Influence Of Political-Legal Environment On Foreign Market Entry Strategies Among Multinationals Corporations In Kenya
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Date
2019Author
Kirimi, Kevin Mutembei
Type
ThesisLanguage
enMetadata
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The study examined the influence of the political-legal environment on international
business entry strategies among multinationals in Kenya. The study was anchored on two
theories, namely, international product life cycle theory and environmental dependency
theory. A descriptive research design was utilized in the study. The survey covered 44
multinationals corporations with offices in Nairobi County. A census was conducted in the
investigation since the focus population was small and manageable. For each of the
company, only one managing director, one business development manager and one legal
manager were picked randomly. Questionnaires with closed-ended questions were
administered directly to the respondents. The data was analyzed using descriptive and
inferential statistics. The descriptive statistics entailed the frequencies, mean and standard
deviation, while inferential statistics comprised of the correlation and the regression
analysis. Analysis of variance was utilized to determine whether the overall model was
statistically significant. The findings of the study established that the political environment
factors that affected the foreign market entry strategies in large extent were election cycles,
politician’s involvement, the political risk and predictability, level of democracy,
embezzlement of funds, the graft level, political traditions, political structure and taking of
bribes. Besides the study found that the legal factors that affected the foreign market entry
strategies among multinationals corporations to a large extent were liberation in
management, levels of consumer protection, economic regulation on price ceiling,
licensing requirements, competition regulation, export subsidies, trade tariffs, import
quotas and level of taxes. Additionally, The study revealed that foreign entry strategies
used in large extent were direct exporting, indirect exporting, investment franchising,
management franchising, provision of managerial expertise, hiring of the management
company, cooperation with another business, separate joint venture, licensing of copyright
and trade secrets and licensing of trademarks. The correlation results showed that the
political environment and legal environment were positively and significantly associated
with foreign market entry strategies. The study concluded that the political environment
and legal environment were positively and significantly related to foreign market entry
strategies. The study recommended that multinational corporations in Kenya be granted
democracy in their leadership style and not dictated on who be involved in the
management. The study also recommended that politicians should distance themselves
from interfering with the operations of the business and government to establish policies
and regulations to protect companies from the interference from the influential people in
the country. The study also recommended that other multinational corporations aiming to
expand their business in different countries can also adapt those strategies of cooperation
with another company, separate joint venture and direct exporting since they were the most
used by the multinational corporations in Kenya.
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UoN
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Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1556]
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