Response strategies of industrial and commercial development Corporation to changes in the external environment in Kenya

Abstract

Strategy of the firm is the match between its internal capabilities and its external relationships.Ideally, an organization wants a close match with its environment which is underpinned by its resources and values. A host of external factors influence a firm’s choice of direction and action and, ultimately, its external structure and internal processes. Development Finance Institutions (DFIs) in Kenya were set up to provide long term finance to prioritized sectors as part of the industrialization strategy. For four decades since its formation, the Industrial and Commercial Development Corporation (ICDC), like all other DFIs in Kenya, was a highly effective DFI. In the past two decades however, it has become a peripheral player in the financial and investment services market.This study sought to find out the changes in the external environment that the Industrial and Commercial Development Corporation considers to affect them most, the response strategies it has adopted, and their effectiveness.The study used a case study research design. The main data for this study was secondary data, which involved in- depth interviews with the respondents. The data was analysed using content analysis. The findings from the study showed that there were major changes in the external environment that affected the Industrial and Commercial Development Corporation and its effectiveness in the market. The Corporation made a number of strategic responses to counter the changes. Some of the changes were beyond the control of the Corporation; hence the responses made were not sufficient to counter the changes. However, there were additional responses identified which would have made the responses more effective.