Environmental Regulation Practice and Sustainable Performance of Multinational Tea Firms in Kenya

Abstract

Performance of firms has remained a global issue based on changes in climate and global warming among others. This issue has forced countries to adopt green strategies so as to reduce the effect of climate change on business sustainability. Climate change affect agricultural-processing firms directly leading to poor performance. Environmental regulation is one of the green supply chain practices introduced to businesses as a measure to solving problem of sustainable performance. This study aimed at determining the relationship between environmental regulation and sustainable performance of multinational tea firms in Kenya.The study was anchored on sustainable and institutional theories. Correlational and cross-sectional research design was adopted. A sample of 225 managers were selected using stratified sampling technique from a target population of 512 from the three multinational tea firms of James Finlay, George Williamson and Ekaterra with primary data being collected using a questionnaire. Content, face, criterion and construct validity of the instrument was achieved through interrogation of instrument by supervisors and experts. Reliability was examined using Cronbach Alpha coefficient where a score of 0.801 was realised. Linear regression and correlation analysis were used in establish coefficient of determination and correlation coefficient. The R squared value showed that environmental regulation had no impact on sustainable firm performance (R2 = 0.000, F=.034; p>0.05), this indicates that sustainable firm performance was not attributable to environmental regulation. Implying that whenever multinational tea firms invested on environmental regulation as a green supply chain practice there was no impact on their sustainable performance. The study recommends that multinational tea firms in Kenya should establish why this practice is not impacting on performance as expected. The findings may be beneficial to the tea industry players, policy makers, scholars, the general public as well as the county and national governments as it will give them necessary information that may assist in developing sustainable performance strategies in the tea sector.