Electric Power Outage Dynamics and Non-Financial Performance of Manufacturing Firms in Kenya

Abstract

Manufacturing firms are heavily reliant on electric power supply to power their operations. Electric power outages are therefore a major disruption to any manufacturing activities that are operated by powering by electric energy. This study aimed at establishing the influence of electric power outage dynamics on non-financial performance of manufacturing firms in Kenya. The study utilized positivism philosophical point of view and descriptive survey research design. The null hypothesis which stated that the relationship between electric power outage dynamics and financial performance of manufacturing firms in Kenya is not significant was tested at 95% confidence level whereby multiple regression models were incorporated for data analysis. A population of 447 firms whose main area of focus is manufacturing in Kenya and are members of Kenya Manufacturers Association was considered for the study out of which a sample size of 138 firms was drawn using stratified random sampling. Structured questionnaires were utilized to collect data which involved drop and pick approach. The research results indicate that electric power outage dynamics did not have a statistically significant influence on non-financial performance. Statistical analysis indicated that power outage frequency did not have statistically significant influence on non-financial performance, while power outage duration had an indirect link on non-financial performance of manufacturing firms which was not statistically significant. For power outage notification, a negative association with non-financial performance of Kenyan manufacturing firms was established, this relationship was not statistically significant. Time of power outage had an adverse relationship with non-financial performance which was not statistically significant. This study outcome provides a contribution to existing knowledge by providing evidence that electric power outage dynamics did not have statistically significant influence on non-financial performance of manufacturing firms. This implies that presence or absence of electric power does not significantly affect firm operations in relation to customer focus, operations efficiency, employee productivity, green performance and social responsibility. The effective performance of these indices may therefore be affected by other factors than power outage dynamics.  The study has also made an input to the academic literature in relation to the assimilation of transformation theory as a production process theory by considering electric power as a major input factor to the manufacturing production process.

Keywords: Electric Power Outage Dynamics, Non-Financial Performance, Manufacturing Firms