strategic issue management

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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

Dear!men! "# $u%ine%% A&mini%!ra!i"n

'(h""l "# $u%ine%%

)ni*er%i!+ "# Nair"bi

i



DEDICATION

This project is dedicated to my dearest other and !ather in law for blessing me with their son". # $ou

can only go as far as your dreams%&.

ii



AC,NO-LEDEMENT

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 mostchallenging of times.

I am eternally grateful to those lecturers who provided energy and inspiration to me throughout the

() programme' and especially to Dr. *. aalu' whose guidance and motivation propelled me through

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.

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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 anagement

/SI0 has now become an essential component of the strategic plan of every successful firm.

This study focused on establishing the SI practices implemented within the shipping

companies based in enya and the challenges encountered by the firms in implementing the

SI practices.

+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 practices that shipping companies in

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)NCTAD 3 United ;ations 9onference on Trade and Development

E'TEL 7 -olitical' <conomic' Social' Technological' <nvironmental = +egal

CEO 7 9hief <xecutive >fficer

'-OT Strengths' :eaknesses' >pportunities and Threats

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TA$LE O4 CONTENT'

DECLARATION...........................................................................................................................i

DEDICATION..............................................................................................................................ii

AC,NO-LEDEMENT..........................................................................................................iii

A$'TRACT.................................................................................................................................i*

A$$REIATION' AND ACRONM'....................................................................................*Table "# C"n!en!%.......................................................................................................................*ii

LI'T O4 TA$LE'......................................................................................................................i

CATER ONE7 INTROD)CTION.......................................................................................i

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

CATER T-O7 LITERAT)RE REIE-.......................................................................*ii

1.2 Introduction......................................................................................................................xvii

1.1 Strategy.............................................................................................................................xvii

1.? Strategic Issue anagement............................................................................................xviii

1.B Strategic Issue anagement -ractices.............................................................................xxii

1.3 9hallenges of Strategic Issue anagement.....................................................................xxiv

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

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CATER TREE7 RE'EARC METODOLO......................................................*i

?.2 Introduction.....................................................................................................................xxvi

?.? -opulation of Study.........................................................................................................xxvi

?.@ Data 9ollection...............................................................................................................xxvii

?.B Data )nalysis.................................................................................................................xxvii

CATER 4O)R7 DATA ANAL'I' AND 4INDIN'................................................*iii

@.2 Introduction...................................................................................................................xxviii

@.1 eneral Information on 8espondents and !irms.............................................................xxix

@.? >perating <nvironment...................................................................................................xxxi

@.@. SI -ractices...............................................................................................................xxxiii

@.BE 9hallenges encountered in implementing SI...............................................................xliii

CATER 4IE7 DI'C)''ION'8 CONCL)'ION' AND RECOMMENDATION'....l*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*

AENDICE'............................................................................................................................li

)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...................................................................................1

Table BE 8ange of Services >ffered.......................................................................................1

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 2E 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 to success of the organi6ation................................................1B

Table 2@E 8ating of anagementJs 8esponse to Strategic Issues.........................................1B

Table 2BE -resence of a SI Department.............................................................................13

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

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Table 2HE <mpowerment of <mployees to ,andle Strategic Issues......................................1G

Table 1E -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.................?

Table 1?E )uthority of the !irmKs anagement....................................................................?2

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.....................................................??

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CATER ONE7 INTROD)CTION

1.1 $a(: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' 120

!or firms to succeed' they can deploy strategic issue management /SI0 as a measure to assist in

fulfilling and protecting their corporate objectives. )ccording to )nsoff and cDonnell /2HH0' it

is through SI that a firm will be able to relate itself to the environment to ensure its success andalso 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 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

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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 2HGKs 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. lobalisation' 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 /110 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 abilityto 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' 2HG0. ) SI

system is described as a systematic procedure for early identification and fast response to

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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' 9 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' 1220. The erchant Shipping )ct of 1H 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' 1H0. 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 r"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 comes in' by offering a

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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 1?. 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 1L of the trade going through ombasa. (acklog in the

maintenance of road infrastructure on the ;orthern 9orridor affects the relatively high traffic of

about 3 trucks a day from the port of ombasa' whilst unnecessary and time consuming

physical inspections at road blocks' customs stations and weighbridge operations that create

major delays /S9' 1210. 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 is a practice used within these firms and the challenges

they face in implementing SI as a tool.

