DECLARATION

I certify that this is my original work and has not been presented to any other University or college for the award of degree diploma or for examination purposes.

Signed

Date

Ceri E. Chamberlain D61/9252/2006

This research project has been submitted with my approval as the University supervisor.

Signed

Date

Dr. J. Maalu De ar!men! "# $u%ine%% A&mini%!ra!i"n '(h""l "# $u%ine%% )ni*er%i!+ "# Nair"bi

DEDICATION
This project is dedicated to my dearest can only go as far as your dreams%&. other and !ather in law for blessing me with their son". # $ou

ii

AC,NO-LED.EMENT
I would like to thank my other for lighting my pathway through education' and setting an example for

me to follow' and my !ather for always assisting me to see the lighter side of life. I thank my dearest brother for his love and especially my sister' who is always there for me in the toughest and most challenging of times. I am eternally grateful to those lecturers who provided energy and inspiration to me throughout the () programme' and especially to Dr. *. my specialist subjects and research project. +astly' I would like to thank my dear husband and soul mate for his confidence in me and his ever encouraging words' and my two sons' ,aytham and ,arith' who were both born during this programme' for the blessings that they have brought us. -eace be upon you all. aalu' whose guidance and motivation propelled me through

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A$'TRACT
The shipping industry plays a very crucial role in the .enyan economy. )s the world business environment changes it is vital that businesses including the shipping firms adapt to these changes in order to survive and achieve their corporate objectives. Strategic Issue This study focused on establishing the SI SI practices. anagement /SI 0 has now become an essential component of the strategic plan of every successful firm. practices implemented within the shipping companies based in .enya and the challenges encountered by the firms in implementing the

+iterature review was gathered from various sources with more emphasis on more current literature from renowned authors in strategic management. The research design used was a census survey design which aimed at identifying the SI
iv

practices that shipping companies in

.enya had implemented and the challenges that they experienced in implementing the strategies. ) total of 12 shipping companies were targeted but only 23 responded to the 4uestionnaires. The data collection tool used was a 4uestionnaire with closed and open5ended 4uestions guided by the contents of the literature review and aimed at achieving the set objectives. The results obtained from the 4uestionnaire were first summari6ed in a data preparation process and results were analy6ed using the descriptive analysis and use of graphical techni4ues. Tables were used to show percentages and trends in the data. In order to measure the spread of the data over the sample population' mean scores and standard deviations were calculated using the S-SS package. The study revealed that the shipping companies in .enya use SI matters with a majority of them indicating that they considered SI to deal with crucial strategic as a project worth investing

in for the success of their organisations. The study recommends consistent application of SI practices and a regular review of the techni4ues in order to match the environmental changes both locally and globally.

A$$RE/IATION' AND ACRON0M'

'IM 7 Strategic Issue anagement

'ID 1 Strategic Issue Diagnosis $'R 1 (usiness Sustainability and 8esponsibility ,MA 1 .enya aritime )uthority

,2A 3 .enya -orts )uthority ,RA 1 .enya 8evenue )uthority ,'C 1 .enya Shipping 9ouncil ,I4-A 5 .enya International !reight and :arehousing )ssociation
v

)NCTAD 3 United ;ations 9onference on Trade and Development 2E'TEL 7 -olitical' <conomic' Social' Technological' <nvironmental = +egal CEO 7 9hief <xecutive >fficer '-OT 1 Strengths' :eaknesses' >pportunities and Threats

vi

TA$LE O4 CONTENT'
DECLARATION...........................................................................................................................i DEDICATION..............................................................................................................................ii AC,NO-LED.EMENT..........................................................................................................iii A$'TRACT.................................................................................................................................i* A$$RE/IATION' AND ACRON0M'....................................................................................* Table "# C"n!en!%.......................................................................................................................*ii LI'T O4 TA$LE'......................................................................................................................i5 C6A2TER ONE7 INTROD)CTION.......................................................................................5i 2.2 (ackground of the Study.....................................................................................................xi
2.2.2 Strategic Issue anagement....................................................................................................xii

2.2.1 The Shipping Industry in .enya............................................................................................xiii

2.1 8esearch -roblem..............................................................................................................xiv 2.? 8esearch >bjectives..........................................................................................................xvi 2.@ Aalue of the Study.............................................................................................................xvi C6A2TER T-O7 LITERAT)RE RE/IE-.......................................................................5*ii 1.2 Introduction......................................................................................................................xvii 1.1 Strategy.............................................................................................................................xvii 1.? Strategic Issue 1.B Strategic Issue anagement............................................................................................xviii anagement -ractices.............................................................................xxii anagement.....................................................................xxiv

1.3 9hallenges of Strategic Issue

1.C Summary...........................................................................................................................xxv
vii

C6A2TER T6REE7 RE'EARC6 MET6ODOLO.0......................................................55*i ?.2 Introduction.....................................................................................................................xxvi ?.? -opulation of Study.........................................................................................................xxvi ?.@ Data 9ollection...............................................................................................................xxvii ?.B Data )nalysis.................................................................................................................xxvii C6A2TER 4O)R7 DATA ANAL0'I' AND 4INDIN.'................................................55*iii @.2 Introduction...................................................................................................................xxviii @.1 Deneral Information on 8espondents and !irms.............................................................xxix @.? >perating <nvironment...................................................................................................xxxi @.@. SI -ractices...............................................................................................................xxxiii

@.BE 9hallenges encountered in implementing SI ...............................................................xliii C6A2TER 4I/E7 DI'C)''ION'8 CONCL)'ION' AND RECOMMENDATION'....5l*i B.2 Introduction......................................................................................................................xlvi B.1 Discussions .....................................................................................................................xlvii B.? 9onclusions...........................................................................................................................l B.@ 8ecommendations .............................................................................................................liv B.B +imitations of the study......................................................................................................liv B.3 Suggestions for further research ........................................................................................liv RE4ERENCE'............................................................................................................................l* A22ENDICE'............................................................................................................................li5 )ppendix 2E +etter to respondents...........................................................................................lix )ppendix 1E Fuestionnaire.......................................................................................................lix )ppendix ?E +ist of Shipping 9ompanies in .enya...............................................................lxix

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LI'T O4 TA$LE'
Table 2E $ears of service of 8espondents.............................................................................2G Table 1E >wnership of the 9ompany.....................................................................................2H Table ?E ;umber of (ranches................................................................................................2H Table @E -eriod of operation in .enya...................................................................................1I Table BE 8ange of Services >ffered.......................................................................................1I Table 3E ;ature of >perating <nvironment...........................................................................12 Table CE Use of (usiness -lans..............................................................................................12 Table GE Impact of !actors to the !irm in the last one year...................................................11 Table HE Issues which affect operations.................................................................................1? Table 2IE Strategic Issues <ncountered >ver the +ast !ive $ears........................................1? Table 22E 8ating of SI -ractice by the !irms.....................................................................1@

Table 21E +ist of key strategic issues kept each year............................................................1@ Table 2?E Importance of SI Table 2@E 8ating of to success of the organi6ation................................................1B

anagementJs 8esponse to Strategic Issues.........................................1B Department.............................................................................13

Table 2BE -resence of a SI

Table 23E !actors considered before engaging in SI .........................................................1C Table 2CE -revailing mode of making critical strategic issue decisions...............................1C Table 2GE Urgent and 9ritical issues.....................................................................................1G
ix

Table 2HE <mpowerment of <mployees to ,andle Strategic Issues......................................1G Table 1IE -resence of a documented process to ,andle Strategic Issues.............................1H Table 12E 9hampions of strategic issues in the firm.............................................................1H Table 11E ethods' Techni4ues and -ractices used to analy6e strategic issues.................?I anagement....................................................................?2

Table 1?E )uthority of the !irmKs

Table 1@E -olicies and -rocedures applied in SI ................................................................?2 Table 1BE 8ating of SI in the organi6ation.........................................................................?1

Table 13E 9hallenges encountered in implementing SI .....................................................??

C6A2TER ONE7 INTROD)CTION

1.1 $a(9:r"un& "# !he '!u&+ The pace of social and economic change is accelerating and increasing the risk of doing business presenting environmental changes that shape opportunities and challenges facing organisations. In turn' they need to adjust to these changes to remain competitive both locally and globally. The environment can be relatively stable or turbulent and affects many organisations. <nvironmental changes affecting organisations include competition' globalisation' political and legal factors' changes in consumer tastes' ecological factors and insecurity. The shipping industry has not been spared from the dynamism of the environment. !rankel /2HGC0 notes that the shipping industry is in the midst of major structural and operational change. In the next five to seven years' market' stakeholder' customer' and regulatory pressures related to sustainability will drive significant changes in the way international shipping lines operate and do business. 9onsidering that the industry transports more than one5third of the value of global trade' provides more than @.1 million jobs' and represents a heavy social and environmental footprint' these are developments that will have a far5reaching impact on the industry. /-eder = !arrag' 1I2I0 !or firms to succeed' they can deploy strategic issue management /SI 0 as a measure to assist in fulfilling and protecting their corporate objectives. )ccording to )nsoff and is through SI also secure itself from surprises brought about by the changing environment. .enya is a transit route for goods being imported to or exported from other landlocked <ast )frican countries' such as Uganda' 8wanda' and (urundi' through what is known as the ;orthern 9orridor. This reinstates the importance of the
xi

cDonnell /2HHI0' it

that a firm will be able to relate itself to the environment to ensure its success and

ombasa -ort' as a key logistical node in the health

of our economy' and the success of the Shipping +ines that supply not only the domestic and

foreign markets' but the landlocked and highly dependent <ast )frican countries. The success' however' is dependent on the firmKs strategic decisions' and the components that constitute good strategic management. SI is one of those components.

1.1.1 '!ra!e:i( I%%ue Mana:emen!

The turbulent environment of the 2HGIKs experienced the limitations of the strategic planning era. Strategic management evolved to recognise the need to diagnose strategic issues that may disrupt the business position. Thus' emerged Strategic Issue Diagnosis /SID0 and SI to offer managers a systematic way of diagnosing' decision making' and planning to deal with potential forth coming issues that may demand rapid changes in response to the environment /Dutton' 2HG?0. Dlobalisation' rapid changes in technology' liberalisation of markets' emerging trading blocs' and intense global competition' are directing the business environment towards +oren6Ks chaos theory' where the capabilities of organisations need to be continually assessed to deal with the impacts of a fast paced' aggressive' and unpredictable environment. SI approaches are process components or pieces of the larger strategic planning process /!iol

= +yles' 2HGB0. ,eath /1II10 defines issue management as an anticipatory' strategic management process that helps organi6ations detect and respond appropriately to emerging trends or changes in the socio5political environment. These trends or changes may crystalli6e into an #issue& which is a situation that evokes the attention and concern of influential organi6ational publics and stakeholders. SI is classified as an extension of strategic planning that involves SID' capability analysis'

issue prioritisation' and response planning /Dutton= Duncan' 2HGC0. ) strategic issue is a forthcoming development in the environment that is likely to impact on an organisationKs ability to achieve its objectives. SI therefore involves the analysis of the impacts of the identified strategic issues and the determination of the actions to be taken by the organisation in response to the strategic issues. They are prioritised on a scale of urgency versus impact' and action re4uired is categorised as immediate' no action' delayed' or monitor /)nsoff' 2HGI0. ) SI system is described as a systematic procedure for early identification and fast response to
xii

important trends and events both inside and outside an enterprise. +iebl /1II?0 continues to identify four functions of a SI system as early detection of trends and issues in the environment' understanding the discontinuities' which are imminent because of the trends and issues' assessment of the resulting strategic implications' and taking measures. Trends in organisations today are showing the involvement as much as possible to include the people within the organisation in SI . This entails participation of SID' and response planning' and the allocation of accountability in ensuring the capability of the organisation' systemically and behaviourally' in implementing that response /Schlesinger' 1I2I0. Issues precipitate into action when a collective' informed assessment demonstrates that the organi6ation is likely to be affected /)nsoff' 2HGI0. The success of SI depends on its ability to complete the response in time to head off threats and to capitalise on opportunities. The timeliness of response depends on the anticipation of changes and in using expeditiously the time provided by the advanced warning. <arly detection of strategic issues increases the time available for responses. /,annan= !reeman 2HG@0

