Strategy Implementation and Performance of Kenya Pipeline Company

STRATEGY IMPLEMENTATION AND PERFORMANCE OF KENYA PIPELINE COMPANY

EDITH M. CHILUYI

A RESEARCH PROJECT REPORT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI

DECEMBER 2018 DECLARATION

This research project is my original work and has not been presented for a degree in any other university.

Signature...... Date......

EDITH M. CHILUYI

D61/82172/2015

This research project has been submitted for examinations with my approval as the university supervisor.

Signature...... Date......

DR. KENNEDY OGOLLAH

DEPARTMENT OF BUSINESS ADMINISTRATION,

SCHOOL OF BUSINESS,

UNIVERSITY OF NAIROBI.

ACKNOWLEDGEMENT

I take this to opportunity to thank my Supervisor Dr. Kennedy Ogollah for his guidance and constant supervision as well as informative support regarding this project completion. I express my kindest regards to him. Further, to the Management of Kenya Pipeline Corporation for making available data that was of importance to this study. I deeply say thank you.

My appreciation to mother Dorcas Nyakoa and Mr. and Mrs. Atsyaya, I express my sincere thanks and appreciation for supporting me emotionally and financially through my study for the MBA program and undertaking this project. My siblings, Georgina and Byron, I am grateful for your encouraging words, all night company and emotional support during my entire study period. You are who have always been there to support me, congratulate me and show me always the best path to follow.

To you all, May God Shower His Blessings on You.

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DEDICATION

This project is dedicated to My Mum Dorcas Nyakoa and Sister Caroline Magina.

TABLE OF CONTENTS DECLARATION ...... ii

ACKNOWLEDGEMENT ...... iii

DEDICATION ...... iv

ABBREVIATION AND ACRONYMS ...... viii

ABSTRACT ...... ix

CHAPTER ONE:INTRODUCTION ...... 1

1.1 Background of the Study ...... 1

1.1.1 Strategy Implementation ...... 2

1.1.2 Organizational Performance ...... 5

1.1.3 Industry Analysis ...... 6

1.1.4 Kenya Pipeline Corporation ...... 7

1.2 Research Problem ...... 8

1.3 Objective of the study ...... 9

1.4 Value of the Study ...... 9

CHAPTER TWO:LITERATURE REVIEW ...... 11

2.1 Introduction ...... 11

2.2 Theoretical Foundation ...... 11

2.2.1 Institutional Theory ...... 11

2.2.2 Resource Based View Theory ...... 12

2.2.3 Upper Echelon Theory ...... 14

2.3 Strategy Implementation in Organizations ...... 15

2.4 Influence of Strategy Implementation on Organizational Performance ...... 17

2.5 Empirical Studies and Research Gaps ...... 18

CHAPTER THREE:RESEARCH METHODOLOGY ...... 21

3.1 Introduction ...... 21

3.2 Research Design ...... 21

3.3 Data Collection ...... 22

3.4 Data Analysis ...... 22

CHAPTER FOUR:DATA ANALYSIS, FINDINGS AND DISCUSSIONS ...... 24

4.1 Introduction ...... 24

4.2 Demographic Information ...... 24

4.3 Implementation Practices and Challenges ...... 27

4.3.1 Strategies Formulated to Achieve Strategic Objectives ...... 27

4.3.2 Successful Implemented Strategies ...... 30

4.3.3 Strategies Underway or Successfully Implemented ...... 31

4.3.4 Measures Put in Place by Management to Ensure Successful Strategy ...... 32

4.3.5 Role of Senior Management in The Optimization of Strategy ...... 32

4.3.6 Recognizing the role of shareholders in ensuring survival ...... 33

4.3.7 Factors Attributing to Successful Strategy at KPC ...... 34

4.3.8 Hindrances of Successful Strategy Implementation at KPC ...... 35

4.3.9 Structure and Culture of KPC Towards Strategy Implementation ...... 36

4.4 Organizational Performance ...... 37

4.4.1 Company Targets ...... 37

4.4.2 Recent Performance Target ...... 38

4.4.3 Target Achievement ...... 38 vi

4.4.4 Measures Put in Place to Ensure Continuous Monitoring of Strategy ...... 39

4.4.5 Key Performance Indicators in KPC that Affects Performance...... 39

4.4.6 Determination of Key Performance Indicators by Departments...... 40

4.4.7 CSR Activities in KPC ...... 41

4.8 Discussion of the Findings ...... 42

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND ...... 45

5.1 Introduction ...... 45

5.2 Summary of Findings ...... 45

5.3 Conclusion ...... 48

5.4 Recommendation of the Study ...... 48

5.5 Limitations of the Study ...... 49

5.6 Suggestions for Further Study ...... 49

REFERENCES ...... 51

APPENDICES ...... 55

APPENDIX I: Introduction Letter ...... 55

APPENDIX II: Interview Guide ...... 56

vii

ABBREVIATION AND ACRONYMS

CEOs Chief Executive Officer

ERC Energy Regulatory Commission

ICT Information Communication Technology

KPC Kenya Pipeline Corporation

KPI’s Key Performance Indicators

KRA Kenya Revenue Authority

RBV Resource Based View

SCA Sustained Competitive Advantage

USA United States of America

VRIN Valuable Rare Inimitable, and Non-substitutable

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ABSTRACT

The objective of this study was to determine the impact of strategy implementation on performance of Kenya Pipeline Corporation (KPC). The research design was a case study. Primary data was collected through the use of an interview guide with open and closed ended questions. Content analysis was used to analyze the data where emphasis was on the qualitative features of the data. The findings indicated that strategic implementation has direct impact on the performance of company. KPC, has adopted different strategies for the attainment of effective performance; The relevance of understanding employees’ involvement in work is also displayed by the findings. The employees at KPC, should also be involved in the strategy implementation process so that, they can attain to what improves their performances as employees. According to our findings, the leadership in the organization has been formulated effectively which has improved the employees’ performance in KPC. Factors that has been identified as a hindrance of successful strategy implementation is resistance to change, institutional challenges, structure adopted by the company, socio-cultural and political factors were found to hinder strategy implementation at KPC. Since the government has 100% stake in the company, political interference has been a challenge in implementation of strategy. The investigation suggests that administration ought to focus on effective communication so that strategic problems are articulated at appropriately to accomplish the strategic objectives. Culture and plans ought to be well-matched to attain great performance and key functions and tasks key for effective strategy execution ought to be identified. There should be coordination among various KPC units, division processes into organization units and ascertain the level of authority to bestow to every division. This investigation suggests that the government ought to institute with strict policy structure to oversee execution of strategy at the parastatal. Technology is key for the parastatal’s attainment of its goals. The investigation hence suggests that the KPC ought to adopt an excellent state of technology pertaining to tools, infrastructure and expertise. The investigation suggests that performance administration ought to be further entrenched and instituted across the whole parastatal (KPC). Every staff ought to engage in the organization’s future direction and decisions. Their day-to-day performance and undertakings ought to be evaluated along the particular indicators and principles pointed out by the KPC blueprint

CHAPTER ONE INTRODUCTION

1.1 Background of the Study

Organizations strive to be successful in their respective areas of business (Lasher,

2015). For strategy implementation to be successful, the participation and collaboration of all players in the organization is required. Proper implementation is the main reason some organizations perform better than others are. To guarantee successful strategy implementation, it is additionally important to keep up key control of basic elements influencing the practicality of the strategic plan and evaluate the impacts of vital activities to guarantee that the strategic plan accomplishes its objective (Noble & Mokwa 2012). It is important that firms understand the set strategies for their businesses, as well as the steps necessary to achieve them. It is imperative that firms get it the set methodologies for their businesses, as well as the steps fundamental to realize them. Most organizations however fail to correctly translate strategies into potential action plans with the intention to permit a hit implementation and assessment of techniques.

There may be need to bring diverse administrative perspectives together as a way to attain fruitful procedure execution (Rufus, 2011). This study was founded on three theories; institutional, Resource Based View (RBV) and Upper Echelon theory. In the institutional theory, organizations are influenced by normative reassurance arising from external forces such as the state and sometimes arising from forces within the organization itself (North, 2009). The RBV school of thought explains the role played by different set of unique resources in building competitive advantage (Barney, 2009).

Upper Echelons theory explains how different positions and roles in an organization affect strategy implementation and realization of set objectives. 1

The motivation for this study was based on the assertion KPC strategies have so far yielded positive results. Based on financial performance records for the years 2014,

2015 and 2016 at 7.154 billion, 7.221 billion and 8.5 billion respectively, KPC has recorded gradual improvement in financial performance, an indication that its strategies are bearing fruits. This study seeks to understand the implementation dimensions KPC strategies and their contribution to the growth and development of the corporation.

