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Global Strategy and Policy: Impacts of Globalization (Kenya)

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Global Strategy and Policy: Impacts of Globalization (A Case of Kenya)

The main driving force of globalization is the rapid flow of cultural values, information,

goods and services, and ideas as individuals shift towards an integrated world economy. The

challenges African countries experience is developing public policies to maximize the possible

benefits of globalization and maximizing risks of marginalization and destabilization.

Globalization has led to several opportunities and challenges in Kenya as the country continues

to experience a cosmopolitan society, economic growth, and increased political participation.

The paper will analyze the impacts of globalization in Kenya by exploring the nature of strategic

management, internal and external environment, competitive dynamics, entrepreneurial

strategies, corporate governance, and ethical and legal considerations of global companies. While

globalization has led to numerous benefits to Kenyan economy, like increased technological

advancements and access to international markets and capital, it is associated with negative

impacts like increased debts, environmental degradation, and cultural homogenization

Globalization has led to significant impacts on the Kenyan economy. Kenya has

witnessed increased investment flows, international trade, and economic opportunities.

According to (Olungo Ukpere,2020), FDI is one of the critical components of the country's

economic development by creating job opportunities, expanding business, and promoting

technological innovations. For example, China Exim Bank offered Kenya a loan of

approximately 3.6 billion dollars in 2014 to finance railway line construction from Nairobi to

Mombasa (Dossou, 2018). The project was completed in 2017 and has helped Kenya reduce

transportation costs for goods and services. Additionally, the project created employment

opportunities as Kenyans were involved in constructing and maintaining the railway. According
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to Wissenbanch and Wang (2017), Kenya is among the African countries China focuses on

economic strategy and international trade as the country is the gateway to Eastern Africa.

FDI has created several externalities in the Kenyan economy by improving

telecommunication services and establishing trade networks. Attracting FDI is a strategy that

helps Kenya improve its economic status in Africa and the rest of the world (Osano & Koine,

2016). FDI has led to the acquisition of Kenyan companies by foreign entities. For example, in

2019, Coca-Cola acquired about 100% of the Kenyan juice manufacturers (Osano & Koine,

2016). Notably, Coca-Cola used this strategy to expand its business operations in Africa. The

investment helped create jobs, especially in the manufacturing industry and increased Kenya's

exports of local products. In the same year, Softbank, a Japanese technological company,

invested over 100 billion in Branch, a mobile payment provider in Kenya (Osano & Koine,

2016). Through this investment, Branch expanded its services to attract more users in Kenya and

the rest of Africa and develop new products. According to Dees et al.,(2023), related

diversification is a global strategy that helps companies to benefit from associations of different

businesses through distribution and production facilities.

Globalization has helped Kenya engage in bilateral trade with other countries. In this

case, imports and exports play a crucial role in the Kenyan economy by creating new job

opportunities and promoting international trade. Economic globalization through channels like

exchange rate, fertilizer consumption, and agriculture imports and exports influences the value of

Kenyan agriculture globally (Sansika et al., 2023). As stated by Pham (2017), Kenya is the

biggest exporter of Tea in Africa, which accounts for 25% of the total exports. The Kenyan tea

industry provides over three million individuals with employment, most of whom are small-scale

farmers. Additionally, tea exports promote Kenyan economic growth and largely contribute to
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international exchange earnings. The study by Krone et al. (2016) indicates that Kenya is the

biggest exporter of fresh flowers in the European Union, and the products account for 10 % of

the total exports.

Globalization helps Kenya to import products like vehicles, machinery, and petroleum.

Petroleum products account for approximately 20% of Kenyan imports (Mann & Graham, 2018).

The global relationship between Kenya and Middle East countries helps it to import petroleum

products. As competitive dynamics, the Kenyan government has implemented several policies

like utilizing biofuels and renewable energy to minimize dependency on imported petroleum

products. Additionally, the government has executed policies like import duty elimination on

equipment and machinery (Osano & Koine, 2016). Moreover, to promote the easier import of

vehicles from foreign countries, the government restricts automotive companies from importing

cars older than eight years to promote local companies.

