Effects of Multinationalism on Organizational Performance of Large Manufacturing Firms in Kenya

Abstract

This study investigated the impacts of multinationalism on the performance of large manufacturing companies in Kenya. A descriptive research design was used in this research. The research focused on all the all 31 manufacturing companies in Kenya. Secondary data was utilized in this research to achieve the set objective. The secondary data was acquired from the audited yearly financial reports for individual firms found on the company website and library as from 2013 to 2017. The quantitative data acquired was analysed with the help of Statistical Package for Social Sciences (SPSS) version 23 and results were presented in tables. Skewness and Kurtosis were utilized to test the normality of the data. This study applied multiple regressions to define the effects of multinationalism on organizational performance of huge manufacturing companies in Kenya. From the regression finding, the research ascertained that the four independent variables studied explained a substantial 66.77%of performance of manufacturing companies in Kenya while other factors and random variations not studied in this research were found to contribute a measly 23.23% of the performance of manufacturing firms in Kenya. The research also ascertained that net foreign assets has significance and positive influence on manufacturing company performance (β1=0.345, p=.00) this means when the net foreign assets is increased the manufacturing firm performance improves as well. Regression results also revealed that the foreign sales have a significance influence on the firms’ performance. Hence the higher the foreign sales by the manufacturing firms the better the performance. Study also established that there existed a weak considerable positive relationship between foreign subsidiaries and performance of manufacturing companies (β3=0.098, p=0.030). This implies that an increase in the number of foreign subsidiaries would lead to a better performance of manufacturing companies and lastly it was found out that there existed a considerable relationship between foreign states establishment and performance of manufacturing firms. This explains that when number of foreign states establishment increases by one unit, there is an increase in the performance of manufacturing companies in Kenya. Based on the results of this research, the study concluded that all large manufacturing firms have foreign subsidiaries in different countries and multinationalism improves the performance of the manufacturing companies. The research also recommends the manufacturing companies to increase their branch networks to isolated geographical areas and countries in order to reach out to more customers and improve their performance. The research suggests that manufacturing companies encourage foreign investors to partner with them so as to raise the net foreign assets since an increase in net foreign assets leads to a better performance. The study also recommends that similar research be done on foreign commercial banks in Kenya to determine the impacts of multinationalism on their financial performance. In addition, same study should be done to small manufacturing firms to establish whether the same results are arrived.