Implementation of Turn-around Strategy at Mumias Sugar Company in Kenya

Abstract

Turnaround strategies are adopted by organizations for the purpose of survivability. The study sought out to find the turnaround strategies adopted by Mumias Sugar Company limited and the factors influencing the implementation of turnaround strategies at MSC. The study adopted a case study research design. The study collected data from four managers from the following departments; Finance, Operations, Information technology and Human resource department. Primary data was collected through the use of Interview guides and analyzed by the use of content analysis. The study established MSC adopted several turnaround strategies with the aim of transforming the organization to a profit making institution. The strategies adopted were asset reduction, financial restructuring, and cost reduction, reorganization of management, reduction of workforce, new innovations and technology adoption and diversification of products. Despite all these strategies being adopted by MSC, the company continued performing poorly. The poor performance is attributed to factors that influenced the implementation of the turnaround strategies. The factors that the studied identified are political interferences, corruption, mismanagement, poor management, poor planning and low morale among employees. The study first recommends that Mumias Sugar Company can convert some debts into equity, this will later result into cash flows for the company. Secondly, the company should focus more building interfirm collaborations and business level learning to enhance business knowledge. Thirdly, the study recommends Mumias Sugar should come up with new products which will impact positively on the profits of the company and improve on the customer base. Forth the study recommends Mumias Sugar company should reorganize its operations and strategies with a small number of workforce who will not compromise on quality. Fifth, the company should invest in innovation and technology so as to improve its production to zero wastages, reduction in production cost, improvement in products quality and having an efficient production system. Sixth, the company should focus on diversification with the aim of opening other channels of revenue. Lastly the study recommends the company should dispose of assets that are not in operational and close divisions, operations or units that are making losses and are a burden to the company.