The relationship between Product Innovative Strategies and Performance of Kenya Tea Development Agency Factories in Kenya

Koech Chepngetich Dorothy; Langat Lydia; Bett Alfred

doi:10.18535/ijsrm/v10i2.em02

Abstract

Kenya Tea Development Agency’s primary role is to collect plucked tea, process and market tea products on behalf of farmers. Despite the crucial role it plays in Kenya’s economy, the tea sector still faces various challenges such as high cost of production, fluctuations in the international market, and emerging issues such as COVID-19 pandemic. To effectively improve the performance of the tea industry, product innovative strategy practices are widely acknowledged for improving productivity and competitiveness in the sector. This study aimed at establishing the relationship between product innovative strategies and performance of KTDA factories in Kenya. It was premised on Schumpeterian theory of innovation and Discovery theory. A correlational and cross-sectional research design was adopted in this study. The target population was 974 employees from 71 KTDA factories in Kenya. A sample of 283 respondents was drawn from four regions using a stratified sampling method. The main instrument of data collection was a semi-structured questionnaire administered to top, middle, and lower-level employees of KTDA factories in Kenya. The questionnaire was pre-tested to ensure its validity and reliability. An aggregate Cronbach Alpha coefficient of 0.703 was obtained. Multiple linear regression and model was employed to determine the significance of the hypothesis. The findings revealed that product innovative strategies (β = 0.695, R=0.748, p<0.05) had a positive and significant relationship with performance of KTDA. The study recommends that stakeholders and interested parties in the industry should make policies that goes toward operationalizing product innovative strategies. The findings may be useful to the industry stakeholders in formulating product innovative strategies that will help improve their fortunes.

