CHALLENGES OF STRATEGY IMPLEMENTATION IN EXPORT
MARKETS AT NATIONAL OIL CORPORATION OF KENYA
MUTHAMI CATHERINE NYOKABI
D61/75760/2012
A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF
REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS, UNIVERSITY OF
NAIROBI
OCTOBER, 2014
DECLARATION
I hereby declare that this is my original work and has not been submitted to any other
academic body.
Student
Name:____________________________________ Reg No._______________________
Sign:______________________________________ Date_______________________
This Research project has been submitted for examination with my approval as the
Supervisor.
Name:____________________________________
Sign:______________________________________ Date_________________________
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ACKNOWLEDGEMENT
I would like to acknowledge my fellow colleagues, classmates and lecturers for the help
they gave me throughout the project. I would also like to acknowledge the guidance of
my supervisor Dr Florence Muindi and my moderator Professor Ogutu.
Last but not least, I would like to acknowledge my family for all the support they gave
me, financial, academic, moral or otherwise.
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DEDICATION
I dedicate this project to my twin sister Alice who has encouraged me throughout the
project and the best sister anyone could ask for.
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ABSTRACT
In this new world order, successful strategy implementation becomes ever more
important. An organization’s success in today’s dynamic business environment is more
than ever before dependent on successful implementation of formulated strategies.
Strategy implementation is the manner in which an organization should develop, utilize
and amalgamate organizational structure, control systems and culture to follow strategies
that lead to competitive advantage and a better performance. The objective of the study
was to establish the challenges of strategy implementation at National Oil Corporation
venturing into exports markets. The study aimed at understanding the literature review
and theoretical foundation for the strategy implementation challenges as researched by
various authors. The study also addressed and discussed in detail the various challenges
of strategy implementation in organizations as researched by various authors. The
research design adopted a case study, data was collected was both primary and secondary
data. The data collected was then analyzed through qualitative content analysis method.
The findings of the study established that National Oil Corporation faced various
challenges when implementing its exports market strategies. These challenges included;
time constraints, inadequate resources, organization structure, organization culture,
leadership, communication challenges and uncontrollable external factors. The
recommendations given were both for policy and practice and included adequate time
allocation, adequate resource allocation, change of structure and culture, improved
leadership practices, effective communication among others.
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TABLE OF CONTENTS
DECLARATION ................................................................................................................ i
ACKNOWLEDGEMENT ................................................................................................. ii
DEDICATION................................................................................................................... iii
ABSTRACT ..................................................................................................................... iv
CHAPTER ONE: INTRODUCTION ............................................................................. 1
1.1. Background of the Study ........................................................................................... 1
1.1.1. Concept Strategy ............................................................................................... 2
1.1.2. Strategy Implementation ................................................................................... 3
1.1.3. Oil Industry in Kenya........................................................................................ 4
1.1.4. National Oil Corporation of Kenya................................................................... 5
1.2. Research Problem ...................................................................................................... 6
1.3. Objectives of the study............................................................................................... 7
1.4. Value of the Study ..................................................................................................... 8
CHAPTER TWO: LITERATURE REVIEW ................................................................ 9
2.1. Introduction ................................................................................................................ 9
2.2. Theoretical Foundation .............................................................................................. 9
2.2.1. Contingency Theory.......................................................................................... 9
2.2.2. Institutional Theory......................................................................................... 10
2.2.3. Agency Theory................................................................................................ 10
2.3. Strategy Implementation .......................................................................................... 12
2.4. Strategy Implementation Challenges ....................................................................... 13
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2.4.1. Time Constraints ............................................................................................. 14
2.4.2. Inadequate Resources...................................................................................... 14
2.4.3. Organization Structure .................................................................................... 15
2.4.4. Organization Culture ....................................................................................... 16
2.4.5. Leadership ....................................................................................................... 16
2.4.6. Communication Challenges ............................................................................ 17
2.4.7. Uncontrollable External Factors ..................................................................... 18
CHAPTER THREE: RESEARCH METHODOLOGY ............................................. 19
3.1. Introduction .............................................................................................................. 19
3.2. Research Design....................................................................................................... 19
3.3. Data Collection Method ........................................................................................... 19
3.4. Data Analysis ........................................................................................................... 20
CHAPTER FOUR: DATA ANALYSIS, INTERPRETATION AND DISCUSSION
........................................................................................................................................... 21
4.1. Introduction .............................................................................................................. 21
4.2. Response Rate .......................................................................................................... 21
4.3. Demographic Profile ................................................................................................ 21
4.3.1. Respondents’ Department ............................................................................... 21
4.3.2. Respondents’ Position..................................................................................... 22
4.3.3. Duration Worked ............................................................................................ 22
4.3.4. Respondents’ Education Level ....................................................................... 22
4.4. National Oil Corporation Exports Market Strategies............................................... 23
4.5. Strategy Implementation Challenges ....................................................................... 23
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4.5.1. Time Constraints ............................................................................................. 23
4.5.2. Inadequate Resources...................................................................................... 24
4.5.3. Organizational Structure ................................................................................. 24
4.5.4. Organization Culture....................................................................................... 25
4.5.5. Leadership ....................................................................................................... 25
4.5.6. Communication Challenges ............................................................................ 25
4.5.7. Uncontrollable External Factors ..................................................................... 26
4.6. Discussion of Findings ............................................................................................. 26
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSSIONS AND
RECOMMENDATIONS................................................................................................ 29
5.1. Introduction .............................................................................................................. 29
5.2. Summary of Findings ............................................................................................... 29
5.3. Conclusions ............................................................................................................ 311
5.4. Recommendation of the Study ............................................................................... 322
5.5. Limitations of the Study........................................................................................... 32
5.6. Recommendation for Further Study......................................................................... 34
REFERENCES ................................................................................................................ 35
APPENDIX 1: INTERVIEW GUIDE .............................................................................. i
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CHAPTER ONE
INTRODUCTION
1.1.
Background of the Study
In this new world order successful strategy implementation becomes ever more
important. Simultaneously, new performance measurement frameworks are evolving to
fill the gap between operational budgeting and strategic planning. As a consequence,
many organizations have tried to enhance their capacity to implement through the use of
management development programmes (Beer and Eisenstat, 2000). Often, these follow
training needs analysis which identifies a set of management competencies which it is
hoped will deliver better competitive and commercial practice. Strategy implementation
is a fundamental management process for the success of corporations. Strategy
implementation is the translation of chosen strategy into organizational action so as to
achieve strategic goals and objectives. It is the match between an organization’s
resources and skills and the environmental opportunities as well as the risks it faces and
the purposes it wishes to accomplish (Thompson, 1993).
Organizations seem to have difficulties in implementing their strategies, however,
researchers have revealed a number of problems in strategy implementation for example,
weak management roles in implementation, a lack of communication, lacking a
commitment to the strategy, unawareness or misunderstanding of the strategy, unaligned
organizational systems and resources, poor coordination and sharing of responsibilities,
inadequate capabilities, competing activities and uncontrollable environmental factors.
Successful strategy implementation that has been receiving a considerable amount of
attention is the impact of an organization’s existing management controls and particularly
its budgeting systems (Otley, 2001).