1.1.2 The 'hi

in: In&u%!r+ in ,en+a

The global economic changes over the last few years have presented the shipping industry with a paradigm shift in many facets of its conventional operations. Those liners that fail to embrace these new paradigms will be engulfed by their ineffective and inefficient traditional methods. -eder and !arrag /1I2I0' in their global focus on (usiness' Sustainability and 8esponsibility' /(S80' predict that in the next five to seven years' market' stakeholder' customer' and regulatory pressures related to sustainability will drive significant changes in the way international shipping lines operate and do business. These will demand a bigger focus on routing to the emerging economies' rise in the costs of energy' cutting carbon emissions and adapting to climate change' maritime piracy and related costs' as well as the stakeholders increasing demand for environmental sustainability and corporate social responsibility. The shipping industry is one of the major driving forces behind the .enyan economy' providing direct and indirect employment. Its liberalisation has also enticed further presence of foreign owned liners' many stretching and redirecting their routes to more lucrative destinations. The
xiii

bearish trend of the ;airobi Stock <xchange has meant that the economy is now riding on the back of private investments' and so the industry is critical to the economy since most of the liners and related organisations are privately owned. The .enyan shipping industry comprises of shipping liners which function as the main global carriers such as aersk +iner' 9D 9 )' among others /see full list in appendix 10. >ther players include the agencies that act as a contact between shipper and liner' and clearing and forwarding agents' who assist in clearing cargo and aiding in further logistical delivery. The industry is regulated by the .enya aritime )uthority /. )0 and the .enya -orts )uthority /.-)0' whilst other major stakeholders include the .enya Ships )gents )ssociation' the .enya 8evenue )uthority /.8)0' the .enya Shippers 9ouncil /.S90' and the .enya International !reight and :arehousing )ssociation /.I!:)0. It is estimated that fifty ships of various types are in the major shipping lanes off the .enyan coast at any given time. These can be characteri6ed as followsE >il tankers' bulk carriers' general cargo' container ships' passenger ships' tank barges' fishing trawlers' offshore supply' amongst others /U;9T)D' 1I220. The erchant Shipping )ct of 1IIH is an act of parliament that makes provision for the registration and licensing of .enyan ships' to regulate proprietary interests in ships' the training and the terms of engagement of masters and seafarers and matters ancillary thereto /.enya Shipping )ct' 1IIH0. Section ?2C of the )ct denotes that the . ) issues licenses in respect to registration of Shipping +ines and Shipping )gents. These are subse4uently registered with the .-).

1.2 Re%ear(h 2r"blem

SI is important to firms because the environment in which we trade is becoming more

turbulent due to the -<ST<+ factors that need to be constantly scanned. The survival of the firm within this environment re4uires the alignment of the environment' its strategy and its capabilities. <very organisation is part of a link in the global trading network' which can be affected by domestic' cross border' and intercontinental issues' therefore' strategic issues can be firm' industry or globally contagious. Some managers have a gifted talent in detecting strategic issues that may impact the firmKs strategic goals' and aligning their capabilities to address those issues. ,owever' if firms wish to hold an international presence' management tools need to be systematic in order for the firm to exercise an effective level of control over the branches or agents representing the mother company abroad. That is where SI
xiv

comes in' by offering a

systematic way to scan and respond to changes impacting the direction of the organisation across the entire scope of the firm. .enya has entered a new decade with renewed momentum for strong and sustained growth with country strategies to meet the Aision 1I?I. To achieve and sustain high growth rates over the next decade' .enya needs to address various logistics related and trade facilitation issues' to achieve international standards' and meet the demands of a growing and increasingly integrated <ast )frican 9ommunity. The key problems identified by the .enyan Shipping 9ouncil include' complex customs operations' congestion' underinvestment' complex clearance procedures and lack of coordination by cargo interveners. )dditionally' the near collapse of the .enya 8ailways 9orporation has essentially left the freight market to the road sector' and complex transit and border crossing procedures affect movement of transit goods to landlocked destinations' which account for about 1IL of the trade going through about 3II trucks a day from the port of ombasa. (acklog in the maintenance of road infrastructure on the ;orthern 9orridor affects the relatively high traffic of ombasa' whilst unnecessary and time consuming physical inspections at road blocks' customs stations and weighbridge operations that create major delays /.S9' 1I210. These evolving changes are going to have an impact on the operations and strategies of many organisations including the shipping liners and their agents. The study therefore determined if SI they face in implementing SI The interest in studying SI is a practice used within these firms and the challenges as a tool. has been gaining momentum within different organistations. ost

recently being :anja /1I220' who concluded that GIL of private security firms engaged some sort of SI . >ther previous studies applying the concept included ;yandoto /1IIH0 who focused on 8eal5Time SI most lacked formali6ed SI -ractices by large5scale tea producers in .enya and concluded that system. uya /1II30 concluded from his study that management ungai /1IIG0 studied the application of by

understands how critical it is to address strategic issues in their organisations but little resources are allocated by the top management to address them. SI practiced SI by Independent >il 9ompanies in .enya and he found out that most of them partially in their organi6ations' whilst )li /1IIG0 conducted a study on SI

commercial banks in .enya and demonstrated they had a high level of awareness on the role of SI ' but the practices were largely influenced by the management culture' si6e and operating
xv

environment. This study attempted to fill the gap by applying the same context of SI ' but in the concept of shipping companies in .enya' and proposed to answer the following 4uestionsE :hat SI practices are adopted by the shipping companies in .enya and what challenges are encountered by the shipping companies in implementing SI M

1.; Re%ear(h Ob<e(!i*e%

This study had two objectivesE (i) To establish the strategic issue management practices implemented within the Shipping 9ompanies based in .enya (ii) To determine the challenges encountered by the firms in implementing the SI practices

1.= /alue "# !he '!u&+

The findings of this study are useful to various stakeholder groups. Diven the many challenges that face the shipping industry today' and the nature of the environment that surrounds it' the study offers the management and proprietors of shipping companies and their agents an insight into SI practices in their industry and the challenges they may face in exerting them. It can that is also be of interest for mother companies and head4uarters to understand the level of SI stakeholders an insight into SI application of SI

practiced within their main branches or nominated agents. In offering potential investors and within the shipping industry and the challenges faced by the firms in handling them' the study hoped to entice further interest in the development and within those firms.

)dditionally' the study presents information to internal regulators and policy makers on SI practices that will influence the future strength and weaknesses of the major players within the industry. It also provides an insight to the key policy making stakeholders externally by giving them an indication of the capabilities of real time change of the major players that the industry relies so heavily upon. This may assist to assess the ade4uacy of the provisions made within the industryKs legal framework in guarding the firms from any serious or sudden impact.
xvi

!inally' the study contributes to the body of knowledge by filling a research gap in offering a study that assesses SI within the shipping industry in .enya. It attempted to revive an interest in an industry so critical to our economy and stimulate a desire for further research. It provides desensitisation to those to whom the concept is knew' and hopefully generated some motivation for further study.

C6A2TER T-O7 LITERAT)RE RE/IE2.1 In!r"&u(!i"n

:hilst this chapter will review literature relating to the concept of strategy and the concept of SI ' more emphasis has however been given to the role of SI ' SI of SI . practices and challenges

2.2 '!ra!e:+
There is no single universally accepted definition of strategy. )osa /2HH10 categorised

definitions of strategy into broad and narrow scope. )ccording to *ohnson and Scholes /1IIB0 strategy is the direction and scope of an organisation over the long5term' which achieves advantage for the organisation through its configuration of resources within a changing environment to meet the needs of markets and fulfil stakeholdersK expectations. !irms need strategies to survive. It is often argued that the strategies that a firm pursues have a major impact on its performance compared to that of competing firms. Strategy is therefore defined as an action that a firm takes to achieve one or more of its goals. !or most firms the key goal is to achieve superior performance /Thomson = Strickland' 2HHG0. )ccording to -rahalad and ,amel /2HHI0' strategy is the managementKs game plan for the business which can contribute to a sustainable competitive advantage of business firms. int6berg and Fuinn /2HH20 viewed strategy as a plan' ploy' position' pattern' and perspective' whilst -earce and 8obinson /1IIB0 advocate that the essence of strategy formulation is coping with competition.
xvii

)nsoff /2H3B0 defines strategy as the product market scope of a company which is clearly presented in his notorious productNmarket matrix.

2.; '!ra!e:i( I%%ue Mana:emen!

!ollowing a period of rapidly expanding companies and opportunities in which strategic planning was rather extrapolative' the mid 2HCIKs and mid 2HGIKs was presented with an era of disenchantment. This was owing to the limitations with which strategic planning offered in that it was easy to apply when environmental conditions were relatively stable. The discussion of strategic issues emerged in the pre 2HCIKs as +awrence and +orsch /2H3C0 expressed the importance of the element of #adaptation&. They expressed that adapting implied an organisation can achieve better alignment with its environment. <lter and >econ /1II@0 advocate that strategic issues emerge from events in the present context of the firm' from the managerKs perception of future opportunities and threats' and their ambitions in shaping the future. The function of using a systematic method to diagnose' evaluate' communicate' and respond to internal and external impacts was named as Strategic Issue )ssociation in 2HG1 /Dutton et al' 2HG?0. Several strategy scholars elaborated on the importance of strategic issues subse4uently. )nsoff /2HGI0 contributed that strategic issues are developments or trends that emerge from an organisations internal or external environment and .ing /2HG10 added that they are perceived to have the potential to affect an organisations performance. 9onse4uently' SI the front line tactics used by todayKs successful firms. Dutton has contributed extensively in areas such as SI and SID systems' processing of crisis evolved as one of anagement by ,oward anagement 9hase in 2HCB' who also played an instrumental part in forming the Issues

and non crisis issues' with more recent work focusing on issue selling. ,er past research spanning over three decades has explored processes of organisational adaptation' focusing on how strategic issues are interpreted and managed in organisations' as well as issues of organisational identity and change. >ne of SI Ks most eminent scholars' her writings continued through the nineties and naughtyKs sustaining a focus on the development of SI managerial function. >ne work that stands out is her contribution to SI
xviii

as a key

systems whereby

Dutton and >ttensmeyer /2HGC0 categorise SI

systems forms and functions. ,ere' she

deliberately categorises issues as those that are internal' such as the decline in employee satisfaction or the introduction of a new technology' or external which she expresses consistent with the views of those who see SI systems as synonymous with environmental scanning' or as an activity affiliated with the public affairs function. )t the same time' she categorises SI systems activities as passive or active. The passive approach is more of a reactive system in the collection and transmission of information about events and developments that could potentially affect the organisations performance. )lternatively' the objective of an active SI system is to have a focus on information richness' /defined as the potential information carrying capacity of a particular communication medium0' that will aggressively shape strategic decisional outcomes or environmental forces. Such active roles may include influencing an issues life cycle such as lobbying to alter the force or impact of an issue. In figure 2' she explores the possible characteristics of the forms of SI that may emerge' or be designed' moving from collector as the most passive and intervener as the most active form of SI . 4i:ure 17 4"rm% "# '!ra!e:i( I%%ue Mana:emen! '+%!em% I%%ue '"ur(e In!ernal 2a%%i*e A(!i*i!+ '(" e A(!i*e
'"ur(e7 Du!!"n8 J.E >O!!en%me+er8 E ?19@AB 2. ;5@

