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Eterminants of Location Choice Decision Among Manufacturing

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Eterminants of Location Choice Decision Among Manufacturing STRATEGIC DRIVERS INFLUENCING PRODUCTION RESHORING DECISION AMONG MANUFACTURING MULTINATIONAL CORPORATIONS IN KENYA JAMES JOMO GATUNDU DOCTOR OF PHILOSOPHY (Business Administration) JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY 2019 Strategic Drivers Influencing P roduction Reshoring Decision Among Manufacturing Multinational Corporations in Kenya James Jomo Gatundu A thesis submitted in partial fulfillment for the degree of Doctor of Philosophy in Business Administration in the Jomo Kenya University of Agriculture and Technology 2019 DECLARATION This thesis is my original work and has not been presented for a degree in any other university Signature ……………………………. Date……………………. James Gatundu This thesis has been submitted for examination with our approval as University Supervisors Signature ……………………………….. Date……………………. Prof. Margaret Oloko, Phd JKUAT, Kenya Signature ………………………………….. Date……………………. Dr. Nicholas Letting, Phd MUA, Kenya Signature ………………………………….. Date……………………. Dr. James Kahiri, Phd KU, Kenya ii DEDICATION This research is dedicated to my wife Mildred and my children David, John and Kairu for their prayers and support throughout the entire period of the study. Your encouragement enabled me to keep going until completion. iii ACKNOWLEDGEMENT I take this opportunity to thank the Almighty God for His providence and extended grace. I acknowledge my wife Mildred Jomo for her patience and understanding during those long periods of absence as I undertook this study. My sincere gratitude goes to my supervisors Prof. Margaret Oloko, Dr. Nicholas Letting and Dr. James Kahiri for the guidance and wise counsel. Without your constructive engagement and direction setting advice, it would not have been possible to complete this study In addition, I would like to appreciate the faculty and staff of Jomo Kenyatta University of Agriculture and Technology for their contributions to my pursuit of knowledge and the opportunity to undertake doctoral studies at the University. Lastly, I cannot forget to thank my classmates for their endless support and encouragement in our academic journey. May the Ancient of Days meet your needs accordingly to His riches in glory. iv TABLE OF CONTENTS DECLARATION ............................................................................................................ ii DEDICATION ............................................................................................................... iii ACKNOWLEDGEMENT ............................................................................................ iv TABLE OF CONTENTS ............................................................................................... v LIST OF TABLES ......................................................................................................... ix LIST OF FIGURES ....................................................................................................... xi LIST OF APPENDICES .............................................................................................. xii LIST OF ABBREVIATIONS AND ACCROYNMS ................................................ xiii OPERATIONAL DEFINITION OF TERMS............................................................ xv ABSTRACT................................................................................................................ xviii CHAPTER ONE ............................................................................................................. 1 INTRODUCTION .......................................................................................................... 1 1.1 Background of the Study .................................................................................... 1 1.2 Statement of the Problem ................................................................................... 9 1.3 Objectives of the Study .................................................................................... 12 1.4 Research Hypotheses ........................................................................................ 13 1.5 Scope of the Study ............................................................................................ 13 1.6 Justification for the Study ................................................................................. 14 1.7 Limitations of the Study ................................................................................... 14 CHAPTER TWO .......................................................................................................... 16 LITERATURE REVIEW ............................................................................................ 16 2.1 Introduction ...................................................................................................... 16 2.2 Theoretical Review ........................................................................................... 16 v 2.3 Conceptual Framework .................................................................................... 21 2.4 Empirical Review ............................................................................................. 37 2.5 Critique of Existing Literature ......................................................................... 44 2.6 Summary of Empirical Literature Review ....................................................... 47 2.7 Research Gaps .................................................................................................. 48 CHAPTER THREE ...................................................................................................... 51 RESEARCH METHODOLOGY ................................................................................ 51 3.0 Introduction ...................................................................................................... 51 3.1 Research Design ............................................................................................... 51 3.2 Target Population ............................................................................................. 52 3.3 Sampling Techniques and Illustrations ............................................................ 53 3.4 Data Collection Instrument .............................................................................. 55 3.5 Data Collection Procedures .............................................................................. 55 3.5.1 Diagnostic Tests ............................................................................................ 56 3.5.1.1 Pilot Study..................................................................................................... 56 3.6 Data Analysis and Presentation ........................................................................ 58 CHAPTER FOUR ........................................................................................................ 62 RESEARCH FINDINGS AND DISCUSSION .......................................................... 62 4.1 Introduction ...................................................................................................... 62 4.2 Response Rate .................................................................................................. 62 4.3 Pilot Test Results .............................................................................................. 65 4.4 Demographic Characteristics of Respondents .................................................. 67 4.5 Descriptive Statistics of Study Variables and Discussion ................................ 69 4.5.1 Production Cost ......................................................................................... 69 vi 4.5.2 Product Quality ......................................................................................... 75 4.5.3 Operational Flexibility .............................................................................. 78 4.5.4 Reduced Time to Market ........................................................................... 82 4.5.5 Hidden Cost ............................................................................................... 86 4.5.5 Market Condition ...................................................................................... 90 4.6 Test of Assumptions of Study Variables .......................................................... 97 4.7 Regression Analysis ....................................................................................... 103 4.8 Overall Multiple Logistic Regression Analysis ............................................. 125 CHAPTER FIVE ........................................................................................................ 136 SUMMARY, CONCLUSION AND RECOMMENDATIONS .............................. 136 5.1 Introduction .................................................................................................... 136 5.2 Summary of Findings ..................................................................................... 136 5.2.1 Influence of Production Cost on Reshoring Decision ............................. 137 5.2.2 Influence of Product Quality on Reshoring Decision ............................. 137 5.2.3 Influence of Operational Flexibility on Reshoring Decision .................. 138 5.2.4 Influence of Reduced Time to Market on Reshoring Decision .............. 138 5.2.5 Influence of Hidden Cost on Reshoring Decision .................................. 139 5.2.6 Moderating Influence of Market Condition on Independent and Dependent Variables ...............................................................................................................
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