An organization’s success in today’s dynamic business environment is more than ever
before dependent on successful implementation of formulated strategies. In Kenya state
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owned petroleum corporation National Oil enters regional market to export petroleum
products adopting business partnerships with governments, petroleum marketers and
direct supplies to large scale consumers, developing an off-shore petroleum jetty project
and is in planning stages for construction of petroleum storage facilities in Mombasa and
Western Kenya. However, the entry of National Oil into the export business has not been
very successful attributed to failure in implementation in strategies adopted.
1.1.1. Concept Strategy
Strategy is a fundamental management tool in any organization. It is a multi-dimensional
concept that various authors have defined in different ways. It is the match between an
organization’s resources and skills and the environmental opportunities as well as the
risks it faces and the purposes it wishes to accomplish. Strategy refers to the machinery of
the resources and activities of an organization to the environment in which it operates
(Johnson and Scholes 2002). According to Ansoff and McDonnell (1990), it is through
strategic management that a firm will be able to position and relate itself to the
environment to ensure its continued success and also secure itself from surprises brought
about by the changing environment.
Ansoff (1999) views strategy in terms of market and product choices. According to his
view, strategy is the “common thread” among an organization’s activities and the market.
Johnson and Scholes (1998) define strategy as the direction and scope of an organization
that ideally matches the results of its changing environment and in particular its markets
and customers so as to meet stakeholder expectation. According to Ansoff and
McDonnell (1990), it is through strategic management that a firm will be able to position
and relate itself to the environment to ensure its continued success and also secure itself
from surprises brought about by the changing environment. Pearce and Robinson (2007)
defines strategy as the organization’s game plan which results in future oriented plans
interacting with the competitive environment to achieve the organization’s objectives.
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1.1.2. Strategy Implementation
Strategy implementation is defined as the manner in which an organization should
develop, utilize and amalgamate organizational structure, control systems and culture to
follow strategies that lead to competitive advantage and a better performance (Pearce and
Robinson, 2007). Organizational structure allocates special value developing tasks and
roles to the employees and states how these tasks and roles can be correlated so as
maximize efficiency, quality and customer satisfaction-the pillars of competitive
advantage. An organizational control system is also required. This control system equips
managers with motivational incentives for employees as well as feedback on employees
and organizational performance (Beer and Eisenstat, 2000).
Accordingly, Huse and Gabrielsson (2004) they define strategy implementation as the
methods by which strategies are operationalized or executed within the organization and
focuses on the processes through which strategies are achieved. Strategy implementation
involves organization of the firm's resources and motivation of the staff to achieve
objectives. Co-evolutionary theory indicates that as firms grow and evolve from small to
larger and multidivisional organizations, the strategy implementation methods also
evolve simultaneously. Strategy implementation as an activity embraces all of those
actions that are necessary to put a strategy into practice. Strategy implementation evolves
either from a process of winning group commitment through a coalitional form of
decision-making, or as a result of complete coalitional involvement of implementation
staff through a strong corporate culture. Implementing strategies successfully is about
matching the planned and the realizing strategies, which together aim at reaching the
organizational vision. With firms evolving in terms of structure it follows that the style of
strategy implementation will differ depending on the style of organization and
management that exists in the firm. In general terms the types of leadership style can play
a critical role in overcoming barriers to implementation.
A firm's relative position within its industry determines whether a firm's profitability is
above or below the industry average. Porter (1996) identified four main competitive
advantage strategies – cost leadership, focus and differentiation. In cost leadership, a firm
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sets out to become the low cost producer in its industry. The sources of cost advantage
are varied and depend on the structure of the industry. They may include the pursuit of
economies of scale, proprietary technology, preferential access to raw materials and other
factors. A low cost producer must find and exploit all sources of cost advantage. In a
differentiation strategy a firm seeks to be unique in its industry along some dimensions
that are widely valued by buyers. It selects one or more attributes that many buyers in an
industry perceive as important, and uniquely positions itself to meet those needs. It is
rewarded for its uniqueness with a premium price. The focus strategy can either be a cost
focus or differentiation focus. In cost focus a firm seeks a cost advantage in its target
segment, while in differentiation focus a firm seeks differentiation in its target segment.
Both variants of the focus strategy rest on differences between a focuser's target segment
and other segments in the industry. The target segments must either have buyers with
unusual needs or else the production and delivery system that best serves the target
segment must differ from that of other industry segments. Cost focus exploits differences
in cost behaviour in some segments, while differentiation focus exploits the special needs
of buyers in certain segments. Porter argues that competitive strategy is about being
different which means deliberately choosing a different set of activities to deliver a
unique mix of value. Porter argues that strategy is about competitive position, about an
organization differentiating itself in the eyes of the customer, about adding value through
a mix of activities different from those used by competitors
1.1.3. Oil Industry in Kenya
Energy is the main driver of the economy in Kenya hence the great importance of the oil
industry. The oil industry is mainly downstream which involves marketing of oil products
and only recently upstream which deals with exploration. There are about 53 registered
oil marketing companies in Kenya dealing with both local and exports trade. There are
several Multinational firms and other local firms within the industry. The main players in
downstream according to Petroleum Institute of East Africa as at September 2013 are
Total Kenya (21.7%), Vivo Energy (16.9%), KenolKobil (14.7%), LibyaOil (8.2%) and
National Oil (5.1%). The oil industry is very high capital intensive hence the key risks in
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the industry lies in inventory as well as financing. The main upstream players in Kenya
include Tullow and National Oil Corporation.
1.1.4. National Oil Corporation of Kenya
National Oil Corporation is a state corporation incorporated and founded by Act of
Parliament in 1981 and become operational in 1984. It is 100% owned by the Kenyan
government through the Ministry of Energy. The formation of National Oil was
precipitated by the oil crisis of the 1970's (1973/74 and 1979/80) and the correspondent
supply disruptions and price hikes which resulted in the country's oil bill comprising of
almost one third of the total value of imports and therefore making petroleum the largest
single drain of Kenya's foreign exchange earnings. The mandate was to provide stability
in Kenyan markets and participate actively in oil exploration. The organization is
involved in upstream activities such as exploration, geological research and production
and in downstream activities such as maintenance of petroleum products retail network
and charged with participation in all aspects of the petroleum industry.
National Oil currently has about 100 service stations spread across the country (NOCK,
2013). For the period ending 2013, the organization focused on achieving market
leadership in commercial operations in Kenya, developing strategic infrastructure and
initiating active exploration and gain regional market through exports (NOCK, 2013).
National Oil focus on becoming an exporter, building large storage capacities in major
cities and having an off-shore jetty to become formidable player in the petroleum
industry in east and central Africa and indeed the whole of Africa at large. The stateowned firm has already started selling products in South Sudan and hopes to create
inroads in Uganda and DR Congo. National Oil strategic intent is to be the premiere
regional energy organization in Africa, providing a full range of downstream services and
supporting an active exploration program in Kenya and Africa. For the period ending
2013, the organization focuses on achieving market leadership in commercial operations
in Kenya, developing strategic infrastructure and initiating active exploration and gain
regional market through exports (NOCK, 2013).
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1.2.
