Kenya Ports Authority was established in the year 1978 with the mandate of managing and operating the port of Mombasa with all its scheduled and diverse seaports across our country’s coastline. These seaports are located across Malindi, Lamu, Kilifi, Maundu, Mtwapa, Shimoni and Funza among others. The organization is also responsible for the management of the country’s inland matters including waterways and depots for containers which are located in Kisumu, Eldoret and Embakasi. The company under the newly appointed managing director, Dr. Arch Daniel Manduku is mainly responsible for controlling traffic related to trade mainly within the Mombasa Port. This being one of the most lucrative ports across East and Central Africa, the company provides direct connection routes across more than eighty global ports. The core business of the organization particularly for the Port of Mombasa includes the navigation of sea vessels, securing vessels, loading and offloading cargo from vessels and the handling of cargo at the shore side (KPA, 2018).
2. Strategic Management
2.1 Introduction to Strategic Management
Lynch (2018) defines strategic management as the process in which the leaders of an organization formulate and implement the main goals and objectives of the organization on behalf of the company’s owners with the aim of ensuring that their wealth is maximized. For Kenya Ports Authority, strategic management involves the selected management team using up the allocated resources to achieve the company’s overall goals and objectives which are to provide excellent and competitive port services that will promote Kenya’s maritime trade on a global scale.
As part of effective strategic management within an organization, the company’s management need to take into account various variables that affect the operations and performance of the organization. These variables are either under the control of the company or outside the control of the organization and can be analyzed using various strategic management tools. Fallon (2018) points out one of the key strategic management tools that can provide insight into both the internal and external environment of an organization, that is, the SWOT Analysis.
2.2 SWOT Analysis of Kenya Ports Authority
This management tool looks at the Strengths, Weaknesses, Opportunities and Threats of an organization as it interacts with both the internal and external environment of an organization. Fallon (2018) points out that the SWOT Analysis is an imperative tool as it aids the company’s management in establishing key factors before a decision is made allowing the organization to be aware of challenges and risk factors before they occur.
The internal environment of an organization is described by the Strengths and the Weaknesses as they are factors within the organization while the Opportunities and Threats represent the external environment of the organization as they relate to the macro-environmental factors of the organization.
Looking at the internal environment of Kenya Ports Authority, the company’s strengths include its brand reputation across East and Central Africa. KPA has received several accolades including one in 2016 where the port of Mombasa was recognized as the best performing cruise port in Africa. KPA is therefore able to benefit from significant brand awareness considering the country’s ports have been noted for their aesthetic value from their sceneries and the manner in which tourism is promoted. Another strength that the company benefits from is investment in infrastructure that has enabled it to gain an edge over its competitors across East Africa. The country has invested significantly in sea vessels and other equipment related to the loading and offloading of cargo. Security has also significantly improved with an aim of ensuring that the ports across the coastline are safe which will increase tourism.
The company’s weaknesses include corruption which has adversely affected the image of the organization in the eyes of the Kenyan citizens. Recent scandals have seen the managing director being replaced with reasons being cited from lack of competency and the theft of valuable containers from the ports (Menya, 2018). Corruption incidences linked to billions of shillings related to freight charges that cannot be accounted for correctly have also seen reduced investor confidence in the organization in general. This can also be attributed to ineffective leadership as part of their second example of weaknesses that has been evidenced by the compulsory leave given to the company’s former managing director Catherine Mturi-Wairi.
The company’s threats include attacks by pirates across the seas that have negatively affected cruise and maritime trade. As much as the Kenyan Government has significantly responded to the same over the years, Kenyan sea waters are still perceived to be quite dangerous by the country’s international partners. The close proximity of our coastline to that of Somalia is also another threat considering the renowned terrorist group Al-Shabab who have claimed responsibility for a number of terror attacks in Kenya in general and who have been largely traced back to Somalia. In addition to this, the aforementioned piracy cases have also been linked to Somali pirates and this negatively affects operations done within the Kenyan ports. An additional threat is the lack of cooperation by other organizations including Kenya Bureau of Standards and Kenya Revenue Authority which should work collaboratively with KPA to increase operational excellence and reduce cases of corruption.
Looking at some of the opportunities accessible to KPA lies the fact that the country has the best ports in the East African region which is mainly considered to be land-locked. This combined with the fact that the organization has received several awards for promoting cruise and maritime trade; together with the country’s tourism provides a great opportunity for increased revenue margins for both the company and economic development for the country as a whole.
Kenya in general is received increased financial aid from countries including China whose aim is to develop various industry sectors in the organization. As of 2014, the Chinese government partnered with the Kenya Ports Authority in a business deal valued at approximately 480 million US Dollars that would see the construction of three berths in the port of Lamu as part of the development of the same port. In addition to the same, increased investment has also seen finances being used to expand the port of Mombasa that aims to see the company’s operational capacity increase by more than 1.5 million teus or twenty-foot equivalent units.
2.3 Strategic Management Plan
In coming up with a strategic management plan, it is imperative to ensure that the plan is feasible for the long-term and is sustainable in such a manner that it does not adversely affect the going concern status of the organization. The strategic management plan should also be easy to monitor and the plan should involve the employees of the organization with an aim of reducing resistance to change which would increase the time frame within which the plan should be executed. The recent change in the managing director of the organization and also within the board members of the organization provides an opportunity to bring immense change having cited some of the weaknesses and threats that the organization is exposed to.
The primary recommendation within this strategic management plan is the decongestion within the ports as a result of containers that have not been correctly allocated to their destination. This will require the establishment of an effective system of load and offload cargo at the various ports as well as the effective management of the inland ports and waterways. This can only be achieved by closing the loopholes through which people are required to bribe off company officials so that their cargo can be released on time as is known to be the case at KPA. The company’s management can look at revising the perquisites that they give to their employees so that they are able to focus on achieving the key goals and objectives of the organization as opposed to pursuing their own interests. This will involve working hand in hand with anti-corruption agencies within the country to ensure that the organization is regularly reviewed for compliance with the rules and regulations provided by such regulatory bodies.
As part of the strategic management plan, the organization should review their code of ethics and compliance to corporate governance by updating their ethical values and principles. This will also involve continually training their employees on ethical values that they should uphold while carrying out their daily duties and responsibilities within the organization. It will also involve whistleblowing training so that the company’s employees are in a position to freely speak out about the company’s management which has already been questioned before in relation to their competency.
After reviewing their ethical principles, the company’s management should look at job rotation as some of the employees within the organization have held one position for many years and may have discovered loopholes which they are using to benefit themselves. Job rotation when effectively carried out will ensure that employees are reminded of the common goals and objectives that they should pursue and that their have their focus on the company’s strategic direction (Kryuchkov, 2015).
The Government should also set up an independent oversight body that is charged with reviewing the work of the board of directors for such parastatals. This is because in most cases, the board of directors usually go unquestioned and maybe they are tied with some of the corruption cases that have been heard of related to KPA. With such an organization in play, this will also ensure that the board of directors have the interests of the owners as their main focus and therefore work to ensure that the managing director, Mr. Manduku is working towards ensuring that the shareholders’ wealth is being maximized.
Kenya Ports Authority has immense growth opportunities mainly evidenced from the significant financial aid that the country is receiving from first world countries including China and also from the fact that Mombasa is renown for its aesthetic value as the leading tourist destination in East Africa. The ports that KPA control are also a major component of trade in Africa as a whole considering the country’s coastline is also a preferred destination for maritime trade.
With the aforementioned recommendations within the strategic plan, the organization will be able to gain various platforms which will provide it with an edge over its competitors (Soldatenkov, 2017).