The application of porter's value chain model at the Kenya revenue authority (KRA)
Abstract
The study was conducted to determine the extent of application of Porters Value Chain Model at
Kenya Revenue Authority (KRA) and further to identify both areas of strengths which could be
maximized and areas of weaknesses which require improvement and urgent attention in order for
KRA to continue attaining its corporate targets. The study design was a case study conducted at
KRA headquarters in Nairobi. Fifteen informers were interviewed, mainly senior managers at the
grades of Senior Assistant Commissioner, Deputy Commissioner and Senior Deputy
Commissioner. All the informers had attained graduate qualifications and the majority have
served KRA for a period of between 10-15 years. This group was therefore well placed and
familiar with the operations of their departments. The informers were drawn from four revenue
departments namely Customs Services Department (CSD), Domestic Taxes -Large Taxpayers
Office (LTO), Domestic Taxes -Domestic Revenue (DTD-DR) and Road Transport Department
(RTD) which perform primary functions at KRA. In addition, eleven support departments
participated namely, Human Resource Management, Procurement & Supplies Services, Finance,
Research & Corporate Planning, Legal Services, Internal Audit & Risk Management,
Investigation & Enforcement, General Management (Commissioner General's office),
Administration, Information & Communication Technology (lCT) and Marketing &
Communication. The findings of the study showed that Porters Value Chain Model is being
applied at KRA; First there was evidence of departmentation where the revenue departments
perform the core or primary activities while Porters secondary activities are performed by the
support departments. Overally, the primary activities are performed to a large extent with a mean
score of 3.4 on a 5-point rating scale, while individually, inbound logistics attained a mean score
of 3.6, operations attained 3.5, outbound logistics attained 3.0, marketing & communication
attained a mean score of 3.4 and Services at 3.3.The secondary activities were equally
performed to a large extent with a mean score of3.9.Individual departments attained mean scores
of ; Human Resource Department 4.2, Procurement & Supplies Services 3.3, Finance 4.0,
Research & Corporate Planning 3.9, Legal Services 4.7, Internal Audit & Risk Management 3.9,
Investigation & Enforcement 3.5, General Management (Commissioner General's Office) 4.5,
Administration 3.6, Information & Communication Technology (lCT) 3.3 and Marketing &
Communication 3.6.
Even though the results show appreciation of the model, there are still value activities which
need improvement if KRA is to attain higher performance levels. These include, need for
additional funding for Revenue Administration Reforms and Modernization Programmes
(RARMP) projects, additional staffing requirements, additional staff development programmes,
continuous automation of processes within the support departments such as Procurement
,Human Resources, Finance ,Administration among others, need for improved service delivery
through the practice of Service Level Agreements (SLA) and Relationship Management among
others. Interestingly, the departments on their own evaluation felt they are performing above
average .However, when rated by other department there is need for a lot of improvements
required in service delivery. The need for continuous surveys on employee and customer
satisfaction levels is critical for purposes of rating and identifying areas of improvement in the
value chain both internally and externally. The study only looked at the internal value chain of
KRA , there is therefore the need to study the value chains of KRA's customers, suppliers and
other stakeholders like the Government, Central Bank of Kenya, Kenya National Audit Office,
Kenya Bureau of Standards, Kenya Ports Authority, Kenya Airports Authority among others.
Citation
Masters of Business Administration, University of Nairobi (2009)Publisher
University of Nairobi. School of Business