E5!ernal )ntenna

9ollector

)ctivator

Intervener

)dditionally' in describing the functions of SI organisation' she categorises SI

against the focus or aspect of SI

within the

as an instrumental or symbolic function' against a focus of with a focus on outputs as

outputs or processes. This provides an instrumental function of SI

judged by their ability to detect a strategic issue early in its lifecycle' and produce information perceived as relevant and timely to decision makers so that 9<>Ks are neither blinded nor
xix

surprised by the conse4uences of issues. :ith a focus on processes' Dutton presents the instrumental aspect of the SI systems participants by creating a receptive and open environment that foster communication on potential issues or threats' or as she terms it #:histle (lowing&. This can be encouraged through group meetings and discussions. The symbolic functions purposely portray an image or culture of understanding and responsiveness that is intended to appeal to internal and external stakeholders. In addition to SI as an instrumental function' it can signal an image of control and awareness. Dutton et al/1II20 and /1II10 also make significant contributions to the topic of issue selling' the process by which individuals within an organisation bring ideas or concerns' solutions and opportunities together in ways that focus othersK attention and invite action. The process represents the earliest stage of change by focusing attention on the issue with the involvement if internal and external stakeholders. :hilst Dutton had a focus on identifying forms of SI ' .ing /2HG10 was discovering ways in which organisations can deal with them. ,e outlined four options with which a strategic issue can be dealt with namely the individual or group responsibility' the formal model' the #issue staff study&' or through strategic issue analysis. :artic and ahon /2HH@0 add that each issue has a lifecycle and that an issue can re5emerge if not resolved satisfactorily' a new issue can emerge from a resolution' an issue will remain solved if the resolution mechanism stays in place' or the issue dies because of the other external or internal developments. Several scholars also explored the topic of manipulation of issues lifecycle through active SI . Throughout the 2HHIKs the link between an organisation' its capabilities and the environment in which it exists became a clear foundation as a catalyst in promoting the use of SI within organisations /9amillus' 2HH20. Some scholars have particularly focused on the element of SI as public affairs management. This entails detecting public policy issues and responding to them before they are crystallised into legislative action. ,eath /2HHC0 argues that issue management is not just one of the many communication functions' but a management function that can entail use of public policy resources to achieve harmony with key publics. ,e views SI as understanding and achieving high standards of corporate responsibility by listening to over the last decade' which is that of crisis and acknowledging the soundness of the opinions of key publics. ,e especially focuses on an element that has emerged to the forefront of SI management. ,e discusses topics such as preparing for a crisis' and seeking to avoid a crisis
xx

form becoming an issue. These topics have become increasingly important in todays environment' and have paved the way for crisis management and real5time strategic response. Several studies on SI SI have been applied locally and abroad. ,eugens /1II?0 assessed whether

activities contribute anything worthwhile to corporate performance' and resolved that they as a

positively influenced firmKs competitiveness as well as the relative standing of firms amongst their peers. This study clearly reiterated the value of implementing and systemising SI management tool.

2.= R"le "# '!ra!e:i( I%%ue Mana:emen!

)ccording to )nsoff /2HGI0 SI does not replace the role of strategic management. It is a tool increases. Therefore firms that practice SI are able to

for effective and efficient employment of strategic management. )s the level of environmental turbulence increases' the need for SI anticipate new developments in their environment on a timely basis. This enables them to achieve their objectives in the short and long term. ,e proposed two rationales for the need of SI ' first is the cost efficiency concern. 8egular strategic management system is too expensive and re4uires huge resources and managerial capacity. Secondly' SI SI is needed for the firms whose basic strategic thrusts are clear and stable but the environment is turbulent. Therefore is an essential tool to explore the environmental turbulence and preparing the capacities of the firm in order to hedge the organisational strategies against unplanned impacts. )nsoff and cDonnell /2HHI0 identified that SI enables firms to respond to problems that

may arise from any -<ST<+ source' on a real time basis. This is because the system gives the firm a 4uick internal reaction time and also it is a lightweight system that is not affected by organisational si6e and complexity. It is also compatible with most organisational structures and systems and so firms operations are not in any way hindered by its implementation. Therefore' a firm may not need to reorganise its systems in order to cater for SI . :hen firms engage in forecasting' the expectation is that there would be a swift response to threats and opportunities. ,owever as )nsoff and cDonnell /2HHI0 note' many firms that engage in forecasting exhibit the same procrastinating behaviour as the reactive firms. They suggest that the firm should start its responses as soon as the forecast has clearly identified an
xxi

impending threat or opportunity. They further propose that early identification of surprising changes can be assured through a continued concern with strategic issues throughout the year. This constitutes periodic review and updating of a key strategic issues list' and concurrent and continuous surveillance' both outside and inside the enterprise for issues that may arise in between the reviews. Information about strategic issues is extracted from the external environment' the evolutionary trends within a firm' and trends in its performance' allowing companies to monitor strategic issues throughout the year and realise the full potential of investing in SI / uya' 1II30.

kamunduli /1IIB0 adds that analysis of issues affecting an enterprise is not a one5time stop affair. )nsoff and cDonnell /2HHI0 assert that all organisations operating in complex and rapidly changing environments should identify major environmental trends and possible major future discontinuities' such as a breakthrough in technology' which might have a major impact on the organisation. This environmental surveillance should be accompanied with identification of important internal trends and events aswell as strengths and weaknesses' which are expected to have important impact on the performance of the organisation.

2.5 '!ra!e:i( I%%ue Mana:emen! 2ra(!i(e%

The Issue anagement 9ouncil /1I210 identified and organised their best practice indicators

into three categories 7 structural' implementation and integration. Structural indicators reflect that there is an established mechanism to identify current and future issues through environmental scanning and issue analysis. The organisation adopts a formal process to assign and manage issues. 8esponsibility for stewardship of the issue management process is clearly assigned and mechanisms are in place to build organisational expertise in the discipline. Implementation indicators re4uire that ownership of each major issue be clearly assigned at an operational level with accountability and results linked to performance reviews. -rogress against key issues is formally reviewed with organisational owners on a regular basis and the status of each is monitored at the highest management level. The executive committee board has mechanisms in place to report progress to directors and or external stakeholders and has authority to intervene in the event of non5compliance or misalignment. !inally integration indicators are present where formal channels exist for managers at all levels to identify and
xxii

elevate potential issues for possible incorporation into broader strategic planning' including external stakeholder management. The management of current and future issues is well embedded within the strategic planning and implementation processes of organisational members. Issue management is recognised and organisationally positioned as a core management function that is not confined to a single function or department. >omens and (osch /2HHH0 concurs that ownership of each major issue is clearly assigned at an operational level with accountability and results linked to performance reviews. Dreening and Dray /2HH@0 supported this re4uirement by providing that the issues management function be formalised by assigning its activities to dedicated department or empowering individuals. -rogress against key issues is formally reviewed with organisational #owners& on a regular basis and the status of each is monitored at the highest management level. !ormal channels exist for managers at all levels to identify and elevate potential issues for possible integration into broader strategic planning' including external stakeholder management. <xternal stakeholders can provide findings and feedback on business or new product reviews allowing diagnosis and attention to potential issues that are identified by formally trained issue scanners. +eadership of the business or operating unit that owns the issues receive regular updates and the 9<> briefing book integrates issues into annual general meeting' analystKs briefings and other shareholder communication. The issue management plans are fully aligned with business plans to ensure optimum synergy and minimise duplication or internal conflict. +en6 and <ngledow /2HG30 reinforced this point by providing that issue analysis be integrated in overall strategic planning of the firm. )nsoff and cDonnell /2HHI0 proposed four analytical techni4ues for strategic issue

management. These are use of simple environmental impact analysis' ranking approach' cross impact analysis' and <ure4uip matrix. Simple environmental impact analysis diagnoses the issues. This is arrived at after analysing the three possible sources of information about impending strategic issues' being the trends in the external environment' the evolutionary trends within the enterprise and the trends in its performance. Issues are identified as a result of scanning and analysing the environment. The second techni4ue is issue5ranking approach. Issues are ranked depending on the urgency and impact to the firm. Urgency is obtained by comparing the probable timing of the impact of the event with the time needed by the firm for a
xxiii

timely response ranking the issue from urgent to delay able or postpone able. 8anking provides a key issue list' which is used in managing the issue system. It is changed and updated' as some issues are resolved' others dropped when their impact turns out to be minor' and new issues are added as a result of issue surveillance. The third techni4ue is cross impact analysis. Impact analysis analyses one event or trend at a time and does not concern itself with their interdependence. It entails assigning a single number' on a judgmental basis' to the impact of each trend or event. The probability and timing of the strength is also estimated. 9ross impact analysis is used to estimate the likelihood of simultaneous occurrence of several events or trends. )nsoff /2HGI0 noted that a complementary approach is S:>T analysis. It identifies the threats and an opportunity posed by each issue and matches them to historical strengths and weaknesses of the firm. The assumption under S:>T analysis is that historical strengths and weaknesses will remain strengths and weaknesses in the future. The fourth method is use of the <ure4uip matrix that analyses issues after ranking and synergy analysis. :hen the strengths and weaknesses turn out to be useful for pursuing future opportunities or minimising the impact of threats' it results to a positive synergy case. ;egative synergy occurs when neither strengths nor weaknesses help in dealing with threats and opportunities' propelling the need to identify new capabilities that must be developed in order to cope with new environmental challenges. The entries in the matrix indicate the kinds of shifts that are desirable in the priorities previously established by estimation of impact. Therefore impact and urgency estimates will usually change as a result of evaluation of S:>T synergies.

