Challenges facing strategy implementation in National Oil Corporation of Kenya
Strategic management is fundamentally about setting the underpinning aims of an organization, choosing the most appropriate goals towards those aims and fulfilling both over time In the strategy implementation often called the action phase - the firm is required to translate its strategies and policies into action through the development of specific budgets and procedures. Strategy may fail to achieve expected results especially when the strategy execution is flawed. The failure to execute is a major concern of executives because it limits organizational growth, adaptability and competitiveness. National Oil is a unique company in Kenya since it's the only National Oil Company in Kenya mandated by the government to provide stability in the supply and pricing of petroleum products owing to the fact that energy consumption levels are a key indicator of the economic activity in the country. This study investigated challenges facing strategy implementation at Nation Oil Company. The objective of the study was to establish the challenges affecting implementation of strategic choices at the National oil corporation of Kenya. The study adopted a case study approach. The case study was preferred for the study because the design provides an in-depth understanding of the cases under study. In this context, the study provides an in-depth understanding of the challenges of strategy implementation in National Oil. The respondents of the study are senior managers and mid-level managers. Interview guide was used to gather information from the target respondents outlining issues relevant to the study. The collected qualitative data from the interview guides was analyzed using content analysis. From the findings the study concluded that technology in the ERP (trade union) that has been implemented has many set-backs. Further, the technology in the National Oil Company is faced by the challenge of expensive implementation of ERP and slow integration process of the new system. The ERP and fuel FACS allow for control loading operation and hence shortcoming in implementing. The study concluded that poor road infrastructure , inadequate pipeline infrastructure was also found to be a challenge because it leads to products rationing especially in West Kenya depots, constrained expansion into new markets and market share and this leads to stock-outs and therefore the customers are not satisfied . The study concludes that the inability to source competitively and access new market opportunities and later competitive pricing is lacking In the National Oil Company. Also the unfair business practices bring about the harmful competition for example saga, K.K case. It was also found out that some multinational corporation gets support from their mother companies unlike the National Oil Company and this make difficult to compete with such kind of the company explaining that multinational already have the stamina and can change prices because they already have a good retail network and this affects the National Oil Company in their marketing of products. The study also concludes that The National Oil Company was facing challenges of Limited supply facilities in strategy implementation process as it has only established one depot in Nairobi and operation in other major towns like Mombasa depends on the hospitality management leading to tracking of product from Nairobi at hails. Also the retail outlets are insufficient in the Nairobi region, lack of filling plant and blending plant frustrated by hospitality arrangement with competitions National Oil organization structure, Lack of Support and resistance and alignment of cross function relation in terms of target signing homogenization are the other challenges facing strategy implementation. The study further concludes that the company corporate strategy was yet another challenge facing implementation of strategy in National Oil Company. Some strategic goals for example reaching the strategic reserves for the country is pegged on the government policy on the source and some other external challenges like economic status of the country. The study also concludes that inadequacy of finances and human resources hinder the strategy implementation but on the other hand the physical and technological resources were adequate for the strategy implementation. This clearly indicated that insufficiency fund and insufficient personnel's in the company were challenges facing implementation of strategies in the Company. The study further concludes that the existing polices in National Oil Company which include guidelines, methods, procedures, rules, norms and administrative practices public procurement and disposal act hinders strategy implementation its delaying long procedures which results to loss of sales and delayed services delivery.