Multinational enterprises and host nations: contribution by Coca-Cola to Kenya's economy

Abstract

The last two decades have seen a steady upsurge in the number of multinational corporations established in emerging economies, especially in Africa. International Business scholars have been comparatively uninterested in analyzing the role of MNEs in relation to emerging economies, and consequently, this area has not received due attention. As such the current study sought to establish the contribution of The Coca-Cola Company, a multinational corporation, to Kenya‟s economy. The study was guided by the following objectives, to determine the various factors favoring the establishment of Multinational enterprises like The Coca-Cola Company in host nations like Kenya, to establish the various contributions of Multinational enterprises like The Coca-Cola Company in the development of host economies specifically the Kenyan economy and to determine the challenges plaguing investment of Multinational enterprises specifically The Coca-Cola Company in host economies like the Kenya. Purposive sampling procedure was used to arrive at the sample of the heads of Marketing, Procurement, Quality Assurance and Logistics, as well as the Chief Executive Officer at The Coca-Cola Company. A semi -structured interview guide was used to collect data from the heads. The data was coded or broken down into manageable categories on a variety of levels and then examined using conceptual and relational analysis. The study established that: Establishment of Coca-Cola Company in Kenya is favored by an ideal investment climate, globalization pressure on Kenya and other emerging economies, economical human and natural resources as well as political stability; the Coca-Cola Company has contributed to the development Kenya‟s economy through introduction of modern technologies and superior taskforce training in the local context, as well as corporate transactions with local firms thereby boosting their productivity as well as overall national economic growth; challenges facing investment of the Coca-Cola Company in Kenya relate to tough regulatory powers by local authorities, high power and fuel costs, fluctuation of the Kenyan shilling, and pessimistic perception of the company.