Changing patterns in foreign investments in Kenya and their impact on HR policies: case studies of China and Britain
View/ Open
Date
2015-09Author
Njoroge, Bernard B I
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Most countries continue to strive in attracting foreign direct investment (FDI).
This is because of FDIs acknowledged benefits as tools of economic growth and
development. Africa and particularly Kenya has joined other countries in seeking FDI as
shown by the formation of the New Partnership for Africa’s Development (NEPAD).
NEPAD has been the centre of attraction of foreign investment to Africa. The major FDI
investors in Kenya have for many years been Britain, United States of America, and other
Western and European nations. However, Kenya has been shifting its priorities and
started to attract FDIs from Asian Pacific nations such as China.
The aim of this study was to explore the changing patterns of foreign investment
in Kenya and their impact on HR policies. The study was guided by the following
objectives: to investigate how foreign investors have impacted HR policies in Kenya, to
analyse how China as a FDI investor has impacted HR policies, to investigate how
different government regimes have handled, facilitated and implemented FDI change in
Kenya, to analyse why Kenya has shifted its foreign policy on investment to the East
(China) rather than the west (Britain) and to determine how foreign investors have
impacted HR policies in terms of transfer of technology and how they differ by
comparing polices for Britain and China. The study was based on the following theories,
namely: Neoclassical growth theory as per Solow and Endogenous growth theory as well
as the Harvard Framework of HRM. The three models are appropriate for the study
because they provide a theoretical framework for exploring the changing patterns of
HRM in Kenya, especially on HR policies. They aimed to test the following hypothesis:
Foreign investment by China and Britain has positively impacted the Kenyan human
resource policies and Human Resources managers have negative perceptions of Chinese
HR policies in comparison to Kenyan HR policies.
The study was conducted by the use of the case study design. Questionnaires and
structured interviews were the primary data collection instruments. The study used a
sample of three companies for comparative analysis, these included: National Oil
Corporation of Kenya (Kenyan company), Standard Chartered Bank (a British Company)
and China Jiangxi International (Chinese Company).
The study established that Kenya is generally characterised by a positive
investment climate, which has made it attractive to international firms that seek locations
for their regional or African operations. Key challenges for investors are Kenya’s
consistently low rankings on international measures of the ease of doing business and
corruption. Kenya also faces increasing threat of insecurity from terrorism and crime. The
findings show that FDI impact Human Resource policies in terms of transfer of
technology. Technological transfers have taken place mostly through transfers of
managerial skills and processes and not so much through embodied technology. The
study concludes that FDI has the potential to absorb some of the surplus literate labour in
the rural and urban informal sectors. It also concludes that foreign direct investment
that is channelled into the country is supposed to be well applied towards the
projects for which it is intended for considering reports that has shown
mismanagement of funds meant for free primary and secondary education. The
researcher recommends that FDI by Chinese companies in Kenya should be encouraged
and the right investment environment provided for they have positive results in economic
growth through human capital development, employment (jobs creation) and capital
supply.
Publisher
University of Nairobi