Keywords

Product Innovative StrategiesOrganization PerformanceTea Industry

References

Abeysinghe, I. (2013). Tea Research Institute Major Issues in the Tea Industry. India: Republic of India.Google Scholar ↗
Ar, I., & Baki, B. (2011). Antecedents and performance impacts of product versus process innovation. European Journal of Innovation Management, 3(2), 45-57.Google Scholar ↗
Augusto, M., Lisboa, J., & Yasin, M. (2014). Organisational performance and innovation in the context of a total quality management philosophy: An empirical investigation. Total Quality Management and Business Excellence, 25, 1144-1155.Google Scholar ↗
Bao, Y., Chen, X., & Zhou, K. (2012). External learning, market dynamics, and radical innovation: Evidence from China's high-tech firms. Journal of Business Research, 65(8), 1226-1233.Google Scholar ↗
Baregheh, A., Rowley, J., & Sambrook, S. (2009). Towards a multidisciplinary definition of innovation. Management Decision, 47(8), 1323-1339. doi:10.1108/002517409/0984578DOI ↗Google Scholar ↗
Barney, J. B. 1986. Strategic factor markets: expectations, luck, and business strategy. Management Science, 32(10): 1231-1241.Google Scholar ↗
Christian Partners Development Agency. (2008). Report on Small-Scale Tea Sector in Kenya. Nairobi, Kenya: CPDA.Google Scholar ↗
Cozza, C., Malerba, F., Mancusi, M., Perani, G., & Vezzulli, A. (2012). Innovation, profitability and growth in medium and high-tech manufacturing industries: evidence from Italy. Applied Economics, 44(15), 1963-1976.Google Scholar ↗
Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of Production Economics, 133(2), 662-676.Google Scholar ↗
Hall, B. (2011). Journal of Supply Chain Management. Nairobi: National Bureau of Economic Research.Google Scholar ↗
Hernández‐Espallardo, M., & Delgado‐Ballester, E. (2009). Product innovation in small manufacturers, market orientation and the industry's five competitive forces. European Journal of Innovation Management, 4(5), 122-134.Google Scholar ↗
Im, S., & J., W. (2004). Market orientation, creativity, and new product performance in high-technology firms. Journal of Marketing, 68(2), 114-132.Google Scholar ↗
International Finance Corporation. (2013). IFC's Investments. Kenya: Kenya Tea Development Agency Ltf.Google Scholar ↗
Karanja, D. (2014). Effects of innovation strategies on performance of commercial banks in Kenya. University of Nairobi: Doctoral Dissertation.Google Scholar ↗
Kirzner, I. M. 1997. Entrepreneurial discovery and the competitive market process: An Austrian approach. Journal of Economic Literature, 35(1): 60-85.Google Scholar ↗
Letangule, S., Letting, D., & Nicholas, K. (2012). Effect of innovation strategies on performance of firms in the telecommunication sector in Kenya. International Journal of Management & Business Studies, 2(3), 75-78.Google Scholar ↗
Levinthal, D. 1997. Adaptation on Rugged Landscapes. Management Science, 43(7): 934- 950.Google Scholar ↗
Montero, R., Pennano, C., & Camilo, L. (2017). Determinants of Product Innovation Performance: Why are some innovations more successful than others? Economia y Desarrollo, 158(2); 43-62.Google Scholar ↗
Morton, J., 2020. On the susceptibility and vulnerability of agricultural value chains to COVID-19. World development, 136, p.105132.Google Scholar ↗
OECD. (2005). The measurement of scientific activities: Proposed guideline for collecting and interpreting technological innovation data. doi: dataoecd/35/61/2367580Google Scholar ↗
Oke, A., Prajogo, D., & Jayaram, J. (2013). Strengthening the innovation chain: The role of internal innovation climate and strategic relationships with supply chain partners. Journal of Supply Chain Management, 49(4), 43-58.Google Scholar ↗
Onikoyi, I. (2017). Impact of Product Innovation on Organization Performance (A Survey of Nestle Nigeria Plc). Journal of Marketing and Consumer Research, 37, 24-31.Google Scholar ↗
Polder, M., Leeuwen, V., Mohnen, P., & Raymond, W. (2010). Product, process and organizational innovation: drivers, complementarity and productivity effects. Unumerit: Maastricht Economic and Social Research and Training Centre on Innovation and Technology.Google Scholar ↗
Saunders, M., Lewis, P., & Thornhill, A. (2011). Research Methods for Business Students 6th Ed. Harlow: Pearson.Google Scholar ↗
Schumpeter, J. (1939). Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process. New York, NY: McGraw-Hill.Google Scholar ↗
Shane, S. 2003. A General Theory of Entrepreneurship. The individual-opportunity Nexus. Massachusetts: Edward Elgar Publishing, Inc.Google Scholar ↗
Therrien, P., Doloreux, D., & Chamberlin, T. (2011). Innovation novelty and (commercial) performance in the service sector: A Canadian firm-level analysis. Technovation, 31(12), 655-665.Google Scholar ↗
Utterback, J. M., & Abernathy, W. J. (1975). “A dynamic model of product and process innovation”, OMEGA. The International Journal of Management Science, 3(6), 639-656.Google Scholar ↗
Wong, E., Ho, K., Wong, S., Cheung, A., & Yeoh, E. (2020). Workplace safety and coronavirus disease (COVID-19) pandemic: Survey of employees. E-Pub: Bull World Health Organ. Retrieved March 20, 2020, from http://dx.doi.org/10.2471/BLT.20.255893DOI ↗Google Scholar ↗

[refR-1] Abeysinghe, I. (2013). Tea Research Institute Major Issues in the Tea Industry. India: Republic of India.Google Scholar ↗

[refR-2] Ar, I., & Baki, B. (2011). Antecedents and performance impacts of product versus process innovation. European Journal of Innovation Management, 3(2), 45-57.Google Scholar ↗

[refR-3] Augusto, M., Lisboa, J., & Yasin, M. (2014). Organisational performance and innovation in the context of a total quality management philosophy: An empirical investigation. Total Quality Management and Business Excellence, 25, 1144-1155.Google Scholar ↗

[refR-4] Bao, Y., Chen, X., & Zhou, K. (2012). External learning, market dynamics, and radical innovation: Evidence from China's high-tech firms. Journal of Business Research, 65(8), 1226-1233.Google Scholar ↗

[refR-5] Baregheh, A., Rowley, J., & Sambrook, S. (2009). Towards a multidisciplinary definition of innovation. Management Decision, 47(8), 1323-1339. doi:10.1108/002517409/0984578DOI ↗Google Scholar ↗

[refR-6] Barney, J. B. 1986. Strategic factor markets: expectations, luck, and business strategy. Management Science, 32(10): 1231-1241.Google Scholar ↗

[refR-7] Christian Partners Development Agency. (2008). Report on Small-Scale Tea Sector in Kenya. Nairobi, Kenya: CPDA.Google Scholar ↗