The interest in studying SI has been gaining momentum within different organistations. ost

recently being :anja /1220' who concluded that GL of private security firms engaged some

sort of SI. >ther previous studies applying the concept included ;yandoto /1H0 who

focused on 8eal5Time SI -ractices by large5scale tea producers in enya and concluded that

most lacked formali6ed SI system. uya /130 concluded from his study that management

understands how critical it is to address strategic issues in their organisations but little resourcesare allocated by the top management to address them. ungai /1G0 studied the application of

SI by Independent >il 9ompanies in enya and he found out that most of them partially

practiced SI in their organi6ations' whilst )li /1G0 conducted a study on SI by

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 SIM

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. iven 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

also be of interest for mother companies and head4uarters to understand the level of SI that is

practiced within their main branches or nominated agents. In offering potential investors and

stakeholders an insight into SI 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

application of SI 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.

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!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.

CATER T-O7 LITERAT)RE REIE-

2.1 In!r"&u(!i"n

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

of SI.

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 /1B0

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 /2HH0' 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 /1B0 advocate that the essence of strategy formulation is coping with competition.

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)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 2HCKs and mid 2HGKs 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 2HCKs 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 /1@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 anagement by ,oward

9hase in 2HCB' who also played an instrumental part in forming the Issues anagement

)ssociation in 2HG1 /Dutton et al' 2HG?0.

Several strategy scholars elaborated on the importance of strategic issues subse4uently. )nsoff

/2HG0 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 evolved as one of

the front line tactics used by todayKs successful firms.

Dutton has contributed extensively in areas such as SI and SID systems' processing of crisis

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 SIKs most eminent scholars' her writings continued

through the nineties and naughtyKs sustaining a focus on the development of SI as a key

managerial function. >ne work that stands out is her contribution to SI systems whereby

xviii



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 E!ernal

a%%i*e

A(!i*i!+

'("e

A(!i*e

'"ur(e7 Du!!"n8 J.E >O!!en%me+er8 E ?19@B . ;5@

)dditionally' in describing the functions of SI against the focus or aspect of SI within the

organisation' she categorises SI as an instrumental or symbolic function' against a focus of

outputs or processes. This provides an instrumental function of SI with a focus on outputs as

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

9ollector )ntenna

)ctivator Intervener



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/120 and /110 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 2HHKs 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 functionthat 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

and acknowledging the soundness of the opinions of key publics. ,e especially focuses on an

element that has emerged to the forefront of SI over the last decade' which is that of crisis

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 have been applied locally and abroad. ,eugens /1?0 assessed whether

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

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 as a

management tool.

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

)ccording to )nsoff /2HG0 SI does not replace the role of strategic management. It is a tool

for effective and efficient employment of strategic management. )s the level of environmentalturbulence increases' the need for SI increases. Therefore firms that practice SI are able to

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 is needed for the firms

whose basic strategic thrusts are clear and stable but the environment is turbulent. Therefore

SI 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 /2HH0 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 /2HH0 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' 130.

kamunduli /1B0 adds that analysis of issues affecting an enterprise is not a one5time stop

affair. )nsoff and cDonnell /2HH0 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! ra(!i(e%

The Issue anagement 9ouncil /1210 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. -rogressagainst 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. reening and

ray /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 /2HH0 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 aboutimpending 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 /2HG0 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

managers accept to play a central role in it /)nsoff = cDonnell' 2HH0. This is a challenge in

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' 1B0.

xxiv



)nsoff /2HG0 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 /2HG0 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. This poses a great challengeespecially when implementing SI. Therefore top management have to exercise caution in

order to meet the various needs of their stakeholders.

2. '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

the operating environment. !irms must therefore develop sound SI practices so as to avoid

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

to continue perusing its corporate strategies.

CATER TREE7 RE'EARC METODOLO

;.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 practices that shipping companies in enya have implemented and the

challenges that they experience in implementing the strategies. This method was successfully

used by uya /130 in his study of SI practices adopted by hotels in enya.

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

The population of study was all the twenty5one shipping companies which are based in enya'

as listed in the -) 121N2? 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 ombasa' and therefore' data collection was

accessible and timely.

;.= 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



CATER 4O)R7 DATA ANAL'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



!oreign B ?2

+iner

(oth +ocal = !oreign 2 3

(oth )gent = +iner 1 2?