2.6 Challen:e% "# '!ra!e:i( I%%ue Mana:emen!

>ne of the major challenges of SI systems is that it will only function in an organisation if cDonnell' 2HHI0. This is a challenge in

managers accept to play a central role in it /)nsoff =

most organisations as managers normally prefer the familiar over the unfamiliar. )nsoff and cDonnell observe that it is also difficult to get managers to submit to the disciplines demanded by the system. The other challenge of SI systems is that it re4uires managers to build networks within and outside the organisation / kamunduli' 1IIB0.

xxiv

)nsoff /2HGI0 observed that installation and acceptance of SI

is not simple regardless of the

benefits achieved from practicing SI . The challenges derive from two sources. The first source is refusal of the top management to submit itself to the discipline of SI . The second source is refusal by top management to accept new and unfamiliar issues as relevant to the business of the enterprise. <xperience shows that getting key managers to submit themselves to the right discipline demanded by SI system and getting them to react to strategic issues which do not conform to historical experience is very difficult. >omens and (osch /2HHH0 noted that implementation of effective issue management cannot guarantee that a company will never experience a crisis situation. It is important for firms to develop crisis awareness and crisis management capabilities. ,owever' sound issue management reduces the number of occasions when crisis management is needed. This is brought about by failure to effectively assess the impact of external changes on existing plans. )dditionally' everyone has their own interpretation of key words such as key issues resulting in miscommunication and management inefficiency. )ccording to )nsoff /2HGI0 the list of issues to be dealt with and monitored keeps on changing due to the turbulence of the operating environment. This may lead to thrashing of resources among solving of issues due to ever changing priority lists resulting in lost energy' time and money. The situation worsens when the new realities to be confronted are drastically different from the past. This may re4uire the enterprise to seek for external help that may prove very expensive to the organisation. >omens and (osch /2HHH0 noted that SI and stakeholder management are related concepts

because for every issue' a stakeholder analysis is re4uired to determine who the most important stakeholders are for a particular issue' and to estimate their influence. This creates a problem since interest of some stakeholders is always conflicting. order to meet the various needs of their stakeholders. This poses a great challenge especially when implementing SI . Therefore top management have to exercise caution in

2.A 'ummar+
xxv

SI

practices are appropriate for small' medium and large enterprises since the operating

environment is not static. It is important that firms develop these practices in order to meet their objectives and adapt their capabilities to the changing environment. Implementation of SI is not easy as the list of issues to be monitored keeps on changing due to the turbulence of practices so as to avoid the operating environment. !irms must therefore develop sound SI to continue perusing its corporate strategies.

delaying issue response time and develop real time crisis management that will enable the firm

C6A2TER T6REE7 RE'EARC6 MET6ODOLO.0 ;.1 In!r"&u(!i"n

This chapter describes the methodology that was used to carry out the study. It covers the proposed research design' the study population' data collection method and data analysis that was used during the study.

;.2 Re%ear(h De%i:n

Since the population of the study is small' a census survey design was adopted which sought to identify the SI used by practices that shipping companies in .enya have implemented and the practices adopted by hotels in .enya. challenges that they experience in implementing the strategies. This method was successfully uya /1II30 in his study of SI

;.; 2" ula!i"n "# '!u&+

The population of study was all the twenty5one shipping companies which are based in .enya' as listed in the .-) 1I21N2? handbook and as listed in appendix 1. This is renewed annually and therefore features the most recent listing of registered shipping companies. The shipping companies comprise the liners and the agents' which both constitute the population. This is deemed necessary since agents act on behalf of liners whose head4uarters are based in a foreign

xxvi

country. The entire population has offices in accessible and timely.

ombasa' and therefore' data collection was

;.= Da!a C"lle(!i"n

The study used primary data collected through 4uestionnaires /see appendix 20 with closed and open5ended 4uestions guided by the contents of the literature review and aimed at achieving the set objectives. The 4uestionnaire was divided into two parts. -art ) focused on the general information about the firm and its environment. -art ( contained 4uestions on SI practices adopted by the shipping companies and the challenges that they experience in applying SI practices. The five point +ikert Scale was used to determine the extent of usage of various SI practices and other related variables. The 4uestionnaires were dropped to the 9<>Ks of each company for completion by themselves and collected within a space of three weeks. If the 9<> was not available' an appointed manager completed on behalf of the 9<>' and sealed with the company stamp. 9ertain firms re4uested soft copies' which were completed and returned by email. This proved to be a more efficient measure of data collection' and easier to follow up.

;.5 Da!a Anal+%i%

The completed 4uestionnaires were checked for completeness and accuracy before being analysed. The data was summarised and interpreted using spreadsheets to form tables and statistical analysis software for descriptive statistics including mean and standard deviation. SI practices were analysed using fre4uency distribution and percentages.

xxvii

C6A2TER 4O)R7 DATA ANAL0'I' AND 4INDIN.' =.1 In!r"&u(!i"n

The objectives of this study were to establish the strategic issue management practices implemented within the Shipping 9ompanies based in .enya and to determine the challenges encountered by the firms in implementing the SI practices. >ut of the sample of 12 firms' 23 /C3L0 responded to the xxviii

4uestionnaire. This was considered ade4uate for the objectives of this study. In this chapter' the analy6ed data is presented together with the relevant interpretations. !indings have been presented in three partsE Deneral information on respondents and firms' information relating to the operating environment and SI practices and 9hallenges encountered by the firms.

=.2 .eneral In#"rma!i"n "n Re% "n&en!% an& 4irm%

=.2.1 0ear% "# %er*i(e "# Re% "n&en!% Table 17 0ear% "# %er*i(e "# Re% "n&en!% 0ear% I 51 ? 5B 3 52I >ver 2I T"!al 4reCuen(+ 2 B ? C 16 2er(en!a:e ?DB 3 ?2 2H @@ 100

!rom the table above it is evident that C /@@L0 out of the 23 respondents that participated in the study have worked in the firm for over 2I years while B /?2L0 have worked between ? to B years. >nly 2 /3L0 has worked for less than 1 years. This implies that majority of those surveyed had worked for more than ? years.

=.2.2 OEner%hi "# !he C"m an+ Table 27 OEner%hi "# !he C"m an+ T+ e +ocal )gent 4reCuen(+ ? B xxix 2er(en!a:e ?DB 2H ?2

!oreign +iner (oth +ocal = !oreign (oth )gent = +iner T"!al

B I 2 1 16

?2 I 3 2? 100

Table 1 shows that B /?2L0 of the firms are )gents as well as !oreign5owned while ? /2HL0 are locally5 owned firms. 1 /2?L0 of the firms surveyed are both )gent and +iner while only 2 /3L0 is both locally and foreign5owned. ;one of the Shipping companies surveyed was in the category of +iner. =.2.; Number "# $ran(he% Table ;7 Number "# $ran(he% Ran:e 25B 3 52I >ver 2I T"!al 4reCuen(+ 23 I I 16 2er(en!a:e ?DB 2II I I 100

The above table shows that all the firms surveyed /2IIL0 have between 25B branches. ;one of them had branhes in the range of 3 and above.

=.2.= 2eri"& "# " era!i"n in ,en+a Table =7 2eri"& "# " era!i"n in ,en+a Ran:e I5B 3 52I 4reCuen(+ I 1 xxx 2er(en!a:e ?DB I 2?

>ver 2I T"!al

2@ 16

GG 100

Table @ above indicates that 2@ /GGL0 out of the 23 firms have been in operation in .enya for more than 2I years while 1 /2?L0 have been in operation for 3 to 2I years. =.2.5 Ran:e "# 'er*i(e% O##ere& Table 57 Ran:e "# 'er*i(e% O##ere& 'er*i(e (ulk Shipping -assenger service >il Tankers )gency Service 9ontaineri6ed 9onsolidated 9learing 4reCuen(+ H 2 ? 2? H I 1 2er(en!a:e ?DB B3 3 2H G2 B3 I 2?

The above table indicates that the firms offer a combination of services. /3L0 offer -assenger service but none of the firms offer consolidated service.

ajority /G2L0 of the firms

surveyed offer agency services while H /B3L0 offer (ulk shipping and 9ontaineri6ed services. >nly 2

=.; O era!in: En*ir"nmen!

The study also investigated the operating environment of the firms in the last five years in order to establish if there were major strategic issues affecting them. The results obtained are tabulated below. =.;.1 Na!ure "# O era!in: En*ir"nmen! Table 67 Na!ure "# O era!in: En*ir"nmen! 4reCuen(+ xxxi 2er(en!a:e ?DB

Turbulent Irregular 8elatively Stable T"!al

? C 3 16

2H @@ ?G 100

!rom table 3 above it is evident that 3 /?GL0 of the firms described the nature of their operating environment as relatively stable while C /@@L0 described it as irregular. ? /2HL0 indicated that their operating environment was turbulent. This implies that a total of /2I0 3?L did not feel their operating environment was relatively stable. =.;.2 )%e "# $u%ine%% 2lan% Table A7 )%e "# $u%ine%% 2lan% Re% "n%e $es ;o T"!al 4reCuen(+ 23 I 16 2er(en!a:e ?DB 2II I 100

:ith regard to the use of business plans the results above show that all /2IIL0 the firms surveyed had plans in place to allow for adjustments with changes in the environment.

=.;.; Im a(! "# !he #"ll"Ein: 4a(!"r% !" !he 4irm in !he la%! "ne +ear Table @7 Im a(! "# !he #"ll"Ein: 4a(!"r% !" !he 4irm in !he la%! "ne +ear Ma<"r Dovernment directives and legislation 9hange in top level management 9hanges in competition Increased insecurity G 2 H G xxxii M"&era!e 3 B B @ Min"r 2 B 2 @ N"ne 2 B 2 I T"!al 16 16 16 16

8estructuring and re5engineering ;ew productsN new markets Increased cost of inputs Increased stakeholder demands

? ? 3 G

C G 3 @

@ ? 1 1

1 1 1 1

16 16 16 16

Table G above shows that G /BIL0 firms indicated that government directives and legislation has a major impact. 9hanges in competition was also seen to have a major impact by H /B3L0 of the firms. >ther factors which were rated as having a major impact were increased insecurity /BIL0' increased cost of inputs /?GL0 and increased stakeholder demands /BIL0. The remaining factors had mostly moderate or minor impact.

=.=. 'IM 2ra(!i(e%

The first objective of this study was to establish the SI The following are the results obtained. practices implemented within the Shipping companies in .enya. Aarious 4uestions were administered in the 4uestionnaire to achieve this objective.

=.=.1 D" +"u n"rmall+ %!u&+ i%%ue% Ehi(h ma+ a##e(! +"ur " era!i"n%F Table 97 D" +"u n"rmall+ %!u&+ i%%ue% Ehi(h ma+ a##e(! +"ur " era!i"n%F 0e% 4reCuen(+ <xternal environment Internal environment -erformance trends 2B 2@ 2B D H@ GG H@ N" 4reCuen(+ 2 1 2 D 3 2? 3 T"!al 4reCuen(+ 16 16 16 D 100 100 100

xxxiii

The table above shows that 2B /H@L0 of the firms study their external environment and performance trends while 2 /3L0 do not. 2@ /GGL0 study the internal environment while 1 /2?L0 do not. =.=.2 '!ra!e:i( I%%ue% En("un!ere& O*er !he La%! 4i*e 0ear% Table 107 '!ra!e:i( I%%ue% En("un!ere& O*er !he La%! 4i*e 0ear% I%%ue ,igh and fluctuation of (unker !uel -rices Increased +egislation The Dlobal <conomic 9risis -iracy in the :aters off <ast )frica Increased 9ompetition -ushing down !reight 8evenue 4reCuen(+ ? B @ ? 3 @ 2er(en!a:e ?DB 2H ?2 1B 2H ?G 1B

The table above results show that B /?2L0 of the firms encountered increased legislation' 3 /?GL0 increased competition while @ /1BL0 global economic crisis and pushing down freight revenue. This means that the firms encountered a combination of factors.

=.=.; Ra!in: "# 'IM 2ra(!i(e b+ !he 4irm% Table 117 Ra!in: "# 'IM 2ra(!i(e b+ !he 4irm% Ra!in: ,ighly practiced -artially practiced ;ot practiced T"!al 4reCuen(+ 22 @ 2 16 2er(en!a:e ?DB 3H 1B 3 100

xxxiv

Table 22 indicates that SI

was highly practiced by 22/3HL0 of the firms' partially practiced by @ /1BL0

and not practiced by 2 /3L0. =.=.= D" +"u 9ee a li%! "# 9e+ %!ra!e:i( i%%ue% #"r ea(h +earF Table 127 D" +"u 9ee a li%! "# 9e+ %!ra!e:i( i%%ue% #"r ea(h +earF Re% "n%e $es ;o T"!al I# 0e%8 h"E "#!enF onthly Fuartely Semi5annually T"!al 3 @ 1 12 BI ?? 2C 100 4reCuen(+ 21 @ 16 2er(en!a:e ?DB CB 1B 100

Table 21 indicates that out of the 21 /CBL0 firms that keep a list of key strategic issues for each year' 3 /BIL0 prepare the list monthly' @ /??L0' 4uarterly while 1 /2CL0 semi5annually. @ /1BL0 of the firms do not keep the list.

