The Impact of Strategic Leadership, Human Resource Capacity Building and Stakeholder Engagement on Kenya Smallholder Tea Industries Performance

This study examines the relationships among strategic leadership, human resource capacity building, stakeholder involvement, government policy, and the performance of smallholder tea factories in Kenya. The study is motivated by the need to understand why performance varies across factories operating within a common industry and regulatory environment. Drawing on Transformational Leadership Theory, Human Capital Theory, Stakeholder Theory, and Contingency Theory, the study adopted a quantitative cross-sectional design. A target population of 213 key informants was identified across 71 KTDA-managed factories, and 198 completed responses were retained for analysis, representing a 92.9% response rate. Data were collected using a structured five-point Likert questionnaire and analysed using descriptive statistics, Pearson correlation, multiple regression, and PROCESS-based mediation and moderation analysis. The results show a positive and significant association between strategic leadership and human resource capacity building (r = 0.60, p < 0.01), and between strategic leadership and factory performance (r = 0.46, p < 0.01). Human resource capacity building was the strongest predictor in the full regression model (β = 0.484, p < 0.001), while stakeholder involvement and the government policy context were also significant positive predictors. The indirect effect of strategic leadership on factory performance through human resource capacity building was 0.309, with a 95% bootstrap confidence interval of [0.222, 0.406]. The interaction between stakeholder involvement and the focal predictor was significant (B = 0.185, p = 0.0004). The study concludes that leadership is most useful when translated into employee capability and supported by constructive stakeholder relationships within the prevailing regulatory environment. The findings provide practical implications for factory management and policy, while the cross-sectional design requires that the reported relationships be interpreted as associations rather than definitive causal effects.

strategic leadership, human resource capacity building, stakeholder involvement, organizational performance, Kenya

1. Awino, K. O., Otinga, H. N., & Miroga, J. (2025). Strategic leadership and competitiveness of Kenya Tea Development Authority factories in the West of Rift Valley Region, Kenya. The Strategic Journal of Business & Change Management, 12(2), 283–312. https://doi.org/10.61426/sjbcm.v12i2.3211 [Google Scholar] [Crossref]

2. Bass, B. M. (1985). Leadership and performance beyond expectations. Free Press. [Google Scholar] [Crossref]

3. Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education (3rd ed.). University of Chicago Press. [Google Scholar] [Crossref]

4. Burns, J. M. (1978). Leadership. Harper & Row. [Google Scholar] [Crossref]

5. Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). SAGE. [Google Scholar] [Crossref]

6. Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16(3), 297–334. https://doi.org/10.1007/BF02310555 [Google Scholar] [Crossref]

7. Donaldson, L. (2001). The contingency theory of organizations. SAGE. https://doi.org/10.4135/9781452229249 [Google Scholar] [Crossref]

8. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman. [Google Scholar] [Crossref]

9. Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Cengage. [Google Scholar] [Crossref]

10. Kariuki, J. N., Wario, G., & Odhiambo, R. (2018). Role of defensive and swing stakeholder management strategies on operational performance of smallholder tea sector in Kenya. Strategic Journal of Business & Change Management, 5(4), 1921–1931. https://doi.org/10.61426/sjbcm.v5i4.998 [Google Scholar] [Crossref]

11. Kenya Accountants & Secretaries National Examinations Board (KASNEB). (2024). Certified Public Accountants (CPA) examination - Revised syllabus June 2024. KASNEB. [Google Scholar] [Crossref]

12. Kiptum, C., Wasike, S., & Jemaiyo, B. (2025a). Relationship between human capital development and organizational performance of KTDA factories in Kenya. CUEA Journal of Business and Economics, 2(1). https://journal.cuea.edu/ojs1/index.php/cjb/article/view/146 [Google Scholar] [Crossref]

13. Kiptum, C., Wasike, S., & Jemaiyo, B. (2025b). Relationship between process reviews and organizational performance of KTDA factories in Kenya. CUEA Journal of Business and Economics, 2(1). https://journal.cuea.edu/ojs1/index.php/cjb/article/view/147 [Google Scholar] [Crossref]

14. Ministry of Agriculture, Livestock, Fisheries and Cooperatives. (2020). The Crops (Tea Industry) Regulations, Legal Notice No. 97 of 2020. Government of Kenya. [Google Scholar] [Crossref]

15. Northouse, P. G. (2022). Leadership: Theory and practice (9th ed.). SAGE. [Google Scholar] [Crossref]

16. Nunnally, J. C. (1967). Psychometric theory. McGraw-Hill. [Google Scholar] [Crossref]

17. Republic of Kenya. (2020). Tea Act, 2020 (Cap. 343). Government Printer https://new.kenyalaw.org/akn/ke/act/2020/23/eng@2020-12-31 [Google Scholar] [Crossref]

18. Tea Board of Kenya. (2025). Kenya tea industry performance report: May 2025. Government of Kenya. [Google Scholar] [Crossref]

• The Indirect Effect of Liquidity and Activity on Company Value with Profitability as an Intervening Variable
• Effect of Financial Skills, Knowledge, and Attitude on The Financial Behaviour of Clergy
• A Decade of Review: Trends in Budget Execution and Financial Performance of Development Projects in Tanzania (2014/15-2023/24)
• The Influence of Pre-Project Planning on the Budget Absorption Rate of Public Funded Infrastructure Projects in Kenya a Comparative Case Study of Narok, Migori, and Kisii County Government Projects
• Assessment of Factors Influencing Digital Transformation in Hotels’ Facility Management in Abuja Metropolis, Nigeria