T"!al 16 100

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 4reuen(+ er(en!a:e ?B

2 5 B 23 2

3 52

>ver 2

T"!al 16 100

The above table shows that all the firms surveyed /2L0 have between 25B branches. ;one of them

had branhes in the range of 3 and above.

=.2.= eri"& "# "era!i"n in ,en+a

Table =7 eri"& "# "era!i"n in ,en+a

Ran:e 4reuen(+ er(en!a:e ?B

5 B

3 52 1 2?

xxx



>ver 2 2@ GG

T"!al 16 100

Table @ above indicates that 2@ /GGL0 out of the 23 firms have been in operation in enya for more than

2 years while 1 /2?L0 have been in operation for 3 to 2 years.

=.2.5 Ran:e "# 'er*i(e% O##ere&

Table 57 Ran:e "# 'er*i(e% O##ere&

'er*i(e 4reuen(+ er(en!a:e ?B

(ulk Shipping H B3

-assenger service 2 3

>il Tankers ? 2H

)gency Service 2? G2

9ontaineri6ed H B3

9onsolidated

9learing 1 2?

The above table indicates that the firms offer a combination of services. ajority /G2L0 of the firms

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

/3L0 offer -assenger service but none of the firms offer consolidated service.

=.; Oera!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 "# Oera!in: En*ir"nmen!

Table 67 Na!ure "# Oera!in: En*ir"nmen!

4reuen(+ er(en!a:e ?B

xxxi



Turbulent ? 2H

Irregular C @@

8elatively Stable 3 ?G

T"!al 16 100

!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 /20 3?L did not feel their operating

environment was relatively stable.

=.;.2 )%e "# $u%ine%% lan%Table 7 )%e "# $u%ine%% lan%

Re%"n%e 4reuen(+ er(en!a:e ?B

$es 23 2

;o

T"!al 16 100

:ith regard to the use of business plans the results above show that all /2L0 the firms surveyed had

plans in place to allow for adjustments with changes in the environment.

=.;.; Ima(! "# !he #"ll"in: 4a(!"r% !" !he 4irm in !he la%! "ne +ear

Table @7 Ima(! "# !he #"ll"in: 4a(!"r% !" !he 4irm in !he la%! "ne +ear

Ma<"r M"&era!e Min"r N"ne T"!al

overnment directives and legislation G 3 2 2 16

9hange in top level management 2 B B B 16

9hanges in competition H B 2 2 16

Increased insecurity G @ @ 16

xxxii



8estructuring and re5engineering ? C @ 1 16

;ew productsN new markets ? G ? 1 16

Increased cost of inputs 3 3 1 1 16

Increased stakeholder demands G @ 1 1 16

Table G above shows that G /BL0 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 /BL0' increased cost of

inputs /?GL0 and increased stakeholder demands /BL0. The remaining factors had mostly moderate or

minor impact.

=.=. 'IM ra(!i(e%The first objective of this study was to establish the SI practices implemented within the Shipping

companies in enya. Aarious 4uestions were administered in the 4uestionnaire to achieve this objective.

The following are the results obtained.

=.=.1 D" +"u n"rmall+ %!u&+ i%%ue% hi(h ma+ a##e(! +"ur "era!i"n%F

Table 97 D" +"u n"rmall+ %!u&+ i%%ue% hi(h ma+ a##e(! +"ur "era!i"n%F

e% N" T"!al

4reuen(+ 4reuen(+ 4reuen(+

<xternal environment 2B H@ 2 3 16 100

Internal environment 2@ GG 1 2? 16 100

-erformance trends 2B H@ 2 3 16 100

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 ear%

Table 107 '!ra!e:i( I%%ue% En("un!ere& O*er !he La%! 4i*e ear%

I%%ue 4reuen(+ er(en!a:e ?B

,igh and fluctuation of (unker !uel -rices ? 2H

Increased +egislation B ?2

The lobal <conomic 9risis @ 1B

-iracy in the :aters off <ast )frica ? 2H

Increased 9ompetition 3 ?G

-ushing down !reight 8evenue @ 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 ra(!i(e b+ !he 4irm%

Table 117 Ra!in: "# 'IM ra(!i(e b+ !he 4irm%

Ra!in: 4reuen(+ er(en!a:e ?B

,ighly practiced 22 3H

-artially practiced @ 1B

;ot practiced 2 3

T"!al 16 100

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 ee a li%! "# e+ %!ra!e:i( i%%ue% #"r ea(h +earF

Table 127 D" +"u ee a li%! "# e+ %!ra!e:i( i%%ue% #"r ea(h +earF


$es 21 CB

;o @ 1B

T"!al 16 100

I# e%8 h" "#!enF

onthly 3 B

Fuartely @ ??

