CONTRACTUAL SUPPLY CHAIN GOVERNANCE AND PERFORMANCE OF AGRO PROCESSING FIRMS IN KENYA
Abstract
Agro processing industry establishes the biggest bit of 38% of Kenya manufacturing sector, but has untapped potential to contribute to employment and gross domestic product growth. The sector is inefficient in terms of value addition to the agricultural produce as Kenya exports raw agricultural produce instead of high-quality value-added products. The aim of this study was to determine the influence of contractual supply chain governance on performance of agro processing firms in Kenya. The study was anchored on the Theory of Constraints and the Theory of Performance. Survey research design was employed for this study as it enabled the combination of both qualitative and quantitative research approaches. The study targeted 344 agro processing firms in Kenya that were registered with the Kenya Association of Manufacturers and grouped into twelve functional sectors. This study used a census survey. The study used Cronbach’s alpha (α) coefficient to test reliability, while face and content validity were used for checking for validity of the research instrument. The primary data collected was analysed with the use of SSPS version 25. Data analysis was conducted using descriptive statistics and inferential statistics by use of moderated multiple regression analysis. The data was presented using a combination of statistical and graphical techniques. The study revealed that contractual supply chain governance had a significant influence on performance of agro processing firms in Kenya. The study recommended that agro processing firms should implement the systems of contractual supply chain governance to enhance their productivity and profitability. The study findings are important to regulators to enhance the level of implementation of contractual supply chain governance in agro processing firms. This study recommended that it is necessary for future researchers to undertake similar or replicate empirical studies in agro processing firms that are not members of Kenya Association of Manufacturers in order to validate the findings and conclusions of this study. The study also recommended future research study in other areas of manufacturing sectors to establish the performing trends regarding the adoption of contractual supply chain governance. The study provides future researchers with a useful conceptual and methodological reference to carry out studies in this area of supply chain governance.
Keywords: Contractual Supply Chain Governance; Agro Processing Firms
CITATION: Ominde, S. O., Osoro, A., & Monari, D. G. (2022). Contractual supply chain governance and performance of agro processing firms in Kenya. The Strategic Journal of Business & Change Management, 9 (2), 585 – 602.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i2.2284
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