Entrepreneurial Competencies and Performance of Dairy Cooperatives in Machakos County, Kenya

Margaret Nganu ,Margaret Ndunge Musyoka ,Benedict Mutuku

doi:10.7176/ejbm/11-33-13

Abstract

The objective of the study was to establish entrepreneurial competencies and performance of dairy cooperatives in Machakos County, Kenya. Specifically, to establish the extent to which managerial competencies influence performance of dairy cooperatives in Machakos County, Kenya; to determine the extent to which entrepreneurial traits influence performance of dairy cooperatives in Machakos County, Kenya; and to assess the effects of technical skills on performance of dairy cooperatives in Machakos County, Kenya. The study was descriptive. The study was a census of the 15 dairy cooperatives registered under the Lower Eastern Dairy Cooperative Association in Machakos County. The unit of analysis was the cooperatives while the units of observations were the board members of the cooperatives. A standard questionnaire was used to collect primary data from the board members of the cooperatives. Data analysis included frequencies, percentages, and t- tests. The data was analyzed by use of computer statistical packages and data presented in tables and figures. Based on the first study objective, study concludes that there was lack of sufficient evidence to show that managerial competencies have an effect on performance of dairy cooperatives in Machakos County. Based on the second study objective, the study concludes that there is adequate evidence to show that entrepreneurial traits have positive effects on performance of dairy cooperatives in Machakos County. Based on the third study objective, the study concludes that there is adequate evidence to show that technical skills have positive effects on performance of dairy cooperatives in Machakos County. The study recommends development, adoption and full implementation of business and strategic plans for the cooperatives for them to attain sustainable competitiveness and growth. The study also recommends data based product development and diversification. Further training would be critical in building capacity for creativity, risk taking, situational analysis and opportunity identification. Moreover, the study recommends training to enhance employees’ capacity and effectiveness in financial management; procurement; production; and marketing. Particularly, loss of revenue due to spoilage of milk can be controlled by training on best processing and quality control methods while training on marketing, would be critical in enhancing product penetration, reducing customer complaints and stimulating positive growth. Finally, further investigations should be conducted to widening the scope of the study to compare Machakos to other parts of the Country and also to identify reasons for high labor turnover and poor public relations between the cooperatives and communities surrounding them. Keywords: Entrepreneurial competency, Performance DOI : 10.7176/EJBM/11-33-13 Publication date: November 30 th 2019

Highlights

Agricultural sector is the main economic stay in Kenya
Based on the first study objective, the study concludes that there lacks sufficient evidence to show that managerial competencies have an effect on performance of dairy cooperatives in Machakos County
The indifference was because none of the dairy cooperatives had an operational business plan with lack of operational business plans leading to more than half of the cooperatives failing to meet their customers demand on a daily basis

Summary

Introduction

Agricultural sector is the main economic stay in Kenya. The sector directly contributes 26% and indirectly contributes another 25% of the Gross Domestic Product (GDP) (Njine, 2014). According to Food and Agriculture Organization (FAO), the sector employs more than 40 per cent of the total population and more than 70 per cent of Kenya's rural people. 2017 annual livestock production report from the State Department of Livestock indicates that milk is Kenya’s most economically important livestock product, with dairy farming being the single largest sub sector of agriculture in Kenya. In 2017, 3.3 billion liters valued at Ksh. 182.06 billion was produced, contributing 50% of the total gross value of livestock’s products in Kenya (GOK, 2018). This means that milk alone contributed 7.4% of Agricultural GDP and accounted for 2.3% of the country’s GDP in 2017 (CBK, 2018). According to Waitituh (2017), dairy sub sector in Kenya is the most rapidly expanding agricultural sub sector in Eastern Africa and an important source of livelihood to approximately 1 million small-scale farmers

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