1.1.1 Strategy Implementation

A strategy is a plan of how a corporation intends to achieve is business goals (Porter

2009). A strategy is a plan that integrates organization goals, polices and continuous action into cohesive agenda. Strategy is the direction and scope of an organization over the long term that delivers a competitive advantage for the organization. Strategy builds a transformative culture for the organization in which the organization solely concentrates on its value addition priorities in line with its vision and mission.

(Mwenda, 2015).

A strategy is clarified as an activity plan whose sole expectation is to encourage the accomplishment of an explicit goal through the most productive way that could be available. Karami (2014) characterizes strategy to be ways how associations thought of, how they use, and also how they amalgamate the structure, frameworks of control and culture of the association to take after procedures which lead to accomplishing favorable position over contenders accordingly guaranteeing better execution. Then again, usage of system is disclosed to be a procedure whereby methodologies and additionally designs are changed over into activities with the aim of accomplishing the set key objectives (John, 2015).

As per Kaplan (2015) to have the capacity to prevail with regards to executing system, it is basic that all players inside and without the association meet up and collaborate. Pearce and Robinson (2015) depict five basic factors that are generally considered for the effective execution of procedure. These are: assignments, individuals, structures, innovations, and reward frameworks. As indicated by Arthur et al, (2009) methodology execution can be alluded to as the procedure in which the arranged systems are converted into painstakingly actualized activity.

Pearce and Robinson (2015) noted that to guarantee achievement, the methodology must be converted into rules for the day by day exercises of the association's individuals. The methodology and the firm should likewise wind up one with the end goal that the technique is reflected in the manner in which the firm arranges its exercises and in the company's qualities, convictions and culture. Johnson, Scholes and Whittington (2014) likewise characterize strategy to be a procedure which guarantees that eventually, strategies are being executed. Different undertakings are included which involves authoritative organizing with a true objective of accomplishing execution that is agreeable and furthermore the utilization of hierarchical assets which incorporate individuals, back, data and innovation to help the organizations' system and change in order to empower accomplishment of progress. To adequately oversee transforming, it is basic to comprehend authoritative setting and how it impacts change approaches, the people accountable for administering the change and their jobs, the diverse change the board styles which chiefs can embrace and in addition the different hierarchical dimensions where change can be affected (Paterman, 2010).

Executing procedures require identification loopholes that exist in abilities and additionally discovering courses on the best way to create or procure them in order to misuse openings and make the association fruitful (Daft, 2011). So as to execute techniques effectively, an association need to put resources into prepared and skilled staff. Fruitful strategy execution demands successful plan and the board all together for these elements to be coordinated. To operationalize system, an association needs to make sense of their destinations that are present moment, present practical strategies that are explicit to their technique, and in addition convey unmistakably on individuals enabling approaches that address the association and furthermore assembled prizes that would be successful. To have the capacity to change over long haul designs into quantifiable yearly targets, it is important to have transient goals.

Activity designs and in addition short range goals makes this attainable, while giving explicit rules on the undertakings that ought to be acted upon (Pearce and Robinson,

2015).

Investigations have uncovered that strategic administration has coordinate impact on execution of any association. The innovative business condition is very powerful and requires visionary administration as opposed to the board. As indicated by Botha

(2010) there exists a noteworthy qualification about administration and the executives. Operationalization of procedures is basic for powerful usage process by present day focused firms working in the tempestuous business condition (Allio,

2015). Persistent checking of key exercises of the association empower an association to assess its execution and stay away from hindrances that impinges on the system usage process (Pearce and Robinson, 2015).

Implementing actions might be troublesome and may likewise require a great deal of time. Investigation has demonstrated that it is much easy to make great arrangement than it is to complete them (Charles and Gareth, 2010). Establishing compelling guidelines and executing technique to carry advance into the association requires great administration ability. Fruitful execution of technique immensely depends on cooperation sorting out, spurring, culture building and building up an incredible connection among procedure and how the enterprise works (KIPPRA, 2013).

1.1.2 Organizational Performance

Organizational overall performance consistent with Brenes (2013) is described as the measure of average productiveness of the employer. It is far measured against a few set of requirements or as compared with similar corporations within the same enterprise. Mclelland (2017) outline performance as an outcome of concerted effort via the management to carry out organizations goals.

The primary indicator of desirable overall performance is profitability. While assessing an organization’s performance, a judgement is made approximately whether or not that overall performance is acceptable primarily based on a fixed of standards

(brenes, 2013). Certain companies carry out higher than others because of efforts do and resources directed toward achievement of agencies goals. Resources play a vital position in determining corporations overall performance. It is essential to increase aid enhances whenever overall performance appears to be going down. The level of achievement of corporations method can first-class be set up by way of performance assessment. Performance evaluation is a technique with the aid of which managers and personnel work collectively to check the organizations strategic objectives and general goals against fixed benchmarks.

Overall performance evaluation is the continuous procedure of establishing targets as well as evaluating advancement to make certain that the business enterprise is realizing its strategic targets and by and large objectives (Kaplan, 2015). It is the extent of achievement of a corporation and may be decided through financial as well as non-financial related pointers, for example, fuel tanker hold up period and Key

Performance Indicators (KPIs) that have been set for the diverse specialty units inside the state parastatal. Financial related data is sources from financial statements of the enterprise.

1.1.3 Industry Analysis

There are many players in Kenya’s petroleum industry most of whom are private entities, government agencies and regulatory bodies. Oil marketing companies form the biggest portion followed by refineries, storage and transportation companies,

Kenya Revenue Authority (KRA), the regulatory commission (ERC) and the quality assurance companies among many other players. Kenya pipeline is the only state corporation authorized to handle and distribute petroleum products in Kenya.

The importation of petroleum products and the related trading arrangements in Kenya is however based on open tendering systems done monthly, which came into effect through legal notice No. 197 of 2nd December 2010 (AfriCOG, 2009). However, distribution to national deports across the country is left to KPC. The Ministry of

Energy and Petroleum operates the open tendering system through the Energy

Regulatory Commission (ERC), which requires all the industry players to compete for importation of crude and refined products for the whole industry.

Independent players entered the petroleum sector in Kenya in October 2010, following the liberalization of the industry. A significant feature of Kenya’s petroleum sector before the liberalization was a relatively high level of government’s direct participation and a correspondingly low level of private sector involvement.

The industry is characterized with fierce competition especially among the oil marketers leading to price wars. There are also barriers entries making it difficult for external players to crowd the industry. Consequently, the ERC regulates petroleum prices across the country in order to protect consumer from unscrupulous traders

(Owino, 2013).

1.1.4 Kenya Pipeline Corporation

The Kenya pipeline corporation (KPC) is a State Corporation established on 6th

September, 1973 under the Companies Act (CAP 486) of the Laws of Kenya and started commercial operations in 1978. Its mandate is distribution, handling and supply of petroleum product in Kenya. The corporation undertakes the transportations of fuels and gases through the use of pipelines. The corporation falls under the ministry of energy and has its headquarters in Nairobi. The company has in the recent past instituted a number of stringent measures in line with its strategic objectives all in an attempt to improve performance (http://www.kpc.co.ke). The company is divided into core departments including marketing, human resources, administration, technology, and production research and developments, with each department performing specific functions towards the attainments overall objective. The human resource department is associated with among other key function the function of employee empowerment. In the recent periods the company has had complains, grievances, disputes and conflicts arising from its performance appraisal practices.

The outcome of the state of affairs at KPC has contributed to more costs of operation, low growth and developments and non-competitive status in the company (Kihara,

2011). Strategy at KPC can be grouped into four categories: distribution strategy, management strategy, Marketing strategy, refinery and processing strategy. KPC employ various strategies to enhance its performance, these strategies might be fully implemented or fail to be implemented.

1.2 Research Problem Strategy implementation is an integral part of an organization's strategic management process (Siro, 2014) that achieves advantage in a changing environment to meet the needs of markets and to fulfill stakeholder expectations (Johnson et al., 2008).

According to Mintzberg (1987) strategy involves attaining and maintaining competitive advantage through the successive exploitation of known or emergent possibilities. Mwanzia (2009) concluded that the strategy implementation process at is a product of both planned and emergent strategies while acknowledging existence of strategic implementation practices.

A detailed search of available studies in the area of implementation of strategy revealed that despite a growing interest in the study of strategy implementation and performance, only a handful of studies have been conducted on the topic in Kenya.