Research Problem
Many organizations are formulating strategies to improve performance and gain market
share in foreign markets (Sinha, 2009). Globalization and integration has often been
linked to internationalization of firms. Implementation of strategies in export markets is
an important factor for achieving competitiveness and enhancing oil export performance
(Shih and Wickramasekera, 2010). However, there has been failure in implementation of
strategies in organizations. Mintzberg and Quins (1991), state that 90% of well
formulated strategies fail at implementation stage. Schaap (2006) observe that strategy
implementation in exporting firm is the most complicated and time consuming part of
strategic management hindering export success . In the current globalized marketplace,
corporation exporting petroleum products found implementation of strategies as critical
in enhancing oil and gas export performance (Leonidou et al., 2002). Success in
implementation of strategies in oil export markets has been identified as a key driver of
petroleum products export success (Drazin and Howard, 2004). This has motivated
corporations to focus on implementation of strategies to enhance exportation of
petroleum products which constitute the largest single item in international trade, whether
measured by volume or value (Stevens, 2005). The way in which the strategies in oil
corporations are implemented can have a significant impact on whether it will be
successful (Thomson, 2007).
National Oil 2008-2013 strategic plan was to focus on retail expansion, enhance
participation in midstream petroleum infrastructure development and intensify oil and gas
exploration activities in the country. National Oil also wanted to set footprints in the
lucrative petroleum exports market as a part of its current business expansion strategy.
This necessitated the needs to expand its regional export capabilities, set up a petroleum
exports business unit to serve regional countries for export products stock to bolster the
corporation's new petroleum exports business. The corporation has established business
partnerships in a number of countries in East Africa including South Sudan and plans to
actively participate in the petroleum exports business. The entry of National Oil into the
export business is part of the broader business strategy of positioning the corporation as a
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key player in Africa's petroleum industry. Despite the adoption of strategies in the
corporations to venturing in export market, the corporation has experienced various
challenges in the implementation of these strategies as it has not gained the envisioned
market share and expected revenues.
Previous studies have been researched on challenges faced in strategy implementation.
For instance, John Roberts (2004) carried a study on performance management and
learning at British Petroleum (BP) Company and concluded that rapid expansion
strategies could lead to organizational challenges affecting their financial performance.
Kimeli (2008) researched on challenges facing implementation of strategies in Kenya
Revenue Authority and concluded that ineffective adoption of technology greatly
hampered implementation of strategies at KRA. Kihara (2013) carried a study on
challenges of strategy implementation for firms in the petroleum industry in Kenya and
concluded that volatility of the international oil prices and technology adoption affects
implementation of strategies in petroleum industry in Kenya. Gladys Koletit (2012)
carried a study on strategy monitoring and evaluation at National Oil and concluded that
strategy monitoring and evaluation has helped the corporation achieve its objectives and
increase productivity. There has been no known study that has focused on challenges
facing implementation of exports strategies at National Oil Corporation. This study
therefore seeks to fill this gap of knowledge by investigating into challenges facing
strategy implementation at National Oil Corporation venturing into exports markets. The
study seeks to answer the question, what are the challenges facing strategy
implementation at National Oil Corporation venturing into exports markets?
1.3.
Objectives of the study
The objective of the study will be to establish the challenges of strategy implementation
at National Oil Corporation venturing into exports markets.
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1.4.
Value of the Study
The study will be significant to the management of the National Oil Corporation
venturing in exports of oil and gases as it will provide an insight into challenges of
strategy implementation and how to overcome them. This will enable the management of
National Oil and other oil firms and other organization successfully implements adopted
strategies for better export performance.
The findings of this study will be significant to the government in developing policies
that will ensure smooth implementation of strategy and influence achievement of export
performance. The findings of this study will be useful to scholars as it will act as a
reference for future study and forms a background for future study. It will help other
academicians who undertake the same research area in their studies in acquisition of
more knowledge on challenges facing implementation of strategies in petroleum firms
venturing in export markets.
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CHAPTER TWO
LITERATURE REVIEW
2.1.
Introduction
This chapter will give an in-depth discussion of the arguments that have been advanced in
the past on strategy implementation. This chapter covers review of relevant literature.
The literature review is divided into parts starting with the concept of strategy
implementation, theoretical review, strategy implementation and strategy implementation
challenges
2.2.
Theoretical Foundation
Most organization’s managers today would agree that strategy implementation has
become a constant phenomenon which must be attended to and managed properly if an
organization is to survive (Li, 2005). Three theories related to this study are reviewed in
this section. These theories include contingency theory, institutional theory and agency
theory. Their relevance to the study is also discussed.
2.2.1. Contingency Theory
Contingency theory is a behavioral theory that states that there is no best way to lead an
organization or to make decisions. Instead, the most favorable course of action is
dependent upon the internal and external conditions. Contingency theory (Johnsen, 2005)
states that complex organizations use performance measurement to reduce uncertainty
and for legitimacy. Contingency theory has sought to formulate broad generalizations
about the formal structures that are typically associated with or best fit the use of
different technologies. The perspective originated with the work of Joan Woodward in
1958 who argued that technologies directly determine differences in such organizational
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attributes as span of control, centralization of authority, and the formalization of rules and
procedures.
Proponents of this theory argue that the best way to organize depends on the nature of the
environment to which the organization must relate. Organizations are open systems that
need careful management to satisfy and balance internal needs and to adapt to
environmental circumstances. There is no one best way of organizing. The appropriate
form depends on the kind of task or environment one is dealing with. Management must
therefore be concerned, above all else, with achieving alignments and good fits. Different
types of organizations are needed in different types of environments. In the current study,
contingency theory was applicable in emphasizing on the environment in which strategy
implementation take place.
2.2.2. Institutional Theory
Institutional theory focuses on the deeper and more resilient aspects of social structure. It
considers the processes by which structures, including schemes, rules, norms and
routines, become established as authoritative guidelines for social behavior (Scott, 1987).
Different components of institutional theory explain how these elements are created,
diffused, adopted, and adapted over space and time; and how they fall into decline and
disuse. Institutional theory states that organizations exist in an institutional environment
which defines and delimits its social reality (Scott, 1987). In the current study,
institutional theory will be applicable given that the oil companies are firm operating in
internal market. It is the organization within which strategy implementation is taking
place and the organization has structures, rules, norms and routines. The institutional
theory therefore points out the need to focus on the institutional factors that could
influence strategy implementation and performance.
2.2.3. Agency Theory
Agency Theory explains how to best organize relationships in which one party
determines the work while another party does the work (Mintzberg Joseph and James
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Sumantra 2003). Agency theory describes the environment within a firm or between a set
of firms in terms of sets of contracts in which one party (the principal) engages another
party (the agent) to perform a service on the principal’s behalf which involves delegating
part
of the decision making authority to the agent. Organizational management
employee’s relationship management is extremely important for the client to achieve both
short- and long-term firm success (Ackermann & Collin, 2004).