[refR-8] Cozza, C., Malerba, F., Mancusi, M., Perani, G., & Vezzulli, A. (2012). Innovation, profitability and growth in medium and high-tech manufacturing industries: evidence from Italy. Applied Economics, 44(15), 1963-1976.Google Scholar ↗

[refR-9] Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of Production Economics, 133(2), 662-676.Google Scholar ↗

[refR-10] Hall, B. (2011). Journal of Supply Chain Management. Nairobi: National Bureau of Economic Research.Google Scholar ↗

[refR-11] Hernández‐Espallardo, M., & Delgado‐Ballester, E. (2009). Product innovation in small manufacturers, market orientation and the industry's five competitive forces. European Journal of Innovation Management, 4(5), 122-134.Google Scholar ↗

[refR-12] Im, S., & J., W. (2004). Market orientation, creativity, and new product performance in high-technology firms. Journal of Marketing, 68(2), 114-132.Google Scholar ↗

[refR-13] International Finance Corporation. (2013). IFC's Investments. Kenya: Kenya Tea Development Agency Ltf.Google Scholar ↗

[refR-14] Karanja, D. (2014). Effects of innovation strategies on performance of commercial banks in Kenya. University of Nairobi: Doctoral Dissertation.Google Scholar ↗

[refR-15] Kirzner, I. M. 1997. Entrepreneurial discovery and the competitive market process: An Austrian approach. Journal of Economic Literature, 35(1): 60-85.Google Scholar ↗

[refR-16] Letangule, S., Letting, D., & Nicholas, K. (2012). Effect of innovation strategies on performance of firms in the telecommunication sector in Kenya. International Journal of Management & Business Studies, 2(3), 75-78.Google Scholar ↗

[refR-17] Levinthal, D. 1997. Adaptation on Rugged Landscapes. Management Science, 43(7): 934- 950.Google Scholar ↗

[refR-18] Montero, R., Pennano, C., & Camilo, L. (2017). Determinants of Product Innovation Performance: Why are some innovations more successful than others? Economia y Desarrollo, 158(2); 43-62.Google Scholar ↗

[refR-19] Morton, J., 2020. On the susceptibility and vulnerability of agricultural value chains to COVID-19. World development, 136, p.105132.Google Scholar ↗

[refR-20] OECD. (2005). The measurement of scientific activities: Proposed guideline for collecting and interpreting technological innovation data. doi: dataoecd/35/61/2367580Google Scholar ↗

[refR-21] Oke, A., Prajogo, D., & Jayaram, J. (2013). Strengthening the innovation chain: The role of internal innovation climate and strategic relationships with supply chain partners. Journal of Supply Chain Management, 49(4), 43-58.Google Scholar ↗

[refR-22] Onikoyi, I. (2017). Impact of Product Innovation on Organization Performance (A Survey of Nestle Nigeria Plc). Journal of Marketing and Consumer Research, 37, 24-31.Google Scholar ↗

[refR-23] Polder, M., Leeuwen, V., Mohnen, P., & Raymond, W. (2010). Product, process and organizational innovation: drivers, complementarity and productivity effects. Unumerit: Maastricht Economic and Social Research and Training Centre on Innovation and Technology.Google Scholar ↗

[refR-24] Saunders, M., Lewis, P., & Thornhill, A. (2011). Research Methods for Business Students 6th Ed. Harlow: Pearson.Google Scholar ↗

[refR-25] Schumpeter, J. (1939). Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process. New York, NY: McGraw-Hill.Google Scholar ↗

[refR-26] Shane, S. 2003. A General Theory of Entrepreneurship. The individual-opportunity Nexus. Massachusetts: Edward Elgar Publishing, Inc.Google Scholar ↗

[refR-27] Therrien, P., Doloreux, D., & Chamberlin, T. (2011). Innovation novelty and (commercial) performance in the service sector: A Canadian firm-level analysis. Technovation, 31(12), 655-665.Google Scholar ↗

[refR-28] Utterback, J. M., & Abernathy, W. J. (1975). “A dynamic model of product and process innovation”, OMEGA. The International Journal of Management Science, 3(6), 639-656.Google Scholar ↗

[refR-29] Wong, E., Ho, K., Wong, S., Cheung, A., & Yeoh, E. (2020). Workplace safety and coronavirus disease (COVID-19) pandemic: Survey of employees. E-Pub: Bull World Health Organ. Retrieved March 20, 2020, from http://dx.doi.org/10.2471/BLT.20.255893DOI ↗Google Scholar ↗