Strategy development among Water Services boards in Kenya

Abstract

Organizations are open systems that depend on the operating environment for resources and outlets of their products and services (Pearce and Robinson, 2007). According to Ansoff (1984), an organization must establish a fit between itself and its operating environment for it to achieve its goals and objectives and for long term sustainability. An organization must therefore match its strategy and supporting capability with the environment to optimize its competitiveness and long-term sustainability (Ansoff, 2006). This therefore underpins the importance of strategy development process. An organization's strategy has a major contribution in its strategic management process, hence the importance of strategy development. Strategic plans are not only important in private organizations, but also in state corporations such as state corporations (Johnson et aI., 2005) such as water service boards. Water services boards are state corporations which were established under section 51 of Water Act 2002. According to the Act, the mandate of the VVSBs is to provide water and sewerage services through infrastructure development, and licensing of water service providers as their agents in provision of water and sewerage services. As a body mass therefore, the WSBs are responsible for achievement of the millennium development goals number 7 target 4 and objectives set out in Vision 2030 for water and sewerage services. The WSBs operate in an environmental context where the broad policy framework and long-term objectives are set by the ministry in charge of water. The demand for the water and sewerage services is big, the government set objectives very ambitious, but on the other hand, tariffs from WSPs, which are main source of revenue, are strictly controlled by the government through the water services regulatory board. The water services board, like all other organizations, faces challenges environment related to the environment such as the political, economy, technology, social, ecological and legal. Further the WSBs as state corporations face competition for resource allocation from the government with other state corporations. As' a sub-sector and individually, they also Vlll compete in attracting bilateral financial support with other state corporations (Johnson et aI., 2005). The WSBs therefore must operate efficiently and demonstrate value for money, to achieve their mandate and for long-term sustainability. This demands for strategic management in the water services boards. The foundation of strategic management is strategic planning, the process through which organizations formulate appropriate strategy to achieve their goals and long-term objectives. The author was not aware of any previous studies carried out to document the strategy development processes and associated challenges faced by the water services boards. It is in recognition of these pertinent issues, that this research was undertaken. The research was undertaken as descriptive study through the cross-sectional survey design method of data collection. The population of WSBs licensed as at August 31st, 2008 the time of this study was small and covered areas of jurisdiction with contrasting geographical features, and each of them had a separate and independent board of directors. Therefore a census survey was undertaken across all the eight WSBs. Primary data was collected using a structured questionnaire, and results verified through personal interviews of the respondents, who were the CEOs of these Boards. The data collected was edited, coded and then analyzed using the SPSS, a computer based software for statistical analysis. Through the study, the research established that strategy development process' in the water services boards were formal and resulted in formal and documented vision and mission statements and strategic plans. This process was driven by a select committee of senior managers and the CEO in most of the WSBs with the facilitation of external consultants. The researcher established that although all WSBs undertook SWOT analysis as part of the strategic planning, other aspects of environmental analysis such as competitor analysis were not common. The researcher established that during the strategy development process, a monitoring and evaluation plan for the strategy was developed, however the documented financial plans did not contain adequate details for implementation. According to findings in this study, the main challenges in strategy development faced by the water service boards were inadequate staff capacities in strategy development, inadequate baseline data for strategic planning,' and inadequate financial resources for investment. Other significant obstacles were poor communication modes between the various stakeholders, and political interference. In view of the findings from this study, the researcher recommended that strategy development in WSBs should include a thorough environmental analysis to enable informed prediction of the future, and therefore development of realistic strategies and accurate identification of the associated risks and assumptions. In line with strategy development practices in successful organizations, the strategic planning process in WSBs should include development of detailed financial plans for ease of strategy implementation. Finally, it should be noted that this study was designed as a descriptive study hence it was not possible to establish the cause-effect relationship, between the strategy development processes and the outcome. The researcher therefore proposed that in future, a study of the relationship between strategy and performance be undertaken.