In the perspective of the agency theory, the paper has included the boards of directors as
principals and by extension agents in the fact they represent the interest of the
shareholders and by extension focused on the hierarchies of strategic formulation using
various managers at each level as agents parse of the principals (Raduan, Jegak, Haslinda,
&Alimin, 2009). The agency theory proves superior to other theories of strategic
management since they all depend on the agents in the entire process of strategic
management in achieving organizational success. (Ackermann et al 2004) contends that
the Agency theory is indeed the critical element in strategy formulation since for all
organizations the nature of strategy will be most contingently influenced by the agents
who constitute the chief executives. He adds that these agent’s personal skills and
personality highly influence the nature of strategic planning. Ackermann further says that
most important outcomes of strategy making for organizations is that of developing a
way of better managing the link between the competing demands of different
stakeholders (Barney,2001)
An agency is the relationship between two parties, where one is a principal and the other
is an agent who represents the principal in transactions with a third party. In an
organization setting, the shareholders are the principals while the management is the
agents who manage the organization on the shareholders’ behalf. Shareholders commonly
delegate decision-making authority to the management (Mintzberg Joseph and James
Sumantra 2003). Agency problems can arise because of inefficiencies and incomplete
information. The agency problems experienced by organizations make it very hard for
effective strategy implementation to take place. This is so because the management might
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not always be in line with the shareholders objectives for the organization and tend to
focus more on their own objectives.
2.3.
Strategy Implementation
Strategy implementation is the process of allocating resources to support the chosen
strategies. This process includes the various management activities that are necessary to
put strategy in motion, institute strategic controls that monitor progress, and ultimately
achieve organizational goals. The implementation process covers the entire spectrum of
managerial activities including such matters as motivation, compensation, management,
appraisal and control processes (Barnat 2005). (Barnat 2005) further argues that
implementation of an organization’s strategy involves the application of the management
process to obtain the desired results. Particularly, strategy implementation includes
designing the organization's structure, allocating resources, developing information and
decision-making processes, and managing human resources, including such areas as the
reward system, approaches to leadership, and staffing. (Barnat 2005) therefore concludes
that, the implementation activities are in fact related closely to one another and decisions
about each are usually made simultaneously.
Research emphasizing strategy implementation is classified by (Bourgeois and Brodwin
1984) as part of a first wave of studies proposing structural views as important facilitators
for strategy implementation success (Drazin and Howard, 1984). Beyond the
preoccupation of many authors with firm structure, a second wave of investigations
advocated interpersonal processes and issues as crucial to any strategy implementation
effort (Noble and Mokwa, 1999). Conflicting empirical results founded upon contrasting
theoretical premises indicate that strategy implementation is a complex phenomenon. In
response, generalizations have been advanced in the form of encouraging: early
involvement in the strategy process by firm members, fluid processes for adaptation and
adjustment and, leadership style and structure (Bourgeois and Brodwin, 1984).
As (Higgins 1985) pointed out, almost all the management functions are in some degree
applied in the implementation process. (Pierce and Robinson 1996) argue that for
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effective and direct control of an organization's resources, mechanisms such as
organizational structure, information systems, leadership styles, assignment of key
managers, budgeting, rewards, and control systems are essential strategy implementation
ingredients.
It is clearly apparent that a current challenge for management lies in
implementing strategy rather than formulating it, in creating and sustaining a climate
within the firm that motivates employees in their implementation role (Dobni, 2003). Not
all firms implement their strategies in the same manner; nevertheless, research
investigating the differing styles of implementation is scarce.
2.4.
Strategy Implementation Challenges
Strategy implementation has always been a challenge for organizations across the board.
Ability to implement strategy is the deciding factor between success and failure of an
organization’s strategy. Organizations seem to have difficulties in implementing their
strategies (Beer and Eisenstat, 2000). Unfortunately, most managers know more about
developing strategy than they know about executing it. Formulating strategy is difficult,
making strategy work, executing or implementing throughout the organization is even
more difficult. Without effective implementation, no business strategy can succeed.
(Hrebiniak, 2006).
The main challenges identified by various authors include the following; (Alexander,
1985) identified inadequate time, organization structure, inadequate resources, leadership
and uncontrollable external factors. (Miller, 1997) identified organization structure,
organization culture and inadequate resources, (Al-Ghamdi, 1998) cited time constraints,
organization structure, inadequate resources and uncontrollable external factors, (Beer &
Eisenstat, 2000) identified organization structure, inadequate resources, laissez - faire
management styles, inadequate down-the-line leadership skills and development and poor
vertical communication, (Kalali, 2011) identified organization structure, organization
culture, inadequate resources and uncontrollable external factors, (Reed and Buckley,
1988) identified inadequate resources and organization structure as the main challenges
affecting strategy implementation. This study will focus on the following challenges of
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strategy implementation; time constraints, inadequate resources, organization structure,
organization culture, leadership, communication challenges and uncontrollable external
factors.
2.4.1. Time Constraints
According to research done by (Alexander, 1985), (Al-Ghamdi, 1998) and (Hrebiniak,
2006), time was considered a major challenge that hindered the successful
implementation of strategies identified. In the research conducted, it was concluded that it
took more time than originally allocated to implement a strategy, it took more time than
the formulation phase and inconsistencies in traslating long range plans into short term
objectives (changes not introduced in daily routines).
(Alexander, 1985) in his research noted that distractions from competing activities in the
organization inhibited implementation as less time was dedicated to strategy
implementation than planned. Salem and (Al-Ghamdi, 1998) carried out a study on
obstacles to successful implementation of strategic decisions focusing on the Saudi Case
and concluded that competing activities distracted attention from implementing decisions.
2.4.2. Inadequate Resources
All organizations have at least four types of resources that can be used to achieve desired
objectives, these include; financial, physical, human and product resources. (Thompson,
1990). Resource allocation is a central management activity that allows for strategy
execution. Strategic management enables resources to be allocated according to priorities
established by annual objectives. Organizations may be captured by their resource legacy
or assumptions people make about what resource priorities really matter (Johnson and
Scholes, 2002). (Hrebiniak, 2005) recognized the difficulty of strategy execution and
identified insufficient financial resources in the execution process as a major contributing
factor.
Most authors relate the inadequate resources constraint to human resources. Quantitative
indicators include too few people involved in implementation while qualitative indicators
14
include inadequate employee skills and capabilities, inadequate training and instructions,
goals and target not well understood, responsibilities not clearly defined and lack of
employee commitment as highlighted in Alexander, Wernham and Miller (research from
the '80s-90s). A number of factors commonly prohibit effective resource allocation. These
include an overprotection of resources, too great an emphasis on short run financial
criteria, organizational politics, vague strategy targets, reluctance to take risks and lack of
sufficient knowledge (David, 1997). Lack of adequate finance, insufficient pertinent
technical expertise and unhelpful multi-national company's attitude are impediments that
should be removed to achieve success in implementing strategies in organizations. The
resources and competences of the organization make up its strategic capability, which
enables success in implementation of chosen strategies.
2.4.3. Organization Structure
Organizational structure defines how activities such as task allocation, coordination and
supervision are directed towards the achievement of organizational goals. Improper
organizational design includes lack in communication, coordination, monitoring and
incentive systems. Most organizations do not align their organizational structure to what
the strategy is calling for in order to enhance effectiveness of communication and
coordination during implementation processes. They also have to ensure they have a
supportive structure in place to provide staff employees with the needed training and
instructions during implementation phase.
