African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4094

Full Length Research Paper

Networking in the Kenyan informal sector: An attempt to manage the market failures

  Ongong'a J. O.1* and Abeka E. O.1        
  1School of Business and Legal Studies, Bondo University College, Box 210-40106, Bondo, Kenya. 2Department of Economics and Business Studies, Maseno University, Box 333-40100, Maseno , Kenya.
Email: [email protected]

  •  Accepted: 26 May 2011
  •  Published: 16 November 2011

Abstract

 

This paper examines the role of informal personal networks in determining micro small enterprises (MSE’s) success in Kenya. It adopts the network perspective theoretical approach. Empirically, the paper finds that MSE’s in Kenya get around market failures and lack of formal institutions through entrepreneurial personal network as a copying strategy in the process of global transformation to bridge the entrepreneurial global divide. General hypothesis predicting the ‘likelihood of MSE’s with better network performing better’ is supported by performance models though pro-poor growth is evident with an average business performance. Network strategies to promote small enterprises are recommended to policy makers, donors and actors in the field against those of the failed traditional strategies. However, there are few empirical studies available in this area particularly in less developed countries; therefore, further research is necessary in this direction.

 

Key words: Kenya, networks, MSE’s performance, environment.