CHALLENGES FACING ORGANIZATIONS EXPANDING
GLOBALLY: A CASE STUDY OF THE NATURE
CONSERVANCY (TNC), AFRICA
BY
RITAH E. MUTUI
UNITED STATES INTERNATIONAL UNIVERSITY
AFRICA
SUMMER 2014
CHALLENGES FACING ORGANIZATIONS EXPANDING
GLOBALLY: A CASE STUDY OF THE NATURE
CONSERVANCY (TNC), AFRICA
BY
RITAH E. MUTUI
A Research Project Report Submitted to the Chandaria School
of Business in Partial Fulfillment of the Requirement for the
Degree of Executive Master of Science in Organizational
Development (EMOD)
UNITED STATES INTERNATIONAL UNIVERSITY
AFRICA
SUMMER 2014
STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any
other college, institution or university other than the United States International
University in Nairobi for academic credit.
Signed: ________________________
Date: _________________________
Ritah Mutui (ID 640147)
This research project report has been presented for examination with my approval as the
appointed supervisor.
Signed: ________________________
Date: _________________________
Dr. George K’Aol
Signed: _______________________
Date: _________________________
Dean, Chandaria School of Business
ii
ABSTRACT
The purpose of the study was to determine the challenges that face organizations as they
expand their operations globally. The study was guided by the following research
questions: What are the cultural challenges that affect TNC’s expansion in Africa? What
are the leadership challenges that affect TNC’s expansion in Africa? What are the
political challenges that affect TNC’s expansion in Africa?
A case study research design was used for this study. The study population was limited to
The Nature Conservancy, Africa. The study population comprised of a total of 53
members of staff based in Kenya, Tanzania and Zambia categorized into the top level
management team, the middle level managers and the general staff. A census of the entire
population was carried out. Frequency distributions and percentages were utilized in the
descriptive statistical analysis part of this study. In addition one-way analysis of variance
(ANOVA) was used to determine whether there were significant differences among the
three countries on selected variables .The findings were presented using tables and
figures.
The findings on the cultural challenges that affect TNC’s expansion in Africa were
majorly in different customs and manners among the three countries. The study showed
that language barrier was not a major challenge to TNC expansion. However, the findings
revealed that the staff members from Tanzania were more affected by language barriers
than those from Zambia and Kenya. This difference on how language barriers affect staff
from different countries was statistically significant at p value < .05 level.
The findings on the leadership challenges that affect TNC’s expansion in Africa revealed
that motivation was a challenge .The country difference was statistically significant at p
(.039) <.05 level for whether staff were frequently consulted on matters affecting their
jobs and also statistically at p (.035) <.05 level for whether staff were satisfied with other
benefit programs such as medical cover and pension that TNC provided to its employees.
The study showed that supervision was not a challenge to TNC’s expansion in Kenya and
Zambia, but it was a challenge in Tanzania. This country differences in opinion with
regard to the challenge of supervision was statistically significant at p (.048) <.05 level
for whether common goals were clearly stated.
The major finding on political challenges to TNC expansion in Africa showed that
government instability hindered TNC’s global expansion and this was statistically
iii
significant at p (.027) <.05 level, for whether conditions set for employing expatriates in
certain countries discouraged TNC from globalization, and statistically significant at p
(0.05) <.05 level for whether restrictive fund repatriation laws discouraged TNC from
venturing in some countries.
In conclusion, the major findings of this study have shown that each country has different
groupings of people with unique backgrounds which may present a challenge to
international organizations. Therefore managers need to develop cultural sensitivity and
be selective in choosing channels for effective communication. In order to accommodate
the needs of globally diverse employees, organizations should provide flexible plans
where individuals can choose the benefits that are best suited to their needs. A nation’s
international relations with other countries and reputational capital is significant, both
politically and economically as it affects the country’s ability not only to pursue and
achieve international political objectives but also to attract in-flow of foreign investment .
The study recommends that organizational managers should be properly prepared for the
multinational assignments and their training should include cultural sensitivity,
understanding the importance of maintaining relationships, and impression management.
Leadership can be improved by promoting staff within the organization’s ranks who
understand the systems, appointment of senior executives from diverse nationalities and
cultural backgrounds and senior management support should be encouraged to enable
staff to perform their best. Structured negotiations either with the support of the home
nation or directly with the host nations can be used as potential solutions to political
challenges.
iv
ACKNOWLEDGEMENT
My appreciation goes out to my supervisor, George K’Aol (PhD) for his guidance
through the whole project.
v
DEDICATION
This work is dedicated to my husband (Felix), my daughter (Natasha), my sisters (Edith
and Faith) and to the Almighty God.