(Reed and Buckley, 1988) acknowledged the need for a clear fit between strategy and
structure and claim the debate about which comes first is irrelevant providing there is
congruence in the context of the operating environment. (Hrebiniak, 2005) recognized the
difficulty of strategy execution and identified lack of understanding of the role of
organizational structure and design in the execution process as a major contributing
factor.
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2.4.4. Organization Culture
Organizational culture is the behavior of humans who are part of an organization and the
meanings that the people attach to their actions. Culture includes the organization values,
visions, norms, working language, systems, symbols, beliefs and habits. Poor
implemented beliefs and values system, conflicting strategy principles and inability to
overcome resistance to change. Organizational culture is the crucial factor which
determines how quickly or how readily the people can adapt to the new demands that
deployment of strategy may make on them. Commitment of the people can be ensured
through clear communication of strategy and individual role in fulfillment of the same.
Aligning individual aspiration with the strategic goals of the organization through
judiciously designed reward schemes, monitory incentives, well thought out support to
individual to plan their career and stimulating their intellectual faculties with challenging
responsibilities are some of the things that can be done to ensure high levels of
commitment from the people who make the strategy work. Organizational culture of trust
and empowerment are bare necessities for effective execution of the strategy through
informed and quick decisions.
Most organizations fail to appreciate the importance of a healthy organization culture in
strategy implementation. The people expected to successfully implement the strategy
must be convinced that it will be a win for all involved. For this to happen, there must be
open discussions and close monitoring in an open environment that may ensure a
correction in execution and as well as plans. (Kalali, 2011) acknowledged the need for a
supportive healthy organization culture as a way to ensure success in strategy
implementation. (Hrebiniak, 2005) recognized the difficulty of strategy execution and
identified lack of understanding of the role of organizational culture as a major
contributing factor.
2.4.5. Leadership
Many a times we find that managers who are supposed to be delivering performance to
meet the strategic goals of the organization do not have a clear idea of what the strategy is
16
all about. They do not realize what needs to be done to fulfill the strategic plan. They are
unaware of their role in the strategic game plan. Authors refer to the knowledge and
leadership skills as the most mentioned problems of strategy implementation. This
includes vague strategy formulation a leaders consider their job done when they are
through with strategy formulation. One problem is managers take pride in planning and
execution is one thing that is always thought of as a lower level job in the hierarchy.
Middle management tasks modification and laissez fair senior management are usually a
major cause of conflict when it comes to strategy implementation. The organizations
management has to be involved and maintain focus during the implementation processes
for successful strategy implementation.
(Beer and Eisenstat, 2000) concluded that lower level managers were not developing
skills through newly created opportunities to lead change nor were they supported
through leadership coaching or training by senior managers. (Alexander, 1985) carried
out a study of challenges faced by organizations in implementing strategies. Based on
empirical work with 93 firms he observed that senior executives were over optimistic in
the planning phase and that leadership, direction, training and instruction given to lower
level employees were not adequate for effective strategy implementation to take place.
2.4.6. Communication Challenges
Great strategic plans or intents are represented by a catchy tag line, which conveys the
organization’s intentions to all concerned. Lack of proper understanding of what is
important for the strategy to be delivered may result failures of successful strategy
implementation. Communication is very important as implementation involves many
more people working for seemingly unrelated processes but with the same goals. Strategy
deployment is generally seen as a function of processes and structures but the fact is that
it is as much a function of voluntary involvement and spirit of the people in the
organization. It is this aspect of strategy deployment that differentiates two companies
pursuing similar strategy. Spirit of the people is something that cannot be imitated by the
competitors and is a decisive factor between success and failure of execution.
17
Leaders must always emphasize the importance of the strategy throughout the execution
phase and follow up through rigorous reviews, so that the managers know that they are
contributing to an important task. Execution is something which is taken for granted.
More so in the case of implementing strategy, leading measures are never agreed upon in
advance and hence what gets measured and reviewed is lagging indicators, which
hampers the ability of the firm to effectively monitor the execution of the strategy for
corrective actions to be taken proactively.
2.4.7. Uncontrollable External Factors
External business environment includes factors and forces that affect a firm’s ability to
build and maintain successful relationships with customers. It also affects how an
organization management and success. Firms should adapt to the environment and with
its strengths take what is good and avoid what is negative. The most mentioned factors
relates to political, economic, social and product environment. Unstable political
environment can greatly impact on the successful implementation of a strategy. Turbulent
economic environment can also be a deterrent in how a strategy is implemented in an
organization as it could have a direct impact on budgets and resource allocations. The
status of the social environment can determine if a strategy is successfully implemented
or not. Similarly, the product environment can impact on the rate of implementation of
strategy in an organization. Alexander, Al Ghamdi and Kalali in their studies emphasize
the impact of external factors on business operations.
18
CHAPTER THREE
RESEARCH METHODOLOGY
3.1.
Introduction
This chapter sets out various stages and phases that were followed in completing the
study. It involves a blueprint for the collection, measurement and analysis of data. This
section is an overall scheme, plan or structure conceived to aid the study in answering the
raised research question. Specifically the following subsections were included, research
design, target population, data collection instruments, data collection procedures and
finally data analysis.
3.2.
Research Design
This research adopted a case study approach. A case study enables the researcher to have
an in-depth understanding of the challenges that have influenced challenges of strategy
implementation at National Oil Corporation venturing into exports markets. A case study
design is most appropriate where a detailed analysis of a single unit of study is desired as
it provides focused and detailed insight to phenomenon that may otherwise be unclear.
The importance of a case study is emphasized by (Kothari, 2003) who both acknowledge
that a case study is a powerful form of qualitative analysis that involves a careful and
complete observation of a social unit, irrespective of what type of unit is under study. It’s
a method that drills down, rather than cast wide. It is a method of study in depth rather
than breadth and places more emphasis on the full analysis of a limited number of events
or conditions and other interrelations.
3.3.
Data Collection Method
The researcher used both primary and secondary data. Primary data was collected using
interview guides while secondary data was collected by use of desk search techniques
19
from published reports and other documents. Secondary data included the companies'
publications, journals, periodicals and information obtained from the internet.
The interview consisted of open-ended questions. The open-ended questions enabled the
researcher to collect qualitative data. This was used to gain a better understanding and
enabled a better and more insightful interpretation of the results from the study. The
interview guides designed in this study comprised of two sections. The first part included
the demographic and operational characteristics designed to determine fundamental
issues including the demographic characteristics of the respondents. The second part was
devoted to the identification of the challenges facing strategy implementation at National
Oil Corporation venturing into exports markets. The respondents of this study were 10
employees at management level working at National Oil Corporation who have a good
understanding of the strategy implementation process.
3.4.
Data Analysis
After the interview, the data which was qualitative in nature was analyzed using
conceptual content analysis which is best suited method of analysis. Content analysis is
defined by (Nachmias and Nachmias, 1996) as a technique for making inferences by
systematically and objectively identifying specific characteristic of messages and using
the same approach to relate trends. According to (Mugenda and Mugenda, 2003) the
main purpose of content analysis is the study existing information in order to determine
factors that explain a specific phenomenon. The content analysis was used to analyze the
respondents’ views about the challenges of strategy implementation at National Oil
Corporation venturing into exports markets
20
CHAPTER FOUR
DATA ANALYSIS, INTERPRETATION AND DISCUSSION
4.1.
