This chapter will cover the background information, statement of the problem clearly stating the problem and possible research gaps which led the researcher to undertake the research. Research objectives and the research questions that the researcher intends to have accomplished will also be stated, clearly indicating the expected importance of the study and the limitations expected during the survey.
1.1 Background on Agribusinesses
Extracts from the Governments’ Kenya Vision 2030 proposal, aims to transform Kenya into a newly industrializing, “middle-income country, providing high quality life to all its citizens by the year 2030.” This vision is based on three “pillars”, the economic, the social and the political. It is on the Economic “pillar” on which the role of Agribusiness is brought out.
The economy of Kenya is very dependent on agriculture, which employs more than 75 percent of the available workforce, both in the formal and informal sectors. Agriculture as a share of GDP contributes more than 30 percent to the economy and brings in more than 6 percent of total foreign exchange earnings. Agricultural goods are now Kenya's third largest merchandise export. GOK (2007)
In Agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, marketing and distribution, processing livestock feeds, wholesale and retail trade. In light of the economic crisis 2008/2009, the environment of many businesses changed dramatically which led to a significant increase in uncertainty and risk for those firms, hence forced many firms to adopt Strategic control mechanisms in line with the changing environment.
From the onset of the process of strategic planning it should be noted that, regardless of the level at which strategies exist, strategies are not always successful. Part of the explanation for this is that others have strategies too. This means that a strategy cannot just be developed in a vacuum, it must be dynamic. Strategic planning process is conceptualized as a continuous process that should be one that involves the formulation of a strategy, the evaluation and control of the strategy’s success. (Katsioloudes, 2006)
Control can be referred to as an integrating mechanism within an Organization to reduce uncertainty, increase predictability and ensure that behaviors originating in separate parts of the organization are compatible and support common organizational goals. The ultimate goal of applying controls is to utilize the available resources in an optimal manner. Control mechanisms within organizations are referred to as one of the strategic implementation tools. The control mechanism must work hand in hand with other implementation aspects to be undertaken in the organization.
Control mechanisms are necessary in order for any business to run smoothly and ensure that things are going as planned. (Bateman &Snell, 2007) controls help the business determine the activity and direction of its employees in a manner that helps the business meet its goals. In controlling the managers monitor and evaluate whether the organizations’ strategy and structure are working as intended, how they could be improved, and how they can be changed if they are not working.
Control however, does not mean just reacting to events after they have occurred, it also means keeping an organization on track, anticipating events that might occur and then changing the organization to respond to whatever opportunities or threats that have been identified.
While enhancing improved business performance through control mechanisms, the control process lets the manager monitor employees’ progress without hampering their creativity or involvement in their work. (Hellriegel, 2005) to most people, the word control has a negative connotation- of restraining, forcing, delimiting,...