=.=.5 Im "r!an(e "# 'IM !" %u((e%% "# !he "r:aniGa!i"n Table 1;7 Im "r!an(e "# 'IM !" %u((e%% "# !he "r:aniGa!i"n Ra!in: Aery important Important <ssential >f limited importance >f no importance T"!al 4reCuen(+ 2I 1 ? 2 I 16 xxxv 2er(en!a:e ?DB 3? 2? 2H 3 I 100

!rom the table above' it is evident that 2I /3?L0 of the firms rated SI ;one of the firms rated SI as of no importance.

as very important to the success

of the organi6ation' 1 /2?L0 important' ? /2HL0 essential while only 2 /3L0 of limited importance.

=.=.6 Ra!in: "# Mana:emen!H% Re% "n%e !" '!ra!e:i( I%%ue% Table 1=7 Ra!in: "# Mana:emen!H% Re% "n%e !" '!ra!e:i( I%%ue% Ra!in: Aery fast !ast Slow Aery slow T"!al 4reCuen(+ G C 2 I 16 2er(en!a:e ?DB BI @@ 3 I 100

The results above show that G /BIL0 firms rated managementKs response to strategic issues as very fast' C /@@L0 as fast while 2 /3L0 rated as slow. ;one of the respondents rated as very slow.

=.=.A 2re%en(e "# a 'IM De ar!men! Table 157 2re%en(e "# a 'IM De ar!men! Re% "n%e $es ;o T"!al I# N"8 -here are 'IM ma!!er% han&le&F In planning meetings or board of directors meetings In strategic management department To the assigned task force meetings xxxvi @ 1 1 @@ 11 11 4reCuen(+ C H 16 2er(en!a:e ?DB @@ B3 100

>utsourced to consultants T"!al

2 9

22 100

Tables 23 above indicate that C /@@L0 of the firms have a SI do not have a SI department @ /@@L0 handle SI

department. >ut of the H /B3L0 firms that

matters in planning meetings or board of directors' 1

/11L0 in a strategic management department' 1 /11L0 to the assigned task force meetings and 2 /22L0 outsourced to consultants. =.=.@ 4a(!"r% ("n%i&ere& be#"re en:a:in: in %!ra!e:i( i%%ue mana:emen! Data on factors considered before engaging in SI were analy6ed using mean scores and standard

deviations. ) mean score of less than 2.B implies that the firm rated the factor as no extent. ) mean score of 2.B to 1.B implies low extent' 1.B to ?.B neutral and ?.B to @.B moderate extent while a mean score of more than @.B implies a great extent. Standard deviation of less than 2 means that there were no significant variations in responses while greater than 2 implies that there were significant variations in the responses.

Table 167 4a(!"r% ("n%i&ere& be#"re en:a:in: in %!ra!e:i( i%%ue mana:emen! ,e+ #a(!"r% >pinion of consultants >ther shipping companies -ast experience and trends Industry policy 9ore competencies ;eeds of target customers A*era:e Mean ?.C @.1 @.@ @.1 @.@ @.3 =.2 '!&e* 2.? 2.I I.3 2.I I.C I.3 0.9

xxxvii

!rom the above table it can be seen that most of the key factors had a mean score of ?.B to @.B. This implies that they were rated as moderate extent. The needs of target customers had a mean score of @.3 indicating that it rated as great extent. The average mean score is @.1 implying moderate extent. The standard deviation of I.H is less than 2 indicating that there were no significant variations in the responses. =.=.9 2re*ailin: m"&e "# ma9in: (ri!i(al %!ra!e:i( i%%ue &e(i%i"n% Table 1A7 2re*ailin: m"&e "# ma9in: (ri!i(al %!ra!e:i( i%%ue &e(i%i"n% De%(ri !i"n Tendency to centrali6e decisions to top managers Tendency to delegate decisions to lower managers Tendency to use interdepartmental committed task force T"!al 4reCuen(+ 2I 1 @ 16 2er(en!a:e ?DB 3? 2? 1B 100

Table 2C above shows that 2I /3?L0 of the firms have a tendency to centrali6e decisions to top managers' 1 /2?L0 tendency to delegate to lower managers while @ /1BL0 have a tendency to use interdepartmental committed task force.

=.=.10 )r:en! an& (ri!i(al i%%ue% ?#a(!"r%B Data on urgent and critical issues was analy6ed using mean scores and standard deviations. ) mean score of less than 2.B implies that the firm rated the factor as no extent. ) mean score of 2.B to 1.B implies low extent' 1.B to ?.B neutral and ?.B to @.B implies moderate extent while a mean score of more than @.B implies a great extent. Standard deviation of less than 2 means that there were no significant variations in responses while greater than 2 implies that there were significant variations in the responses. Table 1@7 )r:en! an& (ri!i(al i%%ue% ?#a(!"r%B '!a!emen! :e analyse strategic plans and Ourgent and critical issues /factors0K which affect the firm between the planning cyclesM :e are continuously preoccupied throughout the year with checking xxxviii Mean @.2 ?.H '!&e* 2.1 I.H

urgent and critical issues which may affect our daily operationsM :e have structures that have been put in place by top management to ensure strategic issues are captured' analysed and implementedM A*era:e

@.I =.0

2.I 1.0

The above results show that all the three issues had a mean score of ?.B 7 @.B implying that they were considered to a moderate impact by all the firms. The standard deviation of 2 indicates there were no significant variations in the responses. =.=.11 Em "Eermen! "# Em l"+ee% !" han&le '!ra!e:i( I%%ue% Table 197 Em "Eermen! "# Em l"+ee% !" han&le '!ra!e:i( I%%ue% Me!h"& Training Involvement in identifying solutions 9onsultations Delegation 4reCuen(+ C G 3 B 2er(en!a:e ?DB @@ BI ?G ?2

!rom the table above it is clear that C /@@L0 of the firms use training' G /BIL0 involvement in identifying solutions' 3 /?GL0 use consultations while B /?2L0 use delegation to empower their employees to handle strategic issues. =.=.12 2re%en(e "# a &"(umen!e& r"(e%% !" han&le '!ra!e:i( I%%ue% Table 207 2re%en(e "# a &"(umen!e& r"(e%% !" han&le '!ra!e:i( I%%ue% Re% "n%e $es ;o T"!al 4reCuen(+ G G 16 2er(en!a:e ?DB BI BI 100

Table 1I above indicates that G /BIL0 of the firms surveyed have a documented process to handle Strategic Issues while the other G /BIL0 did not have. xxxix

=.=.1; Cham i"n% "# !he i&en!i#i(a!i"n an& im lemen!a!i"n "# %!ra!e:i( i%%ue% in !he #irm Table 217 E5!en! !" Ehi(h ea(h "# !he #"ll"Ein: (ham i"n !he i&en!i#i(a!i"n an& im lemen!a!i"n "# %!ra!e:i( i%%ue% in !he #irm Mean 9hief <xecutive >fficer /9<>0 The operations manager Department managers Supervisors 9onsultants A*era:e @.H @.@ @.@ @.1 ?.? =.2 '!&e* I.? I.C I.C I.G 2.? 1.0

8esults on the involvement of key company officers in strategic issues show that 9<>Ks had a mean score of @.H /great extent0' the operations and departmental managers @.@ /moderate extent' supervisors @.1 /moderate extent0 while consultants has ?.? /neutral0. The average mean score was @.1 indicating moderate extent. There were no significant variations in the responses as the standard deviation was 2. =.=.1= Me!h"&%8 Te(hniCue% an& 2ra(!i(e% u%e& !" anal+Ge %!ra!e:i( i%%ue% in !he C"m an+ Table 227 E5!en! !" Ehi(h ea(h "# !he #"ll"Ein: me!h"&/ !e(hniCue/ ra(!i(e i% u%e& !" anal+Ge %!ra!e:i( i%%ue% in !he C"m an+ 'TATEMENT 1 S:>T /Strengths' :eaknesses' >pportunities and Threats0 analysis. (ased on information only Simple environmental impact analysis method based on S:>T /where each issue is analysed separately without considering the effect of other identified issues0 9ross impact analysis method based on S:>T /where various related critical issues are grouped together' the likelihood of simultaneous occurrences is estimated and hence identifies possible future major lossN disaster or future major profitN opportunity0 Issue impact and ranking method based on S:>T /where critical issues are ranked according to urgency0 MEAN @.? 'TDE/ 2.1

?.2

2.@

@.I ?.3

2.B 2.1

xl

<ure4uip matrix method based on S:>T /analyses issues after ranking and synergy analysis. :hen the strengths and weaknesses turn out to be useful for pursuing future opportunities or minimising the impact of threats' it results to a positive synergy case. ;egative synergy occurs when neither strengths nor weaknesses help in dealing with threats and opportunities A/ERA.E

?.? ;.A

I.H 1.;

The above findings indicate that statements 2' ? and @ were rated as moderate extent as mean scores are between ?.B and @.B while statements 1 and B had neutral extent. The standard deviation of more than 2 indicates that there were significant variations in the responses.

=.=.15 Au!h"ri!+ "# !he #irmI% mana:emen! Table 2;7 E5!en! !" Ehi(h !he #irmI% mana:emen! ha% au!h"ri!+ !" &" !he #"ll"Ein:7 'TATEMENT 8eview of strategic issues )ccept or reject strategic issue proposals >ffer advisory role in the strategic issue management process A/ERA.E MEAN @.C @.? @.@ =.5 'TDE/ I.3 I.H I.H 0.@

Table 1? shows that 8eview of strategic issues had mean score of @.C /great extent0' while )ccept or reject strategic issue proposals had @.? /moderate extent0 and >ffer advisory role in the strategic issue management process had @.@ /moderate extent0. There were no significant variations in the responses as the standard deviation was less than 2. =.=.16 2"li(ie% an& 2r"(e&ure% a lie& in 'IM l+ in !he "r:aniGa!i"n

Table 2=7 E5!en! !" Ehi(h !he #"ll"Ein: %!a!emen!% a xli

'TATEMENT 1 2 ; = 5 6 A @ There is an established mechanism to identify current and future issues through environmental scanning and analysis There are established policies or procedures that describe issue management process The management understands how critical it is to address strategic issues The resources re4uired to handle strategic issues are ade4uate 8esponsibility for stewardship of the issue management process is clearly assigned to build firmKs expertise in the discipline >wnership of major issues is clearly assigned with accountability and results linked to performance reviews The importance of strategic issue management is clear to everyone in the firm The top management takes interest in the output of strategic issues committee and has authority to intervene in the event of non5compliance or misalignment The strategic issues committee are properly trained so as to promote issue management as standard operating procedure -rogress against key issues is formally reviewed regularly and status monitored by top management Strategic issue management is incorporated in our plans

MEAN @.2 ?.H @.@ @.I ?.G @.2 @.2

'TDE/ 2.2 2.? I.H I.C 2.? 2.2 2.2

@.? @.I @.1 @.?

