Factors that determine internalization process of commercial banks in Kenya
Internationalization process has been a fascinating topic for several years, from theoretical and practical perspective, business enterprises engage in business beyond their borders, expanding in foreign markets so as to reach more consumers and client-base. In Kenya, commercial banks are motivated to strive for international presences as organizational and environmental factors play an important role. The internationalization initiative has seen both indigenous and foreign Kenya-based commercial banks increasing involvement in neighboring countries by opening branches and affiliates so as to increase their market share. This latest development has seen a 'bandwagon' effect in the Kenyan financial sector as more commercial banks are adopting the same strategies. The study sought to establish the factors that determine internationalization process of commercial banks in Kenya. The study adopted descriptive research design. The population of the study comprised of selected employees of commercial banks with presences outside Kenya. A sample size of22 respondents was used representing 44% of the target population of 50. Stratified random sampling method was used in this study to select the respondents. The data was collected by use of structured and unstructured questionnaire. The structured data was analyzed using spread sheet program. The data presentation was done using frequency tables and a graph. The unstructured data was edited, sorted and coded to develop relationships, and organized using word processing program. Expected outcome of the research revealed that there are factors that determine internationalization process of commercial banks in Kenya. From the study, it was found that majority of the respondents agreed that proactive and reactive motivation, internal and external change agents and barriers to internationalize were core in the internationalization process. In addition, the success or failure of the process will depend on how the barriers or risks are mitigated. The study further makes recommendations that enlightened management and host country's attractiveness are important internal and external factors respectively to be assessed as the commercial bank strategies to operate in foreign markets are developed.