Employees' perceptions on privatization of government owned sugar companies: a case of Muhoroni Sugar Company, Muhoroni Scheme, Kenya

Privatization refers to the transfer of state activities into the private sector by sale (fully or partially) of going concerns or sale of assets following liquidation. There is little empirical evidence on employees’ perceptions and the associated implications on privatization of state owned enterprises (SOEs) in Kenya and more particularly in the Sugar Industry on the planned privatisation of the state owned Sugar Companies, a gap this study has contributed to. Concerns emanating from employees’ perceived change in conditions of employment; employees’ perceived change in management-union relationships/collaboration; and employees’ perceived change in the level of participation in decision-making influence their attitudes on the planned privatization negatively and if not addressed may pose potential danger to the implementation process. This study sought to explore employees’ perceptions on privatisation of Government owned Sugar Companies: A case of Muhoroni Sugar Company. The research was anchored on both the Theory of Bounded Rationality and Vithessonthi’s Perception Based View Model. A descriptive survey design was used in the study to seek the views of 248 employees randomly chosen from the target population of 714 Muhoroni Sugar Company employees. A self-administered questionnaire was used in the study for data collection. The collected quantitative data was analyzed using descriptive statistics based on frequency distributions and percentage counts while qualitative data was organized into various immerging themes of the study and reported narratively. Microsoft Excel and Statistical Package for Social Sciences (SPSS) were used as tools of data analysis. The study found that 132(62.96%) of the respondents who participated in the study perceived a negative change in their conditions of employment upon privatization of Muhoroni Sugar Company Ltd. It was also found that 191(90.95%) of the respondents projected a decline in the level of employee involvement in the firm’s decision making once the Company is privatized. The study further established that 181(86.19%) of the respondents anticipated a decline in the management-union relationship upon privation of the Company. It was also found that the respondents’ responses in the study were significantly influenced by their job category and level of education. Based on the findings of the study, the study concludes that majority of Muhoroni Sugar Company employees hold a negative perception on the planned privatization of the Company. The study also concludes that the employees’ negative perception is largely informed by the anticipated unfavorable changes in conditions of employment and management-union relationship once the Company is privatized. The study further concludes that employees’ perceptions on the planned privatization of Muhoroni Sugar Company are significantly influenced by their level of education and job category. Finally the study concludes that the negative perception established if not addressed may adversely affect the privatization process implementation in the Organisation. The researcher has highlighted the study’s contributions to the body of knowledge and acknowledged key sources of information used in the study. The study has also recommended strategies and mitigation measures that could be deployed to address the expressed employees’ concerns on privatization as a public sector reform policy for enhanced positive perception, acceptability and effective implementation of the process. Finally, the study has suggested areas for further research for a deeper understanding of the subject of investigation and greater generalization of the findings.