CONFLUENCE JOURNAL
OF
MANAGEMENT
Prince Abubakar Audu University
Anyigba, Kogi State,
Nigeria.
ISSN-1595-8736
December 2002
Vol.2No.1
ADVISORY BOARD
1.
2.
3.
4.
5.
6.
7.
Professor P.CA Oaodu
Dr. Tom Miachi
Professor A.D. Yahaya
Professor Aminu 0. Sheidu
Dr. J. Jackson
Professor N.I. Ikpeze
Mrs. Sabina Attah
EDITORIAL BOARD
1.
2.
3.
4.
5.
Dr. I. Ornate: Editor-in-Chief
Mr. I. Atege: Secretary
Dr. Mrs. M.S. Tenuche
Elder S. Afolabi
Mr. John Alabi
© Copyright Reserved (2002)
Faculty of Management Sciences
Prince Abubakar Audu University
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ISSN-1595-8736
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Confluence Journal of Management,
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iv
TABLE OF CONTENTS
Title Page
Advisory Board/Editorial Board.............................................................................................
ii
Guideline for Submission of Manuscripts.............................................................................
iii
Table of Contents................................................................................................................
v
Poverty Alleviation in Nigeria: An Assessment of Approaches and Strategies
-Dr J. Attah...........................................................................................................
1
The Nigerian Economic Crisis: A review -T.M. Obamuyi....................................................
20
Conflict and Conflict Management in Nigeria: The Search for a National Strategy
- Dr Kunle Ajayi...................................................................................................
36
J.I.T. Philosophy: Lessons from Japan Success Story – Ishola Alege.............................
48
Product Innovation: A Tool for Business Survival –Agbo J.C. Onu....................................
59
Technology as a Key Determinant of National Power:
The Case of Nigeria-Victor Egwemi.................................................................................
69
Effects of Managerial Culture on Global Marketing Dr J.O. Olujide and A.L. Badmus.....................................................................................
80
The Public Complaints Commission: An Ombudsman Bureaucratised? - I. Omale........
88
Awareness of Improved Soyabean Production Technologies in Ankpa and Dekina
Local Government areas of Kogi State, Nigeria -N.E. Mundi and J.Y. Odiba....................
98
Determinants of Population Growth in Nigeria: A Study of Jigawa, Kano
and Katsina States
- A. Anyebe (Ph.D).................................................................
105
Book Review....................................................................................................................
119
EFFECTS OF MANAGERIAL CULTURE
ON GLOBAL MARKETING
DR.J.O.OLUJIDE
Department of Business Administration
University of llorin, Ilorin.
and
A.L. BADMUS
Department of Business Administration,
University of llorin, llorin.
ABSTRACT
The globalization of marketing decisions and practices of multinational enterprises (MNEs) has
been a constant source of friction and conflict between host governments and headquarters of
MNEs. It is thought that this problem could further be compounded by heterogeneous cultural and
nationality considerations of international marketing executives of MNEs. This study is designed
to examine the effects of managerial culture and nationality on global marketing.
The approach to this study included a sample of 121 marketing executives of varying cultural
backgrounds and nationalities of Asian MNEs in Nigeria. The questionnaire addressed the impact
of managerial culture on marketing practices relating to four elements of marketing mix.
The results indicate that nationality and cultural background of managers impact significantly on
the globalization of marketing decisions and practices in the MNEs. While marketing executives
from host countries do not support the globalization of marketing decisions and practices, the
other marketing executives from the headquarters support strongly the globalization of product
decisions. Thus, the results point out that great differences exist between managerial culture of
emerging industrialized and developing countries such as Nigeria. And this is perhaps, why the
marketing practices in the Nigerian environment are least standardized.
INTRODUCTION
The most prominent environmental differences are probably realized through different national
boundaries, one from one country to another, where the economic, legal, political and cultural
environment is widely differentiated. In theory, such differences lead to differences in behavioural
structures. This hypothesis leads to a considerable volume of study on international management
by inquiring the specific needs, the attitudes and the values of managers through their cultures
(Bruce-Peters, 1985; Harvin and Moran, 1991; Horvath, Macmillan, Azami & Hickson, 1985).
Thus, the
80
relationship between the managerial culture and behaviour has now become the preoccupation of
many inquiries. Studies (Davies, 1971; Prasad, 1967) indicate that the managerial attitudes and
the modes of behaviour differ from one culture to another. But as for Nath (1969) and Roberts
(1970); they believe that such international differences are very minor. These slight international
differences stimulated the development of a "universalist view of international management by
arguing that since all managers engage in almost the same activities, their behaviours converge
regardless of the unique feature of the environment in which they operate and the country from
which they come.
