An Analysis of Determinants of Internationalization: A Case Study of Selected Kenyan Pharmaceutical and Medical Equipment Firms

Abstract

Business activities that are organized and carried out across borders to pursue an organization`s stated aims and objectives is referred to as international business. The aim of any organization (national or international) is to maximize their profit and minimize their costs; this is achieved through effective and efficient allocation of its resources in its operations. Selected pharmaceutical and medical equipment present in Kenya were investigated to analyze the determinants of their internationalization. The study`s objectives were to establish the extent to which organization`s attributes, decision maker`s abilities, market features and regulatory support influenced the internationalization of selected Kenyan pharmaceutical and medical equipment firms. This study further provided empirical review, conceptual and operational framework. A descriptive research design was used in the study; this design main objective was to clearly describe the persons involved and acquire accurate information from the current situation. Due to this topic being important in the field of international business, this research had for general objective to analyze the determinants that influence the internationalization of selected Kenyan pharmaceutical and medical equipment firms. It specifically looked at determinants such as: organization`s attributes, decision maker`s abilities, market features and regulatory support. A census was used to gain access to information from the population members in order to determine their status and how they relate to one or more variables. The study`s sample size consisted 75 respondents out of the targeted 75 respondents. The study used questionnaire method in form of structured questions to collect data from the field. Data was presented and summarized in forms of tables and questionnaires was collected and analyzed so as to acquire relevant data. This study’s results showed that organization`s attributes, decision maker`s abilities and market features influenced the internationalization of selected Kenyan pharmaceutical and medical equipment firms. The study recommended that Kenyan pharmaceutical and medical equipment firms should concentrate their efforts on building their decision makers abilities, organization`s attributes and taking advantage of host country market features in achieving internationalization. The study found that organization attributes, with its measures: number of employees, number of years in business operations and product appeal significantly affect the internationalization of selected Kenyan pharmaceutical and medical equipment firms, these firms must build up their competencies and strategies in a way to enable them acquire certain features overtime. From the study, decision maker’s abilities and host country market features were also seen as a statistically significant predictor of internationalization of selected Kenyan pharmaceutical and medical equipment firms. These abilities and foreign market features help the organization achieve success both financially and non-financially. Finally, policy makers (host and home country regulators) were seen as a statistically insignificant predictor of the internationalization of selected Kenyan pharmaceutical and medical equipment firms, therefore policy makers should concentrate on building on the competencies and capabilities of organizations whilst formulating and implementing export policies and programs to help increase export volumes.