Our beloved Kenya has witnessed a sudden shift in societal consciousness over the past week. In the midst of new anti-tax protests in Kenya, we as business academics must begin to analyze the potential impacts on businesses and the economy as a whole.
In other countries, small business owners, especially women entrepreneurs, face unprecedented challenges when political and societal climates bring new uncertainty. However, preliminary qualitative research is beginning to show that business owners are actually considering whether the protests will ultimately bring more stability to their strategic and business planning.
Such commercial sentiments are rare when political or societal protests occur in a country. But small business owners interviewed so far suggest that higher fees and taxes would have created more uncertainty and that social action and protests, even with their own uncertainty, may reduce planned tax increases which could lead to greater stability. General.
In comparison to research in other countries, a study conducted by Yasmin Game in Bangladesh explores the negative effects of political instability on women-led businesses, and provides valuable future predictions for Kenyan women entrepreneurs. Political unrest severely restricts women entrepreneurs’ access to critical resources such as debt financing and disrupts daily operations to a greater extent than their male counterparts.
The study highlights the double burden of general business challenges and gender-specific barriers.
Women entrepreneurs often bear the brunt of increased insecurity and market volatility, which hinders the growth and sustainability of their businesses. All this while political unrest impacts micro and small business owners more than medium and large enterprises due to relatively higher increases in operating costs and greater declines in customer care. Therefore, women-owned small businesses face dual economic shocks due to the unrest.
Resilience strategies used by Bangladeshi women during and after the unrest include diversifying income sources, strengthening community ties, and leveraging digital platforms to maintain customer engagement.
Kenyan businesswomen can adapt these methods to mitigate the business impacts during our current national situation. Even small businesses in Bangladesh have benefited from the sudden shifts towards online sales channels and the formation of cooperative groups in new and diverse sectors that have provided stability and support.
In different papers, a book by former US Secretary of State Condoleezza Rice and Amy Zegart delves into companies exposed to political risk. Another danger may revolve around the actions of politicians.
Companies that have been eagerly seeking political alliances, investments and partnerships may henceforth choose to scale back political partnerships for fear of becoming future targets of protests in person and on social media.
In addition, recent research on political risk and the impact of populism by Christopher Hartwell and Timothy Deviney also provides important insights for Kenyan businesses today.
By understanding the role of political and societal actors that can create uncertainty and create institutional volatility and the general public’s response to those actors, Kenyan entrepreneurs can better address current challenges.
This clear perspective encourages local companies to anticipate potential changes in the political landscape and adapt their strategies accordingly, enhancing resilience in a rapidly changing environment. But more usefully, the study underscores the need for a broader framework that includes the influence of political figures and leaders on business operations.
However, when it comes to our business in Kenya, Kenyans on average are more politically informed than our business competitors around the world, and even small and micro business owners are heavily involved. So, while it is not ignorance of politics that has previously kept Kenyan businesses silent compared to citizens of other countries, it is Kenya’s culture of deference and what researchers call “power distance” — a reverence for authority.
As this acquiescence to authority seems to be dissolving nowadays, business owners must more actively monitor, manage and respond to the maneuverings of political figures that shape the economic policies that affect their operations and the response of Kenyan society at even a moment’s notice. By incorporating this nuanced understanding of politics into business strategies, Kenyan entrepreneurs can take steps to help protect their interests and ensure more stable operations amid political or societal changes.
However, the unique nature of the current protests makes it difficult to predict medium- and long-term economic impacts compared to other previous unrest in Kenya or political unrest in other countries.
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