This case study shows how imperative it is for foreign corporations recognize and accept the cultures of the countries they are operating in. Culture is defined as the values, beliefs, customs, practices, and social behavior of a particular nation or people. Hydro Generation (HG) is a United States-based company whose specialty is building hydroelectric power dams. HG’s core values are founded on a solid Christian culture and this was the first time ever operating in Uganda, let alone the African continent.
HG’s company culture was basis of the problems they had faced in Uganda because they were not sensitive the differences between the Ugandans and themselves when it came to conducting business. International companies need to be understanding to the diversities in order to predict and manage the relationship due to the fact that the companies’ accustomed way of contacting business aboard maybe not be the best way.
It is then up to the management in place to decide the best business practices needed and then make any adjustment necessary to complete its objective. Martin with his experience in college and the Peace Corps knew this; Green learned this after evaluating Martin. Whether and how much a company should allow its operations managers to adapt to the foreign cultures should be contingent not only on the culture of the country but also the attitudes approaches of the corporate culture.
These viewpoints take form in one or more of the following attitudes: Polycentric, Ethnocentric, or Geocentric. Due to the Ugandan government officials way of conducting business through acceptance of tips and advances, which is in conflict with HG’s Christian foundation, managers like Martin should have and did take on a polycentric approach thus mixing the two cultures. Even though Martin had completed the project on schedule and under budget, he did disregard company policies as well as the possibility of violating United States federal law.
Martin followed the local business customs of hiring relatives of government officials, handed out tips and advances to local bureaucrats, participated in local rituals, and made the choice to live among the Ugandan people. However, had Martin not followed the practices the project could have fallen severely behind schedule and over budget. This was done at the risk of adverse press for HG, which already faced criticism from the world community for building the project in the chosen location on the Victorian Nile.
Discussions of Case Study Questions Describe Ugandan cultural attributes that affect the operations of a foreign company doing business there (Daniels et al, 2011) Uganda is a multi-ethnic and religious country situated in Africa near Lake Victoria. Although English is the official language, Bantu and Nilotic are often spoken by the indigenous people that increase the risk of foreign companies being unable to speak to local tribes, which creates a cultural obstacle of language.
There are some localized languages in many parts of the country such as West African Swahili in Central Uganda (Daniels et al, 2011). The main religion of Uganda is Christian, predominantly Roman Catholic and Anglican, which accounts for two-thirds of the population. Islam has many followers in Uganda with many local tribal religions thrown in the mix. The diverse religious base could affect how a company does business in Uganda, as was evidence with Martin (Daniels et al, 2011).
Uganda is a country of lacking infrastructure and lots of bureaucratic hoops to jump through. Governmental and Political corruption make it hard to do business without handing out tips and bonuses. The native language of Swahili and few speak English. The many religions of Uganda also make foreign company’s respect them in order to avoid discrimination in the workplace (Daniels et al, 2011). How would you describe the respective attitudes of Martin and Green: ethnocentric, polycentric, or geocentric?
What factors to you suspect of having influence their respective attitudes (Daniels et al, 2011)? Green’s attitude is ethnocentric while Martin’s approach is geocentric. While in college, Martin majored in African studies. He also participated in the Peace Corps in Kenya where he got acquainted with business procedures in Africa. While serving in the Peace Corps Martin began to develop a negative opinion regarding individuals who did not take the time to learn and respect other cultures.
HG hired Martin as the project liaison specialist because of his experience and familiarity with the African economy and business atmosphere. Through his educational and hands-on experience working in the Ugandan culture, Martin developed a level of respect for the way things were expected to be done in Uganda, which is why he takes on a geocentric attitude. However, Martin seems to be taking his respect of Ugandan culture to an extreme. He is quick to adopt Ugandan ways, even if it means it is potentially illegal or unethical in his home-country (Daniels et al, 2011).
Green had not conducted business in Uganda prior to this project and was not familiar with African culture. He was able to take an objective standpoint by trying to maintain home-country policies while conducting business in Uganda because he believed that it was important to uphold company values. While Martin’s attitude and actions were strictly based on Ugandan culture, Green’s focus was primarily on following company and home-country procedures while taking into account cultural variation but not allowing it to dictate the company policies and procedures.
Ethnocentrism can sometimes be an effective way of handling cultural variation, especially since Martin’s geocentrism was quite extreme (Daniels et al, 2011). Who was right, Green or Martin, about Martin’s more controversial actions in facilitating the project? How might have things turned out if Martin had not been a member of the project team (Daniels et al, 2011) Martin was right about the actions he took. He was hired because of his expertise in African studies, as well as international business. Martin completed the operation, and probably made the Ugandan people see HG in a good way.
If Martin did things by the book, HG’s business operation would have moved slowly, over budget, and without respect of the natives (Daniels et al, 2011). Martin was working with the Ugandan government and the local tribes that were being displaced to gain their support and the required consents to proceed with the dam’s construction. He established a local office and hired the necessary personnel who would be accountable for obtaining clearance for imported materials, immigration permits, and logistics of delivering the materials to the dam site.
Martin was also acting as a liaison with foreign visitors sent by HG (Daniels et al, 2011). In the next phase of the project- running the power plant- should HG employ someone whose main function is that of liaison between its corporate culture and the culture of the host country? If so, is Martin the right person for the job (Daniels et al, 2011)? Martin has the expertise to run the power plant; however he does not represent HG’s ethos in a manner that the company would prefer their agents to act while in foreign countries.
In addition, Green did not condone Martin’s lifestyle while living in Uganda, as he chose to live in middle class neighborhood instead of the area where most foreign managers resided. Unfortunately, Martin would not be the choice of HG to run the plant. If, Martin would stay on as a cultural liaison, it is certain that he would censured by the company leaders. Martin’s interactions with government officials could adversely affect HG in the future if the political climate changed, such as a coup, with the new party in power demanding larger tips and bonuses. (Daniels et al, 2011).
Courtney from Study Moose