Using Project Management as a Strategy for Improving Performance Indicators in a Changing External Environment : the Case of Kenya Power and Lighting Company Limited Distribution Projects

Abstract

There is a lot of concern in Africa in general, and Kenya in particular, about poverty eradication, employment creation and economic growth (Soderbom, 2005). Since national prosperity is created, not inherited (Porter, 1998), it is important to study how national institutions are enabling environment for growth of the economy, especially in a changing external environment (Barney and Hesterly, 2005) so as to help formul ate appropriat adaptation to changes for survival, growth and development. Such adaptation can be taken as strategies (Omondi, 2004). The provision of Infrastructure and Utilities in the country is a priority area, and a crucial aspect of it is electricity, which in Kenya is distributed by the Kenya Power and Lighting Company (KPLC), and hence the choice of the Company for case study. KPLC uses Project Management for its Distribution Line works. Due to its implied cost, time, quality and stakeholder satisfaction criteria, this method is now examined here for efficacy. This study examines the external environment of KPLC and the major challenges it presents, and then the key features and techniques of KPLC's Project Management work to determine whether KPLC's the strategy is helping the Company to cope with changes in the external environment. Secondary data was obtained from the Company's records on project tendering and management for all 204 projects scheduled between July 2004 and December 2005, while primary data was obtained by a questionnaire filled in by project management personnel in the Company. The data was analyzed qualitatively and quantitatively. Tables and Charts were used to present and understand the results which were measured against a list of Performance Indicators against which the Company measures its work output (Njoroge, 2003). The results identify several external environmental factors for KPLC, grouped under the industry environment, and other general environmental factors. The study identified two distinct phases of the KPLC's Project Management Cycle: A preparatory Tendering Phase being sometimes longer than the actual Construction Phase. Of the Projects studied, 5% were completed early, 10% completed late and 85% was found to be late and incomplete. On the quality of works, an average of 23% of projects was completed to VII designed standards, 67% completed with modifications, but 10% with some missing items. On stakeholder groups' satisfaction, none were delighted, and customers tended to be dissatisfied. Thus the project do not satisfy the quality, time, and stakeholder satisfaction criteria, but on examining the performance indicators, some real benefits have been realized from the strategy. The study suggests several implementation issues that should be streamlin d t impro e project management at KPLC. The study identifi d me areas for further study including the differences in stakeholder satisfaction, the o ernment Procurement policy, the effect of the Government Procurement Policy on Small and Medium enterprise contractors in Kenya, Project Supervisor Performance as a factor of education, training, personality and motivation, as well as the efficacy of other management sciences such as Total Quality Management in rectifying the deficiencies of the KPLC project management. The study was limited in time and resources, so some stakeholders were not covered in the study, but the study still does illustrate the use of project management as a strategy to improve performance indicators in a changing external environment.