Semi5annually 1 2C

T"!al 12 100

Table 21 indicates that out of the 21 /CBL0 firms that keep a list of key strategic issues for each year' 3

/BL0 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


Aery important 2 3?

Important 1 2?

<ssential ? 2H

>f limited importance 2 3

>f no importance

T"!al 16 100

xxxv



!rom the table above' it is evident that 2 /3?L0 of the firms rated SI as very important to the success

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

;one of the firms rated SI as of no 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%


Aery fast G B

!ast C @@

Slow 2 3

Aery slow

T"!al 16 100

The results above show that G /BL0 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.

=.=. re%en(e "# a 'IM Dear!men!

Table 157 re%en(e "# a 'IM Dear!men!


$es C @@

;o H B3

T"!al 16 100

I# N"8 -here are 'IM ma!!er% han&le&F

In planning meetings or board of directors meetings @ @@

In strategic management department 1 11

To the assigned task force meetings 1 11

xxxvi



>utsourced to consultants 2 22

T"!al 9 100

Tables 23 above indicate that C /@@L0 of the firms have a SI department. >ut of the H /B3L0 firms that

do not have a SI department @ /@@L0 handle SI 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% Mean '!&e*

>pinion of consultants ?.C 2.?

>ther shipping companies @.1 2.

-ast experience and trends @.@ .3

Industry policy @.1 2.

9ore competencies @.@ .C

;eeds of target customers @.3 .3

A*era:e =.2 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 .H is less than 2 indicating that there were no significant variations in the

responses.

=.=.9 re*ailin: m"&e "# main: (ri!i(al %!ra!e:i( i%%ue &e(i%i"n%

Table 17 re*ailin: m"&e "# main: (ri!i(al %!ra!e:i( i%%ue &e(i%i"n%

De%(ri!i"n 4reuen(+ er(en!a:e ?B

Tendency to centrali6e decisions to top managers 2 3?

Tendency to delegate decisions to lower managers 1 2?

Tendency to use interdepartmental committed task force @ 1B

T"!al 16 100

Table 2C above shows that 2 /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! Mean '!&e*

:e analyse strategic plans and Ourgent and critical issues /factors0K which

affect the firm between the planning cyclesM @.2 2.1

:e are continuously preoccupied throughout the year with checking ?.H .H

xxxviii



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 @. 2.

A*era:e =.0 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"ermen! "# Eml"+ee% !" han&le '!ra!e:i( I%%ue%

Table 197 Em"ermen! "# Eml"+ee% !" han&le '!ra!e:i( I%%ue%

Me!h"& 4reuen(+ er(en!a:e ?BTraining C @@

Involvement in identifying solutions G B

9onsultations 3 ?G

Delegation B ?2

!rom the table above it is clear that C /@@L0 of the firms use training' G /BL0 involvement in

identifying solutions' 3 /?GL0 use consultations while B /?2L0 use delegation to empower their

employees to handle strategic issues.

=.=.12 re%en(e "# a &"(umen!e& r"(e%% !" han&le '!ra!e:i( I%%ue%

Table 207 re%en(e "# a &"(umen!e& r"(e%% !" han&le '!ra!e:i( I%%ue%


$es G B

;o G B

T"!al 16 100

Table 1 above indicates that G /BL0 of the firms surveyed have a documented process to handle

Strategic Issues while the other G /BL0 did not have.

xxxix



=.=.1; Chami"n% "# !he i&en!i#i(a!i"n an& imlemen!a!i"n "# %!ra!e:i( i%%ue% in !he #irm

Table 217 E!en! !" hi(h ea(h "# !he #"ll"in: (hami"n !he i&en!i#i(a!i"n an& imlemen!a!i"n "#

%!ra!e:i( i%%ue% in !he #irm

Mean '!&e*

9hief <xecutive >fficer /9<>0 @.H .?

The operations manager @.@ .C

Department managers @.@ .C

Supervisors @.1 .G

9onsultants ?.? 2.?

