Quality Management Strategies and Performance of Oil Marketing Companies in Kenya

Abstract

The business environment within which the oil marketing companies operate has been very volatile. Political anxiety, competition from new entrants, social reforms, technological advancement and global changes are some of the challenges that have greatly affected the growth of the industry. The dynamism of the petroleum firms’ operating environment in the current times is posing a lot of challenges to all oil marketing companies. This study sought to assess the relationship between quality management strategies and performance of oil marketing companies in Kenya. The specific objectives that the study sought to address were: to determine the relationship between quality planning strategy and performance; to establish the influence of quality control strategy on performance; to establish the influence of quality improvement strategy on performance; to establish the influence of management commitment on the relationship between the quality management strategies and performance; to examine the influence of firm operating environment on the relationship between quality management strategies and performance; and to examine the influence of quality preparedness on the relationship between quality management strategies and performance. The philosophical foundation of this study was positivism. To achieve these objectives, the study adopted a descriptive cross sectional research design. The target population was all the 73 oil marketing companies in Kenya as outlined by the KRA report of 2014. Semi-structured questionnaires were issued to the respondents using a drop-and-pick-later method. A pilot study was conducted to test the validity of the questionnaire and the Cronbach’s Alpha was used in testing its reliability. Descriptive statistics, which included the mean, standard deviation and relative frequency, were used to describe the characteristics of the variables of interest in the study, while inferential statistics of multiple regression analyses were used to establish the type and strength of the relationship between the variables as well as to test the hypothesized relationships. An assessment of the model’s underlying statistical assumptions was conducted through tests for Homoscedasticity, Multicollinearity and Normality. The frequencies on the respondents identified that most respondents were male, had attained some level of education, had some level of experience and most were in managerial level in their companies. Generally, the respondents agreed to the statements on the study variables where the responses were ranked on a five point Likert scale. The results showed that the quality management strategies, quality planning (p<0.05; β=0.386), quality control (p<0.05; β=0.295) and quality improvement(p<0.05; β=0.301) had a significant influence on the firm’s performance. It was also observed that quality preparedness (p<0.05; β=0.283) had a significant mediating effect on the relationship between quality management strategies and firm performance. For the moderating variables, only top management commitment had a significant moderating effect at p<0.05; β=0.085, while the data showed that firm operating environment did not have a significant effect (p>0.05; β= 0.335) on the relationship between quality management strategies and firm performance. The study recommends that the management should be more committed to quality and provide resources and direction in regard to quality management strategies, and these should be in line with the firm’s objectives and goals. Policy makers should provide a good environment by providing sufficient resources if the intended improved performance of the oil marketing companies is to be realized.