An alternative explanation to these international differences in the managerial needs, attitudes,
values and behaviours is that most of the past research works contain significantly weak
methodologies. The tendency was to conduct comparative studies by arranging all the managers
of a country - with regard to their nationality - and to compare their attitudes and behaviours to
those of a whole set of managers in another country. In every country, the sample is probably
compiled from different companies of different sizes and from variable industries. Moreover, the
sample was neither stratified nor randomly collected (Haire, et al, 1966). Managerial enquiries,
therefore, only considered features of managers without taking into consideration their nationality
and their cultural environment Such samples are not representative. Nevertheless, these samples
are so varied and diverse that cultural and environmental differences could be disproportionate,
and therefore, rendered ambiguous by many controlled variables. Thus, when such international
comparisons are being made on the basis of such amalgams of data, only slight and
consequently, negligible differences appear.
The impact of culture on managerial behaviour and attitude is an the more not lucid when national
data of a country are combined to form cultural typologies (tor instance, Latin, Oriental) or
regional units (European, American, North African, etc). While it could be very difficult to
assemble a sample of groups of managers of a different but perfectly stratified country and at
random, it could however, be possible to carry out well - controlled and rigorous comparative
studies on management at a micro level. In this way, it could be possible to identity the areas of
divergence between these groups of managers and to relate them realistically to trans-national
environmental and cultural differences.
One other problem is that comparative studies generally measure culture as a residual variable.
Thus, the inability to identity and control independent variables that can influence managerial
attitudes and behaviours makes culture to become a very imprecise variable. According to
Negandhi (1974), measure such a variable will be of no use.
But in a study conducted by Kelly and Reeser (1983) at Hawaii, they examined managerial
attitudes of Caucasian managers vis-a-vis those from the East They analysed the differences
between measures on the following variables: procedures and formal rules, decision making,
seniority, lifelong employment paternalism, management development nepotism and group
leadership. The conclusion of these research works is that some attitudes known in literature to
be the feature of Japanese managers in Japan persisted with Japanese of Hawaii and resulted
into managerial behaviours which are differentiated from those of Caucasian origin" (Kelly and
Reeser, 1973 P. 72). Unfortunately, few published studies in this area up tin now have considered
and analysed the effect of nationality on holders of managerial posts on centralization and
standardization of decision making within a multinational group (Chandton, 1986; Olujide, 1989).
81
Thus, we think that relationships similar to those discovered by Kelly and Reeser in Hawaii can
be generalized to other analogous contexts. We would elaborate a proposition specifying that the
differences discovered between Japanese and Caucasian managers could be seen in other
social contexts revolving around two cultures: one is local or indigenous and the other foreign.
The study, therefore, proposes that these differences in managerial attitudes towards
centralization and standardization of marketing decisions within a MN group could be attributed to
cultural differences.
Thus, the objective of this research is to determine the impact of attitudinal and cultural
differences of managers on the standardization of marketing decisions and practices by the
countries of origin over the host country.
DATA COLLECTION
Data was collected by means of personal interviews based on a form-type questionnaire and was
complemented with the examination of company records and books of account.
The research work covered Asian MNEs in Nigeria and lasted for about nine months. The
interviews were conducted with the 121 marketing executives of each of the companies. The
information garnered from the marketing executives was recorded at the ordinal-scale level for
the variable of centralization and at the interval-scale level for the variable of standardization
covering four fundamentals of marketing mix.
The data was analyzed by assessing the effects of managerial cultures on the centralization and
standardization of marketing mix elements. The effects of cultures on these two control variables
of integration were assessed through the significant level of Kendall correlation coefficient.
DISCUSSION OF FINDINGS
The correlation between the culture of the managers of the subsidiaries and the global index of
centralization of marketing decisions is not significant at p< 0.1. This means that there is no
significant difference between the perceptions of expatriate managers (Japanese, Korean and
Indian) and the indigenous managers (Nigerian) and the centralization of marketing decisions
(see table 1).
The global index of centralization is not significantly different for the four groups of managers Nigerian = 1.27; Japanese = 1.32; Indian = 1.32; and Korean = 1.36 (see table 2). The table
clearly shows that the global index of centralization for Nigerian managers is comparably lower
than that of their counterparts in Asian countries.
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Table 1: Correlation between Managers' Cultural difference and the Centralization of Marketing
Decisions
Culture and perceptions
of managers of the
subsidiaries
Global
**
Cultural Similarity 0.022
Degree of similarity in Managers' perception
of Cultural differences
Product
Price
Communication
**
**
**
0.047
0.027
0.007
Distribution
**
0.007
Correlation co-efficient of Kendall
*
Significant at P>0.1
**
Non-significant at P<0.1
As shown in table 1, the degree of correlation between global index of centralization and
managerial culture is not statistically significant at p< 0.1. This result holds for ail the four
elements of marketing mix,
Table 2: Degree of Centralization of Marketing Decisions according to the Culture and
Nationality of the Subsidiary's Managers
As for the four items of marketing mix, there are no significant relationships between the culture
of managers of the subsidiaries and the centralization of marketing decisions relating to product,
communication and distribution.