Introduction
This chapter presents the data analysis, interpretations and discussion of the findings. The
primary data was collected using interview guides and analyzed through qualitative
content analysis method. The analysis was guided by the study objective which was to
establish the challenges of strategy implementation at National Oil Corporation venturing
into exports markets.
4.2.
Response Rate
The case study targeted 10 employees at management level at National Oil Corporation.
Out of the 10, 9 employees responded representing a 90% response rate. This was
considered sufficient for analysis and deriving required inferences to answer the research
problem.
4.3.
Demographic Profile
The study sought the demographic profile regarding respondents department, education
level, position held and duration over which the respondents had worked in the
organization.
4.3.1. Respondents’ Department
The study sought to establish the respondents’ departments at National Oil. From the
findings, the respondents indicated that they were working in finance, procurement, sales
and marketing, strategic, exploration, human resource and supply chain departments. This
implied that the study collected the information from the relevant employees who have a
good understanding of the organization’s operations and hence offer the information
21
required to determine challenges of strategy implementation at National Oil Corporation
venturing into exports markets.
4.3.2. Respondents’ Position
On respondents’ positions, respondents held positions such as Human resource officer,
Strategic manager, supply chain analyst, sales and marketing officers, finance officers,
exploration manager and exports sales manager who were all in management and middle
management levels. This implies that information on challenges affecting implementation
of strategies was collected from personnel who had experience on challenges facing
strategy implementation in export market at National Oil.
4.3.3. Duration Worked
The study sought to establish the duration over which the respondents had worked in the
organization. The respondents indicated that they had worked in the organization for a
period of between 5 and 10 years, two and a half years, one and a half years and some
had worked for the organization for over 10 years. This implied that the respondents had
the necessary experience to understand the challenges facing implementations of exports
market strategies in the organization.
4.3.4. Respondents’ Education Level
The respondents were requested to indicate their education level. From the findings, five
respondents indicated that they had attained graduate level of education, three were
undergraduate with bachelors degree, while two respondents had higher diploma as their
highest level of education. This implied that data collected on challenges of
implementation of exports market strategies was collected from relevant staff who were
in a position of offering correct information to answer to research questions.
22
4.4.
National Oil Corporation Exports Market Strategies
The objective of the study was to establish the challenges of strategy implementation at
National Oil Corporation venturing into exports markets. In order to do this, it was
important to understand the strategies that the organization had adopted when venturing
into the exports markets. The respondents indicated that National Oil choose two main
strategies when venturing into exports markets; low pricing entry strategy and market
development strategy. According to Ansoff’s matrix, market development strategy entails
taking existing products or services and selling them in new markets. National Oil used
this marketing strategy by taking their existing range of petroleum products to the exports
markets which were markets they had not ventured into before. The low pricing entry
strategy entails setting low prices compared to competition when venturing into new
markets. The organization used this strategy to get customers, sell more volumes and
grow their market share in the exports markets selected.
4.5.
Strategy Implementation Challenges
The objective of the study was to establish the challenges of strategy implementation at
National Oil Corporation venturing into exports markets. The respondents gave
information on the various challenges encountered when implementing the exports
market strategies. The data was analyzed in depth in order to arrive at the findings,
conclusions and recommendations. The challenges addressed in the study included; time
constraints, inadequate resources, organization structure, organization culture, leadership,
communication challenges and uncontrollable external factors. These have been
discussed in detail below.
4.5.1. Time Constraints
The respondents were requested to indicate whether time constraints affected exports
market strategy implementation. The respondents explained that time allocated was not
sufficient for implementation of export market strategies and that they could not serve
their customers on time. The respondents explained that due to numerous distractions
23
from competing organization activities, less time was dedicated to strategy
implementation than planned. Also other time constraints included delays at loading
depots where for instance one of the responder’s indicated that it took more time to serve
the customers due to inefficiencies at the Kenya Pipeline Corporation loading depots.
4.5.2. Inadequate Resources
The study sought to establish how inadequacy in resources allocated affected
implementation of exports market strategy. From the findings, respondents indicated that
the allocated physical, financial, product and human resources were inadequate for the
exports market strategy implementation in the organization. For instance, one respondent
indicated that only one person was assigned to implement the strategy and was expected
to cover more than four countries which was not realistic. Another respondent indicated
that the products allocated for the exports customers were not always adequate leading to
unsatisfied customers. From the findings, majority of the respondents indicated that
inadequacy of financial, physical, product and human resources hindered the strategy
export implementation.
4.5.3. Organizational Structure
The study sought to establish how organization structure affected implementation of
exports market strategy. The respondents indicated that job design and responsibilities
allocation was not clearly defined, uncoordinated and poor supervision which hindered
success in implementation of exports market strategy. It was evident from the
respondents that no clear structure was in place to support the exports markets venture.
For instance, one responded indicated there was a lot of bureaucracy which delayed the
approval of processes thus delaying serving the customers thereby impacting on the
achievement of the exports market strategies objectives.
24
4.5.4. Organization Culture
The respondents were requested to indicate how organization culture affected the exports
market strategy implementation. From the findings, it was evident that the organization’s
culture was not very supportive as one respondent put it; “do-as-you-see-fit mentality had
grounded exports business”. The respondents also indicated that the organization faced
lack of employee’s commitment, risk averse culture, bureaucracy and organization
politics which hindered successful implementation of the exports market strategies. The
respondents also indicated that management styles adopted at National Oil were not
supportive of the exports market strategy.
4.5.5. Leadership
The respondents were asked to indicate how leadership affected exports market strategy
implementation. The respondents indicated that the leadership at the organization was not
clear and focused on performance. The respondents also indicated that leadership at
National Oil lacked clarity of what the implementation of exports market strategy was all
about and failed to realize what needed to be done to fulfill the successful implementation
of these strategies. As one respondent put it; “there is a gap as managers lack
commitment and involvement in the exports business”. Respondents further indicated
that most leaders at National Oil were unaware of their role, failed in planning, execution
and involvement in the exports market strategy implementation.
4.5.6. Communication Challenges
The respondents were asked to indicate how communication challenges affected exports
market strategy implementation. The respondents indicated that there was no effective
communication between the top management and the line staff thus hindering effective
sharing of ideas, effective participation of employees in exports market strategy
implementation and hindering controls in strategy implementation deviations. The
respondents indicated that communication to the staff was not enhanced through
meetings and was also not effectively done through cascading of all targets through
25
performance contracts which would help in understanding the strategies of the
organization. For instance, one respondent felt that communication on strategy, open
quarterly strategic plan review meetings and corporate performance briefing for staff was
not adequate. The respondents also indicated that updates’ from the top management on
the export strategy implementation and the open forums during the departmental
quarterly business presentations were not adequate.
4.5.7. Uncontrollable External Factors
The respondents indicated that there were uncontrollable external factors that hindered
implementation of exports market strategies at National Oil. Among those indicated were
political interferences, international oil prices volatility and turbulent economic
environment which had greatly impacted on successful implementation of exports market
strategy. For instance, one respondent indicated that the unstable international fuel prices
was a big challenge as they change without notice and customers rely on already agreed
on prices for product purchases. The organization is therefore forced to absorb the losses
once this happens. Turbulent economic environment such increase in inflation in the
country had also affected organization’s budget allocation and pricing of the organization
pricing of products hindering implementation of low pricing strategy.
