Cost-Saving in Operational Mechanization Projects on Organizational Performance of Tea Firms
Abstract
Cost reduction strategies assist firms to gain competitive advantages over other firms in the same industry. The introduction of mechanization in the tea industry has come with a shortfall of workforce reduction and the replacement of workers with machines. One of the important questions brought about by this is does mechanization benefit tea firms through cost reduction? Do the benefits outweigh the costs? This article investigates the effect of the accrued cost savings on organization performance. Technology Acceptance Model (TAM) was used to support the concept of technology utilization in production. The descriptive and causal research design was adopted. A sample size of 101 respondents was selected from a target population of 135 respondents using stratified sampling technique from within Multinational Tea Companies in Kericho, Kenya. Data was analysed using both descriptive and inferential statistics. This study concludes that using tea-harvesting machines saves costs, which directly affects organizational performance. This study also concludes that tea-harvesting machines might affect production flexibility, which in turn influences organizational performance. There is a need to put in place policies that will enhance the use of tea harvesting machines to save operation costs. This will affect organizations’ performance positively.
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