Cultural environment for international business in Nigeria

Author: Iloka Benneth Chiemelie

Published: 8/ 12/ 2013

1.0 Introduction

Culture is an integral aspect of success in the business processes whether it comes in the form of organizational or corporate culture. Culture has been defined as something that deal with people, unique quality and an organization’s management style (Kilman et al., 1985), an expression of what is obtainable from a given system (Deal and Kennedy, 1982), or the non-rational and expressive qualities of in a system (Siew and Kelvin, 2004). The basic notion is that it deals with value and since people and organizations differ in their perception of value, there is an expected difference in culture – making business success highly dependent on culture.

2.0 Evaluate the cultural environment for international business in Nigeria

Gert-Hofstede.com (2013) presented an analysis of cultural differences amongst nations, and this will be used to evaluate the cultural environment for international business in Nigeria.

2.1 PDI – Nigeria scores high in power distance and the implication is that international business will have to understand that Nigerians generally accept hierarchy in the business process and subordinates are mandated to adhere to the direction of their superiors. The ideal boss comes in the form of a benevolent autocrat.

2.2 IDV – Nigeria scores low in individualism and the implication is that it is a collectivist society. In this society, group performance is more encouraged and trust serves as the foundation for establishment of relationship or partnership with people expected to be committed in towards increased performance of their group and company.

2.3 MAS – since Nigeria scores high in masculinity, international firms needs to understand that in this country, “people live in order to work.” There is high emphasis on competition, quality, equity and continuous improvement. Managers needed to be assertive and decisive even under high pressure. In this society, people sort out things by fighting them out.

2.4 UAI – Nigeria also scores high in uncertainty avoidance and the implication is that there is need for well-established rules that people must always follow, the need is to limit risk and innovation might be resisted. Time is money in this society and people need assurance that whatever contribution they make will be dully rewarded.

2.5 LTO – Nigeria is low on long term orientation and the implication is that there is a need to preserve a well-established culture and tradition. Societies that are low on long-term orientation such as Nigeria desires quick actions in the business process and profitability is something that will not be given too much time to become a success.

3.0 What strategy should be adopted by a multinational company to fit in with this environment?

3.1 Short-term based and profitability oriented strategy – since the culture demands quick actions and returns to business investment, with high commitment through group work, there are little options that will fit this environment than those that with a short-term view to business and profitability. International business should not seek to conquer the whole market with a given product, but must innovative different forms of products constantly to meet the quick changes in demand. Performance based view on payment will also follow suit as employees in this environment expect to be based whatever commitment to input towards the growth of the company – as such overtime without pay is something that is unlikely, which means that pay performance is the right strategy. Companies need to be competitive and constantly showcase the quality of their products and services as this has a direct influence on consumer purchase intention in the country as a result of its masculinity.

4.0 Conclusion

From the above analysis, it can be seen that Nigeria provides the right platform for investment as its culture eliminates the need for investment in innovation and has potential to short-term returns on investment. Quality influences purchase decision and once a brand gains advantage as a result of quality it can stay on that position for a long period of time. For instance, Coca-Cola is the top selling soft drink in the country as a result of the established brand image of quality and reliability.

References

Deal, T.E. and Kennedy, A. (1982), Corporate Cultures: The Rites and Rituals of Organizational Life, Addison-Wesley, Reading, MA.

Gert-Hoftsted.com (2013), “Nigeria: what about Nigeria?” Available at: http://geert-hofstede.com/nigeria.html [Accessed on: 18/07/2013].

Kilmann, R.H., Saxton, M.J., Serpa, R. and Associates (1985), Gaining Control of the Corporate Culture, Jossey-Bass, San Francisco, CA.

Siew, K. J. l. and Kelvin, Y. (2004),"Corporate culture and organizational performance", Journal of Managerial Psychology, Vol. 19 Iss: 4 pp. 340 – 359.