Influence of Political Environment on Performance of International Hotel Chains Operating in Nairobi, Kenya
Organizations respond to the external environment to stay afloat in the ever changing environment that they operate in (Beck et al., 2010). One of the environmental factors that most businesses have to deal with is the political environment. Companies have to respond to the environment strategically in order to be sustainable and avoid losses (Johnson et al., 2008; 2005). The election politics and environment in Kenya often affect International Hotel Chains. The factors that have shaped and influenced the country‘s political environment include consumers, legislation, taxation, infrastructure, power availability, peace and stability; the electoral legislation and administration of justice as well as discipline of law enforcement agencies; the economic impact in terms of taxation, government spending, general demand, interest rates, exchange rates and global economic factors; political and government policy; rapid technological changes that also affect production processes and product innovation in business; among others.The primary objective of this study was to assess the influence of political environment on the Performance of International Hotel Chains in Nairobi, Kenya and develop a framework for the identification of political environmental issues faced by international hotel chains in Nairobi, Kenya. The study collected primary data by use of a questionnaire. Data collected was analyzed through descriptive statistics, multiple linear regressions was undertaken with a view of examining the cumulative effect of the independent variables (Political environment and its impact) on the dependent variable (performance of International Chain Hotels). The results concluded that there is a positive influence of each independent variable on dependent variable with the other independent variables held constant. The aim of this paper is to establish a comprehensive view of what political environment is and to identify the importance of variables for the decision makers of international hotel firms and experts in this area. The first part of this paper is based on a thorough review of the literature concerning political environment and performance, the importance of political environment in relation to hotel performance and tourism industry, and the way of analysing political environment. Also, the relevance and importance of perception to political environment assessment suggests an ideal methodology for the present study. In the concluding part, application for hotels operating in Nairobi, Kenya will be made. This study determines the major political factors and constraints for international hotel chain development and identified variables which can be utilized by government for eliminating and controlling negative political factors. It is suggested that active involvement of host country government would be necessary' in order to create favorable political environment and promote more foreign investments.
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