Strategic Responses to Investment Shocks by Selected Multinational Corporations (Mncs) in Kenya

Abstract

Multinational corporations (MNCs) operate in divergent environments of diverse political, economic, sociological, technological, environmental, and legal factors. Previous investment shocks provide pointers to possible MNCs strategic responses, but given new investment shocks, it is difficult to predict their trends or prescribe the course of actions that may be successful. This study sought to identify the investment shocks faced by selected MNCS in Kenya and establish their strategic responses to the identified investment shocks. The researcher used a descriptive survey to gather information from 15 selected MNCs in Kenya, which was attributed to its broad application in planning, monitoring and evaluating policies. Descriptive statistics was used to analyse the data, which included percentages, measures of central tendency and standard deviations using Microsoft Excel 2007 package. It was determined that economic factors including global trade, world financial markets, market forces, and global competition were likely to cause investment shocks with a mean of > 3.80 on a 5-point likert scale. The MNCs responded mainly by use of insurance and disaster management preparedness strategies that had a mean value of > 3.81 on a 5-point likert scale. The participation of stakeholders in decision making, resource allocation and performance contract reviews were frequently used responses to investment shocks. The study recommends that various MNCs to adopt stakeholders’ participation strategy, employment of instrument of information, disaster management and preparedness and use of insurance in coping up with the identified investment shocks. It is hoped that this research will provide a baseline for further study on trends in investment shocks and their coping strategies.