The studies identified covered strategy evaluation and control practices among dairy processing firms in Kenya (Kariuki, 2008); Kenya Wildlife Service (Siro, 2009); faith based organizations in Nairobi (Gaithuma, 2009); Kengen Ltd (Kinyua, 2009); Kenya

Revenue Authority (Wanyama, 2009); National Social Security Fund, Kenya

(Chelimo, 2010; Musyoka, 2011); Parastatals in Kenya (Kaguru , 2010);

Pharmaceutical manufacturer and distributors in Kenya (Nandama , 2010); and power generation, transmission and distribution (Rwara, 2011). 8

On further examination of the studies carried out on Kenyan firms, it became apparent that despite conceptual acknowledgement of the relevance of strategy implementation, the measurement of their contribution to company performance lacked practical investigation. Most of the available studies have mostly been on private institutions.

The search further revealed that no research has been conducted on the subject of strategy implementation and performance of Kenya Pipeline Corporation. From the foregoing it was clear that little research has been done on influence of strategy implementation on performance; hence the gap that this study intended to fill. This study therefore sought to provide solutions to one research question: What was the influence of strategy implementation on performance of Kenya Pipeline Company?

1.3 Objective of the study

The objective of this study was to determine the impact of strategy implementation on performance of Kenya Pipeline Corporation.

1.4 Value of the Study

This research was of importance to KPC because it provided the best as well as alternative ways forward as far as formulation and implementation of strategy is concerned. Recommendations and conclusions resulting from this research helped the corporation understand the importance of strategy in achieving growth. It gave KPC the best practices to be adopted in successful implementation process. The findings in this study helped KPC to develop capacity towards improving the implementation of the strategies at the parastatal. The research findings improved the understanding of the key the challenges in the implementation of corporate/strategic plans.

This study helped the national government understand the importance of strategy in achieving growth. It was of immense importance to the government and policy makers in developing the best implementation processes. It was of great benefit to the government and policy makers in developing the best strategies to be implemented.

Assisted the government to create favorable policies and conducive environment to encourage innovation at different levels of corporate/parastatal governance. The study helped donors and other international organizations that support various development projects in state owned parastatals to identify ways that they could improve implementation process.

The findings of the study provided a deeper understanding on the how these strategies could effectively be implemented by other government agencies and parastatals. The findings of the research likewise contributed to the existing body of Knowledge and more specifically performance of KPC. This was a reference point for scholars, academicians and future researchers. The study findings also added to the existing strategic management theories in academia thereby positively contributing to academic research. This was a reference point for scholars, academicians and future researchers.

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This chapter offered a review of relevant literature as presented by previous scholars on the subject of strategy implementation and performance as presented by various researchers and scholars. The exact sections covered here include theoretical foundation, factors affecting strategy implementation, the influence that the implementation process has on the performance of firms and summary of literature review and research gaps.

2.2 Theoretical Foundation

A theory is a set of organized facts or concepts that attempt to provide a rational explanation to a phenomenon (Mugenda & Mugenda, 2003). As identified in chapter one, this study is founded on three theories; institutional theory, Resource Based View theory and Upper Echelon theory. These theories are discussed in details below:

2.2.1 Institutional Theory

The institutional theory comes from the woks of designed by DiMaggio and Powell

(1983) who sought to explain the manner in which organizations are designed and function especially in meeting their social requirements and expectations in a manner that is visible and transparent to the entire public. According to this theory, organizations internal operations perceived as difficult and complex to determine may take a second place in regards to external legitimacy. In this regard, Scott (2010) alleges that the external image of an organization may in this case be coupled with the kind of technology and operational processes adopted.

This theory emphasizes that the contributions of this concept lies in the insights it provides on the manner in which organizations may achieve varied accomplishments and the need for structures to meet these goals (Zucker, 2012). According to institutional theorists, institutional environment may be key in influencing the manner in which organizations develop formal structures. The inclusion of innovative structures may therefore be essential in improving the efficiency of an organization mainly related to the adoption of legitimized processes in organizations (Jepperson,

2011). Such innovative measures therefore rely of effective processes and leadership employed, thus a failure in the adoption of these measures may be considered as negligence.

Concisely, the implications of this theory remains evident in the fact that institutional environment may need to accept the order of an organization in maintaining and gaining legitimacy within the corporate environment (Amenta, 2014). The institutionalization process is the way social procedures of various natures come to take on a rule-like position in ordinary society. Recurrent forms of activities turn into establishments, or established guidelines, hence institutional theory is relevant to this investigation as it describes organizational occurrences through indicating the environment as well as the formal and informal guidelines that are obligatory on organizational undertakings.

2.2.2 Resource Based View Theory

This research is supported by the resource based view theory. The origins of the RBV could be tracked back to numerous biographers. However Baumol, Litan and

Schramm (2009) explained its key tenet by affirming that the source of an organization’s competitive edge is in the use of the package of key resources it possesses. These include human resources, finances, physical, and non-physical assets 12

(Bhide, 2013). As stated by Spanos and Lioukas (2012) firms which do well in the global market are those that have demonstrated the ability to change with the times, rapidity and flexibility in innovating their products and services and superior leadership that is able to effectively and efficiently manage strategies for competitive advantage.

RBV puts emphasis on the significance of resources as well as its effects for enterprise’s performance (Rumelt, 1984 and Barney, 1986). According to Peteraf and

Bergen (2010) the theory is about the changing attribute of the environment; secondly, it stresses the main purpose of strategic management in suitably adjusting, combining, and mobilizing internal and external organizational, resources, as well as practical capabilities towards a shifting environment. The way these resources are strategically managed will determine the achievement of laid out plan of the organization.

Hitt et al (2014) describe resources in terms of three categories: “physical, human and organizational capital which includes capital equipment, the skills of individual employees, patents, finances and talented managers”. According to Hitt et al (2014) an enterprise’s distinctive resources and capabilities provide the basis for a strategy.

This theory is relevant for this study because it explains the role played by internal resources controlled by an organization in the level of performance recorded. RBV of a firm describes its capacity to deliver sustainable competitive edge when resources are administered such that competitors cannot replicate their results, which eventually develops a competitive barrier (Mahoney and Pandian, 2008).

2.2.3 Upper Echelon Theory This concept illustrates numerous levels of staff in the managerial pyramid concerning positions (Carpenter, Pollock & Leary, 2011). The way administrative positions are arranged in an entity establishes how efficient information streams and notifies strategy execution in an entity (Hambrick & Mason, 1984). The senior administration often are those undertaking in strategy origination. The level of comprehension and participation of other employees in formulation impinges on how efficient strategies are executed (Opong, 2014).

This concept is pertinent to this investigation as it puts into standpoint how teams in an establishment impinge on strategy execution. It describes the various duties of every position in strategy execution. An inflexible and mechanical structure negatively affects strategy implementation. An unbending and mechanical framework undesirably impinges on procedure execution. The hypothesis attests that the result of techniques and adequacy of firms– are reflections of the values and cognitive bases of effective on-screen characters who are the senior administrators within the firm (John

2015).

It further states that vision and for that matter the recognitions of the environment that result is confined by their cognitive base and values is critical for the long-term success of a firm. Typically, since the attentional processes is obliged by the constrained capability of people for data preparing at any particular time and therefore, decision to go to certain components within the environment is decided by our miens and individual inclinations. In other words, individual characteristics of beat directors decide the perspectives of the environment that they can see and what they see advises the choices they make with respect to vital choices, which eventually influences the bottom-line of the organization.

In attempts to test this theory, management analysts have drawn closer the issue that the best directors impact their organizations in two ways. To begin with, they evaluate beat officials’ socioeconomics and relate them to the measurements of organizational execution. Moment, they degree the basic mental characteristics of best administrators and decide whether or not they relate to the execution of organizations. Based on the first and changed adaptations of the hypothesis, it can be recommended that beat managers’ individual characteristics can specifically impact the organizational results.

(Hambrick & Mason, 1984).

2.3 Strategy Implementation in Organizations

Strategy Implementation has been found to have a direct relationship with the level of organization performance in many industries. According to Dobni and Luffman

(2010) better performance only accrues to organizations that are in a position to implement strategies better as compared to those who report challenges. According to

Peng and Littleljohn (2012) communication in an organization plays vital roles in organizational performance. It defines how different stakeholders play different roles to deliver on the set organizational objectives.

Communication coordinates different departments and sections to harmonize their aspirations for common organizational goals. Through communication, organizations are able to coordinate different personnel and resources towards a given strategy implementation this reduce the chances of any deviations in the anticipated results

(Pryor, Anderson Toombs & Humphreys, 2015). Unlike strategy formulation where a few individuals in the organization are tasked to run with, strategy implementation involves all staff.