2.1 2.2 2.1 2.2 2.? 2.@ 1.1

9 1 0 1 1 1 2 1 ;

9lear channels of communication exist to disseminate strategic issues to staff @.1 Strategic issue management is recogni6ed and positioned as a core management function A/ERA.E @.1 =.1

The table above shows that all the statements were rated as moderate extent as they have a mean score of between ?.B and @.B. The standard deviation of 2.2 indicates that there were significant variations in the responses. =.=.1A Ra!in: "# 'IM in !he "r:ani%a!i"n Table 257 E5!en! !" Ehi(h %!ra!e:i( i%%ue mana:emen! i% ("n%i&ere& a% a r"<e(! E"r!h in*e%!in: xlii

Re% "n%e To a great extent To a moderate extent To a neutral extent To a low extent ;o extent T"!al

4reCuen(+ 21 1 2 I 2 16

2er(en!a:e ?DB CB 2? 3 I 3 100

The table above shows that 21 /CBL0 of the firms consider SI extent and no extent. ;one of the firms rated it to a low extent.

as a project worth investing to a great

extent while 1 /2?L0 consider it to a moderate extent. >nly 2 /3L0 of the firms considered it to a neutral

=.57 Challen:e% en("un!ere& in im lemen!in: 'IM

The second objective of the study was to determine the challenges encountered by the firms in implementing the SI practices. Data on the challenges was analy6ed using mean scores and standard deviations. ) mean score of less than 2.B implies that the firm rated the factor as no extent. ) mean score of 2.B to 1.B implies low extent' 1.B to ?.B neutral and ?.B to @.B implies moderate extent while a mean score of more than @.B implies a great extent. Standard deviation of less than 2 means that there were no significant variations in responses while greater than 2 implies that there were significant variations in the responses. The results are tabulated below. Table 267 Challen:e% en("un!ere& in im lemen!in: 'IM 'TATEMENT 1 2 ; = 5 6 Inade4uate resources Systems delay in information flow within the firm 8esistance to change Time taken to study unfamiliar or new challenges 8efusal by top management to submit to strategic issue management 8efusal by top management to accept newN unfamiliar issues as xliii MEAN ?.C ?.? ?.@ ?.? 1.? 1.@ 'TDE/ 2.2 2.@ 2.1 2.I 2.1 2.1

relevant A @ 9 10 11 12 1; Time taken in discussing and verifying issues >rgani6ational culture Threat of substitute services <conomic factors Stakeholder resistance Socio5cultural factors Incompetent staff A/ERA.E ?.@ ?.@ ?.2 ?.? ?.I ?.2 1.H ;.1 2.2 2.1 2.3 2.@ 2.B 2.@ 2.@ 1.;

Inade4uate resources had a mean score of ?.C /moderate extent0' while statements B and 3 had mean scores of 1.? and 1.@ /low extent0 respectively. )ll the other challenges had mean scores in the range of 1.B 7 ?.B indicating neutral extent. The average mean score of ?.2 implies that the challenges were rated as neutral extent. There were significant variations in the responses as the standard deviation was P2.

xliv

xlv

C6A2TER 4I/E7 DI'C)''ION'8 CONCL)'ION' AND RECOMMENDATION' 5.1 In!r"&u(!i"n

The global economic changes over the last few years have presented the shipping industry with a lot of challenges in many areas of its conventional operations. The shipping industry is one of the major driving forces behind the .enyan economy' providing direct and indirect employment. Its liberalisation has also enticed further presence of foreign owned liners' many stretching and redirecting their routes to more lucrative destinations. SI has now become an important component of strategic plans of many firms including those

in the shipping industry. Trends in organisations today are showing the involvement as much as possible to include the people within the organisation in SI . !or firms to succeed' they need to embrace SI as a measure to assist in fulfilling and protecting their corporate objectives.

The objectives of this study were to establish the Strategic Issue encountered by the firms in implementing the SI

anagement practices

implemented within the Shipping 9ompanies based in .enya and to determine the challenges practices. This chapter gives a summary of the discussions' conclusions and recommendations drawn after analy6ing data.

xlvi

5.2 Di%(u%%i"n%
The first objective of the study was to establish the SI practices implemented within the

shipping companies in .enya. )s far as studying issues which may affect the operations of the firm are concerned' the results obtained indicated that 2B /H@L0 of the firms study their external environment and performance trends while 2 /3L0 do not. environment while 1 /2?L0 do not. >n strategic issues encountered over the last five years' the study revealed that B /?2L0 of the firms encountered increased legislation' 3 /?GL0 increased competition while @ /1BL0 global economic crisis and pushing down freight revenue. This means that the firms encountered a combination of factors. 8esults on the rating of SI practices by the firms indicated that SI was highly practiced by 2@ /GGL0 study the internal

22/3HL0 of the firms' partially practiced by @ /1BL0 and not practiced by 2 /3L0. )sked whether they kept a list of key strategic issues each year' 21 /CBL0 of the respondents indicated $es while @ /1BL0 indicated ;o. >ut of the 21 /CBL0 firms that keep a list of key strategic issues for each year' 3 /BIL0 prepare the list monthly' @ /??L0' 4uarterly while 1 /2CL0 semi5annually. @ /1BL0 of the firms do not keep the list. )s far as importance of SI to the success of the organisation is concerned' the study revealed as very important' 1 /2?L0 important' ? /2HL0 essential as of no importance.

that 2I /3?L0 of the firms rated SI

while only 2 /3L0 of limited importance. ;one of the firms rated SI

8esults on the rating of managementKs response to strategic issues showed that G /BIL0 firms rated their response as very fast' C /@@L0 as fast' while 2 /3L0 rated as slow. ;one of the respondents rated as very slow. )s for the presence of a SI the firms have a SI have a SI department in the organisation' findings revealed that C /@@L0 of matters in planning meetings or board of directors'

department while H /B3L0 did not have. >ut of the H firms that do not

department @ /@@L0 handle SI

1 /11L0 in a strategic management department' 1 /11L0 to the assigned task force meetings and 2 /22L0 outsourced to consultants.

xlvii

8esults on factors considered before engaging in SI ' showed thatQ >pinion of consultants had mean score of ?.C /moderate extent0' >ther shipping companies @.1 /moderate extent0' -ast experience and trends @.@ /moderate extent0' Industry policy @.1 /moderate extent0' 9ore competencies @.@ /moderate extent0 and ;eeds of target customers @.3 /great extent0. The average mean score was @.1 implying moderate extent. The standard deviation of I.H indicated that there were no significant variations in the responses. !indings on the prevailing mode of making critical strategic decisions showed that 2I /3?L0 of the firms had a tendency to centrali6e decisions to top managers' 1 /2?L0 tendency to delegate to lower managers while @ /1BL0 had a tendency to use interdepartmental committed task force.

)s far as urgent and critical issues are concerned the study showed the following mean scoresQ )nalyses strategic plans and Ourgent and critical issues /factors0K which affect the firm between the planning cycles @.2 /moderate extent0' continuously preoccupied throughout the year with checking urgent and critical issues which may affect our daily operations ?.H /moderate extent0 and structures that have been put in place by top management to ensure strategic issues are captured' analysed and implemented @ /moderate extent0. The standard deviation of 2 indicated that there were no significant variations in the responses. !indings on empowerment of employees to handle strategic issues revealed that C /@@L0 of the firms use training' G /BIL0 involvement in identifying solutions' 3 /?GL0 use consultations while B /?2L0 use delegation to empower their employees to handle strategic issues. This implies that most firms used a combination of approaches. 8esults on presence of a documented process to handle strategic issues indicated that G /BIL0 of the firms surveyed have a documented process to handle Strategic Issues while the other G /BIL0 did not have. )s for the champions of the identification and implementation of strategic issues in the firm the study showed mean scores as followsQ 9<>Ks @.H /great extent0' >perations and Departmental anagers @.@ /moderate extent0' Supervisors @.1 /moderate extent0 and 9onsultants ?.?
xlviii

/neutral0. The average mean score was @.1 indicating moderate extent. significant variations in the responses as the standard deviation was 2.

There were no

!indings on methods' techni4ues and practices used to analy6e strategic issues in the company indicated that S:>T /Strengths' :eaknesses' >pportunities and Threats0 analysis had a mean score of @.? /moderate extent0' Simple environmental impact analysis method based on S:>T ?.2 /neutral extent0' 9ross impact analysis method based on S:>T @ /moderate extent0' Issue impact and ranking method based on S:>T ?.3 /moderate extent0 and <ure4uip matrix method based on S:>T ?.? /neutral extent0. The average mean of ?.C indicated moderate extent while the standard deviation of more than 2 indicated that there were significant variations in the responses.

!indings on the authority of the firmKs management showed mean scores as followsQ 8eview of strategic issues @.C /great extent0' )ccept or reject strategic issue proposals @.? /moderate extent0 and >ffer advisory role in the strategic issue management process @.@ /moderate extent0. The average mean score of @.@ implied moderate extent authority on the areas. There were no significant variations in the responses as the standard deviation was less than 2.

8esults on policies and procedures applied in SI

revealed the following mean scoresQ There is

an established mechanism to identify current and future issues through environmental scanning and analysis @.2 /moderate extent0' There are established policies or procedures that describe issue management process ?.H /moderate extent0' The management understands how critical it is to address strategic issues @.@ /moderate extent0' The resources re4uired to handle strategic issues are ade4uate @ /moderate extent0' 8esponsibility for stewardship of the issue management process is clearly assigned to build firmKs expertise in the discipline ?.G /moderate extent0' >wnership of major issues is clearly assigned with accountability and results linked to performance reviews @.2 /moderate extent0' The importance of strategic issue management is clear to everyone in the firm @.2 /moderate extent0' The top management takes interest in the output of strategic issues committee and has authority to intervene in the event of non5 compliance or misalignment @.? /moderate extent0' The strategic issues committee are properly
xlix

trained so as to promote issue management as standard operating procedure @ /moderate extent0' -rogress against key issues is formally reviewed regularly and status monitored by top management @.1 /moderate extent0' Strategic issue management is incorporated in our plans @.? /moderate extent0' 9lear channels of communication exist to disseminate strategic issues to staff @.1 /moderate extent0 and Strategic issue management is recogni6ed and positioned as a core management function @.1 /moderate extent0. The average mean was @.2 indicating moderate extent. The standard deviation of 2.2 indicated that there were significant variations in the responses.

!urther findings on SI

practices related to the rating of SI

as a project worth investing in by as a project worth investing to a

the firms. The results showed that 21 /CBL0 considered SI of the firms rated it to a low extent.

great extent' 1 /2?L0 to a moderate extent and 2 /3L0 to a neutral extent and no extent. ;one

The second objective of the study was to determine the challenges encountered by the firms in implementing the SI practices. The mean scores were as followsQ Inade4uate resources ?.C /moderate extent0' Systems delay in information flow within the firm ?.? /neutral extent0' 8esistance to change ?.@ /neutral extent0' Time taken to study unfamiliar or new challenges ?.? /neutral extent0' 8efusal by top management to submit to strategic issue management 1.? /low extent0' 8efusal by top management to accept newN unfamiliar issues as relevant 1.@ /low extent0' Time taken in discussing and verifying issues ?.@ /neutral extent0' >rgani6ational culture ?.@ /neutral extent0' Threat of substitute services ?.2 /neutral extent0' <conomic factors ?.? /neutral extent0' Stakeholder resistance ? /neutral extent0' Socio5cultural factors ?.2 /neutral extent0 and Incompetent staff 1.H /neutral extent0. The average mean score of ?.2 implies that the challenges were rated as neutral extent. There were significant variations in the responses as the standard deviation was greater than 2.

