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Culture is an important factor a business organisation needs to take into consideration when they propose to opening a subsidiary operation, thus it enables them to understand how the business interacts with its environment, the target customers, and the workforce of the organisation in that particular region. Furthermore, not taking all this key factors into consideration could be disastrous for company's image and proposed business operation in any country. Therefore, as a cultural management advisor this essay would advise a UK company about the culture of Nigeria, where they are proposing to open a subsidiary, and also to advise the company manager from UK headquarter been sent to Nigeria to work as an expatriate to oversee business operation. Using the views of Hofstede and Bond, and those of Trompenaars and other cross cultural management researchers to consider implications. Using the 5D model of professor Geert Hofstede, the Graph below shows the cultural dimensions between Nigeria and United Kingdom:
PDI Power Distance Index
UAI Uncertainty Avoidance Index
LTO Long-Term Orientation
Source: Hofstede (2010)
Brooke, M (1992) suggest that "marketing new business entity is also a position to promote and coordinate in a region or group of countries. Thus, as against these advantages, there are some challenges. The opening of subsidiary abroad exposes the organisation to risks and cost money which could be spent on development of new products. Innovation and research at home may be important to the export part than facilities overseas if a choice needs to be made. There may be a loss of flexibility".
(Harris et al, 2004:567) States that "the history of Nigeria and its citizens date back to the 12th century A.D. In 1861, the British took the industrial city of Lagos, to end the slave trade which was flourishing there. The financial, English social, and political cultural influence has been considerable ever since. Furthermore, the people gained their independence in 1960, but are still part of the British Common Wealth, often travel to the UK for pleasure, resettlement and business". English is one of the most spoken languages, often used for national affairs and business. Nigeria is growing rapidly in population of about 130 million and composed of 250 tribal groups which consist of population approximately 65% of Hausa, Ibo, and Yoruba. Religious influences consist of 45% Muslim; 25% Protestants; 12% Roman Catholic; 11% African Christian; and 6% traditional African or indigenous beliefs (Harris et al, 2004:567).
Many business people and international organisation have been concerned about doing business in Nigeria. This may sound strange because Nigeria is amongst the most populous nations in Africa in addition to being an oil-rich country. To add to this with the evidence that Nigeria is abundant in good port facilities and natural resources and one might think that international investors would be looking for opportunities to invest in Nigeria. The fact that Nigeria is not an attraction for international investors could be seen as a tragedy of large proportions. Years of, regional conflicts, the influence of huge corruption and political instability have resulted in the Nigeria failing to capitalise on its massive advantages; leaving the country with poor infra-structure and large percentage of the population in relative poverty (World Business Culture, 2010).
Management style is a key factor that needs to be considered as one would expect as Nigeria is country with a strictly hierarchical culture, managers are expected to maintain strongly. The manager is expected to make decisions without broad consultation and the decisions of the manager are expected to be passed out to the letter (World Business Culture, 2010).
Instructions should be given in a friendly and polite but defined fashion. Explain in detail tasks to be executed - anything which is not carefully requested is likely to remain unexecuted. This does not mean that inferior class are lazy or inefficient, because they expect the manager to know exactly to explain things to them in full detail and what he wants to be done (World Business Culture, 2010). (World Business Culture, 2010) states that "In return for loyalty, the manager will have to govern subordinates in a fatherly manner. The manager is expected to take an interest in employees above their directly work-related duties. Subordinates are likely to ask their manager to advise them on personal issues as they are on business matters".
Decision making is focused on a central system. Nigerians are dependent on supervision and they cling to authority. A Nigerian manager at high position may feel compelled to give jobs to his or her family. If the Nigerian manager is very powerful, there is nothing a foreign business person can do about this. This decision-making is based on family responsibilities which is maybe very frustrating to a British business representative, conditioned to a work environment with a norm of promotion and merit selection in advance (Harris et al, 2004:574).
In Nigeria meetings are a few practical issues a UK manager really need to take into consideration. Firstly, the UK manager should make sure that he or she will be met at the airport by representative of the company he or she is visiting. Safety is a real issue in Nigeria as the security is unreliable. Secondly, meetings maybe difficult to organize by phone whilst in Nigeria due to bad infrastructure. Nigeria is a country in which relationships are very important, therefore meetings will mostly start and end with social interaction. Do not try to finish these conversations in a hurry as they are vital parts of close interaction process. In Nigeria meetings do not start on time - they may do, but the UK manager should not relay on it. It is good to be on time, but be prepared to wait. Patience is important in many business meetings in Nigeria (World Business Culture, 2010).