Globalization has significantly impacted the Kenyan culture. Due to increased global

interconnectedness, the country has spread new cultural practices and ideas. For example,

globalization has created Kenya's vibrant and diverse cultural environment (Moon, 2016).

Additionally, it has led to the spread of popular culture and the sharing of cultural experiences.

According to Goltz et al.,(2016), the popularity of American movies, music, and TV shows has

positively impacted the Kenyan entertainment industry. Globalization has also resulted in a

cosmopolitan society with great tolerance for alternative lifestyles and diversity, like the fusion

of modern and traditional elements that enrich Kenyan cultural heritage. Moon (2016) states that

all these impacts make it easier for foreign companies to conduct their business in Kenya as

products from other countries largely influence people.

Globalization has positively influenced the process of making public policies in Kenya.

Universal mass media coverage influences how policies are implemented in Kenya. For example,

Voice of America, British Broadcasting Corporation ( BBC), Cable News Network( CNN), and

Aljazeera play a critical role in shaping Kenyan public policies( Jonyo,2023). Through global

media coverage, the issue of international terrorism has been discussed by different international

media and has shaped Kenyan perceptions of public policy. The emergence of international

institutions, including the United Nations, the World Bank, and Federation of International

Football Association (FIFA) influences how Kenya implements public policies (Jonyo, 2023).

Additionally, to address the shortage of medical professionals, the Kenyan government hired

doctors from Cuba and Tanzania to ensure that citizens receive adequate and proper treatment

facilities.

Although globalization helps develop and grow the Kenyan economy, it is also associated

with a few challenges. The Kenyan economy largely depends on exports and tourism, and

globalization facilitates international markets. However, it has made Kenya experience price

fluctuations in global commodities. Additionally, Kenya's over-dependency on the main exports

exposes it to global trade risks, which means that after international prices decrease, the country

experiences economic instability (Osano & Koine, 2016). The strategy used by the Kenyan

government when exporting its products has resulted in the concentration of economic activities

in certain sectors in which other industries are underdeveloped. This has limited the country's

capability to diversify its economy and safeguard it from external shocks.

Increased debts is another challenge associated with globalization in the Kenyan

economy. Kenya largely depends on global financial institutions to fund mega projects and

development initiatives. Although all these loans help the country to improve its infrastructure,
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including roads and airports, they also increase national debts (Haushofer & Shapiro, 2016). The

Kenyan government also borrows loans for recurrent expenditure, which could be more

sustainable for long-term goals (Mann & Graham, 2018). In this case, increased debts limit

Kenya from investing in important sectors like healthcare and education, which help countries

achieve sustainable development. Deterioration of trade is one of the problems associated with

increased debts. Internal factors associated with high debts are deficits in the public sector and

exchange rate movements. Although the country has met its debt repayments, the low rate of its

economy and decrease in capital inflows suggest that it is hard for Kenya to sustain its debts.

Globalization helps spread Western values and culture, negatively affecting Kenyan

cultural heritage. According to Goltz et al. (2016), Kenyan people shift away from their

traditional values and practices by adopting Western norms and ideals. For example, Kenyan

farmers have replaced traditional farming practices with industrialized and modern agriculture,

which results in the loss of indigenous practices and knowledge. The young generation has also

been introduced to Western culture through social media platforms, which has declined their

interest in traditional music, dance, and art (Haviland et al.,2016). Cultural homogenization leads

to diversity loss and the decline of cultural heritage.

Conclusion

Although globalization has led to numerous benefits in Kenya, like increased

technological advancements and access to international markets and capital, it is associated with

negative impacts like increased debts, environmental degradation, and cultural homogenization.

Kenya has witnessed increased investment flows, international trade, and economic opportunities

through globalization. Globalization also helps Kenya import products like vehicles, machinery,

and petroleum. Kenyan policymakers should collaborate with the government to maximize on
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benefits brought by globalization as they address the negative impacts. This can only be achieved

when government starts to develop effective policies that promote sustainable development,

cultural preservation, and equity.

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