EFFECT OF STRATEGIC LEADERSHIP ON ORGANIZATION PERFORMANCE OF STATE-OWNED SUGAR MANUFACTURING FIRMS IN WESTERN KENYA

Abstract

Properly applied strategic leadership is precursory for effective strategy formulation, implementation and control especially in the current highly volatile business environment. Due to limited empirical findings locally on how strategic leadership affects performance of organizations, this study increased this knowledge by answering the question: what is the effect of strategic leadership on organization performance of state-owned sugar manufacturing firms in Western Kenya. The main objective of the study was to assess the influence of strategic leadership on organization performance of state-owned sugar manufacturing firms in Western Kenya. Specifically, the study aimed to; assess the influence of strategic direction setting on organization performance of state-owned sugar manufacturing firms in Western Kenya, determine the influence of core competence exploitation on organization performance of state-owned sugar manufacturing firms in Western Kenya, establish the influence of organization culture building on organization performance of state-owned sugar manufacturing firms in Western Kenya and assess the influence of organization controls on organization performance of state-owned sugar manufacturing firms in Western Kenya. The study was guided by upper echelon theory, environment dependency theory, contingency theory and trait theory. Target population was 917 employees from Chemelil, South Nyanza, Muhoroni, and Nzoia. Survey design was adopted for the study. Simple random sampling technique was used to arrive at the population sample; total sample size of 269 respondents was used. Data collection instruments were both primary and secondary. Primary data was collected by way of semi structured questionnaire. Secondary data collection involved documentary analysis to capture information on organization performance of state-owned sugar manufacturing firms in Western Kenya. Pilot study was carried out on a group of employees from Nzoia Sugar Company to ensure the research instruments capture the required information before carrying out the research. Descriptive and inferential statistics which included mean, frequency and regression was used in this study. The test criteria was to reject the first null hypothesis if the value of beta was not equal to zero (β1 ≠0). From the results, the beta value for strategic direction setting 0.346 at p< 0.05. This result implied 34.6% of change in Organization performance is attributed to Strategic direction setting. Therefore the first hypothesis was rejected. The test criteria was to reject the second null hypothesis if the value of beta was not equal to zero (β2 ≠0). From the results, the beta value for core competencies exploitation from the regression model was 0.503 at p< 0.05. This result implied that 50.3% of change in Organization performance is explained by Core Competencies exploitation. Therefore the second null hypothesis was rejected. The test criteria was to reject the third null hypothesis if the value of beta was not equal to zero (β3 ≠0). From the results, the beta value for organization culture building from the regression model was 0.399 at p< 0.05. This results implied that 39.9% of change in Organization performance is attributed to Organization Culture building. Therefore the third null hypothesis was rejected. The test criteria was to reject the fourth null hypothesis if the value of beta was not equal zero (β4 ≠0). From the results, the beta value for organization controls from the regression model was 0.315 at p< 0.05. This result implied that 31.5% of change in Organization performance was explained by Organization controls, hence the fourth null hypothesis was rejected. In conclusion, the study established a statistically significant correlation between strategic leadership and organization performance of state-owned sugar manufacturing firms in Western Kenya. The findings of the current study form a basis for reference in future by interested parties. Further research should be carried out on the Influence of strategic leadership on organization performance of privately owned sugar manufacturing firms in order to make generalizations as relates to effect of strategic leadership on organization performance of sugar manufacturing firms in Western Kenya.