The Internationalization Process of Commercial Banks in Kenya
View/ Open
Date
2013-11Author
Makunyi, Caroline W
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Internationalization of business is the expansion of a firm’s activities into foreign
markets. It is a business strategy influenced by internal and external forces; proactively or
reactively such as profit, growth goals, economies of scale, sale of seasonal products,
opportunities in foreign markets and competitive pressures. The banking industry in
Kenya has 44 commercial banks which have operations in foreign markets; some are
foreign owned while a good number of the local banks have internationalized into several
countries. In the process of internationalization firms adopt different models such as the
Uppsala model, Network models, Vernon’s product life cycle model, Eclectic model and
Born global and Born again global models. The expansion of business into foreign
markets faces cultural challenges that cut across national, business environment and
organizational cultures. The operating costs increase, firms may have insufficient funds
to invest in the foreign markets and they face unfair competition from firms in the foreign
markets. The bulk of studies on internationalization have focused on developed
economies; while studies on Kenyan banks have focused on strategy. This study focuses
on the internationalization of commercial banks in Kenya, with the objective of
determining the processes adopted and challenges encountered. The research was done by
carrying out a cross sectional survey on a population of 21 internationalized banks. The
findings of the study indicate that the banks commonly applied the Uppsala, Born global
and Born again global models. The main challenges are cultural differences and increased
operational costs in the foreign markets. The recommendations of the study are for the
banks to consider the influence of the external business environment. The recommended
are for further research on the impact and management of cultural challenges.
Citation
Degree Of Master Of Business AdministrationPublisher
University of Nairobi School of Business
Description
A research project submitted in the partial fulfillment of the requirement for the award Of Degree Of Master Of Business Administration, School Of Business, University Of Nairobi