Stakeholder Engagement: Issues to Resolve for Sustainable Performance of Sugar Mills in Western Region, Kenya

Abstract

The Kenyan sugar industry suffers from poor performance linked to corruption, mismanagement, reduced cane production, overreliance on imports and growing long maturing cane variety. These problems can be resolved by engagement of different stakeholders. This article is on stakeholder engagement and effect on sustainable performance in the sugar mills in western Kenya. The paper adopted the stakeholder theory, balanced scorecard model and human relations theory of management, as its theoretical framework. The descriptive research design was employed. The respondents included managers in the sugar mills, the permanently employed staff, government officials handling the industry in the region and representatives of cane farmers from the farmer blocs. Simple and stratified sampling technique was used and respondents filled the structured questionnaire from which descriptive, regression and correlation analyses were conducted. The findings revealed that respondents agreed that stakeholder relationship management increased sustainable performance of sugar mills. The correlation analysis results showed that stakeholder communication at (r =0.852), capacity building (r =0.551), stakeholder relationship management (r =0.742) and stakeholder control processes (r =0.641) were all closely associated with the dependent variable on sustainable performance. From the regression analysis, the results showed that 70.9% of change in sustainable performance in the sugar mills was influenced by stakeholder engagement. The beta coefficient results indicate that the four means of stakeholder engagement influenced performance of the sugar mills. The study concluded that aspects of stakeholder engagement improved performance as measured in terms of high-quality products, profit margin, sales volume and increased market share. It is recommended that the government as a key stakeholder of the sector should have policies to ban sugar free imports, enhance competencies of stakeholders through training, research on best cane variety and engage stakeholders to monitor and control activities in reducing corruption, mismanagement and misappropriation of resources. Engagement of stakeholders is important when seeking to grow and establish the industry.