Effect of Operations Strategies on Performance of Sugar Manufacturing Sector in Kenya

Abstract

The overarching goal of manufacturing firms is long term survival and the ability to wade off competition evident in the industry. The current wave of globalization has resulted into fierce competition and as a result, the sugar firms soon realize that the current “competing on cost” strategy is an untenable, hence the need to refocus their strategies by deploy their potentially scarce resources into efficient transformation process. This calls for a strategic operations at all levels for any sugar manufacturing firm to stay afloat. This study assesses the effect of operations strategies on the performance of sugar firms in Kenya, with an aim of exploring the cause – effect relationship between operations strategies and performance. The specific objectives of the study were to: analyze the effect of competitive priorities on performance; assess the effect of structural decisions on performance; determine the effect of infrastructural choices on the performance; establish the effect of leadership styles on the performance of sugar manufacturing firms in Kenya; and to assess the moderating effect of leadership styles on the relationship between operations strategy and the performance of sugar manufacturing firms. To achieve the set objectives, the study developed and tested hypotheses. The theories on which the study was hinged are Strategic Contingency Theory, Resource Based Theory, Routine Based Theory, Institutional Theory and Path – Goal Theory of leadership. The study adopted descriptive survey research design anchored on realism ontology, and used both quantitative and qualitative approaches. The unit of analysis was sugar manufacturing plant, and hence the study targeted all the twelve registered and licensed sugar manufacturing firms in Kenya. The respondents were sought through both purposive and simple random sampling strategies. From the four categories of respondents, a sample size of one hundred and sixty five respondents was generated. Structured questionnaires and semi-structured interview schedule were the main tools to collect primary data from the targeted respondents. A pilot study was done to test the validity and reliability of the survey tools. Quantitative data collected was processed and analyzed both descriptively and inferentially using MS Excel and SPSS. EFA, regression analysis, correlation analysis and moderated multiple regression analysis were equally used, while qualitative data analysis was done through expert judgment, scenario mapping and critical thinking. Upon analysis, data was presented using frequency distribution tables. The study results revealed that competitive priorities have a significant effect on performance, structural decisions have no significant effect on performance, infrastructural choices have a significant effect on performance, and leadership styles was found to have a significant effect on performance. In addition, Operations Strategies was found to have a significant effect on performance, while leadership styles was found to have a significant moderating effect on the relationship between operations strategies and performance. Based on the findings, the study concluded that the management of these sugar firms need to identify appropriate operations strategies at their operations areas, contingent of their core and yet scarce resources. These needs to be managed well since the study found a statistical positive contribution of operations strategy to performance. The differential advantage of these strategies shall help to separate one firm form another in planning for resources, strategy implementation, and success of the operations strategies.