4.6.
Discussion of Findings
The objective of the study was to establish the challenges of strategy implementation at
National Oil Corporation venturing into exports markets. The study established various
challenges which have been discussed in length with relation to studies done by various
researchers on the same.
From the study, it was evident that time constraints was a major hindrance to exports
market strategy implementation at National Oil. Due to numerous distractions from
competing organization activities, less time was dedicated to strategy implementation
than planned. The findings concurred with Salem and (Al-Ghamdi, (1998) study carried
out on obstacles to successful implementation of strategic decisions focusing on the Saudi
26
Case and concluded that competing activities distracted attention from implementing
decisions due to lack of sufficient time allocation. The study also concurred with research
findings by (Alexander, 1985), (Al-Ghamdi, 1998) and (Hrebiniak, 2006) which
indicated that time was considered a major challenge that hindered the successful
implementation of strategies identified. From the study, it was evident that inadequate
resources were a major hindrance to the success of the exports market strategy
implementation at National Oil. From the findings, respondents indicated that the
allocated physical, financial, product and human resources were inadequate for the
exports market strategy implementation in the organization. The findings concurred with
(Hrebiniak, 2005) whose study recognized the difficulty of strategy execution and
identified insufficient financial resources in the execution process as a major contributing
factor.
From the study, it was evident that organization structure was a major hindrance to the
success of the exports market strategy implementation at National Oil. The finding
concurred with (Reed and Buckley, 1988) who found that lack effective alignment in
organizational lead to difficulty in implementation of strategy and strategy execution
and that due to lack of understanding of the employees and management responsibility
of organizational structure and design. The study also concurred with (Hrebiniak, 2005)
whose study recognized the difficulty of strategy execution and identified lack of
understanding of the role of organizational structure and design in the execution process
as a major contributing factor to unsuccessful strategy implementation. From the study, it
was evident that organization culture was a major hindrance to the success of the exports
market strategy implementation at National Oil. From the findings, it was evident that the
organization culture was not very supportive of the strategy implementation process. The
findings concurred with (Kalali, 2011) who acknowledged the need for a supportive
healthy organization culture as a way to ensure success in strategy implementation.
From the study, it was evident that leadership was a major hindrance to the success of the
exports market strategy implementation at National Oil. The findings concurred with
Beer and Eisenstat, (2000) who found that poor leaders resulted to ineffective
27
implementation of strategies in manufacturing companies in Malaysia. The study
concurred with (Alexander, 1985) whose study on challenges faced by organizations in
implementing strategies observed that senior executives were over optimistic in the
planning phase and that leadership, direction, training and instruction given to lower level
employees were not adequate for effective strategy implementation to take place. From
the study, it was evident that communication challenges were a major hindrance to the
success of the exports market strategy implementation at National Oil. The findings
concurred with concurred with (Alexander, 1985) whose study identified communication
challenges as one of the major hindrances in organizations’ strategy implementation
process. From the study, it was evident that uncontrollable external factors were a major
hindrance to the success of the exports market strategy implementation at National Oil.
The respondents indicated that uncontrollable external factors that hindered
implementation of export strategies at National Oil, the respondents indicated that
political interferences and international oil prices volatility had greatly impacted on
successful implementation of exports strategy. The findings concurred with Al Ghamdi
and Kalali studies that emphasized the impact of uncontrollable external factors on
strategy implementation and business operations.
28
CHAPTER FIVE
SUMMARY OF THE FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
5.1.
Introduction
This chapter provides the summary of the findings from chapter four and also gives the
conclusions and recommendations of the study based on the objectives of the study. The
objective of the study which was to establish the challenges of strategy implementation at
National Oil Corporation venturing into exports markets.
5.2.
Summary of Findings
The study established that National Oil adopted functional strategies such as market
development strategy and low entry pricing strategy as exports market strategies which
enabled the organization to export its products at lower price than the competitors and
venture into new markets with their existing range of products. However, the study found
that export market strategies employed had not been very successful as the organization
faced stiff competition, failure by management to support strategies, limitations in
strategy scope and international oil prices volatility among other challenges. The specific
findings on the challenges of strategy implementation are discussed below.
The study discussed various challenges that hindered the successful implementation of
the exports market strategies. Among these were time constraints as time allocated was
not sufficient for implementation of the strategy. Due to numerous distractions from
competing organization activities, more time was spent implementing exports strategy
than initially planned. They also indicated delay at loading depots which led to increased
lead times for customers. The study also found that inadequate resources hindered the
successful implementation of exports strategy. This involved physical, financial, product
and human resources allocated to the implementation of exports market strategy. There
was need to allocate adequate resources to ensure successful implementation of exports
29
strategy. This involves allocation of adequate funds, dedicated staff and the needed
product resources assigned to the team implementing the exports market strategy.
The study also revealed that the organization structure affected implementation of exports
strategy as job design and responsibilities allocation was not clearly defined,
uncoordinated and poor supervision, poor monitoring and evaluation and unclear
compensation structures greatly hindered the successful implementation of exports
strategies at National Oil Corporation. The study also established that implementation of
export strategy was affected by existing culture which is risk averse, lacking employee’s
commitment, organization politics, bureaucracy and unsupportive management. The
organizations values, norms, beliefs and habits did not embrace change and thus greatly
hindered the successful implementation of the exports market strategy. The study also
revealed that lack of effective and clear leadership at National Oil greatly hindered the
successful implementation of exports market strategy. Majority of the leaders were
indifferent to the implementation of the exports strategy, failed to understand what it
entailed and therefore did not give the necessary support required during planning and
implementation of the exports market strategy.
The study established that lack of effective communication was a major hindrance to the
successful implementation of the exports strategy. Ineffective communication between
the top management and the line staff hindered effective sharing of ideas, effective
participation of employees and lack of understating and appreciation of the exports
strategy. Lack of effective communication reduced the success of the exports market
strategy as majority of the employees did not understand the importance of the exports
strategy for the success of the organization. The study also revealed that uncontrollable
external factors also greatly hindered the implementation of exports market strategy at
National Oil. These included political interferences by various politicians focused on
achieving their goals, international oil prices volatility and turbulent economic
environment such as increase in inflation in the country. These factors especially the
volatility of international oil prices greatly hindered the success of exports market
30
strategy as the organization could not hold their low prices in these markets when the
international oil prices increased due to crisis in the oil producing countries.
5.3.
Conclusions
The study drew several conclusions from the information collected through
questionnaires on the challenges of exports market strategy implementation at National
Oil. From the findings, the study concluded that time constraints was a major hindrance
to the successful implementation of exports strategy at National Oil. It concluded that
competing activities reduce the time dedicated to strategy implementation as the team
assigned to the implementation process has to be involved in other activities. This led to
prolonged implementation time than planned and ultimately affecting the success of
exports strategy implementation process. There were also delays at serving customers
orders at the loading depots due to depot inefficiencies. This led to long lead times for
customers which made them look for alternative sources of product.
