Factors influencing MNC's in choosing Nairobi Kenya as Africa regional headquarters
Several multinational companies have set up base in Africa over the past years. This has led to a need of having Africa regional head quarters. Kenya can boast of being The African regional headquarter of 20 multinational companies. This research was carried out mainly to determine why multinationals would choose Kenya out of all the countries in Africa to be a regional headquarter. This study focused on variables such as location, economic status, political stability, market potentiality and labor as the main factors that would qualify Kenya to be a regional headquarter. In addition, this study was able to find out whether the country of origin and type of industry had an effect on choosing of Nairobi Kenya as a regional headquarter. Due to the findings of the study, it can be concluded that market potentiality has the greatest influence on choice of Kenya as a regional head quarter. Availability of skilled labor and the Kenyan economy influenced the decisions of MNCs to enter Kenya. The conclusion of the research showed that the USA has the highest number of MNCs with Africa headquarters in Nairobi. The media industry is the most invested industry in Kenya followed by NGOs. Highest entry of regional office set up by MNCs in Nairobi was in 2012 and 2011. This was a period when the economy of Kenya was growing but ironically just before the general elections period. This shows that many MNEs could still continue operations despite Kenya have a shaky political arena.A large number of the multinational firms used FDI as a mode of entry. It was also found out that most firms used both the centralized and decentralized system of decision making.10 MNCs have between 1-5 branches in Africa which is the most in number. These are followed by 3 MNEs which have between 16-20 branches in Africa. M-pesa has been a great determinant that has led to Kenya’s popularity. MNCs like Kiva and GSM mainly chose Kenya because of m-pesa which has enhanced their operations within the Kenyan market.Good international relations between Kenya and China have also led to major investments by Chinese in Kenya. The Chinese have set up several head offices in Kenya mainly due to the government relationships. Several Multinationals have chosen Kenya to be the East Africa HQ but however not African regional headquarters. Improvements on our economy, literacy levels, better infrastructure and better political situations will see many of those firms get promoted to African headquarters. However, findings have also indicated that several firms demoted Kenya from being the African head office. For example Nokia from Finland demoted the Kenyan office. This study recommends that there should be efforts channeled by the government to increase economic growth, literacy levels, better infrastructure and create a calm political scene. These efforts will definitely lead to many Kenyan offices getting promoted to African headquarters. Another recommendation is that Kenyan government should also create good international relations with several other countries which will lead to more investment.