Effect of Environmental Scanning on Performance of Chemelil Sugar Company in Kisumu County, Kenya

Abstract

The environmental scanning been recognized as a vital management tool for well-performing companies. It includes collecting information within the organization's internal, industrial, and external environment that affect performance. The performance Chemelil Sugar Company in Kisumu County has been incompatible with the company's envisage strategic development plan. The company posted a loss of K.sh 821 million in the year June 2018, which is an increase compared to the loss of K.sh 767.25 million incurred in 2016. This formed the motive of the study to examine the effect of environmental scanning on the performance of Chemelil Sugar Company. The study was anchored on open system theory. The research adopted a descriptive research design. The target population was 60. The study focused on the heads of departments as the key respondents. The research instruments used in the study were questionnaires. The study conducted a census because the population size was small and for accuracy. The study applied purposive sampling technique. It was found that environmental scanning is positively and significantly related to performance. The results of regression analysis established that environmental scanning is positively and significantly related to performance (?=.840, p =.035). Thus, a unit increase in environmental scanning practices while holding all other factors constant, increases performance by 0.840 units. The study recommended that the company need to look at the internal analysis, industrial analysis and external analysis to maintain a higher performance level. The company can regularly analyze its industrial environment to determine its opportunities and threats using Porter's Five Factor analysis tool. In addition, it is recommended that the company need to regularly analyze its internal environmental factors to determine its strengths and weaknesses using SWOT as an analysis tool. Conducting environmental audit is necessary and the company needs to prepare plans to cope with dynamically changing environments. Keywords: Environmental scanning, performance, Chemelil Sugar Company, Kisumu County, Kenya