A*era:e =.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(hniue% an& ra(!i(e% u%e& !" anal+Ge %!ra!e:i( i%%ue% in !he C"man+

Table 227 E!en! !" hi(h ea(h "# !he #"ll"in: me!h"&/ !e(hniue/ ra(!i(e i% u%e& !" anal+Ge

%!ra!e:i( i%%ue% in !he C"man+

'TATEMENT MEAN 'TDE

1 S:>T /Strengths' :eaknesses' >pportunities and Threats0 analysis. (ased on

information only @.? 2.1

2

Simple environmental impact analysis method based on S:>T /where each

issue is analysed separately without considering the effect of other identified

issues0 ?.2 2.@

;

9ross impact analysis method based on S:>T /where various related criticalissues are grouped together' the likelihood of simultaneous occurrences is

estimated and hence identifies possible future major lossN disaster or future

major profitN opportunity0 @. 2.B

= Issue impact and ranking method based on S:>T /where critical issues are

ranked according to urgency0 ?.3 2.1

xl



5

<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 ?.? .H

AERAE ;. 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 #irm% mana:emen!

Table 2;7 E!en! !" hi(h !he #irm% mana:emen! ha% au!h"ri!+ !" &" !he #"ll"in:7

'TATEMENT MEAN 'TDE

8eview of strategic issues @.C .3

)ccept or reject strategic issue proposals @.? .H

>ffer advisory role in the strategic issue management process @.@ .H

AERAE =.5 0.@

Table 1? shows that 8eview of strategic issues had mean score of @.C /great extent0' while )ccept orreject 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 "li(ie% an& r"(e&ure% alie& in 'IM

Table 2=7 E!en! !" hi(h !he #"ll"in: %!a!emen!% al+ in !he "r:aniGa!i"n

xli



'TATEMENT MEAN 'TDE

1 There is an established mechanism to identify current and future issues

through environmental scanning and analysis @.2 2.2

2 There are established policies or procedures that describe issue management

process ?.H 2.?

; The management understands how critical it is to address strategic issues @.@ .H

= The resources re4uired to handle strategic issues are ade4uate @. .C

5 8esponsibility for stewardship of the issue management process is clearly

assigned to build firmKs expertise in the discipline ?.G 2.?

6 >wnership of major issues is clearly assigned with accountability and results

linked to performance reviews @.2 2.2

The importance of strategic issue management is clear to everyone in the

firm @.2 2.2

@ The top management takes interest in the output of strategic issues committee

and has authority to intervene in the event of non5compliance or

misalignment @.? 2.1

9 The strategic issues committee are properly trained so as to promote issue

management as standard operating procedure @. 2.2

10

-rogress against key issues is formally reviewed regularly and status

monitored by top management @.1 2.1

11

Strategic issue management is incorporated in our plans

@.? 2.2

12

9lear channels of communication exist to disseminate strategic issues to staff

@.1 2.?

1;

Strategic issue management is recogni6ed and positioned as a core

management function @.1 2.@

AERAE =.1 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.

=.=.1 Ra!in: "# 'IM in !he "r:ani%a!i"n

Table 257 E!en! !" hi(h %!ra!e:i( i%%ue mana:emen! i% ("n%i&ere& a% a r"<e(! "r!h in*e%!in:

xlii




To a great extent 21 CB

To a moderate extent 1 2?

To a neutral extent 2 3

To a low extent

;o extent 2 3

T"!al 16 100

The table above shows that 21 /CBL0 of the firms consider SI 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

extent and no extent. ;one of the firms rated it to a low extent.

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

'TATEMENT MEAN 'TDE

1 Inade4uate resources ?.C 2.2

2 Systems delay in information flow within the firm ?.? 2.@

; 8esistance to change ?.@ 2.1

= Time taken to study unfamiliar or new challenges ?.? 2.

5 8efusal by top management to submit to strategic issue

management 1.? 2.1

6 8efusal by top management to accept newN unfamiliar issues as 1.@ 2.1

xliii



relevant

Time taken in discussing and verifying issues ?.@ 2.2

@ >rgani6ational culture ?.@ 2.1

9 Threat of substitute services ?.2 2.3

10 <conomic factors ?.? 2.@

11 Stakeholder resistance ?. 2.B

12 Socio5cultural factors ?.2 2.@

1; Incompetent staff 1.H 2.@

AERAE ;.1 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



CATER 4IE7 DI'C)''ION'8 CONCL)'ION' ANDRECOMMENDATION'

5.1 In!r"&u(!i"nThe 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 anagement practices

implemented within the Shipping 9ompanies based in enya and to determine the challenges

encountered by the firms in implementing the SI practices. This chapter gives a summary of

the discussions' conclusions and recommendations drawn after analy6ing data.

xlvi



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 .H indicated

that there were no significant variations in the responses.

