is influenced by management perceptions of stakeholder pressure of namely owners, employees, customers, community and government stakeholder groups. Diagnostic survey research design was employed in the study because the study was concerned about associations between variables. The target population was all tea plantation firms in Kenya and managers in charge of these business units were the respondents. A census enquiry was used due the small nature of the target population. Data collection was done using a semi-structured questionnaire that targeted both quantitative and qualitative data. Data processing and analysis employed content analysis for qualitative data and logistic regression analysis for the quantitative. The results of the study indicated owners’ pressure and customer pressure were positively significant at 5% level of significance. The beta coefficients were 3.043 and 2.034 whereas p values were 0.001 and 0.003 for the two variables respectively. Perception of employees influence on innovation was negatively significant at 5% level of significance with beta coefficient and p value being -1.463 and 0.016 respectively. Perception of community and governments influence on mechanized harvesting technology adoption was found not to be significant. The overall logistic model indicated a Nagelkerke R square of 0.84 meaning that the predictive value of the model was very good. The findings suggest that the three most important stakeholder groups in the tea subsector in Kenya with regard to firm’s decision to adopt mechanized harvesting technology as perceived by management are owners, employees and customers. The findings are in consonance with expectation from both theory and past empirical research as far as owners, employees and customer stakeholder groups are concerned. It is therefore recommended that those firms in the tea industry intending to pursue MTH technology innovation as an option of cost mitigation must take into cognizance the views of owners, employees and customer stakeholder groups since they are the most important in determining the success of innovation especially in the context of mechanized harvesting technology adoption in the tea subsector.
