Response by Kenyan firms to Globalization: A survey of manufacturing firms in Nairobi and Athi - River

Abstract

Globalization affects local and international firms in many ways. Studies have shown that factors in the internal as well as external environments of firms influence the rate at which globalization affects them. The concept of globalization is multidimensional and its influence is varied in nature. This study aimed at investigating how manufacturing firms in Kenya have responded to probable pressure from the forces of globalization in order to sharpen their competitiveness. To achieve this, the study focused on manufacturing firms’ response on managerial innovation, resource management, distribution chain, adoption of technology and competition. Cross sectional survey design was adopted for the study. The target populations of the study were CEOs/MDs and their deputies from 545 manufacturing companies in Nairobi and Athi-River. Stratified sampling technique was used to categorize the targeted manufacturing firms into sectors where purposive sampling technique was used to sample the respondents for the study. A total of 100 firms from the 14 sectors were targeted by the study out of which 80 responded giving a response rate of 80%. A questionnaire was used to collect primary data. Regression and correlation analysis was done to test the relationship between the study variables. The study found that continued global technological advancement has enabled management come up with innovations to respond to customer needs and economic and regulatory factors, which have prompted outsourcing some operations, respectively. The results of the correlation analysis showed that adoption of technology was significant. The study also found out that continued global technological advancement has enabled management come up with innovations in response to customer needs and economic and regulatory factors, which have prompted outsourcing some operations respectively. The findings of the study showed that there was a positive correlation between globalization and managerial innovation. The results from the study also showed that there was a positive correlation between globalization and resource management. The study found a positive relationship between the distribution chain and globalization in manufacturing firms in Kenya. The research established that legislative measures had led to the use of local intermediaries who understand legislative matters. The study concluded that manufacturing firms in Kenya have adopted the use of technology, managerial innovation, resource management, distribution chain and competition as response strategies to globalization. The study recommends that manufacturing firms in Kenya should; keep abreast with new technologies and encourage employee knowledge and skill development ranging from low to highly specialized besides the development of hard infrastructure, work closely with institutions of higher learning to sponsor research and enhance their research departments so as to embrace innovation as a response to globalization, improve on their resource management strategies, become globally integrated enterprises, The study finally recommends that other studies should be done to find out the relationship between specific industry technologies and globalization, to bring out the technology specific challenges, to determine different managerial innovations that can stimulate firms to respond more effectively to globalization, to establish the reasons as to why energy resource is more costly to manufacturing firms and on the challenges facing manufacturing firms in their response to globalization, which was not the concern of this study.