5.; C"n(lu%i"n%
(ased on the findings above' it can be concluded that majority of the shipping companies surveyed' study issues which may affect the operations of the firm from the external environment' performance trends and the internal environment. It is also evident that the main

strategic issues encountered by the firms over the last five years were increased legislation' increased competition' global economic crisis and pushing down freight revenue. :ith regard to the rating of SI practices by the firms it is clear that SI is highly practiced by

most of the firms with only a few firms that partially practice SI . ,owever' there was one firm that did not practice SI . The findings show that most shipping firms keep a list of key strategic issues each year with half of them preparing the list monthly while only a few preparing 4uarterly and semi5annually. ost firms also indicated that SI firms rated SI was very important to the success of the organisation while

a few of them felt it was either important' essential and of limited importance. ;one of the as of no importance. The response of management to strategic issues showed that majority of the firms rated their response as very fast and fast while only one firm felt the response was slow. ;one of the respondents rated as very slow. )s for the presence of a SI of the firms had SI did not have a SI department in the organisation' findings revealed that almost half matters in planning meetings or board of

department while slightly above half did not have. >ut of the firms that department most handle SI

directors' while only a few handle them in a strategic management department' assigned task force meetings and outsourced to consultants. 8esults on factors considered before engaging in SI ' showed thatQ >pinion of consultants had moderate extent' >ther shipping companies moderate extent' -ast experience and trends moderate extent' Industry policy moderate extent' 9ore competencies moderate extent and ;eeds of target customers great extent. This means that the firms did consider all the factors before engaging in SI but needs of customers were of more importance.

!indings on the prevailing mode of making critical strategic decisions showed that majority of the firms had a tendency to centrali6e decisions to top managers' while a few firms had tendency to delegate to lower managers and a tendency to use interdepartmental committed task force.

!indings on urgent and critical issues show thatQ analyses strategic plans and Ourgent and critical issues /factors0K which affect the firm between the planning cycles had moderate extent'
li

continuously preoccupied throughout the year with checking urgent and critical issues which may affect our daily operations moderate extent and structures that have been put in place by top management to ensure strategic issues are captured' analysed and implemented moderate extent. This implies that all the statements were considered to a moderate extent. 8esults on empowerment of employees to handle strategic issues revealed that most of the firms use training' involvement in identifying solutions' while a few use consultations and delegation. :ith regard to presence of a documented process to handle strategic issues the results indicate that half of the firms have a documented process to handle Strategic Issues while the other half do not have.

9<>s were considered to a great extent as champions of the identification and implementation of strategic issues in the firms' >perations and Departmental seen to play a greater role in SI matters. anagers to a moderate extent' Supervisors to a moderate extent while 9onsultants to a neutral extent. This means 9<>s were

!indings on methods' techni4ues and practices used to analy6e strategic issues in the company indicated that S:>T /Strengths' :eaknesses' >pportunities and Threats0 analysis had moderate extent' Simple environmental impact analysis method based on S:>T neutral extent' 9ross impact analysis method based on S:>T moderate extent' Issue impact and ranking method based on S:>T moderate extent while <ure4uip matrix method based on S:>T had neutral extent. This implies that these techni4ues were not very common except S:>T and 9ross impact analysis.

The authority of the firmKs management on reviews of strategic issues had great extent' accepts or rejects strategic issue proposals moderate extent while offers advisory role in the strategic issue management process had moderate extent. This means that the firmKs management had authority in all the areas researched.

lii

8esults on policies and procedures applied in SI

revealed thatQ There was an established

mechanism to identify current and future issues through environmental scanning and analysis to a moderate extent. )s far as established policies or procedures that describe issue management process this had a moderate extent while there was also moderate extent on the management understanding how critical it is to address strategic issues. The resources re4uired to handle strategic issues were ade4uate to a moderate extent' responsibility for stewardship of the issue management process was clearly assigned to build firmKs expertise in the discipline to a moderate extent while ownership of major issues was clearly assigned with accountability and results linked to performance reviews to a moderate extent. >ther issues included the importance of strategic issue management was clear to everyone in the firm to a moderate extent' the top management takes interest in the output of strategic issues committee and has authority to intervene in the event of non5compliance or misalignment to a moderate extent' the strategic issues committee are properly trained so as to promote issue management as standard operating procedure moderate extent' progress against key issues is formally reviewed regularly and status monitored by top management moderate extent' Strategic issue management is incorporated in our plans moderate extent' 9lear channels of communication exist to disseminate strategic issues to staff moderate extent and Strategic issue management is recogni6ed and positioned as a core management function moderate extent. This indicates that all the policies and procedures were applied by the firms. !urther findings on SI related showed that most firms regarded SI indicating otherwise. )s regards the challenges encountered by the firms in implementing the SI practices the practices as a project worth investing in with only a few

findings indicate that the most factors were regarded as challenges to a neutral. These includeQ resistance to change' time taken to study unfamiliar or new challenges' time taken in discussing and verifying issues' organi6ational culture' threat of substitute services' economic factors' stakeholder resistance' socio5cultural factors and Incompetent staff. This means they were not considered as major challenges by the firms in implementing SI practices. 8efusal by top management to submit to strategic issue management and refusal by top management to accept newN unfamiliar issues as relevant were rated as low extent. This implies that they not considered important at all. ,owever' inade4uate resources' was rated as moderate extent indicating that it was a major challenge in many firms.
liii

5.= Re("mmen&a!i"n%
The study revealed that there were gaps in a number of dimensions in the SI practices adopted

by the shipping firms in .enya. )lthough most of the shipping companies highly practice SI ' a few of them still are not consistent in their application. The study shows that the firms do scan their environments and consider the key strategic issues before implementing SI . The study also shows that management have a lot of authority in handling SI the strategic issues. <mployees are also empowered to handle SI firms do not have a SI responses to such matters. It is also clear that there are policies and procedures in place to deal with SI . The problem is whether these policies and procedures are reviewed to be in line with current environmental changes both locally and globally. It is recommended that the shipping companies should regularly collect information on the environment in order to update their SI techni4ues so as to maximise the gains from SI . The management should also consider setting up a SI department to deal with strategic issues and delegate more to empower employees on SI matters. and respond fast to matters. ,owever' some

department to handle strategic issues which is a weakness in timely

5.5 Limi!a!i"n% "# !he %!u&+

The study was limited to the perspective of the Shipping companies in .enya and not the entire Shipping sector which includes the -orts )uthority' 8egulators' Ship Suppliers' Ship aintenance firms' the 8evenue )uthority etc. >ut of 12 shipping firms 23 filled and returned the 4uestionnaires. The response rate was therefore C3L with a none5response rate of 1@L. Some respondents did not also fill in some of the key data that was essential in coming up with the findings and conclusions.

5.6 'u::e%!i"n% #"r #ur!her re%ear(h

The study was conducted on shipping companies only. The findings can be verified by conducting the same study on other industries as well. This will help to identify if other industries also practice SI as well as establishing whether similar challenges are encountered
liv

in other industries. The study findings are according to the firmsK management point of view. The scope of the study may also be extended to cover the views of other key stakeholders in the shipping industry such as regulators' the ports authority' ship suppliers and the revenue authority.

RE4ERENCE'
)li' ). . /1IIG0. Strategic Issue Management by Commercial Banks in Kenya. Unpublished () project' University of ;airobi. odel

)osa' <. /2HH10. 9ontextual Influence on Strategic -lanningE -orterKs Industry )nalysis in the .enyan Setting. Moi University Journal, 2/20' @5B.

)nsoff' ,. I. /2H3B0. Corporate strategy: An analytic approac to business policy !or gro"t an# e$pansion%' cDraw5,ill ' ;ew $ork. )nsoff' ,. I. /2HGI0. Strategic Issues 2@G. )nsoff' ,. I.' = ,all . anagement. Strategic Management Journal&, /20 2?27

cDonnell' *.<. /2HHI0. Implanting Strategic Management. 1nd <dition' -rentice

Dutton' *.<.' )shford S.' >K;eill 8.' = +awrence ..' /1II20. oves that atterE Issue Selling and >rganisational 9hange. Aca#emy o! Management Journal' @@ /@0' p.C235C?3. Dutton' *.<.' )shford' S.' +awrence' ..' = iner58ubino' .. /1II10. 8ed +ight' Dreen +ightE aking Sense of the >rganisational 9ontext for Issue Selling. 'rganisational Science, 2? /@0' ?BB5?3H.

lv

Dutton' *.<.' = Duncan' 8. /2HGC0. The 9reation of omentum for 9hange through the -rocess of Strategic Issue Diagnosis. Strategic Management Journal' G' 1CH51HG. Dutton' *.<.' !ahey' +.' = ;arayanan' .. /2HG?0. Towards Understanding Strategic Issue Diagnosis. Strategic Management Journal, Aol @' ?IC5?1?. Dutton' *.<' = >ttensmeyer' <. /2HGC0. Strategic Issues anagement SystemsE !orms' functions and context. Aca#emy o! Management (evie".21 /10. ?BB5?3B. 9amillus' *.' = Deepak .. /2HH20. anaging Strategic Issues in a turbulent <nvironment. )ong (ange *lanning' 1@ /10' 3@5C@. 9hege' 9. /1II20. + e ,$tent o! Usage o! t e Marketing Mi$ -ariables in t e S ipping In#ustry in Kenya. Unpublished () project' University of ;airobi Disi' . /1IIG0. A Survey o! Competitive Strategies ,mploye# by S ipping Companies in Kenya. Unpublished () project' University of ;airobi anuscript'

<lter' !.' =>econ D. /1II@0. Strategi.ing in Comple$ Conte$ts. Unpublished ;orwegian School of anagement' >slo. />n5line0 www.kunne.no !iol' .' = +yles GI? 7 G2?.

. /2HGB0. >rganisational learning. Aca#emy o! Management (evie". 2I'

!rankel' D.<. /2HGC0. + e /orl# S ipping In#ustry. Droom ,elm publishers +td' -rovident ,ouse. Dreening' D.:.' = Dray (. /2HH@0. Testing a model of organi6ational response to social and political issues. Aca#emy o! Management Journal. ?C /?0' @3C 7 @HG. ,annan' . T.' = !reeman *. /2HG@0. Structural inertia and organi6ational change. American Sociological (evie"' @H' 2@H523@. ,eath' 8. +. /2HHC0. 0Strategic Issue Management: 'rganisations an# *ublic *olicy C allenges%. Sage -ublications +td. ,eath' 8. +. /1II10. Issue anagement' Its -ast' -resent and !uture. Journal o! *ublic A!!airs: An International Journal. 2I' /10. ,eugens' -. /1II?0. 0Strategic Issues Management an# 'rganisational 'utcomes%. Utrecht School of <conomics' Utrecht University. I 9. /1I210. >rigins of issue management. />n5line0. www.issuemanagement.org. *ohnson' D.' Scholes' ..' = :hitiington' 8. /1IIB0. ,$ploring Corporate Strategy. -rentice5 ,all' Cth <d. .enyan Shipping )ct. /1IIH0. />n5line0. www.kenyalaw.org.
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.S9. /1I210. .enya Shippers 9ouncil. />n5line0 www.kenyashippers.org. .ing' :. 8. /2HG10. Using strategic issue analysis. )ong (ange *lanning. 2B/@0' @B 7 @H. +en6' 8.T.' = <ngledow *.+. /2HG30. <nvironmental )nalysis Units and Strategic Decision5 aking !ield Study of Selected O+eading5edgeK corporations. Strategic Management Journal 1E 3H5GH. +iebl' !. /1II?0. Issue Management becoming www.issuesmanagementgesellschaft.deN. an Integrate# Concept. />n5line0.

