Factors influencing ethical standards of managers within the Kenyan oil industry

Abstract

The Government of Kenya ended regulation of retail fuel prices in Kenya in 1994, with the expectation that competitive forces would prevent price exploitation by the oil companies. In 2008, global prices of crude rose to unprecedented levels resulting in previously unseen prices in Kenya. As prices started dropping later in 2008, the collapse of an oil importing company, Triton Oil, caused shortages that were widely seen as an attempt by the oil companies to maintain high oil prices. This resulted in claims by both the public and the sector regulator, that the oil companies operating in Kenya had poor ethical practices. The objectives of the study were therefore to determine the level of ethical standards of managers within the Kenyan oil industry and to determine factors that influence their ethical standards. The scope of the study was limited to oil marketing companies operating in Kenya. The study was a cross-sectional survey that assessed the same variables across respondents in the oil industry in Kenya and over a limited period of time. The target population was madeup of the junior employees, middle and senior level managers in the oil marketing companies operating in Kenya. The employees were sampled using the stratified random sampling method based on seniority level. The data was collected through a structured questionnaire that was administered on a drop and pick basis and the results analyzed using SPSS. The findings of the study were that, based on the responses received, the managers in the oil marketing companies in Kenya are primarily ethical in nature. The study also found that two key factors (i) the presence of values and (ii) the presence of a code of ethics specifically, had a positive impact on the ethical performance of senior managers in the companies.