Mediation models: A focus on the Effect of Customer Satisfaction on the relationship between Ethicaltreatment towards Farmers and Enterprise Performance in Mumias sugar belt, Kenya

Abstract

In the simplest mediation theory, the investigation of mediation specifies a chain of relations by which an antecedent variable affects a mediating variable, which in turn affects a dependent variable. Mediating variables can be behavioral, biological, psychological, or social constructs that transmit the effect of one variable to another variable. There are two overlapping applications of mediation theory. One major application of mediating variables is after an effect is observed and researchers investigate how this effect occurred. In this framework, a third variable is inserted into the analysis of an X~ Y relation to improve the understanding of the relation, that is, to determine whether the relation isdue to a mediator or is spurious. To demonstrate this astudy was conducted in Mumias Sugar Belt among cane haulage SMEs and their customers. The purpose of the study was to establish the mediating effect of consumers satisfaction on the relationship between ethical treatment towards farmers and enterprise performance. The study was guided by the stakeholder theory and a conceptualmodel of the same theory. Correlational survey design was adopted for the study. The study population was made up of 75,000 sugar cane farmers.  A sample size of 382 based on 90% response rate was used guided by coefficient of determination formula. Cluster and simple random sampling techniques were used to select farmers with counties being the basis of cluster before applying random techniques. Questionnaires were used to obtain data from farmers. Frequencies were used to show distribution of responses. Correlations were used to assess associations between ethical treatment towards farmers and enterprise performance. Kenny and Barron 4 step mediation models were used to assess the mediating effect of customer satisfaction on the relationship between ethical business practices and enterprise performance. Pearson correlations established that farmers trust in drivers was negatively correlated to enterprise reputation and goodwill to the company. Similarly, Pearson correlations revealed that cane theft in transit had negative correlations with enterprise goodwill and customer loyalty. Logistic Regression indicated that cane theft in transit negatively affected customer loyalty. Pearson correlations revealed negative correlations between willingness to listen to farmers and employee dressing code. On the other hand, cane theft in transit negatively affected willingness to listen. Logistic regression revealed that willingness to listen to farmers partially mediated the relationship between cane theft in transit and customer loyalty by 9.62%. These findings are expected to enable cane transport owner managers increase enterprise profitability. Sugar cane sector policy makers are expected to use the findings to address the dwindling fortunes of the sugar sector in Kenya.

KEY WORDS: Mediation model, Consumer Satisfaction, Ethical treatment enterprise performance.

DOI: 10.7176/JMCR/60-05

Publication date:September 30^th 2019