A survey of corporate venturing practices by software development and distribution firms in Nairobi, Kenya

Abstract

This research set out to find out: what were the corporate venturing practices, and their justifying factors, as exhibited by software development and distribution firms in Nairobi, Kenya. These were issues of concern given the various changes in business environment in Kenya: the complex. uncertain and dynamic IT industry in the flat Kenyan economy; which called for continued entrepreneurial behaviour for continued renewal and growth. To explore these corporate venturing practices and the pertinent factors. primary data was collected using a survey design from eighteen respondent firms on empirically documented corporate venturing practices, namely: culture, climate and corporate support: structure and design of venturing effort; planning, monitoring, evaluation and control of ventures: and staffing and rewarding venture activity. Additionally, factors espoused as being influential to the success of corporate venturing such as mission of the venturing activity, environmental factors. product market strategy, and entry strategies were investigated. The findings were ana lysed usmg descriptive statistics and factor analysis .. The findings of this study indicates that: there exists barriers to exercise of entrepreneurial initiative due to bureaucratic designs in the organ izations, Iirn ited support from sen lor management, and management styles that stifle corporate venturing; venture efforts are granted sufficient autonomy, closely monitored by senior management and appropriate modes of venturing employed. Majority of the firms plan for, evaluate, monitor and control venture efforts as they do established lines of business; staff venture teams with team-builders, risk takers and politically sensitive while rewarding them based on the success of the venture. Further. few are concerned with customer satisfaction levels. This led to the conclusions: the supportive entrepreneurial culture, climate and support are lacking; empirically espoused practices on structure and design of corporate venturing are employed; planning, monitoring, evaluation, and control of venture is based on conventional systems; and staffing and reward systems were as empirically documented outside Kenya. These practices are largely explained by: limited market research to identify existence of new venture opportunities; limited resources to exploit new venture opportunities; low venture user-need congruency due to market ignorance; inability to leverage existing skill base to exploit new technologies; and a lack of aspiration to be global market leaders. Due to .the breadth of this study, it is limited in level of detail. Findings that are more concrete can be drawn if a' more focused study say on staffing and rewarding venture effort or any other area is conducted. It would be highly inspiring for example to find out why most of the respondents in this study plan for, control and evaluate new venture efforts using similar systems they employ to the existing lines of business, yet literature from outside Kenya indicates otherwise.