The External Environment and Performance of Tea Processing Firms in Bomet County, Kenya

Abstract

External environment is important to organizations as it affects the readiness of resources and is a source of opportunities as well threats. Organizations are viable if they can take advantage of available opportunities by streamlining their actions through active internal capabilities to achieve the desired goals. The study examined the influence of external environment on performance of tea processing firms in Bomet County, Kenya. The objective of the study was to establish the influence of external environment on the performance of tea processing firms in Bomet County. The study was anchored on three theories; contingency, institutional and open system. Cross-sectional survey design was used. Semi-structured questionnaires were used to collect data from the respondents of all the thirteen identified tea processing firms in Bomet County thus a census survey. Data was analyzed using descriptive and inferential statistics. Descriptive statistics was used to analyze and summarize data while the t-test was used to determine the significance of the relationship between external environmental forces and performance of tea processing firms in Bomet County. All the measures as per the balanced scorecard were adopted in assessing performance of the tea processing firms in Bomet County. T-test was done and the t-value obtained was 2.0124 showing that the relationship is statistically significant hence the influence of external environment on the performance of tea processing firms in Bomet County is statistically significant. It is recommended that the tea firms develop dynamic internal capabilities to ensure effective response to changes in the external environment, particularly understand the government policies or regulations as these have a significant impact on their performance. The limitations of the study are that data was collected at a single point in time leading to less reliability of the results than if a longitudinal study had been conducted. It is proposed that further study is done using different design involving longitudinal tracking of the relationship between external environmental factors and performance of the tea firms.