Turnaround Strategies and Performance of Kenya Power and Lighting Company

Abstract

The energy sector in Kenya is plagued by inefficiencies, leading to higher costs and reduced access to electricity for many consumers. The purpose of this study was to establish the effect of turnaround strategies on the performance of KPLC. The study objectives were to find out the turnaround strategies implemented by Kenya Power and Lighting Company, to establish the performance of Kenya Power and Lighting Company, to evaluate the effect of turnaround strategies on the performance of Kenya Power and Lighting Company and to assess the moderating effect of government policies on the relationship between the turnaround strategies and the performance of KPLC. The research was guided by two theories strategic turnaround theory and the stage theory of successful turnaround, and Porter’s Five model. This study was a census of all 60 employees including managers and heads of units working at KPLC Busia branch. An explanatory research design was adopted. A semi-structured questionnaire was used to collect primary data. The outcomes were presented in tables and figures. Qualitative data was analyzed using content analysis and presented in prose form. Key findings revealed that KPLC has implemented the following turnaround strategies, which are; technology adoption, cost efficient, asset retrenchment, and strategic repositioning, all aimed at improving performance. Regarding technology adoption, 547% of respondents agreed that KPLC demonstrates a proactive approach to technology adoption, while 47.4% reported that the company conducts pre-testing of products or services before their adoption. 63.2% of the respondents displayed that KPLC developed specific cost-efficient strategies. 45.6% of respondents pointed out that KPLC conducts a thorough analysis of its operational costs while 49.1% highlighted that KPLC leverages technology and automation tools to improve cost efficiency across various business processes. KPLC considers the impact of asset retrenchment on its employees, as highlighted by 35.1% of respondents, while 43.9% of participants noted that asset retrenchment helps KPLC achieve its cost-saving targets. Only 31.1% of respondents indicated that KPLC communicates the reasons for asset retrenchment to relevant stakeholders and 35.1% of participants believed that strategic repositioning is seen as a viable strategy for achieving long-term success at KPLC. 43.9% of the participants highlighted that key stakeholders are consulted in the decision-making process regarding strategic repositioning. The findings demonstrated that technology adoption has had a significant impact on KPLC's market share, with 47.4% of participants citing this as a key driver. 45.6% of respondents highlighted that cost-efficient strategies have contributed to increasing the company’s market share, indicating that streamlining operations and reducing costs have had a positive effect on competitiveness. Lastly, 49.1% of respondents noted that strategic repositioning has also led to an increase in market share. Additionally, government policies were found to significantly influence KPLC’s strategic decision-making. The study concluded that while turnaround strategies positively affect performance, success relies on clear execution plans, stakeholder involvement, and consideration of intervening factors. The study recommends greater involvement of stakeholders in strategy execution and encourages future research to include other companies to validate the link between turnaround strategies and firm performance.