Factor That Influence Internationalization of SMES: A Case Study of Top 100 SMES in Nairobi

Abstract

The man objective of this study was to determine factors that influence internationalization of SMEs in Kenya. This study was guided by the following three research objectives: to determine if Internationalization theories influences internationalization process of SMEs in Kenya, to determine if changes in organizational environment influences internationalization of SMEs in Kenya and to determine if core competencies of an organization influences SMEs in Kenya to internationalize. The research design was descriptive in nature focusing on SMEs in Nairobi. Simple random sampling technique was used to select the sample in which thirty eight (30) respondents from a population of one hundred (100) companies based in Nairobi were chosen. The staff included both managers categorized into two levels; senior level management and middle level management. Information was collected using a questionnaire developed by the researcher and administered with the help of a trained research assistant. Data was analyzed using Statistical Package for Social Sciences (SPSS) to obtain descriptive statistics in terms of the mean, mode, median and frequencies and result presented in pie charts and tables. The study findings on the internationalization theories on internationalization process of SMEs in Kenya revealed that ease of doing business in this country(s), availability of market for company products, economies of scale of SMEs seeking to go international, as well as the availably of capital to do business in the international markets and the availability of human resource in such countries influence the internationalization of SMEs. The findings on changes on the external environment and how it influence internationalization of SMEs revealed that technology, skilled human resources, capital, effective leadership, effective communication, clarity of vision and mission as well as market availability and government policies indeed influence the internationalization of SMEs in Kenya. The study findings also revealed that knowledge of foreign market, entrepreneurial role in internationalization, organization resources, organization capabilities as well as consideration of perceived are elements of core competencies that influence the internationalization of SMEs in Kenya. The study concludes that indeed innovation, skilled human resources, capital, effective leadership, effective communication, clarity of vision and mission as well as market availability and government policies indeed influence the internationalization of SMEs in Kenya. It also concludes that knowledge of foreign market, entrepreneurial role in internationalization, organization resources, organization capabilities as well as consideration of perceived are elements of core competencies that influence the internationalization of SMEs in Kenya. In light of these findings the study recommended the continuous introduction of brand new financial products and services in order to advance economies and financial liberalization and thus bring about the adoption of new products and services in emerging international markets. The study also recommends that the there is need for the organization to put in efforts aimed at ensure that strengthen their core competencies so as to be able to penetrate such markets.