Effect of Logistics Management Practice on Firm Performance of Kenya's Tea Subsector Industry

Abstract

The general objective of this study was to assess the effect of logistics management practice on firm performance of Kenya's tea subsector industry. The specific objectives of the study were to establish the effect of transport management practice on firm performance of Kenya's tea subsector industry; to determine the effect of inventory management practice on firm performance of Kenya's tea subsector industry; to assess the effect of distribution management practice on firm performance of Kenya's tea subsector industry. The theoretical framework of the study was guided by Resource Based View Theory (RBV) and Supply Chain Network Theory. This research adopted a quantitative research design to address the formulated hypotheses. Stratified random sampling technique was used to select a sample size of 155 firms from the target population of 254 firms in the tea subsector industry in Kenya. The study selected 2 respondents from every firm sampled of 155 firms each drawn from top management and middle level management to make a sample size of 310 respondents. Primary data was collected by use of self-administered structured questionnaires which were distributed through the drop and pick method. Secondary data collected from various tea subsector bodies websites, in annual and published financial statements, in national newspapers, during annual general meetings and in-house magazines, important business disclosures in journals, manuals and the various firm's documents were used to cross validate the primary data information collected. A total of 229 questionnaires were completed, returned and used for analysis.  Data was analyzed by use of descriptive statistics and inferential statistics using Statistical Package for Social Sciences (SPSS) version 24.The Pearson's product moment correlation analysis and standard multiple regression analysis were used for hypotheses testing. The data was presented using tables, and figures for the purpose of giving a pictorial view of the results. The findings indicated that transport management practice had a statistically significant and positive effect on firm performance of Kenya's tea subsector industry; inventory management practice had a statistically significant and positive effect on firm performance of Kenya's tea subsector industry and distribution management practice had a statistically significant and positive effect on firm performance of Kenya's tea subsector industry. The study recommended for the adoption of logistics management practices by the tea subsector industry in Kenya in order to enhance firm performance of Kenya's tea subsector industry.