Article Published In Vol.6 (May-June-2018)

Stakeholder Relationship and Performance of State Owned Sugar Manufacturing Firms in Western Kenya

Author : Edith Omukubi, Dr. Robert K.W. Egessa and Mr. Evans Kwendo

Corporate Governance is a subject of academic and professional debate. It has and it will continue to be a topic under scrutiny for subsequent deliberations since there are many different research dimensions and contexts associated with it. However, it has been observed that the linkage between Corporate Governance and Performance of sugar manufacturing firms remains as an untapped area with considerable avenues of research. Corporate Governance is increasingly becoming important in organization as an approach of improving performance. Corporate Governance is the system through which organizations are directed and controlled. It is concerned with Transparency, Accountability and Power Relationship within and outside the organization. There has been an increasing importance in Corporate Governance in organizations in recent years. Some studies have argued for a positive relationship while others argued that there is a negative relationship between Corporate Governance and Organizational Performance. Studies have associated corporate governance with stakeholder relationship which has resulted to organization performance. This study sought to determine the effect of stakeholder relationship on Performance of state owned Sugar Manufacturing firms in Western Kenya. The researcher employed Correlation survey design. The population of the study consisted of four sugar manufacturing firms in Kenya which are state owned. Primary and Secondary data was be gathered through Qualitative and Quantitative approaches. Both Questionnaires and interview guide were used to collect primary information from key informants in the sugar sector. The study used use the test-retest technique to ascertain the reliability of the data collection instruments and the results from the two sets of responses was analyzed using crobanch alpha coefficient which was 0.936 thus above the acceptable threshold of reliability of 0.70. The Pearson Product Moment Correlation Coefficient was used to estimate the influence of the independent variable on the dependent variable while partial correlation was used to establish the influence of Environmental conditions on the relationship between Corporate Governance and Performance of state owned sugar manufacturing firms in Kenya. The study found out that there is a higher and positive correlation between stakeholder involvement (r=0.825) on performance of state owned sugar manufacturing firms in Kenya. From the study findings, it is recommended that that management of the state owned sugar firms should invest much of its resources in improving their stakeholder relationship. This can be achieved through: Regular stakeholders’ communication of board and management changes; Communication distribution to stakeholders is in line with Corporation Act and Listing rules; having Roles/responsibilities which are clearly articulated in the MOU.

Keywords: Stakeholder Relationship, Performance, State Owned Sugar firms, corporate governance, stakeholder