The influence of culture in the operation of selected multinationals (MNCs) in Kenya

Abstract

The purpose of the research study was to determine the influences of culture on the operations of multinational corporations in Kenya. The study in particular sought to determine the language factor as a cultural influence, examine the effects of education on culture, and identify the social institutions that influence culture in MNCs. Further the study sought to determine the values and attitudes that influence culture in the business operations of multinational corporations, establish the influence of religion and also identify the manners and customs that have impact on the operations of the MNCs. Operating in ways that are congruent with a firm’s cultural contexts can improve business performance. For multinational companies, some variation in operating practices across locations is normally required. And as companies push further with variation across locations, complementary moves such as decentralization of decision-making and indigenization of in-country management teams can support a company’s ability to be responsive to local conditions. At the extreme, a multinational becomes so localized that it gives up all of its potential interactional synergies and performs no better (and perhaps even worse) than a series of separate local firms would. Therefore, managing adaptation (to cultural as well as other types of differences) entails finding ways to limit the need for and/or cost of variation. Cultural differences remain persistent and present an array of challenges for multinational companies. Firms that manage adaptation effectively are able to achieve congruence in the various cultures where they operate while extending their main sources of advantage across borders, and in some cases even making cultural diversity itself a source of advantage. This study endeavours to determine the influences of culture on the operations of multinational corporations in Kenya. The study was able to meet this objective by employing a descriptive research design. The main tool for data collection for this study included a questionnaire for the major multinational corporations operating in Kenya, these were a total of 20 companies. In both practice and theory, the cultural distances between countries do vary and hence affecting business decisions of companies operating in cross nations. The study found cultural factors such as religion, education, language, cultural infrastructure, social institutions, values and attitudes, and manners and customs to influence the way multinational companies carries out their operations. Different factors have unique influence, education plays a major role in the passing on and sharing of culture, social institutions affects the buying power and decision making positions as well as the consumption patterns of a society. Religion on the other hand provides a basis for trans-cultural similarities and influences consumption of goods and services as well as consumptions patterns. The study found that the culture of the society is highly influential on the performance of the firm in a given society and recommends companies to understand societal culture and align their internal cultures with those of the society they are investing and operating in so as to gain from the culture.