As an African woman, born and bred in rural areas, my first real experience of urban life was after me acquiring my first academic degree. My childhood upbringing was my window to how people lived and influenced heavily in my view of how I thought the world works.
I quickly realised in my working life that the way people lived in rural areas and cities were quite different. In rural areas, culture was dominant in guiding how people related with each other, the values that people were brought up in and the norms that defined the way of living. On the other hand, the city was all about the modern society where even children had rights to do what they believed was right and parents were supposed to discipline the child in other ways than the corporal punishment that I grew up with. The strong culture in rural areas gives a sense of belonging.
Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies and religion. Hofstede (1980), refers to culture as ‘mental programming’, or the ‘software of the mind’ and which is the ‘basic assumptions and beliefs… that operate unconsciously’. Culture therefore refers to the accepted norms and values and rational behavior of groups. It is about, “How we do things!”. Countries, as well as groups of people within countries, may operate differently according to beliefs, values, norms, morals and attitudes. The question then is how does culture influence the way people do business?
Across the world, and Africa is no exception, specific values are associated with some groups of people. In Africa language and ethnicity play a major role, but these may solely be the material or visible aspects of culture, such as food, clothing, housing, drumming and dancing, and art. The values and morals are abstract and invisible such as respect, marriage, taboos, etc. and is prevalent in the background and visible to a select few outsiders.
This backdrop of strong cultures in most African countries inspired my doctoral research on how South African companies are successfully expanding their businesses into other African countries. Despite Africa being the 2nd largest continent after Asia in terms of population, and area, it is quite diverse in terms of culture. Africa is a land of diversity defined by multiple languages, a broad range of cultures and colonial history. Colonisation resulted in the continent having four official languages such as Arabic, English, French and Portuguese. On the other hand, Africa is known as a melting pot for local cultures and languages. African cultures and languages are interlinked. Nigeria alone, the most populous nation on the continent, with population of 190 mil has more than 500 languages which would inadvertently lead to more diverse cultural norms.
With most of the 54 African countries classified as developing countries (World Bank), the economies of such countries are not as developed and most of the people live in rural areas and even though urbanisation is increasing, there is still a large informal economy due to low levels of economic development, lack of infrastructure and nascent regulatory landscape. The main challenges that companies face when investing in Africa include differences in cultures, governance, languages, economic structure and difficulties for customers accessing credit. Despite this, African countries still conduct do business amongst each other. For example, the 2018 African Continental Free Trade agreement was promulgated to create a single continental market for goods and services, with free movement of business persons and investments which promotes intra-regional trade in order to stimulate economic activity and grow local economies. Despite the developing nature of business on the continent, it is a hive of creativity. The continental agreement is expected to enhance competitiveness of industries and countries through exploitation of opportunities for scale production, continental market access and better reallocation of resources. Companies can only participate and contribute towards the economic sustainability of the continent if they are familiar with culture and how to adapt their business models to serve people in diverse cultural settings.
As firms expand beyond their national borders, they choose markets that are physically and culturally close to their home country (Dunning, 1988). Corporates from developed nations, because they are used to operate in developed infrastructure, functional institutions, and stable economies find it difficult to operate to do business in some of these African countries where there are institutional gaps. Despite such companies having huge financial resources, familiarising with the cultural dynamics require more than just resources but having locals in senior management to create the bridge between the western way of doing things and customising solutions to local taste.
For companies from developing countries, because of their innovative nature which they use as their competitive capability, they prefer to own their companies as they go across the borders rather than going into partnership so that they leash and control a series of innovations to match the changing customer tastes as they expand. It has also been found that there is a relationship between culture and corporate performance and culture influences strategy, influencing corporate culture.
What was very clear in my research was that in Africa, culture amongst other factors, played a major role in the business structure and success in the destination country. With South Africa having a dual economy of both developed and developing economy, they are in a good position to expand and contribute towards the growth of the continent. In her research, the realities in host countries across the continent included:
There are many skilled diaspora Africans working in South Africa who understand both the South African corporate culture and home culture and can play the bridge in ensuring that as the subsidiary expand outside national border, though it has the hallmarks of the parent company, is localised to compete in the host market. For South African companies to succeed in their chosen markets, consideration has to be given to the business model to suit local customers tastes in line with culture.
Looking at the 2019 Forbes richest list, it is clear that though the top 100 richest list is dominated by the developed nations, the richest Africans who feature on the list are founders of their companies compared to many rich individuals on this rich list whose wealth was passed on from past generations. This indicates that as Africans, we are creative and innovative and know how to make money in our own way. What is very clear is that despite the challenges on the continent, Africa is abound with opportunities.
Despite the business world being influenced hugely by the western world of doing things, culture plays a very big role in how business is done on the continent. The years I have spent in West Africa setting up business has taught me that as Africans, we have our own way of doing business, and what works for us. For example, in Ghana because of its strong Christian background, I have been to events where prayers were done before and after a presentation to clients; the African culture is also about sharing and giving so there is an expectation to give monetary tips to drivers or someone that assisted though in the western culture this could be construed as bribery; bargaining is also big in some African countries especially in flea markets where one rarely see prices on goods but one has to bargain for the best price. This culture of bargaining is very prevalent in how business is done in many countries. What was very clear, especially in my years of spending time in some of the African countries was that as Africans, we are colourful, not just the way we dress but in culture and in how we do business. There is a huge contrast to the way business is done in developed nations and most of how we do business is influenced by our cultural beliefs and social values.
Article Source: www.bizcommunity.com
