Strategic responses of companies listed in the Nairobi stock exchange to globalization
Abstract
In an era of globalization, managers, consultants, and researchers have all recognized that the
study of industries, strategies, and organizations in a global context needs to be regarded as the
norm. Ohmae (1989) argues that success or failure of a business in the twenty-first century will
depend on whether it can compete effectively in world markets. The study aimed at determining
the strategic response of companies listed at the Nairobi Stock Exchange to globalization.
The population of interest in this study comprised of companies listed at the Nairobi Stock
Exchange. There are 47 companies listed at the Nairobi Stock Exchange as of May 2009 (NSE,
2009). Primary data was collected using a questionnaire with close ended, open ended and
matrix questions administered to the finance managers of the target companies. The targeted
respondents were senior managers in the respective firms, who were involved in strategic
decision making. The questionnaires were self administered. The data was coded by assigning
numbers to various responses and then statistical computations were used to draw conclusions.
Data was interpreted using mean scores, frequencies and percentages and presented using
frequency tables.
From the study, the challenges of globalization that affected the companies were political
instability, instability of global financial structure, change in technology, competition and greater
consumer awareness about products. The strategic responses to globalization adopted by the
companies listed at the Nairobi Stock Exchange to deal with the challenges were environmental
scanning, operational excellence, customer intimacy, product leadership, market development,
differentiation and product development. The study therefore recommends that in order to reduce
the effects of globalization in the companies quoted in the NSE, the companies should ensure
that they adopt the latest technology, they should be aware of the consumers changing needs, the
employees should be fully trained on how to cope with the negative aspects of globalization and
also the firms should focus on cost reduction, revenue generation and asset reduction in order to
respond to globalization.
Citation
Masters of business administrationSponsorhip
University of NairobiPublisher
School of business,University of Nairobi