Influence of Industry Legislation on Strategy Implementation of Oil Marketing Companies in Kenya

Abstract

Organizations are both environmental serving and dependent and industry legislation forms an integral part of the environment. Notwithstanding the growing importance of industry legislation, many companies do not always give due significance to co-alignment of legislation with strategy implementation. This study’s objective was to establish the influence of industry legislation on the strategy implementation of oil marketing companies in Kenya. The environment dependency theory was the study’s anchoring theory and the institutional theory was the supporting theory. This research used a cross-sectional descriptive survey methodology. The population of this research was all 137 Oil Marketing companies in Kenya that are licensed to import, export, and wholesale petroleum products. The study was a census and the primary data collection tool was a semi-structured questionnaire. The target respondents were the CEOs or heads of business units in the organizations. Descriptive statistics were used in analysis. The study findings determined that the petroleum industry in Kenya is over-regulated with numerous laws and regulations. Some of the laws are perceived by market players as impediments to growth and development of the sector. The study determined that the strategy implementation aspects affected by industry legislation included process of performance measurement/review, action plans, resource allocation, operational plans, schedules of strategic activities, budgets of administrative departments, and essential strategic measures of the oil marketing firms. The study found that the oil marketing firms used many strategic measures to mitigate the impact of industry legislation including consulting with policymakers and regulatory agencies, participating in lobbying efforts with other marketers, and including industry legislation as a fundamental external environmental factor in the execution of their strategies. The study recommends for policymakers to consolidate and integrate the numerous regulations in the industry, reduce the frequency of changes and ensuring involvement of oil marketing companies in the design and implementation of legislation in the industry. The study further recommends Oil Marketing companies to ensure that their strategy implementation is co-aligned with the industry legislation to reduce risk of litigation, penalties and loss of brand reputation. They should enhance the capacity of their employees through training, and engagement with professional bodies to understand and comply with industry legislation.