Through their day to day activities, they are able to influence the attainment of strategies (Kaplan & Norton, 2014). Through effective communication, the management needs to ensure that all employees clearly understand the where the organization is coming from, where it is headed and how it desires to get there.

Rajasekar (2014) argues that strategy implementation if negatively affected by the type of leadership existing in that organization. The amount of information availed to the different stakeholders determines how accurate the different stakeholders undertake different tasks for the common target of the organization. It is further affected by the way employees carry themselves around and perform their tasks which can be summarized in the culture prevailing in an organization.

In a different view, Lorange (2013) argues that the callibre of human capital hired by an organization in terms of experience and adequacy determines how well it implements strategies. Beer and Eisenstat (2013) identified leadership as a key ingredient in strategy implementation. For any strategy to be effectively implemented the managing directors charged with organization the resources of the organization and their top management teams need to emphasize the importance of implementing a given strategy. The level with which the management of an organization get involved in strategy implementation in terms of support affects the way in which the strategy implementation is undertaken.

According to Nutt (1986) organizational leadership needs to well structure if an organization is to implement strategies smoothly. According to Chimanzi and

Morgan’s (2014) firms that involve their employees in strategy formulation and implementation is likely to record high organizational performance. The level of involvement of all employees in strategy formulation plays a vital role in strategy implementation. 16

2.4 Influence of Strategy Implementation on Organizational Performance

Strategic management is vital for organizational performance. Records shows that numerous strategies that can be properly formulated turn to be now not well executed due to demanding situations in strategy execution. Properly executed strategies bring about attainment of higher enterprise performance (blahová & knápková, 2010).

Viseras, baines and sweeney (2014) put forward that strategy excecution fulfillment is extremely subject to human factor of project management and less on business enterprise and structures related aspects. Alloting sufficient resources to a particular strategy excecution results in enhanced performance.

Empirical investigations from strategic management viewpoint, shows that making use of suitable strategies in an enterprise is essential in attaining higher enterprise performance (Brown Squire & Blackmon, 2015). Operationalizing strategy is as crucial as components simplest that it entails many stakeholders in comparison to system (Favaro, 2015). Devoid of a nicely deliberate strategy implementation scheme, no strategy might be undertaken regardless of its superiority. Proper strategy implementation assures enterprise of stepped forward ROA (Lefort, 2015). Effective strategy implementation allows an enterprise file first rate advantages in phrases of advanced customer delight, loyalty and repeated buying. Indications of bad strategy implementation may possibly entail low self-esteem amongst personnel, low staff retention, low client satisfaction as well as grappling enterprise performance. John

(2015) ascertained that organizations that underline on great strategy execution realized twice-financial related achievement contrasted with poor executers. At times execution is difficult to get right, yet achievement of associations relies upon viable usage.

Shah (2009) notes that effective strategy execution, foundation of the hierarchical course of activity and the definition of the enterprise strategy. In this manner, for execution to be realized, measures must be set up to guarantee viable strategy execution. The bearing of strategy execution on performance depends on delicate variables, which are the components identified with human capital like responsibility, correspondence, and agreement, hard aspects like chain of command of positions in the enterprise as well as management frameworks. Numerous enterprises fail to report high performance results on the grounds that the associations and their executives overlook the indispensable significance of strategy execution (Rahimnia, 2009).

2.5 Empirical Studies and Research Gaps

Several studies have been conducted on strategy implementation in relation to organizational performance. For instance, Njagi and Kombo (2014) ascertained that strategy execution impinged the performance level of Kenyan commercial banks. The strategies described the route that the banks taken in attaining competitive edge and distinguishing the offerings of their financial service. The outcomes pointed out that

Kenyan commercial banks embraced various strategy execution schemes to leverage their operational effectiveness for enhanced ROE. The banks managed various assets that they mixed in various ratios to realize effectiveness. The investigation suggested that constant enhancement on ICT in to gain efficiency in their operations. Rajasekar

(2014) examined how different factors affect among electricity supply corporations in the Sultanate of Oman by addressing the role played by organizational communications in strategy implementation. Among key factors in strategy implementation included types of leadership, structure of the leadership positions and internal control mechanisms.

Mbaka and Mugambi (2014) undertook an investigation on strategy execution in the

Kenyan Water Sector using descriptive design. The investigation involved numerous secondary data information regarding how numerous water initiatives were executed.

The outcomes pointed out that strategy execution was impinged on to a great level by the extent of administration backing, insufficiency of resources as well as technical proficiency amongst employees. Additionally, it was ascertained that the administration leadership type as well as communication efficiency impinged strategy execution.

Ndegwah (2014) verified strategy execution in Public Secondary Schools in Nyeri

County, Kenya. The explanatory variables of the investigation comprised: managerial proficiency, resources apportionment, rewards and inducements, and established guidelines. The outcomes ascertained that managerial proficiency, resources apportionment, rewards and inducements, and established guidelines. Highly impinged on strategy execution. Apt administration of these aspects bore a considerable bearing on strategy execution amongst secondary schools in the area of investigation.

Globally researches have undertaken have pointed out that several establishments have embraced strategies, however those who accomplish their strategies are small in number. An investigation by Bigler (2011) ascertained that a huge proportion, nearly

90 percent, of strategies instituted by enterprises in USA, fail to be executed on a timely routine and similarly do not realize the anticipated outcomes (Freedman,

2013). Similarly, an investigation by Charan and Colvin (2011) noted that 7 out of 10

CEOs that do not realize their anticipations is as a result of poor implementation other than poor strategy.

As per the investigation by the Board of Management Today (2009) it was ascertained that throughout strategy execution, the strategy drops 37 percent of its significance particularly by incompetent personnel. Daft (2011) in his investigation noted that the biggest problem encountered by strategists in the execution currently embroils a shifting world hence demanding a variety of managers who are ready to transformation and embrace new concepts that focus on social proficiency, competence, taking up teamwork and placing integrity first. Investigations have established that prolific and more inventive personnel are those that are well-driven

(Viedge et al., 2013).

Another investigation performed by Cobbold and Lawrie (2011) wherein they explored 200 corporations, ascertained that 160 them, directors suggested to establishing strategies that were pertinent to their enterprises, while 28 alleged that their corporations had been executing their strategies well. It was ascertained that, no matter the reality that 194 directors concurred to establish a 'strategic vision', the ones stated to having performed excellent were 33. Zagotta and Robinson (2013) also note that for an executive to realize immense outcomes, it was vital they are acquainted with the reality that sound implementation is what results in the fulfillment.

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This part described the method employed in this study to collect and analyze data. It covered the research design, study population, data collection method, instruments and the method of analysis employed. It outlined the research design, data collection and analysis approaches.

3.2 Research Design

The research design was a case study. Case studies are preferred over cross-sectional surveys because they enabled researchers to obtain in-depth information about the topic of study Cooper and Schindler (2010). This was appropriate because it provided a clear and accurate focus of the Kenya Pipeline Company and in-depth understanding of how the parastatal manages its strategy implementation process. Cresswell (2013) explains that a research design depicts a precise profile of individuals, phenomena or state of affairs, while Mugenda and Mugenda (2010) states that case studies are used to establish the nature of the existing condition or situation.

This research design provided a means to gather, analyze and interpret strategy implementation and performance at KPC. This was appropriate as the study sought to collect and review primary data. The study therefore attempted to explain in depth the attitudes, cultures, structures, beliefs and available knowledge about strategy implementation and performance of KPC.

3.3 Data Collection

Both primary and secondary data was utilized in the investigation. Primary data was sourced by way of an interview guide with open and closed ended questions. Open- ended questions are useful in enabling the researcher to gather qualitative data to understand the study better and possibly come up with a more detailed translation and interpretation of the findings from the study. Bryman and Bell (2014) pointed out that open ended questions enable the respondents to embrace more information, comprising feeling, viewpoints and cognizance of the issues.

The interview guide assisted in the collection of the qualitative data focusing on the strategy implementation practices within Kenya Pipeline Company. The interview guide was separated into three parts: the first one on respondent demographics; second on strategy implementation practices and challenges: third on organization performance. Eight senior KPC executives was interviewed. The interviewees included the general managers in charge of internal audit, HR and administration, strategy, infrastructure, supply chain, operations and maintenance, Morendat institute of oil and gas.