Approach to recruitment & selection in Nigeria as a country with over 250 ethnic nationalities and three major tribal tongues (Hausa, Yoruba and Igbo) (Harris et al, 2004:567) , Nigeria as a Nation has no other choice than to follow the path of fairness and justice when pursuing the course of administration and governance. In one sense, it would be advocated that recruitment methods adopted by developed societies over time that makes for relative validity should be adopted. Mukoro (2005) explains that "Table 1 reveals a negative rank correlation between the frequency in the usage of selection methods and the validity of such methods with an exception of graphology method, which show no validity at all. A question which one may ask is what factors are responsible for this general trend? The reasons are not far fetched. As earlier mentioned, most employees think that use of interviews, application forms, as well as references are the easiest methods that they could employ in selecting candidates for organization. While the use of both the application forms and references may not require the physical presence of the candidates before any selection is done, even when interviews are conducted",
Table 1: Use of selection method and their validity
Selection %Employers Validity a scale
method using method of 0-10
Interviews 99.4 1-2
Application Forms 97.8 1-2
References 96.5 1-2
Trainability Tests 31.5 3.5
Personality Tests 21.5 2-3
Cognitive Tests 16.0 4.5
Assessment Centres 8.0 4-5
n= 352 5.2 0
Source: Mukoro (2005)
Mukoro (2005) Also states that "the effects of whatever information is gathered from the two sources could be tremendous in deciding who to select at the interview. Thus when the candidates present themselves before an interview panel, a very strong impression about the suitability of the candidates would have already been made. Hence, the real interview session is reduced to a mere free discussion without delving so much into the cognitive domain of the candidates. Secondly, when a candidate is sponsored by either an influential person in the community (politicians, military officer, traditional ruler and a big time contractor), by a member of the interview panel, it goes without saying that candidates would be given some preferential consideration at the interview even when such a candidate does not perform very well like his colleagues. Barring all these factors, a well structured interview could be near valid a method as the cognitive tests. On the other hand, selections based on cognitive or aptitude tests and assessment centers, are found to be too technical in approach and therefore not very frequently used by the employers".
In preferences for team working, Nigerians are very relationship oriented, they tend to work very successfully and collaboratively in a team environment. Furthermore, there is a need for team members feel comfortable with one another and this maybe hard to achieve. Many factors are noticed when there are interaction between Nigerians. Tensions may surface. The tensions maybe religious (Muslim vs. Christian), language or even tribal related. If a team has been formed and is seen to flourish together, it is maybe best to leave it in place. Team members will work best when managed by an authoritative leader who clearly defines each team member's responsibilities and roles and gives clear consistent instructions (World Business Culture, 2010).
Implications for communication, dispute resolution and negotiation, Nigeria has well over 300 ethnic groups with different language . In such a language-diverse nation, English has been discovered as a unifying language and although local languages of Igbo, Hausa and Yoruba are used but are not universally understood.
The UK manager should therefore have no problem organizing business in English throughout Nigeria and all business leaders and senior governmental figures are fairly fluent in the English language. (World Business Culture, 2010) states that "Nigerians tend to use language in a fairly literary fashion and will often greet you with great courtesy and respect. This wish to show respect to people is shown in the Nigerian use of titles and honour. The UK manager should not be surprised to hear his or herself being addressed as sir or boss. Business conversations may often drive towards the personal issues and you may be asked questions about hobbies, family and other issues within business meetings. It is not seen as overly personal but rather as a signal of friendship. Handshaking is very significant and it is usual to exchange handshakes with everybody you meet. On negotiating style, Kwintessential (2010) states that, "as age in Nigeria is considered indicative of wisdom, older businesspeople should be included on your negotiating team. Wait to be told where to sit. Status often dictates a seating plan. Companies are hierarchical. Ultimate decision-making often rests with the CEO. Decisions are made slowly. If you attempt to hasten the process, you will give offense and risk your business relationship. Getting decisions from government officials can be extremely protracted. Nigerians are tough bargainers. They may get into heated discussions and will state their position clearly. You will be expected to honor any promise you make. The initial agreement is generally verbal, which is then followed up with a contract".
Potential pitfalls for a UK manager, working as an expatriate with people from Nigeria culture should be concerned about Electricity, compared to the UK which already possess constant power supply, (The Economist, 2010) states that "Nigeria is a big oil producing nation, but its residents get only a few hours of power a day. The whole population of approximately 150m-is said to use as much grid electricity as the area around Narita airport in Tokyo. South Africans use 55 times more electricity per head, and Americans 100 times more. Furthermore, it states that Nigeria's electricity supply has been effective for 30 years. During the 1990s there was no investment despite rising demands. Since then, generation capacity has risen by half but distribution is so dysfunctional that actual supply has remained flat. And also that There have been reform attempts in the past". To run a business, many Nigerians have their own power generators, creating the world's highest users of small generators. Most of all power supply are created in backyards, at a cost of $13 billion a year (The Economist, 2010). The graph below show the business constraints for firms in Nigeria
Source: Enterprisesurveys (2007)
The graph above shows that electricity has the highest constraint up by approximately 64%. Another pitfall a UK manager should be aware of is corruption. Dike (2008) Argues that "There are unresolved economic mismanagement in Nigeria, but the rising issue of corruption is alarming. And the damages it has caused to the politics are astronomical. The effects of corruption leads to police extortion, slow traffics on the highways, slow movement of files in offices, queues at passport offices, port congestion and election irregularities. Consequently, the issue keeps appearin in every informal and academic discussion in Nigeria".
It appears to the author, based on what this essay talks about that Nigeria is good country to open a subsidiary operation, as it is an oil rich country with a fast growing economy, but the growth of the economy is being hampered by economic mismanagement. But the UK manager should take the implication of the factors discussed in the essay into consideration, factors which includes; management/leadership style, Involvement of staff in decision making, & planning, Approach to recruitment & selection, in the subsidiary country, and how local staff may be recruited, team working, Implications for communication, negotiation. In addition the UK company should be aware of the disadvantages of opening a subsidiary operation there, disadvantages such as; lack of power supply (electricity), corruption.