Case Study
On

Charles Martin in Uganda

Submitted to:

Salma Akter

Senior Lecturer

Department of Business Administration

Submitted by

Muhammad Nazmus Shakib

ID: 2008-2-10-213

ITB301 (05)

Date of submission

25-03-2012

[pic]East West University

Acknowledgement

In preparing this case study, I had the support and co-operation of the personnel of my group members. At the beginning I would like to thank my honorable course instructor. I am pleased to present the Case Study that was assigned to me as a partial requirement of the ITB301 course. I have found the experiences regarding the assignment quite valuable and interesting. I tried my level best to make the case study authentic and worth reading. I really enjoyed the hard work of preparing the paper. I am very thankful to you for giving me such an assignment from which I can enhance my knowledge over cultural influence and other factors affecting international business.

I ensure that certain information enclosed in this paper is appropriate and authentic within academic interest.

Table of Contents

|Serial |Topic |Page number |
|01 |Introduction |04 |
|02 |Concept of the case |05 |
|03 |Language and religion |05 |
|04 |Economy |06 |
|05 |Charles Martin Assignment |06 |
|06 |Charles Martin Practice |06 |
|07 |Problems with Charles Martin |06 |
|08 |Company and Management orientation |06 |
|09 |Discussion on questions |08 |
|10 |References |13 |

Introduction

Uganda is a country of about 32 million people, as it’s official language is English. But many people speak only another language, mainly Bantu or Nilotic languages of the Bugandas, Langos, Acholi, Teso and Karamojong tribes. There has been a strong separist movement among the Buganda. Although about two third of Uganda are Christians. From that perspective of a foreign company wants to operate its business in Uganda then language for communication is the main problem because of the different types of language is here. For that reason a company engines many specialist employees for speaking with different people by different languages. On the other hand business in Uganda typically moves slowly. For instance one may wait months to have a trade license. This is a country where income is extremely low and there having on exorbitant payment system.

HG (Hydro Generation) is U.S. based company, specialist in power plants (dams). It values strongly built on the Christian culture. It has built plants in 16 countries maintained an ownership in about half of them. The Uganda project is its first anywhere in Africa. Because dam constructions involve huge amount of capital and because of many groups oppose their construction on the grounds that they typically displace large groups of people, HG wanted to build as many local allies as possible for its Ugandan project in order to prevent adverse publicity that could lead demonstrations and costly work stoppages. Its employees have a high degree of empowerment, being fully responsible for their actions. There is no code of conduct concerning lifestyle, but its corporate culture was one that reflected the lifestyle of a prosperous international company.

Charles Martin was 29 year old American. He was specialist in African culture, graduating with a major in African studies and a professional experience in Kenya, Ethiopia and Tanzania. He took a job in HG with the purpose of being assigned to an African project after two years of training and doing business in the U.S. He combined a home country corporate perspective and a deep knowledge of Uganda economic, political and cultural aspects. He devoted of the philosophy of integrating the African society, not drawing attention to oneself, but learning and respecting its culture. He lived among middle class Ugandan and not in up-scale neighborhoods where most international manager live.

He didn’t integrate himself within the expatriate’s community. He made “extra payments” to local people to get things moving faster. He hired staff closely related to Government officials and participate in tribal rituals to get support from villagers affected by the dam construction, although being employed in a company embedded in Christian values. Some of Martin’s practices were concerning James Green, the VP of HG such as, independent lifestyle, participation in tribal rituals, way of achieving results, unethical practices, payments which might be illegal under U.S. law, Martin’s distance from the expatriate community.

The Concept of the case

This case shows how important it is for a foreign company to understand and adjust to ever changing operating environments is an integral part of operating environment. Culture refers to the learned values, norms based on attitudes, values and believes of a group of people.

Again this case have also given a concept that an international company must be sensitive to these cultural differences in order to predict and control its relationship and operations.

Finally it should be realized that its accustomed way to do business in abroad might not be a only in only best way. A company should first determine what business practices in a foreign country differ from those it’s used to.

UGANDA

Uganda lies on equator and surrounded by the Victoria Lake. Arab traders came here 1840’s in search of slaves and Ivory then British came here. Uganda became independent in 1962 from Britain became republic in the following year. First prime minister was Milton Obote. In 1971 Obtoe’s government was toppled in military coup led by Idi Amin. Amin was toppled in 1979 and Obote come back to power. At present there is presidential form of Government and Museveni is the president of Uganda.

Language and Religion

English and Kishwali are the official languages. But Luganda is most widely spoken in the capital city of Kampala. Many Ugandas live along people who talks in different languages. Ugandan population is approximately 84% christians and 12 % muslims. Only 1 % follows traditional languages.

Economy

Agriculture employs 80% of the workforce. Coffee and fish is the largest exports. Foreign investment has slowly returned after the reign of brutal corrupt director Idi Amin. Uganda is a lower income country where 4 out of 10 people live on less than a dollar a day.

Charles Martin Assignment

He gained support and necessary permissions from the Ugandan governmental atheistic and affected villagers for the dam construction and builds an operating structure and facility with people responsible for local purchases and hiring, customs, immigration, affairs, logistics of materials and record keeping. He helped foreign visitors and HG expatriates to become accommo0dates and oriented when visiting/ arriving at Uganda.

