The Kenya Tea Development Authority (KTDA)

Case Studies

The Kenya Tea Development Authority (KTDA) focuses on efforts to “Africanize” the Kenyan tea industry in the years following the country’s independence from the United Kingdom. In particular, it looks at Charles Karanja’s stewardship of KTDA, which oversees smallholder tea cultivation in Kenya. In large part due to Karanja’s effective management, the profitability of smallholder tea cultivation in Kenya has increased significantly. At the time of the case, it is 1973 and Karanja is considering whether the KTDA should expand into tea manufacturing, a function that is always contracted out to multinational tea firms operating in the country. Karanja believes that by having the KTDA manufacture the tea produced by the smallholders overseas, he will be able to facilitate the placement of Africans into managerial positions at the tea factories. However, several influential policymakers and international donor organizations are skeptical of this idea; manufacturing tea is technically demanding and if the Authority proves inefficient at managing the process, it could imperil the considerable progress made by the KTDA in making smallholder tea cultivation a viable enterprise. Karanja must decided whether to push ahead with his ambitious plan to take over factory management in the face of opposition from influential players in the Kenyan tea industry or to content himself with the KTDA’s current role. There are several objectives to this case. First, it aims to make students think about market forces and price incentives. What features of the KTDA’s organizational design and relationship to growers create incentives for smallholders to improve quality and increase production? Second, the case seeks to encourage students to think about the importance of the political landscape in policy reform and implementation. Through this case, they should see that there is more to being an effective reformer than simply having a good idea. 

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