Doing business in Africa: Hofstede’s cultural dimensions

 

Today, Africa has reasons to be cheerful. There is growing interest from both outside and internal financiers to invest in the opportunity and potential the continent presents. The continent presents a growing number of middle-income households with salient spending power, cheap labour and the potential to reap abnormal profits.

Middle-income households in Africa are estimated to be at least 370 million or 34 percent of the continent’s 1.1 billion people and their spending power estimated to reach $2.2 trillion by 2030 (AFDB, 2014). Furthermore, Africa has the youngest population on earth and by 2020, the continent will have 122 million workers enter the workforce (Mckinsey, 2012). This availability of cheap labour is likely to attract savvy investors if governments implement the right education and vocational programs for the masses to equip them with skills fit for the 21st century.  

For savvy investors seeking to do business in Africa consider using Hofstede’s cultural dimensions to succeed in the African environment. Communication, relationship building and negotiation style are important to trade successfully in Africa. For example, in 1995, Zeffane and Rugubana  found that in most cases social-cultural mishaps caused delays in completing projects and a wastage of resources. To stop delays and poor resource allocation, organizations can deploy Hofstede’s model to achieve greater returns on investment. It is social engineering you can implement to your advantage.

Geert Hofstede studied the influence of national culture on organizations. He defines culture as “the collective programming of the mind distinguishing the members of one group or category of people from others”. This culture comes from educational systems and political systems and through values and behaviors of organizational participants. Based on 117,000 questionnaires from 88,000 respondents in twenty languages representing sixty-six countries, Hofstede used five important dimensions to classify countries, namely:

  1. Individualism (IDV)
  2. Power distance (PDI)
  3. Long-term orientation (LTO)
  4. Uncertainty avoidance(UAI)
  5. Indulgence (IND) and

 

Below is a graph mapping Hofstede’s cultural dimensions across Africa. The data presented in the graph is collected from Burkina Faso, Cape Verde, Nigeria, Sierra Leone, Ghana, Kenya, Tanzania, South Africa, Zambia and Angola. The data is aggregated to build up a generic cultural dimension for Sub-Saharan Africa and to paint a picture of what businesses can expect while trading in Sub-Saharan Africa.

 africakibs.com

 

Individualism (IDV) is society’s preference for a group or individual. The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”.  Sub- Saharan Africa’s low score of 30 means that it is mainly a collectivistic society. Loyalty in a collectivist society is paramount and overrides most societal rules and regulations. In many African countries, the individual derives his or her identity from being a member of a clan, a community or ethnic group whose norms and values take precedence of those of an individual (Nyambegera, 2002).

 

Power Distance(PDI) is defined as the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally. A high score of 70 on this dimension indicates that African society is Hierarchical in nature. This means that people accept a hierarchical order in which everybody has a place which needs no further justification. Furthermore, centralization is popular, subordinates expect to be told what to do and the boss is a benevolent autocrat. 

Indulgence (IND) is defined as the extent to which people try to control their desires and impulses, based on the way they were raised. A tendency toward a relatively weak control over their impulses is called “Indulgence”, whereas a relatively strong control over their urges is called “Restraint”. Sub-Saharan Africa scores moderately on this dimension at 60. According to Hofstede, people in such societies generally exhibit a willingness to fulfill their impulses and desires in regards to enjoying life and having fun. They possess a positive attitude and have a tendency towards optimism. In addition, they place a higher degree of importance on leisure time, act as they please and spend money as they wish.

 Uncertainty avoidance (UAI) is the extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance. Sub-Saharan Africa (SSA) scores 53 on this dimension meaning that there is a preference for avoiding uncertainty. Countries in SSA maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas. There is an emotional need for rules (even if the rules never seem to work), time is money, people have an inner urge to be busy and work hard.