The study also concluded that inadequate resources allocated for the strategy
implementation process greatly hindered the successful implementation of the exports
market strategy at National Oil. These resources include physical, financial, product and
human resources. The corporation had not dedicated enough resources like human
resource, product allocation and budget allocation for the exports market strategy
implementation thereby hindering its successful implementation. The study also
concluded that organization structure affected implementation of exports market strategy
as job design and responsibilities allocation was not clearly defined, uncoordinated and
poor supervision, improper organizational design characterized by ineffective
communication, lack of coordination, poor evaluation and unclear compensation
structures hindered successful implementation of exports market strategies at National
Oil. From the findings, the also study concluded that implementation of export strategy
was affected by existing culture which is risk averse, lacked employee’s commitment,
organization politics, bureaucracy and one with unsupportive management. The
organizations values, norms, beliefs and habits did not embrace change and thus greatly
hindered the successful implementation of the exports market strategies.
31
The study also concluded that lack of clear and effective leadership hindered the
successful implementation of the exports market strategy. Lack of top management buy
in, lack of understanding and involvement led to inadequate support required from top
management during the implementation process. Most of the leaders were unaware and
indifferent to the importance of the successful implementation of the exports market
strategy. They did not relate this to the overall performance of the organization and failed
to understand their roles in the whole process. The study also concluded that lack of
effective communication was a hindrance to the successful implementation of exports
market strategy. Ineffective top management communication to line staff, lack of timely
feedback on implementation process to the staff through involvement hindered effective
sharing of ideas and participation. The study also concluded that uncontrollable external
factors were a major hindrance to the successful implementation of the exports market
strategy at National Oil. These included political interferences by politicians,
international oil prices volatility, inadequate pipeline infrastructure and turbulent
economic environment such as increase in inflation in the country. These factors greatly
hindered the successful implementation of exports market strategy as the organization
had limited ability on mitigating their effects.
5.4.
Recommendation of the Study
The study recommends that National Oil should ensure that time allocated for the
implementation of strategies should be adequate. It further states that competing activities
should be managed by a separate team from the one undertaking the strategy
implementation process to allow full concentration and dedication to the strategy
implementation process. In so doing, the time allocated during the strategy planning
process will be adhered to and the implementation process will not take longer than
planned. This will enable the organization to meet its objectives in a timely manner and
leap maximum benefits from this. The study also recommends that National Oil should
have adequate resources allocated for the strategy implementation process. These
resources include physical, financial, product and human resources. In so doing, the
organization will be in a position to successfully implement its strategies and thereby
32
achieving their set goals and objectives within the set timelines. The study also
recommends that National Oil should ensure the organizations structure is well aligned to
the exports strategy to ensure successful strategy implementation. This could be achieved
through proper job designs, effective coordination, supervision, monitoring and the right
remuneration schemes for staff. The organization should ensure the structure is aligned
with the strategy in order to ensure successful implementation.
The study also recommends that National Oil should ensure that the organizations culture
is supportive to ensure successful implementation of the exports market strategy. The
organization’s values, language, norms, beliefs and habits should not be in conflict with
the strategies being implemented. The organization should embrace a risk taking culture,
improve employee commitment to tasks and reduce bureaucracy in its processes. In so
doing, they will ensure the success of strategies implemented. The study also
recommends that National Oil should ensure clear effective leadership is in place for
successful implementation of exports strategy. There needs to be buy- in and support
from senior management to ensure that everyone in the organization is aligned and
supports the strategy. All managers in the various departments should be in a position to
understand the roles they play to ensure the successful implementation of the strategy.
The study also recommends that National Oil should ensure effective communication is
in place to ensure staff understands the exports market strategy. This could be done
through meetings, engagement and involvement in strategy formulation, cascading of all
targets effectively and ensuring all staff involved in the strategy implementation fully
understands their roles and responsibilities to ensure successful implementation. The
organization should also ensure there is effective communication of the vision, mission
and other goals of the organization. The study also recommends that National Oil should
put measures in place to mitigate against the effects of uncontrollable external factors.
The management should discourage political interferences; shield itself from effects of
international oil prices volatility and turbulent economic environment. In so doing, the
organization will be in a position to maintain stability in their exports strategies and
thereby achieving their objectives.
33
5.5.
Limitations of the Study
The study investigated challenges facing implementation of exports market strategies at
the National Oil Corporation of Kenya. The main limitation of the study was based on the
data collection where data collected included few respondents comprising of 10 managers
in the organization. This might not have been an adequate representation of the whole
organization’s perceptions about the research problem.
5.6.
Recommendation for Further Study
The study investigated challenges facing implementation of exports market strategies at
the National Oil Corporation of Kenya. Further research should be undertaken in other oil
companies and parastatals to find out challenges facing implementation of exports
strategies so that organizations can minimize and eradicates them for maximum
achievement of their objectives. A further study requires to be carried out to determine
the influence of exports strategies implementation on overall performance of the
organization.
34
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36
APPENDIX 1: INTERVIEW GUIDE
Section A: Demographic Profile
1. Which department are you working in at National Oil? ...........................................
2. What is your position at National Oil? .....................................................................
3. How long have you worked at National Oil? ............................................................
4. What is your current education level? ......................................................................
Section B: Strategy Implementation
Which strategies did National Oil choose when venturing into exports markets?
....................................................................................................................................
...................................................................................................................................
Has these strategies been successful?
....................................................................................................................................
...................................................................................................................................
How has the following factors affected the exports strategy implementation?
1. Time Constraints
a. Has time constraints affected exports strategy implementation? If so, in what
ways?..........................................................................................................................
....................................................................................................................................
b. In what ways could the Corporation improve on effective time allocation to
ensure success of the exports strategy implementation? ...........................................
....................................................................................................................................
...................................................................................................................................
2. Inadequate Resources
a. Has resource constraints affected the implementation of the exports strategy? If
so, in what ways?
..................................................................................................................................
....................................................................................................................................
...................................................................................................................................
b. In what ways could the Corporation improve on resource constraints to ensure
success of the exports strategy implementation? ......................................................
....................................................................................................................................
...................................................................................................................................
3. Organization Structure
c. Has organization structure affected the exports strategy implementation? If so, in
what ways?
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a. In what ways could the Corporation improve on organization structure to ensure
success of the exports strategy implementation? ......................................................
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4. Organization Culture
a. Has organization culture affected exports strategy implementation? If so, in what
ways?..........................................................................................................................
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ii
b. In what ways could the Corporation improve on organization culture to ensure
success of the exports strategy implementation?
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5. Leadership
a. Has leadership affected exports strategy implementation? If so, in what ways?
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b. Do you think the leaders at National Oil fully understand the export strategy? ......
If not where are the gaps and how can they be addressed?
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...................................................................................................................................
a. In what ways could the Corporation improve on leadership to ensure success of
the exports strategy implementation?
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6. Communication Challenges
b. Has communication affected exports strategy implementation? If so, in what
ways?..........................................................................................................................
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c. In what ways could the Corporation improve on effective communication to
ensure success of the exports strategy implementation?
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iii
7. Uncontrollable External Factors
a. Are there any external factors that have affected exports strategy implementation?
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b. Out of these factors, which are uncontrollable?
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iv