A survey of corporate venturing in large scale manufacturing companies In Kenya

Abstract

This research study set out to establish the extent to which large scale manufacturing companies in Kenya practice corporate venturing and to determine what motivates corporate venturing by large scale manufacturing companies operating in Kenya. These were issues of concern to the researcher and to the wider community, given the various changes in the business environment that have taken place in Kenya, the numerous examples of failed Kenyan firms that had a long history of success in the monopoly era, and the need for the firms to remain competitive and relevant in the turbulent environment. Given the ever growing pressures of globalization resulting in increased importation of virtually all categories of goods, including consumer goods into the Kenyan market from eastern block countries, rendering the locally manufactured goods uncompetitive, the issues assumed an even more urgent dimension. To explore those issues, primary data was collected from large scale manufacturing companies operating in Kenya. Data was collected using a survey design from thirty five respondent firms on documented corporate venturing practices. These included corporate venturing as an organizational value, level of corporate venturing commitment and the extent of management support towards corporate venturing activities to evaluate the culture, climate and corporate support; firms' awareness of the corporate venturing activities and structure of corporate venture unit management to establish the structure and design of the venturing effort; and new product development and delivery to gauge the planning, monitoring, evaluation and control of the ventures; and organizational arrangements to evaluate the staffing and rewarding of the venturing activities. Other additional factors such as mission statements and product-market strategy were investigated. The findings were analyzed using descriptive statistics. The findings of this study indicates that corporate venturing (pursuit of new business ideas and markets) is not new to many of the large scale manufacturing companies in Kenya; however, there exists barriers to undertaking of corporate venturing due to the bureaucracy in the firms, limited support from senior management, management styles that stifle innovation. Majority of the parent firms plan for, evaluate, monitor and control venture efforts as they do their established business, grant the venture units sufficient autonomy but the senior management closely monitors and at times, get involved in the day to day management of the ventures. The foregoing indicated that there was deficient supportive entrepreneurial culture, climate and support. This research study was rather broad which meant that the level of detail it could delve into given the two objectives was limited, in view of the limited resources that were at the researcher's disposal. Findings that can be generalized for the whole manufacturing sector can be deduced if more detailed studies in the various aspects of corporate venturing are conducted.