Strategy-structure relationship in Kenya Power and Lighting company limited

Major changes took place in both the strategy and structure in the Energy Sector in Kenva \nover the ten years from 1995 to end 2005. From the mid 1990s tile Government or Kenya \ncommenced with a strategy to among others attract investors in to the electricity sub-sector \nand promote efficiency in the power sector as a whole by segregating the generation business \nfrom the transmission, distribution and customers service together with improving assets \nownership and management that was to be achieved through the energy sector reform. The \nreforms or strategies were accompanied by sector structural changes. \nOn the on-set one would have concluded that structure followed the strategy. However. \nmacro-strategies were expressed and placed on tile drawing board and consultations \ncontinued to attest to what extent they would accommodate acceptable and workable \nstructures. This study sought to determine the relationship between changes in the structure \nand strategies and the processes in Kenya Power and Lighting Company (KPLC), ami further \nto establish the factors and or agents that influenced the relationship. Two similar earlier \nstudies were carried out in Kenya on the structure strategy relationship. Matscshc (1999) and \nMwang! (200]) whose studies were ou nianulacturing industries ill the private sector \nconcluded that strategy and structure were reciprocal. Mwangi (2003) further concl udcd that \nin multinational pharmaceutical manufacturing companies no change in one led to change in \nthe other. \nThis was a case study that involved in-depth interviews with the management team of KPI ,C, \nand the Ministry or Energy covering the processes that took place two in continuous \nconsecutive periods: from late I<)<)5 to around 19<)<), and 2000 to 2005. The periods are \nseparately significant ill that an organizational configuration that is composed of" processes, \nstructures, and boundaries and relationships were very different in that the environmental \ndemands from KPLC increased and crystallized progressively in the two periods as time \n.passed, including increased environmental complexities. \nDuring the earlier period the management struggled in maintaining the traditional KPLC \nstructure intact with minimal incremental changes, ill spite or the major changes in strategy \n \nthat had taken place. It was the period that market-oriented strategy was intimated as \nopposed to the then existing public-utility-oriented strategy. Two clear phenomenons were \nobserved that abated company structures lagging after strategy changes: considering KPLC is \na monopoly. it was observed that organizational efficiency was not a priority. as there was \nnot enough incentive to change because under zero-sum competition, performance \ninefficiencies are transferred to the customer. Thus the classical view that structure must \nfollow strategy appears basically simplistic because other conditions like managerial control \nand cultures, monopolistic security and uninformed electricity customers contributed greatly \ntowards the lag. \nAs the KPLC number of transactions increased and as the complexity of internal \nrelationships grew over time, the company was progressively adopting structures that \nfacilitated better and acceptable interactions with the environment. This phenomenon was \nobserved in the period from 2000 to 2005. The organizational structures started to gravitate \ntowards relatively organic type or structure by being more flexible to customer and \nstakeholders needs through sharing responsibility and increased influence delegated at lower \nmanagerial levels through adopted business restructuring. This was evidenced in the \nstructures and strategies that were implemented partly to resol vc uncertainties emanating \nfrom the new environment. Interlink between the strategy and structure was observed wi th \nlesser lags compared to earlier periods.