Effect Of Internationalization On Organizational Performance Of Food And Beverages Manufacturing Firms In Kenya

Abstract

The 21st century has been influenced by a protraction of globalization whereby firms have been obliged to make three strategic decisions- which target markets to enter, when to enter, and how to enter those selected markets. With the shrinking of the domestic markets, the future of the firm is on internationalization of their operations. This study sought to determine the effects of internationalization on organizational performance of food and beverages manufacturing firms in Kenya. Specifically, the effect of product-market internationalization, input-market internationalization and human capital internationalization on organizational performance of food and beverages manufacturing firms in Kenya were assessed. The study will focus on firms operating in Nairobi since it is estimated the 80% of the manufacturing firms in Kenya operate in Nairobi. The study used a questionnaire to collect primary data which were distributed to the respondents and collected at a later date. The data was coded and analyzed with the help of SPSS software version 24 and STATA 13. Descriptive statistics such as mean and standard deviation were computed. To study the effects of the independent variables on the dependent variables, a linear regression model was fitted. To enable this, the major assumptions of linear regression; normality, multicollinearity, heteroscedasticity and autocorrelation were tested. The data was found to have heteroscedasticity and autocorrelation. To resolve this, a linear model with robust standard error was used. The study concluded that input market and human capital internationalization have a significance positive effect on organizational performance of food and beverages manufacturing firms in Kenya. The study was however inconclusive on the effect of product-market internalization on organizational performances of food and beverages manufacturing firms in Kenya.