3.4 Data Analysis

Data analysis entails bringing significance to the mass of data gathered (Mugenda &

Mugenda, 2010). The aim of data analysis is to originate importance from the material obtained regarding the association being explored. Content analysis was utilized for data analysis where emphasis was on the qualitative features of the data. Nachmias and Nachmias (2009) term content analysis as an approach employed to draw conclusions by organized and impartial recognition of identified features of information’s.

Kothari (2011) similarly explained content analysis as the examination of documentary as well as verbal material contents and illustrate it as a qualitative assessment on the overall import of information of the present materials and determine prevalence. Content analysis allowed the researcher to draw conclusions by empirically and analytically ascertaining quantified features of messages (Bryrnan,

2012). This approach has gained popularity in recent years in addressing social phenomena in research problems (Mugenda & Mugenda, 2010).

Analysis of the data was done concurrently with the data collection. Prior to performing content analysis, the researcher evaluated the secondary sources quality so that the presented material is precise and up to date. The researcher then recorded and précised the key issues in the verbal answers. This allowed organizing the data in a manner to allow ease of summarizing and interpretation.

CHAPTER FOUR

DATA ANALYSIS, FINDINGS AND DISCUSSION

4.1 Introduction

This part illustrates data analysis, presentation and study findings as established in the research objective and methodology. Part 4.2 presents the demographics of the respondent; part 4.3 presents implementation practices and challenges; and lastly part

4.4 illustrates assessment of organizational performance.

The investigation targeted nine interviewees encompassing top KPC executives at the organization. The nine encompassed: general managers in charge of internal audit,

HR and administration, strategy, infrastructure, supply chain, operations and maintenance, Morendat institute of oil and gas. The response rate of 100% as they all took part in the investigation.

4.2 Demographic Information

The investigation obtained particular demographic material of the respondents in a bid to ascertain their appropriateness in giving the material looked for by the investigation. The respondents were requested to state out their education which will assess the skills they have as individuals in KPC that enable them to implement strategies for the company for its performance. The information of department is also key in understanding which department the employees come from. The position held by workers in the KPC enabled the researcher to understand whom to approach on the basic information on strategy implementation and performance of the company.

Experience is measured through the time one has stayed in a given company. By understanding the years spent by each employee, the researcher understood which employees are going to provide vital information on the strategy implementation.

According to the findings on KPC in strategic implementation and performance, it is noted that, most of the people who were interviewed, have attained a higher academic status of Masters and PHDs, this is because they are more skilled. For the interviewees, most of them were from the top management level, followed by middle then low. The top management individuals are the one mostly involved in the strategy implementation period. In addition, the people interviewed pointed out that, they had been for more than 15 years in the constituency.

Averagely the number of working years by most of the employees was 6-12 years of experience. The number of working years has an overall impact on strategic implementation. The outcomes points out that the interviewees had been in the establishment for a lengthy period to comprehend the aspects impinging on strategy execution and their bearing on performance.

As part of the demographic material the employees of KPC were asked to mention some of the strategies that the company had put in place, performance evaluation of the strategies and how these strategies enables KPC to effectively perform its roles.

Adoption of strategies that will deal with the top management, implementing rules of employee performance is key to the performance of the establishment. The employees’ devotion to work also affect the performance of the company at a whole.

The organizational cultures also affect the performance of employees. Coming up with strategies that improve the competitive advantage is key to the company performance.

KPC has also adopted the strategies that could enable them to address issues to do with environmental degradation. Making more customers since, they are not polluting the environment through wastes and mode of transportation. Adoption of operational strategies, allows KPC to be able to understand how various departments in the organization operates effectively to in corporate level strategies regarding resources, individuals and procedures. This enables the company in planning process and organization of the company’s departments annually. The respondents ascertain that

KPC has adopted some strategic such as distinguishing competence and competitive advantages in the business level. This has enabled them to have competitive advantage over their competitors.

For a successful strategic implementation, a company must always consider various variables. Some of the strategies put in place by KPC to enhance strategic implementation are as follow; the use of enterprise resources that encompass individuals, funds, IT to facilitate the firm’s procedure and transformation. The skillful utilization of resources enhances the achievement of success. At KPC, the training of employees has also been one of the strategies that put in place to enhance strategic implementation. According Paterman (2010) a firm needs to invest in its staff. Members of staff who undergo formal training and are competent, as well as those who go through informal coaching are better at implementation.

The evaluation of performance in strategy implementation is important in any company such that a company that if a company does not set out time to evaluate their performance, they will not have a successful and smooth running of activities. Once a company evaluates it structure and overall organization culture it should analyze its performance. Analysis of a company’s performance can help identify the challenges and opportunities offered towards the achievement of strategy implementation.

Management styles have a direct bearing on the implementation of strategy, the collective experience of managers and their style of coordinating the organizations activities can greatly influence the outcome of strategic implementation. Evaluation of managers and the employees of a company ensure the overall positive performance of strategy implementation.

A strategy is a game plan developed by an organization to enables it effectively perform its roles as well as to boost their achievement of long term and short-term goals. When strategies are in place and implemented by an organization the nature of role performance in that organization also changes. Some strategies once implemented improve the quality of service delivery, quantity of output productivity and reduce the level of absenteeism thus effective performance of roles by the staff.

4.3 Implementation Practices and Challenges

This part illustrates assessment and outcomes of how strategy execution impinges on performance at KPC. The respondents were asked several questions regarding the bearing of strategy execution on performance at KPC. The findings of the investigation are as pointed out in succeeding parts.

4.3.1 Strategies Formulated to Achieve Strategic Objectives

According to the respondents interviewed, the following factors were considered as strategy implementation in achievement of the strategic objective. KPC, opt to consider communication, leadership, organizational culture, ICT infrastructure and employee involvement. All this factors would directly impinges on the performance of the company.

The culture of the establishment is key to the service providence of the organization this is because, organization cultures, supports the strategy implementation practices.

The respondents stated that the organizational culture aspects that affect strategy execution were how leaders make deliberations, management approach of managers and the leading norms. Poor organization structure will result to non-performance from employees, poor working conditions in terms of infrastructure and many more.

Formulation of new organization cultures on social integration among employees and working ethics to improve employees discipline were key to the company’s performance.

Through communication of the management and employees and also to their customers after the implementation of strategies, makes the organization to understand if the strategy has contributed to performance or not. According to the findings, the organization, gets feedback from its employees and customers through the suggestion boxes, the seminars conducted by the company and many more.

Through those feedbacks, the company is able to change its ways of implementing their strategies or rather come up with new strategies. The company has embraced the suggestion boxes by making them user friendly, conducting seminars for both employees and customers at least after implementation of a strategy.

Information Communication Technology dictates most of the operations in KPC. The

ICT section though regarded as one offering support is essential in the accomplishment goals of the divisions. The respondents stated that it is the enabler of their goals. It positions the division to the swift moving IT world.

Usage of social media channels like Facebook, Twitter, LinkedIn has enabled customers and also employees to air out their opinions on the strategies implemented by KPC. This has helped KPC in evaluation and improvement of strategy performance on the enterprise. Social media platforms as part of the ICT department in KPC, has enabled the company to understand how different strategy implementation impinge on the performance of the enterprise either positively or negatively. The KPC has employed individuals to actively handle their social media platforms for improving its service providence.

The management of KPC was key to offering leadership that allows strategy execution. The respondents stated that they offered the required direction for realizing the anticipated outcomes of the divisions. The administration indicated a dynamic team determination in the process of strategy execution. Selections to major positions are considered be by way of qualification and procedures are consistent with the legal necessity.

Some respondents contended that top administration guide in strategy execution by individually overseeing the strategy execution process and apportioning sufficient funds for the course. This is because of their experiences in the industry and their advanced skills gained through education attainment. In addition, respondents stated that senior management guide in strategy execution by choosing a lineup to aid in execution of the strategy and appraising progress of execution course. KPC management has formulated strategies for corporate governance so has to handle everything effectively.

The structure of the organization was indicated by the respondents, to be in order.

This is because communication was done from bottom to top. Also each department was organized in such a manner that it does its own function for achievement of the companies goals. This type of strategies was core to define the organization structure to its performance. Since the organization is structured in an orderly way, it is easy to know which department is not working and which is performing most. Hence the company could assess the performance progress.

Concerning the bearing of staff engagement in strategy execution. The interviewees agreed that the involvement level of staff impinge on strategy execution. They indicated that it was influential in the determination and comprehension of the strategy execution by staff. Furthermore, they revealed that staff involvement enables them to gain practical as well as interactive competencies for strategy execution and impinges on employee commitment, training as well as proficiency. The enterprise introduced the performance contract to the employees so as to increase the level of commitment among the employees. Performance contract is believed to improve performance of the company since employees are committed and are working to on finishing their targets.

