EFFECT OF CONTROL ENVIRONMENT ON COST EFFICIENCY OF KENYA TEA DEVELOPMENT AGENCY FACTORIES IN BOMET COUNTY
DOI :
https://doi.org/10.46827/ejefr.v10i5.2300Mots-clés :
control environment, cost efficiency, internal control, KTDA factories, Bomet CountyRésumé
Agriculture remains an important sector of the Kenyan economy, playing a major role in rural livelihoods, job creation, and food security. However, the high cost of production and overhead costs remain a challenge to the profitability and sustainability of the tea sector. Kenya Tea Development Agency factories face challenges arising from increasing costs of production, which may result in low earnings and fluctuating bonus payments for the smallholder farmers. The objective of this study was to evaluate the effect of the control environment on the cost efficiency of Kenya Tea Development Agency factories in Bomet County. The study was guided by Agency and Contingency theory. The study targeted 11,647 employees from nine factory companies located in Bomet County, with a sample of 387 selected proportionally from each factory, using purposive sampling. Structured questionnaires were used to gather primary data. The descriptive analysis showed that the control environment had a mean score of 4.04 (SD = 0.86), which demonstrated the presence of internal control systems. Regression analysis showed that the control environment had a statistically significant influence on cost efficiency (R² = 0.538, β = 0.733, p < 0.000). Pearson correlation results showed positive and significant associations between cost efficiency and control environment (r = 0.733, p = 0.000). The study concludes that control environment significantly enhances cost efficiency in KTDA factories. The study would help policymakers to enhance internal control frameworks, optimize resource utilization, improve cost efficiency, and strengthen the sustainability of the tea sector.
JEL: G3, G18, G19
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