ABSTRACT: Labour-intensive agribusiness sectors in emerging economies face persistent operational inefficiencies that undermine competitiveness. Sri Lanka’s tea smallholder sector, which contributes over 70% of national green leaf output, exemplifies this paradox of high contribution but stagnating efficiency. While prior research has emphasised agronomic practices and labour shortages, the strategic role of employee engagement in shaping efficiency outcomes remains underexplored. This paper reconceptualises engagement as a strategic catalyst for operational efficiency by drawing on the Theory of Constraints (TOC) and Contingency Theory. It argues that engaged employees, supported by training and welfare mechanisms, can mitigate systemic bottlenecks, enhance resource utilisation, and improve timeliness in production. A conceptual framework is developed that positions engagement as the central cultural mechanism linking human motivation to efficiency outcomes. The paper advances theoretical propositions for future empirical testing using Structural Equation Modelling (SEM). It contributes to strategic management and agribusiness literature by integrating human engagement into efficiency models, while offering policymakers and industry actors actionable strategies for strengthening engagement-driven sustainability.

KEYWORDS – agribusiness, employee engagement, operational efficiency, strategic management, Sri Lanka, tea smallholders