Stakeholder Engagement and Organizational Performance: A Case of Kenya Power and Lighting Company, Eldoret Branch, Uasin-Gishu County – Kenya

Abstract

The effects of stakeholder involvement in daily running of organizations remain unclear on their performance leading to the current study. The study specifically investigated employee investment, performance management systems, employee participation in decision, product customization, customer recognition, and customer relationship management on firm performance. Stakeholder theory was the basis of the study with a descriptive research design employed on a target population of 718. Stratified random sampling was used in selecting a sample size of 215 employees and customers. Data was collected using self-administered closed-ended questionnaires and analyzed using both descriptive and inferential statistics. Pearson product moment correlation and multiple regression models were employed with findings indicating customer recognition (β5=0.441, P Value = 0.000), employee decision making involvement (β3=0.234, P Value = 0.04), customer relationship management (β6=0.2, P Value = 0.000), employee investment (β1=0.145, P Value = 0.05) , performance management system (β2=0.143, P Value = 0.04) and product customization (β4=0.084, P Value = 0.000) all having positive effect on firm performance significant at 0.05. The overall regression result indicated an R2 = 0.762 with an implication that 76.2% of the changes in organizational performance is as a result of stakeholder involvement in decision making process. The research therefore concluded that both the customer and employee involvement strategies contributed significantly to the performance of the organizations with the customer recognition indicating more effect on the performance of the organization. The research recommended that the two stakeholders be an integral part in decision making process for better performance.