Response of kenol to changes in external environment

Abstract

The external environment plays a significant role in survival of organizations. Its significance is brought out when organizations are left to playing catch up to the change process taking place in the external environment. The oil industry in Kenya has experienced various changes in their external environment prompting responses from players in the industry with an objective of success in their business. Kenol has not been discriminated from these changes. This research· was a case study whose objectives were to find out if there were changes in Kenol's external environment and how the organization responded to them. The objectives were achieved by collecting primary and secondary data. Primary data was collected from personal interviews with respondents who were the heads of department at Kenol. These are the people responsible for developing and implementing the strategic responses at Kenol. Secondary data was obtained from published and corporate development plans. These were analysed by way of graphs. The research ascertained that the external environment for Kenol experienced changes in the period of research. They included political, economic, social and technological, de regulation of the market, change in tax laws, need to play more role in community activities and environmental safety and quality driven concerns were noted. The research results indicated that market de-regulation, price controls, introduction of open tender systems COTS) and tax laws changes were the major political/legal changes in external environment. Economically, the opening up of the East African Community markets, escalation of international fuel prices and changes in consumption patterns majorly affected Kenol. Introduction of various product lines, expansion into the larger East African Markets and introduction of trading desk were a reaction to the changes in the economic environment. On the social front, the increased participation in corporate social responsibility through Mama Ngina Children's home, Kenol employee share ownership scheme and the establishment of Kenol Scholarship. fund for the bright but needy students were the major findings. Organization innovations on service stations, adoption of ISO standards and reduction of Sulphur and lead contents in products were put in places to respond to changes in the technological environment. v Kenol's case demonstrates a scenario of responses to external environment so as to deliver success in business. Kenol responded to each of the changes in a unique way. The company was largely playing catch up to the external environment for survival and meeting in business objectives. The fact that Kenol is dependent on the external environment for survival came out across all the changes in external environment. The changes were largely sporadic and unrelated to one another, though a few could follow a specific pattern. The external environment will continue posing various challenges to the existence of Kenol. To some extent the past approach to responding to changes in external environment may not be used to demonstrate the ability of the firm to handle the future changes. This is on the premise that immense resources are required to continuously keep the company abreast with changes and rate of change of the external environment cannot be predicated with a lot of ease. However, it's the objective of the firm to have the least cost but best and prompt approach to responding to changes in its external environment.