INFLUENCE OF POWER DISTANCE ON EMPLOYEE EMPOWERMENT AND MULTINATIONAL CORPORATION PERFORMANCE IN KENYA

Abstract

A study was carried out with the specific objectives as to establish the influence of power distance on the strength of the relationship between employee empowerment and organization performance and to establish whether there is a direct relationship between employee empowerment and organization performance. Data for the study was collected using a questionnaire which contained measurements of power distance, employee empowerment and non-financial measures of performance of organizations. A pilot study was conducted to pre-test the questionnaire using a sample of 10 respondents. The questionnaire consisted of a Likert type scale ranging from 5 – very great extent to 1 – not at all. A census study of 60 multinational corporations operating in Kenya was conducted. The response rate was 65%, which is, 39 firms were interviewed. These results confirmed that the strength of the relationship between employee empowerment and MNC performance in a host country is influenced by power distance. The result (r = 0.608, < 0.01) showed a moderate relationship between employee empowerment and MNC performance. The magnitude of the correlation coefficient implies a moderate relationship (r = 0643, p < 0.01) between employee empowerment and organization performance.