Charles Martin Practices:

He lived among middle class. Ugandans are not in up-scale neighborhoods where most international managers. He didn’t integrate himself within the expatriates’ community. He have some own method to manage the situations which were not going with company policy.

Problems with Charles Martin:

Some of Martin practices were concerning James Green, the Vice President of Hydro Generation (HG) such as:

• Independent lifestyle

• Participation in tribal rituals

• Way of achieving results

• Unethical practices

• Payments which might be illegal under U.S. law

• Martin distance from the expatriate community.

Company and Management Orientation

Whether and how much a company and its managers adapted to foreign cultures depends not only on the conditions within the foreign cultures but also on attitude of the companies and the managers. This can be explained by the following three such attitudes or orientations.

Polycentrism

In polycentric organizations, control is decentralized so that managers feel free to conduct business in what he thinks. In other words business units in different countries have a significant degree of autonomy from the own office and act very many like local companies. Because many discussions of international business focus on the unique problems that companies have experience abroad, it is understandable that many companies develop a polycentric orientation.

Ethnocentrism

It is the belief that one’s own culture is superior to others. In international Business, it describes a company or individual so, imbued with the belief that what worked at home should abroad. That is ignores environmental differences. It takes three general forms.

• Managers overlook important culture factor abroad because they have become accustomed to certain cause and effect relationship in the home countries.

• Management recognizes the environmental differences but still focuses on achieving home countries, rather than foreign or worldwide objectives.

• Management recognizes differences but assume that the introduction of its new product or way to produce and sell them is both necessary and easy to achieve when it is really a complex process.

Geocentrism:

It is between the extremes of polycentrism and ethnocentrism are business practices are neither the home operations nor the host countries environment is substantially differe4nces from home, for that international companies must decide whether to pursue people in the country to accept something new or to make change in the company itself.

Discussions on Questions

Question 1: Describe Ugandan cultural attributes that might affect operations of a foreign company operating there?

Uganda is a country located in East Africa and has a population of about 25 million. While English is the official language of Uganda, many of the inhabitants speak an indigenous language (Bantu or Nilotic). Clearly language barriers are an important aspect to take into account when conducting international business. The foreign company must be able to communicate effectively while conducting business there. In order to do so, the company must seek out and hire individuals who are able to effectively communicate using native Ugandan languages. Religion is another cultural aspect that the foreign company must take into account. Two-thirds of the Ugandan population is Christian. The remainder of the population is made up of Muslims and a variety of animistic religions. Religion is often a large part of any culture, therefore it is important for the foreign company to respect any religious traditions when conducting international business. Uganda has a variety of tribes who practice specific tribal rituals. If a company is conducting business that interferes or affects these rituals, the company may lose the favor of the general population as a result.
Nepotism is common and accepted in Uganda, whereas in some countries it is considered unethical and illegal. While it may be considered the norm in Uganda, it is important for the foreign company to take into account international publicity which can negatively affect their business. It is important for any foreign company to avoid conducting any type of illegal business or extortion that may be brought upon by a somewhat unstable government. Business practices in Uganda typical move at a slow pace. This is another cultural attribute that could affect a foreign company that is typically used to conducting business in a fast-paced environment.
Uganda is a country in central Africa with a population of about 25 million people. Uganda is ethnologically diverse, with at least 40 languages in usage. Luganda is the most common language. English is the official language of Uganda, even though only a relatively small proportion of the population speaks it. Access to economic and political power is almost impossible without having mastered that language. The East African Swahill is relatively widespread as a trade language and was made an official national language of Uganda in September 2005. Luganda, a language widespread in central Uganda, has been the official language in education for central Uganda for a along time.

Two thirds of Ugandan’s are Christians who are mainly divided between Roman Catholics and Anglicans. There are also a large number of Muslims and also people following animistic religions. Attributes that might affect the operations of a foreign company trying to operate in Uganda.

Language Barrier

Uganda is a country which has a multi ethnic, multi religious and multi language background. Even though it is stated that English is the official language as mentioned above many people speak indigenous languages such as Bantu and Nilotic. Hence resulting in a risk to the operations of the company by not being able to communicate with the locals, thus resulting in a language barrier.

Religious Concerns

Uganda is also a multi religious country with people practicing many religions. This would mean the company will have to hire employees fit to work from any religion and also respect those belongings to all religious groups in order to avoid discrimination of workforce.

Violent Political History, Political Instability and Nepotism

Uganda is a country of about 25 million people, as English as its official language. But many people speak only another language, mainly Bantu or Nilotic languages of the Bugandas, langos, Acholi, Teso and Karamojong tribes. There has been a strong separist movement among the bugandas. Although about two third of Ugandans are Christians. From that perspective of a foreign company wants to operate its business in Uganda ,then language for communication is the main problem because of the different types of language is here. For that reason a company engines many specialist employees for speaking with different people by different languages. On the other hand, business in Uganda typically moves slowly. For instance one may wait months to a phone installed. This is a country where incomes are extremely low and there having on exorbitant payment system.

