Our beloved Kenya has seen a surprising shift in societal consciousness over the past week. Amidst the new anti-tax protests in Kenya, as business-discipline academics we must start analysing prospective impacts on businesses and the economy as a whole.
In other countries, small business owners, and in particular women entrepreneurs, confront unprecedented challenges when the political and societal climates bring fresh uncertainty. However, initial qualitative research is starting to show business owners actually pondering whether the protests will end up bringing more rather than less stability to their strategic and business planning.
Such business sentiment is rare when political or societal protests occur in a nation. But small business owners interviewed so far indicate that increasing fees and taxes would have created more uncertainty and that social action and protests, even with its own uncertainty, may lower planned tax increases which may bring more overall stability.
In comparing with research in other countries, a study by Jasmine Jaim in Bangladesh explores the adverse effects of political instability on women-led enterprises, offering valuable prospective predictions for Kenyan businesswomen. Political unrest severely restricts women entrepreneurs' access to critical resources like debt financing and disrupts day-to-day operations in greater proportion than their male counterparts.
The study highlights the dual burden of generic business challenges and gender-specific barriers.
Women entrepreneurs often bear the brunt of heightened insecurity and market volatility, which hinder their business growth and sustainability. This all while political unrest affects small and micro business owners more than medium and larger companies due to proportionally higher increases in operating costs and greater reduced customer patronage. So, small businesses owned by women face double economic shocks from unrest.
The resilience strategies used by Bangladeshi women during and after unrest include diversifying income sources, strengthening community ties, and leveraging digital platforms to maintain customer engagement.
Kenyan businesswomen could adapt these approaches to mitigate business impacts during our present national situation. Bangladeshi micro businesses even leveraged surprising shifts to online sales channels and forming cooperative groups in new and varied sectors that provided stability and support.
In different research, a book by former United States Secretary of State Condoleezza Rice and Amy Zegart delves into businesses exposed to political risk. Another risk may revolve around the business of politicians.
Businesses who once eagerly sought out politician alliances, investment, and partnerships may henceforth choose to reduce politician partnerships out of concern for becoming future targets of in-person and social media protests.
Additionally, recent research on political risk and the influence of populism by Christopher Hartwell and Timothy Devinney also offers significant insights for Kenyan businesses at present.
By understanding the role of political and societal actors who can foment uncertainty and create institutional volatility and the general public’s response to those actors, Kenyan entrepreneurs can better navigate the current challenges.
This obvious perspective encourages local businesses to anticipate potential changes in the political landscape and adapt their strategies accordingly, enhancing resilience in a rapidly shifting environment. But more usefully, the study underscores the need for a broader framework that includes the influence of political personalities and leaders on business operations.
However, in terms of our Kenyan businesses, Kenyans are on average much more politically informed than our business competitors around the world, even down to small and micro business owners being intensely engaged. So, while ignorance of policies is not what kept Kenyan businesses silent before as opposed to other countries’ citizens, but rather in Kenya a culture of respect and what researchers call “power distance” reverence for authority.
As that deference to authority seems to be melting at present, then business owners must even more actively monitor, pivot, and respond to the maneuvers of political figures who shape economic policies affecting their operations and the Kenyan society’s response even at a moment’s notice. By integrating such a nuanced understanding of politics into business strategies, Kenyan entrepreneurs can take steps to help to safeguard their interests and ensure more stable operations amidst political or societal changes.
Nonetheless, the unique nature of the current protests makes the medium and long-term economic affects harder to predict than other previous unrest in Kenya or political upheavals in other countries.
Have a management or leadership issue, question, or challenge? Reach out to Dr Scott through @ScottProfessor on Twitter or on email at [email protected]
