MODERATING EFFECT OF PSYCHIC DISTANCE ON THE RELATIONSHIP BETWEEN MARKET ENTRY STRATEGIES AND PERFORMANCE OF MULTINATIONAL CORPORATIONS IN KENYA
Abstract
Purpose of the Study: The aim of this study was to examine the influence of psychic distance on the relationship between market entry strategies and organisational performance of multinational corporations in Kenya. The specific objective was to establish the influence of psychic distance on the relationship between market entry strategies and organisational performance.
Study Methodology: The study used descriptive cross-sectional research design and collected data using questionnaire after testing its reliability and validity.
Results and Findings: The study established that psychic distances moderates the relationship between market entry strategies and organisational performance. The results reveal that R2 improved from 48.1 to 50.3 percent on financial performance and from 64.0 percent to 65.4 on non-financial performance. The study based on perceived distances suggests that organisations need to advertise one’s country in a host market in order to increase exposure and liking and therefore reduce the perceived differences.
Conclusion: The results findings makes a contribution to theory development, policy and marketing practice in relation to the effect of psychic distance on the relationship between market entry strategies and organizational performance. The study suggests that there is room for further research using longitudinal design and using group discussion to get more information from the respondents.
Key words: Market Entry Strategies, Psychic Distance, Organizational Performance.
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