!indings on the prevailing mode of making critical strategic decisions showed that 2 /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 /BL0 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 /BL0 of

the firms surveyed have a documented process to handle Strategic Issues while the other G/BL0 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. There were no

significant variations in the responses as the standard deviation was 2.

!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 /moderateextent0' >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



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 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

firms rated SI 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 department in the organisation' findings revealed that almost half

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

did not have a SI department most handle SI matters in planning meetings or board of

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 anagers to a moderate extent'

Supervisors to a moderate extent while 9onsultants to a neutral extent. This means 9<>s were

seen to play a greater role in SI matters.

!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' acceptsor 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 practices

related showed that most firms regarded SI as a project worth investing in with only a few

indicating otherwise.

)s regards the challenges encountered by the firms in implementing the SI practices the

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 notconsidered 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 and respond fast to

the strategic issues. <mployees are also empowered to handle SI matters. ,owever' some

firms do not have a SI department to handle strategic issues which is a weakness in timely

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.

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' ). . /1G0. Strategic Issue Management by Commercial Banks in Kenya. Unpublished

() project' University of ;airobi.

)osa' <. /2HH10. 9ontextual Influence on Strategic -lanningE -orterKs Industry )nalysis odel

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% ' craw5,ill ' ;ew $ork.

)nsoff' ,. I. /2HG0. Strategic Issues anagement. Strategic Management Journal&, /20 2?27 2@G.

)nsoff' ,. I.' = cDonnell' *.<. /2HH0. Implanting Strategic Management. 1nd <dition' -rentice,all .

Dutton' *.<.' )shford S.' >K;eill 8.' = +awrence .' /120. oves that atterE Issue Sellingand >rganisational 9hange. Aca#emy o! Management Journal ' @@ /@0' p.C235C?3.

Dutton' *.<.' )shford' S.' +awrence' .' = iner58ubino' . /110. 8ed +ight' reen +ightE

aking Sense of the >rganisational 9ontext for Issue Selling. 'rganisational Science,2? /@0' ?BB5?3H.

lv



S9. /1210. 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 1 E 3H5GH.

+iebl' !. /1?0. Issue Management becoming an Integrate# Concept. />n5line0.www.issuesmanagementgesellschaft.deN.

+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.). /1B0. SIM in te Insurance companies in Kenya. Unpublished ()

project' University of ;airobi.

ugambi' . /1?0. +e Strategic Management *ractices o! Sipping Companies in Kenya.

Unpublished () project' University of ;airobi.

ungai' .*. /1G0. Application o! SIM by In#epen#ent 'il Companies in Kenya. Unpublished

() project' University of ;airobi.

uya' !. . /130. (eal time SIM practices by classi!ie# otels in Kenya. Unpublished ()

project' University of ;airobi.

wakanongo' . /1C0. A Survey o! Competitive Strategies mploye# by Sipping Companies

in Kenya. Unpublished () project' University of ;airobi.

;yandoto' D. /1H0. (eal2+ime SIM *ractices by large scale tea pro#ucers in Kenya.

Unpublished () project' University of ;airobi.

>omens' .*.,.' = (osch !.).*. /2HHH0. Strategic Issue anagement in major <uropean5 (ased

9ompanies. )ong (ange *lanning. ?1 /20' @H5BC.

-earce' *.).' = 8obinson 8.(. /1B0. Strategic Management: 3ormulation, Implementation an#Control. /2th <d.0 craw5,ill.

-eder' .' = !arrag ). /120. Sustainability +ren#s in te Container In#ustry. (S8 8eport./>n5line0 www.bsr.org.

-rahalad' 9..' and ,amel . /2HH0. Competing !or te 3uture. (oston .)' ,arvard' (usinessSchool -ress

lvii

http://www.kenyashippers.org/

http://www.issuesmanagementgesellschaft.de/

http://www.bsr.org/

http://www.kenyashippers.org/

http://www.issuesmanagementgesellschaft.de/

http://www.bsr.org/



United ;ations 9onference on Trade and Development. /1220. (evie" o! Maritime +ransport.