Long-term orientation (LTO) describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future. SSA scores 21 on this dimension meaning that culture is SSA is Normative. In Sub-Saharan Africa (SSA), folks prefer to maintain time-honored traditions and norms while viewing social change with suspicion. People in such a society have a strong concern with establishing the absolute truth; they are normative in their thinking.

 

Implications – African orientations to work (Oppong, 2013)

Attitude towards the company and organizational members:

 Results from Hofstede’s model suggest that Africans tend to be committed towards each other within an organization. Needs of a group are put above an individual. Kinship and relations play a major role in the recruitment process as there is a big chance that friends and relatives of people working in the organization are more likely to be hired in the spirit of Ubuntu. Employees are more likely to accept a leader from within who they believe has wisdom and can give instructions.

Behavior towards work rules

There is an emphasis on doing things in an orderly manner especially when they are established in values. Loyalty in a collectivist society trumps and tops all other social rules and regulations. Africans work well with established values knowing that non-adherence will lead to punishment by authorities or deities. The African therefore is rules-abiding and is likely to improve performance if rules are well defined with related disciplinary actions. This work orientation is also as a result of the high uncertainty avoidance which commands them to work in order to avoid failure, which they believe comes from unprogrammed courses of action. 

Decision-making process

Decision-making is likely to rest with managers as respect for authority may make employees less willing or even not permitted to participate in decision-making process. Women suffer discrimination as they are considered weaker and less capable of making important organizational decisions, especially strategic ones. Young male bosses face resistance from older subordinates due to the culture of respect for the elderly, who are regarded as the wiser.

Life-long employment

The African is expected to remain with one company for greater part of their working life because work is considered as a “necessary evil to survival”.  The African could, however, resist innovation as high score for uncertainty avoidance means rigid codes of behavior and intolerant to unorthodox ideas or behavior whilst he remains with the organization.

Trade unionism

A collectivist attitude means that the African is likely to be interested in forming and belonging to a trade union.

Pay and promotion

To uphold the values of respect for age and the elderly, promotion is more likely to be based on seniority. As a collectivist society, promotion is likely to take into account employee/manager’s in-group. Women are likely to be discriminated against in positions, promotions and remunerations because of the perception that women are inferior and less capable of competing with men, even when doing the same job.

Employee Motivation/Commitment

Commitment to the company is expected to be high if the job is realized as not just a contractual relationship but a real commitment to a new community from where one derives his survival. The indigenous African wants to share, including seeing the co-employee as ‘community brother’. Incentives and enjoyable work for continuous earnings for one’s livelihood and good work relations are strong motivators for commitment.

Filing Positions

Jobs may be defined with the required personal skills and other relevant requirements for recruiters to avoid the likelihood of failure, informed by the high score for uncertainty avoidance, recruitment is likely to be influenced by a sense of group identity. Prime consideration could be applicant’s loyalty and compatibility with co-workers who are considered as community members.

Training and development

With the perceived attitude towards life-long employment and the level of development, the African needs to be trained to improve better and develop for higher roles. High uncertainty avoidance score portrays the African’s anxiety to avoid future uncertainties and pride security as an important. Training and development are therefore critical for improved skills and capabilities to ensure that performance targets are not missed and/or deviate from performance standards.


References:

Africa at Work: Job Creation and Inclusive Growth.” Africa at Work: Job Creation and Inclusive Growth. N.p., n.d. Web. 09 Feb. 2016.

Afdb 2014

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Africa_Progress_Report_2014.PDF

Nyambegera, S.M. (2002), ‘Ethnicity and Human Resource Management Practice in Sub Saharan Africa: The Relevance of the Discourse of Managing Diversity’, International Journal of Human Resource Management, Vol. 13(7).

Oppong 2013

http://www.iiste.org/Journals/index.php/EJBM/article/viewFile/7315/7473

Zeffane, R. & Rugimbana, R. (1995) Management in the less-developed countries: A review of pertinent issues, challenges and responses. Leadership & Organisational Development Journal, 16(8), 26-36