Risk Mitigation Strategies and Performance of Floriculture Firms in Laikipia County, Kenya

Abstract

Floriculture firms operate within export-oriented and quality-sensitive value chains where performance depends on profitability, productivity, product quality, export volume, buyer retention, and sustainability compliance. Despite the contribution of Kenya’s flower industry to foreign exchange earnings, employment creation, rural livelihoods, and agricultural commercialization, firms in Laikipia County continued to face risks linked to climate variability, pest and disease pressure, water scarcity, logistics disruptions, rising production costs, exchange rate exposure, certification requirements, and export compliance demands. This study examined the effect of risk mitigation strategies on the performance of floriculture firms in Laikipia County, Kenya. The study was anchored on Enterprise Risk Management Theory and adopted a positivist research philosophy, quantitative approach, and descriptive-correlational research design. The target population comprised 116 managerial and supervisory personnel drawn from 10 floriculture firms in Laikipia County, and a census approach was used. Primary data were collected using a structured questionnaire. Validity was assessed through expert review, Kaiser-Meyer-Olkin measure, and Bartlett’s Test of Sphericity, while reliability was tested using Cronbach’s Alpha. Data were analyzed using descriptive statistics, Pearson Product-Moment Correlation analysis, and simple linear regression with the aid of SPSS Version 27. The findings showed that respondents generally agreed that floriculture firms used risk mitigation strategies such as standard operating procedures, process redesign, policy and behavioural controls, diversification, insurance arrangements, and contingency planning. Correlation analysis revealed a strong, positive, and statistically significant relationship between risk mitigation strategies and firm performance. Regression results showed that risk mitigation strategies explained 41.2% of the variation in firm performance and had a positive and statistically significant effect (β = 0.642, p < 0.001). The study concluded that risk mitigation strategies enhanced operational continuity, reduced losses, protected product quality, supported export compliance, strengthened buyer confidence, and improved sustainability performance. The study recommended stronger internal controls, process redesign, insurance, diversification, irrigation investment, pest and disease control, staff training, financial controls, export compliance systems, and contingency planning.