Challenges of Strategy Implementation in Selected Sugar Companies in Kenya

Abstract

he sugar industry in Kenya plays a key role in driving the economy of the country by contributing about 15% of the Country‟s Agricultural GDP. Overall agriculture contributes nearly 27% of the Nation‟s GDP. Despite crafting robust strategies, the performance of sugar companies in Kenya has been on a downward trend. Theoretical literature suggests that strategic planning and implementation generates positive outcomes for organizations. Additionally, empirical studies indicate that more strategies fail at the point of implementation not at the formulation phase. The failure rate is more than 70% and in some cases at more than 90%. In the developing countries little attention has been given to study the management perception on challenges of strategy implementation and almost none existent empirical study in the sugar sector. Therefore this study sought to determine the management perception on challenges of strategy implementation in the selected sugar companies in Kenya. It sought to determine the effect of external environment, organizational structure, organization culture, managerial skills and quality of workforce development on strategy implementation. The unit of analysis was the selected sugar companies while the unit of observation was the top, middle and lower level management of three sugar companies. The study used descriptive and correlation design. The target population was 180 senior management from selected sugar companies (Mumias, Nzoia and South Nyanza) in Western Kenya registered with the Kenya Sugar Directorate (formerly Kenya Sugar Board). The sample size of 122 was selected through stratified random and simple sampling methods. A pilot study of 10% of the sample was done to improve on validity and reliability. To collect the primary data, questionnaires were distributed to top, middle and lower management employees as guided by the sampling technique. The research hypotheses adopted two approaches; one was testing the significance of the relationship and two, the goodness of fit of the relationship, i.e correlation and regression analysis xviii respectively. The hypotheses were tested within the 95% level of confidence interval or 5% level of significance. Strategy implementation was regressed against five predictor (independent) variables that capture key elements while controlling for other factors of interest. From the study, external environmental has a linear and significant relationship with strategy implementation in sugar companies in Kenya. Kenya is a net importer of sugar from the COMESA countries since the demand outstrips the local production. The study revealed that political interferences, “corporatocracy”, Sugar imports, rivalry within the market, climate change and entry of other sugar companies, the Constitution of Kenya, 2010, which devolved most Agricultural functions to the Counties and the study recommends that sugar companies should work closely with respective counties to support farmers, improve infrastructure especially roads and more R & D. The privatization Commission needs to work hand in hand with respective County Governments based on location of sugar mills. In terms of organization culture, the Analysis of Variance (ANOVA) indicated that the model was statistically significant in explaining the impact of culture on strategy implementation in selected sugar companies in Kenya and concluded that organization culture has a linear and significant relationship with strategy implementation in selected sugar companies in Kenya. Similarly, the findings indicated a statistical significant association between managerial skills, quality of workforce development and strategy implementation in sugar companies in Kenya.