-ublication prepared by the U;9T)D. />n5line0. www.unctad.org.

Schlesinger' . /120. Strategic Issue Management 4 an ability o! 'rganiational 3uture'rientation. />n5line0. www.futureorientation.net.

Thompson' ).' = Strickland *. /2HHG0. Cra!ting an# Implementing Strategy. ;ew $ork'craw 7 ,ill.

:anja' ;.9. /1220. 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# syntesis o! te literature, Business Society. ?? /?0' 1H?5?22.

lviii

http://www.unctad.org/

http://www.unctad.org/



2. -osition in the companyE """"""""""""""""".."".

1. ;umber of years since joining the firm / *lease tick as appropriate5

5 1 ? 5 B 3 5 2 >ver 2

?. >wnership of the company / *lease tick as appropriate5

+ocal !oreign (oth +ocal = !oreign

)gent +iner (oth )gent = +iner

@. ,ow many branches does the company have in enyaM

7 B 352 >ver 2

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

7 B years 3 5 2 years >ver 2 years

3. :hat range of services does your company offerM /Tick as many as are applicable0

(ulk Shipping 9ontaineri6ed

-assenger service 9onsolidated

>il Tankers 9learing

)gency Service

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

TE OERATIN ENIRONMENT

lx

ART A7 ENERAL IN4ORMATION AND OERATIN ENIRONMENT



C. ,ow would you describe your business operating environment within the last five

yearsM / *lease tick one5

/a0 Turbulent /c0 8elatively stable

/b0 Irregular /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 "rN"ne0

Ma<"r M"&era!e Min"r N"ne

overnment 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

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

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

lxi

PART B: STRATEGIC ISSUE MANAGEMENT PRACTICES AND CHALLENGES



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 obectives!

2. Do you normally study issues which may affect your operations /both short and long

term0 coming from the following areasM

/a0 <xternal environment $es ;o

/b0 Internal environment $es ;o

/c0 -erformance trend $es ;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 ;o

If yes' how often do you update this listM

lxii



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 !ast

Slow 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.

lxiii



$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% 5 = ; 2 1

>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

lxiv



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$tent @5 Mo#erate e$tent ?5 eutral 15 )o" e$tent 25 o e$tent

'TATEMENT 5 = ; 2 1

: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

1. ,ow are employees in your firm empowered to handle strategic issuesM /Tick0

Training Involvement in identifying solutions

9onsultations Delegation

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

12. Is there a documented process in your firm to handle strategic issuesM

$es ;o

lxv



11. To what extent do each of the following champion the identification and implementation

of strategic issues in your firmM


5 = ; 2 1

9hief <xecutive >fficer /9<>0

The operations manager

Department managers

Supervisors

9onsultants

>thers /please specify0

1?. To what extent do you use each of the following methodN techni4ueN practice to analyse

strategic issuesM


'TATEMENT 5 = ; 2 1

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 futuremajor 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

lxvi



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


'TATEMENT 5 = ; 2 1

8eview of strategic issues

)ccept or reject strategic issue proposals

>ffer advisory role in the strategic issue management process

1B. To what extent do the following statements apply in your organi6ationsM


'TATEMENT 5 = ; 2 1There 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

lxvii



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""""""""""""""""""""""""""""..

Aen&i ;7 Li%! "# 'hiin: C"manie% in ,en+a

20 )frican +iner )gencies +td

10 (at5haf (arwil )gencies +td

?0 Delmas enya +td

@0 Diamond Shipping Services +td

B0 reen Island Shipping Services +td

lxix



30 Inchcape Shipping

C0 aersk enya +td

G0 otaku Shipping )gencies

H0 >ceanfreight td

20 -.I.+. /0 +td

220 Seabulk Shipping Services +td

210 Seaforth Shipping enya +td

2?0 Spanfreight Shipping +td

2@0 SpearKs Shipping )gents /0 +td

2B0 Sturrock Shipping enya +td

230 lobal 9ontainer +ines

2C0 Igna6io essina = 9o

2G0 9 9)

2H0 editerranean Shipping 9o

10 -=> ;edlloyd east )frica +td

120 :<9 +ines enya +td

SourceE K*A <an#book ;=&;>&9 ?""".kpa.co.ke5

strategic issue management

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