Strategic responses of companies listed in the Nairobi stock exchange to globalization
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.