4.3.2 Successful Implemented Strategies

According to the findings, the strategies which were successfully implemented to employee performance was the implementation of performance contract. It improved the performance of the company since employees are committed and are working to on finishing their targets. It has also encouraged employees to work tirelessly due to salary appraisal and promotion in their departments by the company.

Emplacement of individuals in the ICT section also improved their performance. This was done through influencer marketing. This is where by KPC employed individuals who are popular in twitter because they have a lot of followers and can do advertisement of their new product in their platform. KPC has also come up with seminars and placed more suggestion boxes at places of their service delivery. This has enabled them to receive feedback from their employee and customers on how to improve their strategies and recommendation of their new strategic implementation.

4.3.3 Strategies Underway or Successfully Implemented

The corporate governance is not giving the management level mandate to implement strategies. Strategies have to pass to the corporate governance first before the management starts to implement them. It is noted that, the corporate governance has influence on strategy implementation which is not supposed to be the case.

According to the respondents, the structure of the company is not yet changed. The departments are not working independently in achievement of the company’s goal.

The departments are still depending on each other. Hence, roles are not clearly defined in the company according to its departments.

The culture of the organization has still not changed. It is not that, KPC are still using the organization structure of the past four years ago. According to the findings, it is indicated that there is no social integration among employees and also work ethics such as absenteeism among employee is rampant.

4.3.4 Measures Put in Place by Management to Ensure Successful Strategy

Execution at KPC

The leadership structure of KPC was vital in the implementation of strategy. The top management were put in the forefront to champion strategic implementation since they had skills that were required to steer the company to a successful execution.

Through the top leadership, KPC was able to align organizational operations in a clear manner thus the achievement of strategic implementation. The organizational structure adopted by KPC at its current state was a big determinant in strategic implementation. The organizational structure was based on clear organizational functions and operations that strategic implementation achievable.

ICT is essential in the execution of strategy. It is among the measures put in place by

KPC to ensure that various departments have access to information across the world and especially from their competitors in the oil industry. Utilization of ICT facilities as a measure put in place has enhanced the efficient performance of duties and the execution of tasks. This has in effect reduced the overall cost of disseminating information and the time that is required to perform a particular task.

4.3.5 Role of Senior Management in The Optimization of Strategy

Implementation

Senior management members at KPC have diverse skills and expertise in different fields these skills enable them to effectively execute strategy implementation at the organization. The support of senior managers towards projects that need execution by the firm enhance successful strategic implementation. Therefore, making the company to work effectively to its functions and hence its performance.

4.3.6 Recognizing the role of shareholders in ensuring survival

The Kenya Pipeline Company (KPC) is 100% owned by the government a show that the government has the largest share of the company. This calls attention to the fact that the role of this particular shareholder is vital in the implementation of strategy and the overall execution of the organizations activities. The government has a big in the effective on strategic implementation at KPC. KPC is regulated by acts of finance, public procurement regulation and performance contracting. All these influence strategic implementation directly.

Siphoning of money by top management attracts thorough investigations from the company’s shareholders and some of them loose their job. This enhances strategic implementation since the shareholders are at the forefront of the campaigns to eradicate corrupt officials whose actions hinder successful implementation of strategy by the company. Through such actions by the shareholders, the company’s survival is enhanced and similar character traits averted.

Aside from the government, the respondents also seemed to concur that the people they interact with daily in their operations are stakeholder, petroleum and oil marketers, distributors, transporting companies, privileged bodies and other entities in the oil and gas sector. The respondents revealed that stakeholder participation is essential in effective strategy execution. They similarly revealed that key stakeholders ought to be engaged in strategy origination in order to be amongst the lineup in execution and lower opposition in execution. In addition, they stated that KPC has a yearly stakeholder week for enhancing stakeholder and public involvement.

4.3.7 Factors Attributing to Successful Strategy at KPC

ICT is one of the factors that have helped implement successful strategy at KPC. ICT dictates most of the operations in KPC. The ICT division is essential in the attainment of the parastatal’s goals. The respondents revealed that ICT is among the facilitators of their goals. ICT positions the parastatal to the swiftly moving customs computerization world. It was similarly noted that KPC bears an ICT plan for enhancement of performance and assessment of plans. It came out clearly that KPC works towards the computerization of all the procedures to minimize manual procedures. All these efforts aim at enhancing efficiency and lessening cost of operation. They also alluded to the fact that various systems instituted in the parastatal facilitated strategic implementation.

They similarly alluded to enhanced usage of social media channels e.g. Facebook,

Twitter, LinkedIn. These receive response and data on their numerous plans, which has resulted in lessening cost and time managing owing to cut expenditures on paper and time for numerous undertakings. Additionally, they revealed that the parastatal bears a twitter handle and a face book page named “Kenya Pipeline (KPC)” for singularly providing material and getting public’s feedback.

Communication is also one of the factors that KPC has put in place to enforce strategic implementation. Communication in an organization plays vital roles in organizational performance. It defines how different stakeholders play different roles to deliver on the set organizational objectives. Communication coordinates different departments and sections to synchronize their shared enterprise goals. By communication, enterprises can organize various personnel and funds for a particular strategy execution (Pryor, et al., 2015).

KPC according to those interviewed has quality human staff. Lorange (2013) argues that the caliber of human capital hired by an organization in terms of experience and adequacy determines how well it implements strategies. This has enabled successful implementation of strategy at KPC.

4.3.8 Hindrances of Successful Strategy Implementation at KPC

Successful implementation of strategy at KPC and many other companies has not been a smooth walk. One of the factors that has been identified as a hindrance of successful strategy implementation is resistance to change. When employees are accustomed to a particular manner of undertaking things they are usually slow in adopting and implementing changes in the daily operation of the company. This can majorly affect strategy implementation at any company. Change management is an important element in strategic implementation and when it is effected alongside strategic implementation, it can be useful in the preparedness of the company to implement strategy.

Another hindrance to implementation to strategy at KPC is institutional problems. The system embraced by the enterprise however effective as a control practice it has made the process of strategy implementation slower as multiple approvals must be sought from the top leadership, this has escalated costs of operation and lead to delays in the execution of strategy. Certain socio-cultural and political factors were found to hinder strategy implementation at KPC. Since the government has 100% stake in the company, political interference has been a challenge in implementation of strategy.

The boards of governors who oversee the company make decisions based on political forces rather than business demands. The interviewees observed that every time the political governance changed, changes were made to the leadership structure of the company. 35

4.3.9 Structure and Culture of KPC Towards Strategy Implementation The respondents unanimously agreed that there the entity’s culture has a powerful bearing on strategy execution. Link between strategy and culture was essential for effective strategy execution. The investigation ascertained that the entity’s culture fosters the strategies execution. They alluded that confidence and self-control flows from the top management to other employees, thus enhancing strategic implementation. The culture of optimism often as a strategic practice is used to achieve the parastatal’s ideal performance. The establishment’s culture impinges strategy execution on how leaders make decisions, administration approach and the leading norms.

Regarding how the present entity’s structure facilitates or hampers the strategy execution. It was established that the entity’s structure aids in creation, designing and execution of procedures and plans and controls downward to upward communication and aids in decision-making. Also, the parastatal bears a consolidated framework that needs discussion and approval in decision making hence eliminating decision-making errors.

The KPC structure was established as suitable according to strategy execution. The respondents revealed that the existing structure is aligned with well-defined practical procedures, that make it suitable and helpful to strategy execution. The structure ensures responsibility as the duties are delegated to particular titles. It similarly allows achieving agreement for strategy execution. Unanimity helps recognize various individual welfares that when determined allows strategy execution.

4.4 Organizational Performance

The management of KPC was at the lead in offering direction to allow strategy execution. The respondents revealed that senior administration offered the required direction for attaining the anticipated outcomes of the parastatal. The administration exhibited a dynamic team determination in the strategy execution course. Selections to major positions considered being on qualification and procedures are according to the legal necessity.

They similarly contended that middle management guide in strategy execution by individually overseeing the strategy execution course and apportioning sufficient funds for the process. Furthermore, they indicated that as leaders they individually guide in strategy execution through choosing a lineup to enable the execution of the strategic blueprint and assessing development of the strategy execution course. They illustrated also that they individually own the plan, research on it as well as convey the concept to middle personnel who also convey the strategy to other lower level employees. Lastly, they revealed that they individually provide consistent feedback to their seniors.

