Abstract:
A firm’s investment in research and development strategies is considered a crucial factor for tea firms in global markets. In order to maintain its competitiveness in a swiftly changing environment, tea firms have embraced radical innovations, by rolling out a range of strategies and new measures. Despite these efforts, this sector is under threat due to the ever escalating cost of production, high operating costs, technological challenges, less revenues, over reliance on export markets and limited value added products. The broad objective of the study was to establish the influence of research and development strategies on performance of tea firms in Kenya with a focus on the moderating effect of environmental factors. The specific objectives of the study were to; determine the influence of investment strategy, examine the influence environmental factors, determine the influence of innovation strategy, investigate the influence of intellectual capital, asses the influence of leadership styles and explore the moderating role of environmental factors in the relationship between R&D strategies and performance of tea firms in Kenya. The main theory for the current research was resource-based view theory. The study also used absorptive capacity theory, innovation theory and agency theory. A descriptive survey design was adopted. The target population was 1509 and the sample size was 411employees. The study relied on primary data. Questionnaires were used to collect data from directors, top and middle level managers’. Pilot study was conducted in Mundete tea factory. Content and construct validities were tested. The study used internal consistency to test reliability. Cronbach’s alpha was used to establish the reliability of research instruments. Data was analyzed using SPSS software version 22.0. Data analysis tools comprised of descriptive analysis using mean, standard deviation, t-test, ANOVA, correlation and regression analysis. The study used Pearson’ correlation to test the strength of the relationship between independent and dependent variables. Regression results confirmed a positive, strong and substantial association amongst R&D strategies and performance of tea firms in Kenya, meaning that R&D strategies were significant predictors of R&D decision, new technology acquisition, and innovation output. Further, the study revealed that environmental factors have a moderating effect on the influence of R&D strategies on performance of tea firms. Lastly, the research findings revealed that there existed a positive, moderate and significant joint effect of R&D strategies and environmental factors on performance of tea firms. The study concludes that R&D strategies contribute to higher tea firms’ performance by increasing absorptive capacity. Also, tea firms that had invested in R&D and technology, and launched new or improved products/processes to the markets performed better than those that did not. The study recommends managerial and policy adjustments should focus their efforts on strengthening and embrace R&D practices to improve tea manufacturing firms’ performance in Kenya.
