Modes of Internationalization and Performance of Airline Firms in Kenya

Abstract

All the aspects involved in the internationalization process model complement each other. An organization’s present position is the basis used by the organization to gather its knowledge. The overall knowledge of an organization eventually determines the organization’s capability to recognize opportunities upon which decisions on relationship and commitment are made. A new position is formed after the decisions are made which lead to the organizations trust-building, learning and creating. With time, these subsequently lead to a new position in the network of the firm. This research focused on the influence of various modes of internalization on the firm’s performance of airlines firms in Kenya. The study sought to discover the various modes of internalization adopted by airlines in Kenya and to establish the relationship between the various internalization modes and the firm performance of airlines in Kenya. This study was informed by three theories: market imperfections theory; the electric paradigm theory; and transaction cost analysis model.The study employed descriptive research design.There are approximately 66 airlines firms in the aviation industry in Kenya. The study targeted the 66 airlines operating in Kenya. The specific respondents were the CEO and the Senior Operations managers in the airline firms in Kenya. Fifty percent of these airlines were randomly sampled. A semi structure questionnaire was designed to mine primary data. The statistical package for social sciences (SPSS) was used to analyze the data. The results showed that there export modes of internationalization and performance of airline firms were positively and significantly related. The results also established a significantly positive correlation between Investment entry modes of internationalization and performance of airline firms. Investment Entry Modes increase the profit of the firms to a large extent. Applying export approaches to gain knowledge and experience in new markets leads to increased profitability of the firms. The study recommends that airlines firms should enter into partnership contracts or joint ventures.