4.4.1 Company Targets

One of the main targets of the KPC is to eliminate fuel transportation by the use of oil tankers. This is because when oil tankers are involved in accident they cause the loss of thousands of lives. The main target of the company is to pump fuel to do away with road transport and save the lives of dozens of people from oil tanker accidents. This have lately contributed to their plans of constructing an oil jetty in Kisumu which will enable them to transport oil under Lake Victoria to supply oil in Uganda and

Tanzania.

According to the interviews, The Company is also targeting to double its storage capacity to ensure it meets the local and regional demands of the local and regional community. By doubling of its storage capacity, this will ensure that the local people do not have oil shortage hence making them the leading oil company in Kenya. And also will help them in budgeting of their oil supply easily.

KPC also targets to evacuate oil products from Mombasa to Nairobi once the

Mombasa-Nairobi pipeline is complete. This will enable them to understand the needs of their customers hence customer satisfaction.

4.4.2 Recent Performance Target

Construction of the Oil jetty is the most recent target by KPC. This will enable KPC reduce transportation cost and also number of accidents by the tankers on the road.

This also enables KPC to get wide market share in the East African countries. Also they have come up with massive storage tanks in Nairobi. This has enabled them to be able to supply oil to all Nairobi residents effectively.

4.4.3 Target Achievement

The recent target for construction of an Oil jetty in Kisumu was funded 1.7 billion 2nd

May 2017. The construction has not yet happened but KPC is working towards achieving it. This will have a lot of positive impact in reduction of costs and maximization of profit.

4.4.4 Measures Put in Place to Ensure Continuous Monitoring of Strategy

Implementation

Some of the measures put in place by KPC to ensure successful strategy implementation are strategy formulation. This is enhanced continuous monitoring and championed the mission, vision and the objectives of the KPC. A proper organization structure by KPC also helps the continuous monitoring of strategy implementation.

The organization structure defines the lines of communication thus valuable feedback from employees to their bosses ensuring a clear network and flow of information thus strategy implementation.

The maintenance of an overall positive atmosphere by KPC is one of the measures that is in place to enhance strategic implementation. A culture of owning up to individual actions that affect the company to ensure accountability has enabled the company to monitor strategic implementation.

4.4.5 Key Performance Indicators in KPC that Affects Performance

Some of the key indicators that affected the performance of KPC were their staff, budget approval, oil stock and oil marketing companies. The respondents alluded numerous mechanisms by which staff are endowed to execute the established strategies. Among the mechanisms by which staff are endowed comprised; analysis of plan into actions and work schemes to allow execution; offering necessary funds to staff to allow the execute the established plans; staff training is aligned to needs evaluation done by human resource division, rewards as well as differentiation is aligned to job descriptions and performance.

Regarding the overall financial performance in the parastatal they alluded that variations in revenue amassed have been optimistically growing for the past thirteen

(13) years which was backed by secondary material sourced from KPC data

(Appendix III). They similarly indicated that how a plan is executed is a key aspect in enhancing the parastatal’s performance. Anticipated financial performance was indicated as encompassing an upsurge in revenue obtained. From the secondary material; colected, there has been an average upsurge projected at 11.6% in the past thirteen (13) years (Appendix III).

Concerning how strategy execution impinged on application of measures for deter debasement of fuels. It was established that there is an upsurge in the stakeholders as well as oil dealers’ number. They willingly conform to legal guidelines. The interviewees mentioned that independent importers as well as exporters are apparently driven by progresses at the parastatal for instance computerization. Regarding how strategy implementation has impinged on queues at the fuel depots they indicated that there was improved participation by stakeholders making the process smooth and reducing delays at the fuel depots. They also added that there was rise in speeds of service (tanker loading).

4.4.6 Determination of Key Performance Indicators by Departments.

Department of Human resource has assisted in the training of employees for the purpose of understanding the job descriptions in the company. Frequent employee training is aligned to needs evaluation done by HR division, rewards and differentiation aligned to job descriptions and performance.

The management department needs to understand how, to implement the usage of resources that is revenue for the purpose of making profits. Also introduction of stakeholders in KPC and the effect they have in advancing of the company’s performance. This will enable KPC have a wide market in the oil company.

4.4.7 CSR Activities in KPC

The relevance of CSR activities is to ensure that companies conduct their businesses in an ethical way. This means that they conduct their activities in a manner that it does not affect the social, economic, environmental and violation of human rights as they partake their business activities. According to the findings, KPC has indulge itself in

CSR activities such as going green. This activity involves KPC, taking the mandate of conserving the environment by planting trees. They have planted over 5000 trees on their installation areas. The tree plantation is done all over the country in areas such as

Makindu, Kisumu, Eldoret, Samburu, Konza and Mombasa. Adoption of this strategy because trees are excellent absorbers of hydrocarbons emissions which are believed to come from the KPC limited.

KPC has also spear headed the Inuka scholarship program which is believed to be hailed by legislators. This is for the purpose of helping out the physically challenged individuals from the poor families. By doing this, KPC is able to assist the victims of accidents who loosed their normal life and are disabled. Also the poor families who have loosed their loved ones as a result of the accidents on the roads caused by tankers.

They have also come up with storage tanks which holds 33.4 million liters of pure petrol or diesel. This tanks have increased Nairobi storage capacity of oil. Which has enhanced operational flexibility since the number of road accidents caused by tankers have reduced due to reduced number in transportation. The tanks are also fire prove hence no fire accident involved. All these CRS activities are done by the KPC annually. These activities are permanently implemented and are used in achieving the company goals of helping the people at large. This has enabled customers to embrace

KPC as their oil pipeline industry in Kenya.

4.8 Discussion of the Findings

The findings indicated that in KPC, information is passed from the top management level to the bottom. This is because the top administration level implements policies that are used by the company in achieving its goals. This is in agreement with the institutional theory which focuses on entity’s structures and how they impinge on the information stream that is essential to strategy execution (DiMaggio & Powell, 2013).

This is seen in the demographic findings of the organization. According to the findings, the company consists of different departments. Each department have various employees who are responsible for tasks in that department. There is the management department in KPC which is responsible for formulation of strategies which are passed down to every department and action begins. This is agreement with the upper echelon theory which describes the numerous staff levels in the entity’s pyramid with regards to positions (Carpenter, Pollock & Leary, 2011). The way administration positions are arranged in an entity establishes how well information streams (Hambrick & Mason, 1984).

Strategic implementation has direct impact on the performance of company. KPC, has adopted different strategies for the attainment of effective performance. John (2015) ascertained that organizations that underline on great strategy execution realized twice-financial related achievement contrasted with poor executers. At times execution is difficult to get right, yet achievement of associations relies upon viable usage. Shah (2009) notes that effective strategy execution, foundation of the hierarchical course of activity and the definition of the enterprise strategy. In this manner, for execution to be realized, measures must be set up to guarantee viable strategy execution. Therefore, for performance to be realized, measures have to be put in place to ensure effective implementation of the strategy.

The relevance of understanding employees’ involvement in work is also displayed by the findings. The employees at KPC, should also be involved in the strategy implementation process so that, they can attain to what improves their performances as employees. This will enable the company to understand what their employees want to increase their commitment level while working hence increasing the company’s performance. This finding is in agreement with finding of Chimanzi and Morgan

(2014) firms that involve their employees in strategy formulation and implementation are likely to record high organizational performance. The level of involvement of all employees in strategy formulation is essential in strategy execution. According to our findings, the leadership in the organization has been formulated effectively which has improved the employees’ performance in KPC. Rajasekar (2014) argues that strategy implementation is negatively affected by the type of leadership existing in that organization. It will result to under performance of employees. It states that, it will further have affected the way employees carry themselves around and perform their tasks which can be summarized in the culture prevailing in an organization.

Factors that has been identified as a hindrance of successful strategy implementation is resistance to change, institutional challenges, structure adopted by the company, socio-cultural and political factors were found to hinder strategy implementation at

KPC. Since the government has 100% stake in the company, political interference has been a challenge in implementation of strategy. Daft (2011) in his investigation noted that the biggest problem encountered by strategists in the execution currently embroils a shifting world hence demanding a variety of managers who are ready to transformation and embrace new concepts that focus on social proficiency, competence, taking up teamwork and placing integrity first. Ndegwah (2014) studied strategy implementation in Public Secondary Schools in Nyeri County, Kenya. The outcomes ascertained that managerial proficiency, resources apportionment, rewards and inducements, and established guidelines. Highly impinged on strategy execution.

Apt administration of these aspects bore a considerable bearing on strategy execution amongst secondary schools in the area of investigation.