+awrence' -.' = +orsch *. /2H3C0. 0'rganisation an# ,nvironment. Managing #i!!erentiation an# integration.% (oston ,arvard University -ress. int6berg' ,.' = Fuinn *. (. /2HH20. 0+ e Strategy process. Concept, Conte$ts an# Cases%. -rentice ,all 1nd <d. kamunduli' S.). /1IIB0. SIM in t e Insurance companies in Kenya. Unpublished project' University of ;airobi. ()

ugambi' . /1II?0. + e Strategic Management *ractices o! S ipping Companies in Kenya. Unpublished () project' University of ;airobi. ungai' .*. /1IIG0. Application o! SIM by In#epen#ent 'il Companies in Kenya. Unpublished () project' University of ;airobi. ()

uya' !. .. /1II30. (eal time SIM practices by classi!ie# otels in Kenya. Unpublished project' University of ;airobi.

wakanongo' D. /1IIC0. A Survey o! Competitive Strategies ,mploye# by S ipping Companies in Kenya. Unpublished () project' University of ;airobi. ;yandoto' D. /1IIH0. (eal2+ime SIM *ractices by large scale tea pro#ucers in Kenya. Unpublished () project' University of ;airobi. >omens' .*.,.' = (osch !.).*. /2HHH0. Strategic Issue 9ompanies. )ong (ange *lanning. ?1 /20' @H5BC. anagement in major <uropean5 (ased

-earce' *.).' = 8obinson 8.(. /1IIB0. Strategic Management: 3ormulation, Implementation an# Control. /2Ith <d.0 cDraw5,ill. -eder' .' = !arrag ). /1I2I0. Sustainability +ren#s in t e Container In#ustry. (S8 8eport. />n5line0 www.bsr.org. .)' ,arvard' (usiness

-rahalad' 9...' and ,amel D. /2HHI0. Competing !or t e 3uture. (oston School -ress
lvii

United ;ations 9onference on Trade and Development. /1I220. (evie" o! Maritime +ransport. -ublication prepared by the U;9T)D. />n5line0. www.unctad.org. Schlesinger' . /1I2I0. Strategic Issue Management 4 an ability o! 'rgani.ational 3uture 'rientation. />n5line0. www.futureorientation.net. Thompson' ).' = Strickland *. /2HHG0. Cra!ting an# Implementing Strategy. ;ew $ork' cDraw 7 ,ill. :anja' ;.9. /1I220. SIM *ractices a#opte# by private security !irms in Kenya. Unpublished () project' University of ;airobi. :artic' S.' = ahon *. /2HH@0. Towards a Substantive Definition of the corporate issue construct. A revie" an# synt esis o! t e literature, Business Society. ?? /?0' 1H?5?22.

lviii

A22ENDICE' A en&i5 17 Le!!er !" re% "n&en!%

en&i5 27 Jue%!i"nnaire
lix

2ART A7 .ENERAL IN4ORMATION AND O2ERATIN. EN/IRONMENT 2. -osition in the companyE """"""""""""""""".."".

1.

;umber of years since joining the firm /*lease tick as appropriate5 I51 ?5B 3 5 2I >ver 2I

?.

>wnership of the company /*lease tick as appropriate5 +ocal )gent !oreign +iner (oth +ocal = !oreign (oth )gent = +iner

@.

,ow many branches does the company have in .enyaM I7B 352I >ver 2I

B.

,ow long has the company been in operation in .enyaM

I 7 B years

3 5 2I years

>ver 2I years

3.

:hat range of services does your company offerM /Tick as many as are applicable0 (ulk Shipping -assenger service >il Tankers )gency Service 9ontaineri6ed 9onsolidated 9learing

>thers /-lease specify0 """"""""""""""""""""""""""""

T6E O2ERATIN. EN/IRONMENT

lx

C. ,ow would you describe your business operating environment within the last five yearsM /*lease tick one5 /a0 Turbulent /b0 Irregular /c0 8elatively stable /d0 >thers /please specify0E """""""""""..

G. Do you have business plans in place to allow for adjustments with changes in the environmentM $es ;o

H. In the last one year what impact did the following have on your firmM /-lease tick according to the estimated impactE either Ma<"r8 M"&era!e8 Min"r "r N"ne0 Ma<"r Dovernment directives and legislation 9hange in top level management 9hanges in competition Increased insecurity 8estructuring and re5engineering ;ew productsN new markets Increased cost of inputs Increased stakeholder demands M"&era!e Min"r N"ne

>thers /please specify0 """"""""""""""""""""""""""""..

PART B: STRATEGIC ISSUE MANAGEMENT PRACTICES AND CHALLENGES

For all the following, please tick (K) as appropriate

lxi

NB: A strategic issue is a forthcoming development either inside or outside the organisation, which is likely to have an impact on the ability of the enterprise to meet its ob ectives! 2I. Do you normally study issues which may affect your operations /both short and long term0 coming from the following areasM /a0 <xternal environment /b0 Internal environment /c0 -erformance trend $es $es $es ;o ;o ;o

/d0 >thers /please specify0 """""""""""""""""""""""" 22. In your view what strategic issues have you encountered for the past five years due to change in operating environmentM .indly list them down. """"""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""" """"""""""""""""""""""""""""""""""".

21. ,ow do you rate the level of strategic issue management practice in your organisationM /Tick one0 ,ighly practiced -artially practiced ;ot practiced

2?.

Do you keep a list of key strategic issues for each yearM $es If yes' how often do you update this listM
lxii

;o

onthly Semi5annually Fuarterly

>thers /please specify0 """"""""""""""""""""""

2@.

,ow important is strategic issue management on the success of your organisationM Aery important Important <ssential >f limited importance >f no importance

>thers /please specify0 """""""""""""""""""""""" 2B. ,ow can you rate the top management response to tackling strategic issues in your firmM Aery fast Slow !ast Aery slow

>thers /please specify0 """"""""""""""""""""""""

23. Do you have issue management department in your organisationM ;(E Issue management involves developing a systematic process by which the company can identify' evaluate and respond to strategic issues affecting the company.
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$es

;o

If the answer is ;o' where are such strategic issues discussed and recordedM In planning meetings or board of directors meetings In strategic management department To the assigned task force meetings >utsourced to consultants

>thers /please specify0 """"""""""""""""""""""""""""

2C.

To what extent do you consider the following factors before engaging in strategic issue management in your firmM 6 4 7reat e$tent 8 4 Mo#erate e$tent 9 4 :eutral ; 4 )o" e$tent &2 :o e$tent

,e+ #a(!"r% >pinion of consultants >ther shipping companies -ast experience and trends Industry policy 9ore competencies ;eeds of target customers

>thers /please specify0 """"""""""""""""""""""""""""" 2G. ,ow can you describe the prevailing mode of making critical strategic issue decisionsM /+ick " at is applicable0 Tendency to centrali6e decisions to top managers
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Tendency to delegate decisions to lower managers Tendency to use interdepartmental committed task force

>thers /please specify0 """"""""""""""""""""""""".

2H.

To what extent do the following statements apply in your organi6ationE ;(E Urgent and critical issues /factors0 are those perceived problems or happenings which have profound or major impact on the firm and they must be acted upon without delay. B5 7reat e$tent 'TATEMENT :e analyse strategic plans and Ourgent and critical issues /factors0K which affect the firm between the planning cyclesM :e are continuously preoccupied throughout the year with checking urgent and critical issues which may affect our daily operationsM :e have structures that have been put in place by top management to ensure strategic issues are captured' analysed and implementedM @5 Mo#erate e$tent ?5:eutral 15)o" e$tent 25:o e$tent 5 = ; 2 1

1I. ,ow are employees in your firm empowered to handle strategic issuesM /Tick0 Training 9onsultations Involvement in identifying solutions Delegation

>thers /please specify0 """"""""""""""""""""""""". 12. Is there a documented process in your firm to handle strategic issuesM $es ;o

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11.

To what extent do each of the following champion the identification and implementation of strategic issues in your firmM B5 7reat e$tent @5 Mo#erate e$tent ?5:eutral 15)o" e$tent 25:o e$tent 5 9hief <xecutive >fficer /9<>0 The operations manager Department managers Supervisors 9onsultants >thers /please specify0 = ; 2 1

1?.

To what extent do you use each of the following methodN techni4ueN practice to analyse strategic issuesM B5 7reat e$tent 'TATEMENT S:>T /Strength':eakness' >pportunities and Threats0 analysis. (ased on information only Simple environmental impact analysis method based on S:>T /where each issue is analysed separately without considering the effect of other identified issues0 9ross impact analysis method based on S:>T /where various related critical issues are grouped together' the likelihood of simultaneous occurrences is estimated and hence identifies possible future major lossN disaster or future major profitN opportunity0 Issue impact and ranking method based on S:>T /where critical issues are ranked according to urgency0 <ure4uip matrix method based on S:>T /analyses issues after ranking and synergy analysis. :hen the strengths and weaknesses turn out to be useful for pursuing future
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@5 Mo#erate e$tent

?5:eutral

15)o" e$tent 25:o e$tent 5 = ; 2 1

opportunities or minimising the impact of threats' it results to a positive synergy case. ;egative synergy occurs when neither strengths nor weaknesses help in dealing with threats and opportunities

>thers /please specify0 """"""""""""""""""""""""""

1@. To what extent does the firmKs management have authority to do the followingM B5 7reat e$tent 'TATEMENT 8eview of strategic issues )ccept or reject strategic issue proposals >ffer advisory role in the strategic issue management process @5 Mo#erate e$tent ?5:eutral 15)o" e$tent 25:o e$tent 5 = ; 2 1

1B. To what extent do the following statements apply in your organi6ationsM B5 7reat e$tent 'TATEMENT There is an established mechanism to identify current and future issues through environmental scanning and analysis There are established policies or procedures that describe issue management process @5 Mo#erate e$tent ?5:eutral 15)o" e$tent 25:o e$tent 5 = ; 2 1

The management understands how critical it is to address strategic issues The resources re4uired to handle strategic issues are ade4uate 8esponsibility for stewardship of the issue management process is clearly assigned to build firmKs expertise in the discipline >wnership of major issues is clearly assigned with accountability and results linked to performance reviews
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The importance of strategic issue management is clear to everyone in the firm The top management takes interest in the output of strategic issues committee and has authority to intervene in the event of non5compliance or misalignment The strategic issues committee are properly trained so as to promote issue management as standard operating procedure -rogress against key issues is formally reviewed regularly and status monitored by top management Strategic issue management is incorporated in our plans 9lear channels of communication exist to disseminate strategic issues to staff Strategic issue management is recogni6ed and positioned as a core management function

13.

To what extent do you consider strategic issue management as a project worth investing inM /Tick as appropriate0 a0 To a great extent b0 To a moderate extent c0 To a neutral extent d0 To a low extent e0 ;o extent C6ALLEN.E' O4 IM2LEMENTIN. 'TRATE.IC MANA.EMENT I'')E'

1C.

To what extent do you encounter challenges in implementing SI each of the following factorsM

in your firm from

'TATEMENT Inade4uate resources Systems delay in information flow within the firm 8esistance to change
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Time taken to study unfamiliar or new challenges 8efusal by top management to submit to strategic issue management 8efusal by top management to accept newN unfamiliar issues as relevant Time taken in discussing and verifying issues >rgani6ational culture Threat of substitute services <conomic factors Stakeholder resistance Socio5cultural factors Incompetent staff

>thers /please specify0""""""""""""""""""""""""""""..

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