Effect of strategic flexibility on performance of sugar companies in western region, Kenya

Abstract

This study delves into how strategic flexibility influences the performance of state-owned sugar companies in Kenya's Western region. Strategic flexibility is crucial for organizations to navigate market uncertainties effectively, allowing them to adapt to changing consumer preferences and competitive landscapes. Despite extensive research on its benefits, its application within Kenya's state-owned sugar firms remains largely unexplored. These firms encounter challenges like political influence, high production costs, and inefficiencies, hindering their ability to meet consumer needs efficiently. The study aims to bridge this gap by examining how strategic flexibility can enhance the performance of these firms amidst their challenges. Employing a multi-faceted approach, the research focuses on production, marketing, and supply chain flexibility and their effects on performance. It encompasses several key state-owned sugar companies in the Western region over a four-month period. The findings aim to provide valuable insights for stakeholders, including policymakers and industry managers, to devise strategies for improving sector performance. The study contributes to the broader understanding of how internal strategic adjustments can mitigate external challenges, thus enhancing the efficiency and competitiveness of state-owned enterprises in the sugar industry. It also sets the stage for future academic inquiries into strategic flexibility's role in similar industrial contexts. The literature review, grounded in the Dynamic Capabilities Theory (DCT), explores how firms can adapt, innovate, and realign resources to secure competitive advantages in dynamic markets. While empirical studies highlight the positive effects of strategic flexibility across various sectors, its specific applications in the sugar industry remain underexplored. Using a descriptive correlational research design, the study examines the relationship between strategic flexibility and performance in state-owned sugar factories in Kenya. Data collected from 94 respondents reveal significant positive relationships between production, marketing, and supply chain flexibility and organizational performance. The regression analysis showed the relationship between performance and the production flexibility was significant, F (1, 61) = 257.064, p = 0.000. Also, both marketing flexibility (B = 0.335, p = 0.14) and supply chain flexibility (B = 0.447, p = 0.000) significantly influenced the performance of the organizations in the market. Recommendations include enhancing production capacity, adopting market-responsive strategies, and strengthening supply chain resilience. Limitations of the study include reliance on questionnaires and a focus solely on public companies. Future research avenues could explore qualitative aspects, compare public and private sector performance, and investigate the role of data-driven decision-making in strategic flexibility.