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Strategic Responses Adopted by the Kenya Ports Authority to Changing External Environment

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Strategic Responses Adopted by the Kenya Ports Authority to Changing External Environment STRATEGIC RESPONSES ADOPTED BY THE KENYA PORTS AUTHORITY TO CHANGING EXTERNAL ENVIRONMENT BY KEZIAH MUCHELULE A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE MASTER OF BUSINESS ADMINISTRATION (MBA) DEGREE TO THE SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI OCTOBER, 2010 DECLARATION I declare that this research is my original work and has not been presented to any other university for the award of a degree. Signature Student’s Name KEZIAH MUCHELULE Reg. No. D61/70067/2007 Date SUPERVISOR’S DECLARATION This research project has been submitted with my permission as the University Supervisor. Signature Supervisor’s Name JEREMIAH KAGWE Lecturer, University of Nairobi School of Business Date ii DEDICATION This work is dedicated to my late parents David and Ruth Habwe who instilled in me the value of education and to my loving husband Aggrey, children Linda, Brian and Bruce for their support and patience during the entire period of my study. I cannot overstate their encouragement and continued prayers towards successful completion of this course. iii ACKNOWLEDGEMENTS I would like to express my sincere thanks to the Supervisor Mr. Jeremiah Kagwe, University of Nairobi in School of Business for agreeing to supervise this research paper. I am grateful to my family for giving the invaluable support to concentrate on this research. I am also grateful to all the respondents who cooperated a great deal. I pay glowing gratitude and tribute to my employer and colleagues for understanding me during the entire period of study. Lastly, I thank Almighty God as my source of all inspiration in allowing me to undertake this project that is too involving in terms of time and resources. iv TABLE OF CONTENTS DECLARATION................................................................................................................. ii DEDICATION ...................................................................................................................iii ACKNOWLEDGEMENTS ............................................................................................... iv LIST OF ABBREVIATIONS ........................................................................................... vii ABSTRACT .....................................................................................................................viii CHAPTER ONE: INTRODUCTION ................................................................................ 1 1.1 Background of the Study......................................................................................................... 1 1.1.1 Concept of Strategic Responses......................................................................................2 1.1.2 The Changing Organizational Environment.....................................................................3 1.1.3 Profile of the Kenya Ports Authority ...............................................................................4 1.2 Statement of the Problem....................................................................................................... 6 1.3 Objective of the Study............................................................................................................. 7 1.4 Importance of the Study ......................................................................................................... 7 CHAPTER TWO: LITERATURE REVIEW.................................................................... 9 2.1 Introduction ............................................................................................................................ 9 2.2 Concept of Strategy ......................................................................................................................9 2.3 Environmental Changes ........................................................................................................ 10 2.4 Environment and Strategy .................................................................................................... 13 2.5 Strategic Responses .............................................................................................................. 13 CHAPTER THREE: RESEARCH METHODOLOGY.................................................. 16 3.1 Introduction .......................................................................................................................... 16 3.2 Research Design ................................................................................................................... 16 3.3 Data Collection Method ........................................................................................................ 16 3.4 Data Analysis ........................................................................................................................ 17 CHAPTER FOUR: DATA ANALYSIS, INTERPRETATION OF RESULTS AND DISCUSSION.................................................................................................................... 18 4.2 General Information.............................................................................................................. 18 4.2.1 Name of Department.......................................................................................................18 v 4.2.2 Designation in the Department .........................................................................................19 4.2.3 Total Work Experience .......................................................................................................19 4.2.4 Length of Time Worked in the Company............................................................................19 4.3 Environmental Changes ........................................................................................................ 19 4.4 Strategic Responses .............................................................................................................. 22 4.5 Discussion ............................................................................................................................. 25 5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS.................................. 27 5.1 Introduction .......................................................................................................................... 27 5.2 Summary of the Findings....................................................................................................... 27 5.3 Conclusion............................................................................................................................. 30 5.3 Recommendations ................................................................................................................ 32 5.4 Limitations of the Study ........................................................................................................ 33 5.5 Recommendations for Further Research .............................................................................. 34 5.6 Implication on Policy and Practice ........................................................................................ 34 REFERENCES.................................................................................................................. 35 APPENDICES .................................................................................................................. 39 Appendix III: KPA organizational structure ................................................................................. 42 vi LIST OF ABBREVIATIONS CBK Central Bank of Kenya CEO Chief Executive Officer CFS Container Freight Station COMESA Common Markets for Eastern and Southern Africa GATT General Agreement on Tariffs and Trade IAPH International Association of Ports and Harbors ICD Inland Container Depot ISPS International Ship and Port Facility Security KPA Kenya Ports Authority KWATOS Kilindini Waterfront Automated Terminal Operating System MIS Management Information system QMS Quality Management System SAPs Structural Adjustment Programmes vii ABSTRACT To the date of this study, no known study had focused on the strategic responses adopted by Kenya Ports Authority to counter changes in environment. This was despite the fact that the current changes brought about by globalization and economic crisis have had a great effect on the port given its international dealings. The objective of this study was to determine the strategic responses adopted by KPA as a response to the changing external environment. This was a case study since the unit of analysis is one organisation. The research utilized both primary and secondary data. The interviewees of this study were the eight heads of divisions. These respondents are appropriate because they are well versed and form part of the decision making body. The raw data was edited for completeness and consistency. A content analysis was employed. The data was then presented in a continuous prose as a qualitative report on the strategic responses to the changing environment in Kenya Ports Authority. The study concludes the organization has employed strategies such as differentiating the main services from those offered by competitors as well as global economic changes that had made the organization launch extensive financial strategies so as to remain competitive in the market. The study concludes that low cash flows, entry of many regional competitors due to liberalization of the economy; regulation and receptive attitude of potential customers since the authority is a government agency. The study concludes that to counter the changes, the organization has
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