If any company involves such activities then it is illegal under U.S law. Not only thati, in Uganda nepotism is a norm and this country considered one of the more corrupt in the world because from the root level to Govt. in all sectors conniption exists. Here the main problems in Uganda for a foreign company have shown as like some key points, we find out wishes.

Different types of communication language

Higher and lower class discrimination

Nepotism is a norm for employment staffs

Restructuring of rules and international law

People are involved with corruption

Lack of the legal opportunity

People of Uganda’s are too much devout to their religion and beliefs and culture.

Question 2: Would you describe Green’s and Martin’s attitudes as being ethnocentric, polycentric or geocentric? What factors do you think have influenced their attitudes?

Answer:

HG’s corporate philosophy embraces the idea that although secular, HG’s business activities should embody strong Christen values. Further, subordinates should be given full responsibility in making and implementing decisions but they should also be held accountable for their results. By choosing to live in a middle class Ugandan family neighborhood while shunning the expatriate community. By playing extra for service, by hiring recommended relatives, and by paying fees and participating in tribal ceremonies, Martin exhibited a more polycentric (autonomous) attitude, while Green seemed to be more geocentric in his approach. While Martin was more concerned about his effectiveness with respect to his assignment in Uganda, Green was more concerned with corporate-level issues.

Question 3: Who was right, Green or Martin, about the controversial actions Martin took in the Ugandan operation? What might have been the results if he had not taken those actions?

Answer:

Martin was right about the controversial actions he took in the Uganda operation. Because, HG saw the wisdom of having someone with both a home country corporate perspective and a knowledge of Uganda’s economic, political and cultural complexity. Charles martin was 29 still young by business stands had a background that seems well suited to the Ugandan project. After high school, he entered the university of Wisconsin-Madison where he becomes fascinated while taking a course about its pre-colonial history. After graduating with a major in African Studies, he joined the Peace crops and served in Kenya. His duties involved working unit starts up of small business. So he has some knowledge and experience how to working with the start up of any business at Uganda project for HG was first any where in Africa. Further for that reason Martin quickly learned that by paying tips in advance to the responsible peoples, he could speak completion of HG,s requirements such as phone installs, supply delivered on operating licenses issued. To handle import clearances Martin hired the niece of High ranking customs officer from the3 perspective of Ugandans culture hand economic situation. Martin wanted to give the exorbitant payments and participated in the second ceremony of tribal by respecting there beliefs. Not only had that he also hired a specialist in African religion. Because, Martin know that how to operate business as a foreign companies in a country, that company must give respect and considered their culture norms and beliefs.

Arguments can be made for the positions of both green and Martin. Certainly Martin had achieved the desired result, in a timely fashion. However, martin rejection of the typical expatriate lifestyle ran counter to Green’s idea of a desirable corporate ; further felt that this might create assimilation problems for future HG s expoertie4s assign to the project. Tipping for s3ervice could easily have led to the expectation of increasingly large payments as the project progressed. His dealing with the official caretaker of the scared site, who was willing to appease the spirit for increasingly higher fee.

Further, Martin participation im the tribal ritual could have been constructing as a mockery of tribal customs and also have been seen as an affront by Ugandans Christian majority. Finally the close connection between HG local Ugandan employees and government officials chosen to ignore local custom, the project could easily have4 fallen behind schedule at any point. The result if Martin had not taken those actions could be

• HG’s buseness operation would move slowly.

• One may wait months to get a phone installed, supplies delivered on op0erating license issued without paying tips.

• Without exorbitant payments and family connections hiring people of staffs will be difficult because nepotism is a norm in Uganda.

• Without hiring a specialist African religion and participation in the ceremony by Martin. HG would not continue its operation and its place the villagers where the dam will be built.

• Every task would not be computed on time. Within the total budget.

Question 4: IN HG’s next phase, the dam construction should it employee someone whose main function is to be a liaison between HG’s corporate culture and the culture of UGANDA? If so, should Martin be the person for the job?

Answer: In HG’s next phase, the dam construction employee some one whose main function is to be a liaison between HG’s coronate culture and the culture of Uganda without considering the Ugandans cultures then the same problem will occurred which was occurred earlier in Charles Martin case, because, culture includes norms based on learn attitude, values and beliefs which are vary from one country to another. Or if in one country then one place to another place so martin should be the right person for the job. Given the importance and the size of the project as well as the many pitfalls that will surely be encountered along the way, it seems only logical to employee someone who is extremely well versed. in the culture of Uganda to serve as a liaison with HG’s headquarters. Whether that person is martin or someone else, however, HG must establish clear guidelines that reflect both US law and corporate policy to guide the manager of their foreign operations.

References:

International business environment and operation , Joan D. Daniel’s and Lee H.Radenbaugh,11th Edition.

International Business, Alan H.Rugman and Richard M.Hodgetts.

http://docented.fe.unl.pt/FE/2_2_ Charles_Martin_in_uganda_G31.ppt

http://docented.fe.unl.pt/FE/2_2_ Charles_Martin_in_uganda_G23.ppt

www.mba.biu.ac.il\stfhome\bijaoui\891\case\2009\uganda