Moderating effect of Organizational Factors on the relationship between Diversification Strategies and Competitiveness: Case of Sugar Firms in Kenya

Abstract

This study sought to analyze the effect of organizational factors on the relationship between diversification strategies and competitiveness sugar firms in Kenya. The main objective was to establish the effect of organizational factors on the relationship between diversification strategies and competitiveness of sugar firms in Kenya. The specific objectives were to: establish the effect of age of the firm on the relationship between diversification strategies and competitiveness sugar firms in Kenya, to establish the effect of size of the firm on the relationship between diversification strategies and competitiveness sugar firms in Kenya and finally to find out the effect of management structure on the relationship between diversification strategies and competitiveness sugar firms in Kenya. The study adopted descriptive correlational survey design and this being a census study; all the sugar firms in the Kenya were studied. Using a questionnaire, primary data was collected from the production and marketing managers as key informants of each of the sugar firms. The production  and marketing managers of every sugar firm were selected to take part in the study as they are perceived to be knowledgeable on the issues under study and for which they are either responsible for their execution or they personally execute them. The questionnaire was pre-tested on a pilot respondent who are not part of the study respondents but knowledgeable in the study aspects in order to ensure their validity and relevance.  Secondary data was extracted from annual reports, publications and documentary analysis was also used to gather background information by reviewing literatures relevant to the study.   Reviews of the measures used to measure the study variables were also used to construct the questionnaire to ensure face and construct validity. The data collected was analyzed using descriptive and inferential statistics. Cronbach’s alpha coefficient was used to measure the reliability of the scale, which was used to assess the interval consistency among the research instrument items. To determine the effect of organizational factors on the relationship between diversification strategies and competitiveness, the researcher used Karl Pearson’s first order partial coefficient (r_xy.z). Organizational factors had no overall moderating role on the relationship between diversification strategies and competitiveness in that they had an overall significance value greater than the set p-value of 0.05 (Overall significance = 0.069). However, on individual significance, the degree of moderation varies from one organizational factor to another. The findings of this study are of great benefit to practitioners, academicians in the area of knowledge development, farmers and other stakeholders in the sugar industry.

Key Words: Moderating factors, Diversification strategies, Competitiveness, Sugar Firms in Kenya