The interviewees ascertained that entity’s structure aids in creation, designing and execution of procedures and plans, controls downward to upward communication, and aids in decision-making. In addition, the parastatal bears a consolidated framework that needs discussion and approval in decision making hence eliminating decision- making errors. An investigation by Muinde (2015) ascertained that the arrangement of new plans and structures, sound entity’s structure and sound governance brought about setting of smart goals and instituting outstanding tools for performance contracting.

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS

5.1 Introduction

This part6 illustrates overview, inferences and commendations of the investigation.

The aims of the investigation were to verify the bearing of strategy execution on performance of KPC. The conclusions are derived from the investigation which intended to find out the influence of strategy execution on performance of KPC.

5.2 Summary of Findings

According to the outcomes, the interviewed people indicated that, the highest level of education attainment. This was for the purpose of understanding the people who are involved in strategy implementation process if have the skills foe strategy formulation. It is also noted that, different employees belong to different departments at KPC. These departments are responsible for performing the task of the company if the strategies are implemented. The respondents were asked to say their title in the company. This enabled the researcher to know which respondents are responsible with the implementation of strategies. The experiences of the workers were also measured as the findings indicated that, most of the workers who are experienced are at the management level and they are responsible for implementation of strategies.

The study did put into consideration if the respondents know the meaning of strategy implementation and if they understand that KPC is involved in the strategic management. Some example of strategy implemented by KPC such as adoption of technology, governance strategies and employee commitment strategies had an impact on performance. It was noted that different departments were responsible in performing different tasks in implementation of strategies to its performance.

KPC, continued to implement their strategies despite of the challenges they are facing during implantation of strategies. Some of the strategies employed by KPC include:

Formulation of new organization cultures on social integration among employees and working ethics to improve employees discipline were key to the company’s performance. The company has embraced the suggestion boxes by making them user friendly, conducting seminars for both employees and customers at least after implementation of a strategy. This enables communication on effects of implemented strategies on employees’ performance. The KPC has employed individuals to actively handle their social media platforms for the purpose of improving its service providence. KPC management has formulated strategies for corporate governance so has to handle everything effectively. The structures of firms have also been formulated in such a manner that, the management is able to handle all the department effectively. It has also encouraged employees’ commitment by salary appraisal.

Some of these strategies formulated have been successful while others not. This is due to the availability of resources available, their customers’ needs and also the final decision from the corporate governance. The leadership system in KPC, ensures that the strategies are met by exercising order in the company. Also the ICT department ensures that each department has reached its target and has also performed in terms of quality service. The senior management in KPC, ensures that strategies are met my ensuring that the organization culture is met to address the performance factor.

The shareholders contribute much to the strategy implementation process. According to the findings, the government has a big in the effective on strategic implementation at KPC. KPC is regulated by acts of finance, public procurement regulation and performance contracting. All these influence strategic implementation directly. The government is formulating strategies to its advantage on profit maximization. 46

While implementing strategies, some may be successful or not. This is seen earlier due to the findings indicated. Factors contributing to successful implementation of strategies include: communication, ICT and adequate resources. Factors which contribute to unsuccessful strategy implementation include: poor governance, structural changes in the company, socio- cultural and political challenges. Apart from those, the structure and culture at KPC, is made in such a way that it will improve on the performance of the employees and the company at large.

KPC like any other company, works with targets for successful implementation of the strategies. KPC’s targets include, coming up with pipeline transportation systems so as to avoid the accidents on road transports which leads to loose of lives. Another on is coming up with storage tank which enables them to store enough oil for supplying to the available regions. KPC also targets to evacuate oil products from Mombasa to

Nairobi once the Mombasa-Nairobi pipeline is complete. To ensure the following strategies have been put in place, the company has employed measures such as the proper organization structure, continuous monitoring of the company’s mission and vision and frequent maintenance of their systems.

Key performance indicators that affect the performance of KPC. Lack of training of employees and inadequate finances were part addressed as key performance indicators. It was noted that, departments such as the Human resource department, should come up with training sessions for employees to increase their performances and also resources should be used responsibly. KPC, has also come up with CRS as a way of giving back to its customers may be due to the damages they have caused or not. This has made them to have a higher competitive advantage over its competitors.

5.3 Conclusion

Strategy execution is undoubtedly the hardest component of strategic management procedure and numerous plans nosedive at the execution phase. The investigation establishes that for an enterprise to effectively execute its plan, it ought to align every of its strategy facilitating elements of the entity. There ought to be a match between strategy and framework, culture, communication, ICT, leadership as well as strategy and staff participation.

The investigation ascertains that strategy execution was an essential aspect in enhancing the performance of the establishment owing to the staff performance, retention and attraction, greater implementation, decreased time wastage as well as an efficient clearance procedure for tanker loading.

5.4 Recommendation of the Study

The investigation suggests that administration ought to focus on effective communication so that strategic problems are articulated at appropriately to accomplish the strategic objectives. Culture and plans ought to be well-matched to attain great performance and key functions and tasks key for effective strategy execution ought to be identified. There should be coordination among various KPC units, division processes into organization units and ascertain the level of authority to bestow to every division.

This investigation suggests that the government ought to institute with strict policy structure to oversee execution of strategy at the parastatal. Technology is key for the parastatal’s attainment of its goals. The investigation hence suggests that the KPC ought to adopt an excellent state of technology pertaining to tools, infrastructure and expertise.

The investigation suggests that performance administration ought to be further entrenched and instituted across the whole parastatal (KPC). Every staff ought to engage in the organization’s future direction and decisions. Their day-to-day performance and undertakings ought to be evaluated along the particular indicators and principles pointed out by the KPC blueprint.

5.5 Limitations of the Study

The investigation having employed a case study design makes it hard to generalize the outcome. This is because of a case study allowing for comprehensive investigation of a particular unit and in this perspective strategy execution at KPC. The outcomes of the investigation are not pertinent other establishments.

The case study entailed a comprehensive investigation through content analysis.

Partiality of the researcher in the way she comprehends material provided. The broad view of the outcomes could possibly not be promising as no established guidelines are pursued gathering of the material.

5.6 Suggestions for Further Study

The investigation explored bearing of strategy execution on performance of KPC.

Additional investigations ought to be done in alike parastatals to ascertain the bearing of strategy execution on performance. The researcher suggests that an investigation whose respondents comprise middle as well as lower staff would offer more insights on the bearing of strategy execution on performance. This would lay focus on their participation, duties of administration and the performance. Their influence to the realization of the strategy execution course is essential hence the need to establish their bearing on the entire execution course.

There is need to investigate how specific projects at KPC have influenced performance of the KPC. These projects are key milestones in the achievement of overall KPC goals, hence the need to carry out a quantitative study on the influence of each of the projects as a variable. This study further suggests the need to investigate the influence of organization culture on the performance of the KPC. Culture plays a major role in shaping the strategic direction of any organization. This calls for an investigation into the cultural practices and behavior at the parastatal.

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APPENDICES

APPENDIX I: Introduction Letter

APPENDIX II: Interview Guide

SECTION ONE: DEMOGRAPHIC

1. Level of Education?

2. Department /Section/Division/Unit?

3. Tittle of respondent?

4. For how long have you been working at KPC?

5. Are you aware of any KPC strategies? Mention some?

6. Do you as a department do regular performance evaluations?

7. What are the strategies being used by KPC in order to effectively perform its

roles?

SECTION TWO: IMPLEMENTATION PRACTICES AND CHALLENGES.

1. How many strategies have been formulated by KPC in order to achieve its

strategic objective?

2. How many have successfully been implemented?

3. How many are underway?

4. What are the measures put up by management to ensure successful strategy

execution in Kenya Pipeline Company?

5. How does senior management take the lead in ensuring the above factors are

optimally met?

6. There is a complex relationship between firms and their stakeholders.

Shareholders play an important role in daily operations of a firm thus their

concerns should be recognized to ensure survival and successful goal

accomplishment.

7. What factors would you attribute to successful strategy implementation at

KPC? (SWOT analysis)

8. What are the hindrances to successful strategy implementation at KPC?

(SWOT Analysis)

9. Briefly comment about structure and culture of KPC with regards to strategy

implementation at KPC.

SECTION THREE: ORGANIZATIONAL PERFORMANCE.

1. Do you work with targets?

2. What was your most recent performance target?

3. Did you meet the target?

4. What measures have been put in place to ensure that there is continuous

monitoring of strategy implementation?

5. Has your department developed a set of Key Performance Indicators (KPIs) or

some other form of accountability to track the success of strategic initiatives?

6. If yes mention at least 3

7. How does the department determine the KPIs to be used at the operations

level?

8. Do you carry out any CSR activities?

How often?

THANK YOU FOR YOUR CO-OPERATION AND TIME