Capacity Building, Transformational Leadership and Productivity of Sugar Companies in Kenya

Abstract

Emerging issues such as Covid-19, inflation, cheap imports, and political instability have affected most manufacturing firms, requiring them to adopt internal capacity building. Sugar firms in Kenya are among those facing challenges such as resource constraints and management issues, which have resulted in poor production. To address these challenges, it was essential to develop unique capabilities through capacity building, coupled with appropriate transformative leadership, to enhance the productivity of sugar companies. The goal of this study was to evaluate capacity building, transformational leadership, and productivity of sugar companies in Kenya. In particular, the study assessed the relationship between employee capacity building and productivity; determined the relationship between knowledge management capacity building and productivity; determined the relationship between innovation capacity building and productivity; and examined the relationship between organizational capacity building and productivity of sugar companies in Kenya. The study further assessed the moderating effect of transformational leadership on the relationship between capacity building and the productivity of sugar companies in Kenya. The study was grounded in several theories, including human capital theory, institutional theory, theory of action, theory of change, dynamic capability theory, and transformational leadership theory. The study adopted a positivist research philosophy and correlational research designs. Census of all the target population of 218 managers working in 8 sugar companies in Kenya was used in the study. Primary data was gathered through the use of a structured questionnaire. Using Cronbach's alpha coefficient, the internal consistency of the research tool was evaluated; ideally, a threshold of 0.7 and above was used. Similarly, the instrument's validity was enhanced through an extensive literature review and consultation with human resource subject experts. Mean and standard deviation was utilized with frequencies as descriptive statistics. The data used inferential statistics which includes Pearson correlation and multiple linear regression analysis. The findings revealed that employee capacity-building practices, achieved through training, induction, motivation, and employee retention, positively impacted the productivity of sugar companies. However, periodic reviews on employee motivation were lacking. Moreover, knowledge management capacity-building showed a statistically significant relationship with productivity, suggesting a need to enhance knowledge management systems, retrieval, and acquisition in sugar companies. Similarly, innovative capacity-building was found to have a significant relationship with productivity, driven by improved ICT resources and innovation in product packaging, though process and production innovation required improvement. Organizational capacity-building also positively correlated with sugar company productivity, attributed to flexible organizational structures and operational restructuring. Upgrading organizational systems with modern technology was deemed necessary. Additionally, transformative leadership moderated the relationship between capacity-building and organizational productivity, emphasizing the importance of leadership in enhancing organizational performance. Ultimately, the study concluded that there was a statistically significant relationship between capacity-building and organizational productivity, moderated by transformative leadership.