Effects of Managers' Culture of the Subsidiaries on the Standardization of Marketing
Programmes
The result obtained indicates that the degree of correlation between the culture of managers and
the global index of standardization is significant. This implies that there are significant differences
between local managers' and expatriate managers' perceptions and the standardization of
marketing programmes. Thus, the relationship is significant at P>Q.1(see table 3). As shown in
table 4, the global index of standardization is comparably lower for Nigerian managers than their
counterparts in Asian countries. This implies that marketing programmes and practices are least
standardized than those of their counterparts in developed countries.
To this end, opinions of some indigenous and expatriate managers have been sampled on this
issue. According to some of the indigenous managers interviewed, they contend that the market
environment of the host country (Nigeria) is completely different from that of the three countries of
origin (Japan, Korea and India). Thus, the consumer needs, preferences and lifestyles are totally
opposed to those of their Asian counterparts. Because of this, it becomes imperative for the
83
parent company not to integrate the marketing activities of its Nigerian subsidiaries. Further, the
indigenous managers know their culture and environment and consequently, are in the vantage
position to spot the opportunities and threats associated with the culture and environmental
uncertainty. Thus, they are in a better position to know the position of the government in respect
to policies and legislation and consumers' preferences. As a result of the differences in the
economic environment between Nigeria and the three countries of origin, standardized marketing
approach by their parent companies is not feasible.
The expatriate managers interviewed on the same subject contend that although the indigenous
managers have deeper understanding of the conditions of Nigerian market environment, the
technological know-how, the managerial expertise and perceived uncertainty in the local market,
yet it is unadvisable to entrust totally to these indigenous managers the destinies of the MNEs
because of the considerable amount of funds invested. For this reason, the parent company must
intervene to some extent in the decision making process so as to ensure the transfer of marketing
techniques and the accumulated experiences to the host country so as to reduce the risk of
bankruptcy.
Since the subsidiaries manufactured products of international brands as developed by their
parent companies, it is normal for the headquarters to transfer their acquired experiences in order
to protect the reputation and image of their brands and enterprises. This transfer could only be
achieved through the mechanism of standardization of marketing programmes.
These two opposing comments show how individual expectations and aspirations of the
managers can influence the degree of standardization of marketing programmes of the
subsidiary. The acceptance of the hypothesis indicates that there are significant differences
between the perceptions of indigenous and expatriate managers on the standardization of
marketing programmes. This position was confirmed by Andrao (1971) who contends that
managers in charge of MNEs do not exclusively consider what the enterprise could do but rather
they seem to be sometimes influenced by what they want it to do.
The culture of the managers of the subsidiaries of the MNEs significantly correlates with the
standardization of marketing programmes in respect of product item. However, this correlation
cannot be established for other elements of marketing mix - price, communication and
distribution.
84
Table 3: Correlation between Culture and Nationality of the Managers of the Subsidiary
and the Standardization of Marketing Programmes
Perceptions and Culture
of managers
Global
*
Cultural Similarity
0.097
Correlation co-efficient of Kendall
*
Significant at P>0.1
**
Non-significant at P<. 0.1.
Note
1
7
=
=
Product
*
0.088
Degree of correlation
Price Communication Distribution
**
**
**
0.025
0.016
0.016
Complete differentiation
Complete standardization
CONCLUSION
The study has attempted to determine the impact of managerial culture on the marketing
integration strategies of Asian MNEs operating in Nigeria. The study showed that managerial
culture significantly influenced the degree of standardization and centralization of marketing
decisions and programmes.
One observation from this analysis is that the Nigerian subsidiaries of the MNEs have the lowest
degree of standardization of marketing procedures. This analysis shows that MNEs tend to adopt
standardized marketing procedures when cultural differences between the host country and the
country of origin are very minimal. For instance, Sorenson and Wiechmann found that American
MNEs used highly standardized marketing techniques with subsidiaries in Europe. This result
was due to the high degree of similarity between American and European market environments.
However, great differences exist between managerial culture of emerging industrialized and
developing countries such as Nigeria. This is perhaps why the marketing practices in the Nigerian
market environment are the least standardized. Environmental and cultural factors such
85
as product use conditions, income levels, custom and traditions, literacy, technological context,
legislation etc. help to explain such modification
Besides, the perception and culture of subsidiaries (expatriates and indigenous) was not
significant because of great dissimilarity in managerial culture and therefore, the relationship
could not be established
Moreover, the relationships between the culture of the subsidiary's managers (expatriate and
indigenous), a subsidiary belonging to a linguistic zone different from that of the parent company
and the global index of standardization were validated. On the whole, the study has shown that
similarity between managerial culture of the host country and country of origin and the degree of
marketing integration strategies tends to be positively correlated.
86
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