Sustainable Supply Chain Management Practices and Firm Performance of Oil and Gas Companies in Kenya

Abstract

Sustainable supply-chain management practices (SSCMPs) has undergone transition from a mere fringe to mainstream because of the need to have consideration on a number of economic, environmental and social matters in the firm’s operations. Research into SSCM has tremendously gained consideration in managing SC, management of operations, ethics, business, and discourses of sustainable development. The research aimed at assessing the impact of SSCM practices and Kenyan oil and Gas Company’s performance. The study was aided by three specific objectives namely; to establish the sustainable supply-chain management (SSCM) of Kenyan oil and gas companies, to analyze the relationship between SSCM practices and firm performance of Kenyan oil and gas companies and to assess challenges facing the implementation of the SSCM practices. The paper was anchored towards stakeholder theory and general systems theory. To achieve the goal of the research, descriptive cross-sectional survey design was adopted. The research targeted 63 oil and gas firms in Nairobi where the study used a census because of relatively small population size. The respondents were supply chain managers or their equivalents. A questionnaire was used as a data collection instrument. The data gathered was analysed using descriptive statistics and regression analysis as inferential statistics. The study established that social supply chain practices and information sharing and management had insignificant and positive effect on firms’ performance; internal environmental management had a significant and positive effect on firm’ performance; strategic supply chain integration and partnership had a significant and positive correlation with firms’ performance; responsible eco-design had a positive and significant effect on firms’ performance. It was also established that the R2 value of 58% infers that 58.2% of variation in firms’ performance is accredited to the adoption of independent variables: social SCP, internal environment management, strategic supply chain integration and partnership, responsible eco-design and information sharing and management. It was established that financial constraints is the major challenge that the firms are facing in the implementation of the SSCM practices. It was concluded that sustainable SCM practices have a positive and substantial effect on firms’ performance. The study recommends that the management of oil and gas firms need to adopt managing and sharing information to boost timeliness, minimize cost and enhance flexibility. It was ascertained that managing and sharing information are embraced by the entities to handle clients, vendors and internal processes. Future studies ought to be carried out in a different context away from the oil and gas firms.