vi
TABLE OF CONTENTS
STUDENT’S DECLARATION ........................................................................................ii
ABSTRACT .......................................................................................................................iii
ACKNOWLEDGEMENT ................................................................................................. v
DEDICATION................................................................................................................... vi
LIST OF ABBREVIATIONS .......................................................................................... ix
LIST OF TABLES ............................................................................................................. x
LIST OF FIGURES .......................................................................................................... xi
CHAPTER ONE ............................................................................................................... xi
1.0
INTRODUCTION................................................................................................... 1
1.1
Background of the Problem................................................................................... 1
1.2
Statement of the Problem ...................................................................................... 3
1.3
Purpose of the Study ............................................................................................. 6
1.4
Research Questions ............................................................................................... 6
1.5
Importance of the Study ........................................................................................ 6
1.6
Scope of the Study................................................................................................. 6
1.7
Definition of Terms ............................................................................................... 7
1.8
Chapter Summary.................................................................................................. 7
CHAPTER TWO ............................................................................................................... 9
2.0
LITERATURE REVIEW ...................................................................................... 9
2.1
Introduction ........................................................................................................... 9
2.2
Cultural Challenges Affecting Global Expansion ................................................. 9
2.3
Leadership Challenges Affecting Global Expansion .......................................... 15
2.4
Political Challenges Affecting Global Expansion............................................... 19
2.5
Chapter Summary................................................................................................ 23
CHAPTER THREE ......................................................................................................... 24
3.0
RESEARCH METHODOLOGY ........................................................................ 24
3.1
Introduction ......................................................................................................... 24
3.2
Research Design .................................................................................................. 24
3.3
Population and Sampling Design ........................................................................ 24
3.4
Data Collection Methods ..................................................................................... 26
3.5
Research Procedures ........................................................................................... 26
3.6
Data Analysis Methods ....................................................................................... 26
vii
3.7
Chapter Summary................................................................................................ 27
CHAPTER FOUR ............................................................................................................ 28
4.0
RESULTS AND FINDINGS ................................................................................ 28
4.1
Introduction ......................................................................................................... 28
4.2
Demographic Characteristics of the Respondents ............................................... 28
4.3
Cultural Challenges Affecting Global Expansion ............................................... 31
4.4
Leadership Challenges ........................................................................................ 38
4.5
Political Challenges ............................................................................................. 46
4.6
Chapter Summary................................................................................................ 53
CHAPTER FIVE ............................................................................................................. 54
5.0
DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ................. 54
5.1
Introduction ........................................................................................................ 54
5.2
Summary ............................................................................................................. 54
5.3
Discussion ........................................................................................................... 56
5.4
Conclusions ......................................................................................................... 63
5.5
Recommendations .............................................................................................. 64
REFERENCES…………………………………………………………………………66
APPENDICES…………………………………………………………………………..74
Appendix A: Cover Letter
Appendix B: Questionnaire
viii
LIST OF ABBREVIATIONS
CRPG
Collaboratory Research on Global Projects
NGOs
Non-Governmental Organizations
TNC
The Nature Conservancy
USA
United States of America
WRF
World Economic Forum
ix
LIST OF TABLES
Table 3.1: Sample Size Distribution………………………...………… ......…..………25
Table 4.1: Language Barrier.………………...……………….…………... ……….…..31
Table 4.2: One-Way Analysis of Variance on Language Barrier by Country…..….. …33
Table 4.3: Different Values and Attitudes……………………………. ...……………. 33
Table 4.4: One-Way Analysis of Variance on Values/Attitudes by Country….….. …..34
Table 4.5: Different Education Systems………………...…………..………………….35
Table 4.6: One-Way Analysis of Variance on Education Systems by Country………..36
Table 4.7: Different Customs and Manners……………………………...………...…...37
Table 4.8: One-Way Analysis of Variance on Customs and Manners by Country….…38
Table 4.9: Supervision/Direction Setting…………..………………...…….………….. 38
Table 4.10: One-Way Analysis of Variance on Customs and Manners by Country….....39
Table 4.11: Motivation…………………………………………………………………...40
Table 4.12: One-Way Analysis of Variance on Motivation by Country………….……..41
Table 4.13: Creating Teams…………………………………………………………….. 41
Table 4.14: One-Way Analysis of Variance on Creating Teams by Country……… …42
Table 4.15: Information Management……………………………………………………43
Table 4.16: One-Way Analysis of Variance on Information Management by Country…44
Table 4.17: Encouraging of Creativity/Innovation………………………………………44
Table 4.18: One-Way Analysis of Variance on Creativity/Innovation by Country……...45
Table 4.19: Nationalization Policies……………………………………………………..46
Table 4.20: One-Way Analysis of Variance on Nationalization Policies by Country…..47
Table 4.21: Government Instability………………………………………………...……48
Table 4.22: One-Way Analysis of Variance on Government Stability by Country……..49
Table 4.23: International Relations………………………………………………………50
Table 4.24: One-Way Analysis of Variance on International Relations by Country……51
Table 4.25: Government Bureaucracies………………………………………………….52
Table 4.26: One-Way Analysis of Government Bureaucracies by Country…………….53
x
LIST OF FIGURES
Figure 4.1:
Country of operation ……………………………………………….…….28
Figure 4.2:
Department ……………………………………………………………….29
Figure 4.3:
Gender of the respondents………………………………….…….……….29
Figure 4.4:
Age of the respondents…………………………………….……….……..30
Figure 4.5:
Management position……………………………………………………..30
Figure 4.6:
Years worked for TNC……………………………………………………31
Figure 4.7:
Country versus Language Barrier…………………………………………32
Figure 4.8:
Country versus Different Values and Attitude…………………………...34
Figure 4.9:
Country versus Education System……………….……………………….35
Figure 4.10: Country versus Customs and Manners………………………………..…..37
Figure 4.11: Country versus Supervision……………………………………..………...39
Figure 4.12: Country versus Motivation………………………………..………………40
Figure 4.13: Country versus Creating of Teams…………………………..……………42
Figure 4.14: Country versus Information Management……………………..………….43
Figure 4.15: Country versus Creativity/ Innovation………………………………..…..45
Figure 4.16: Country versus Nationalization Policies……………………………..……47
Figure 4.17: Country versus Government Instability…………………………….…….48
Figure 4.18: Country versus International Relations…………………………….……..50
Figure 4.19: Country versus Government Bureaucracies……………………..………..52
xi
CHAPTER ONE
1.0
INTRODUCTION
1.1
Background of the Problem
The challenges of globalization comes with liberalization of markets, intense competition,
decline of domestic job opportunities and revenues, economic volatility of the integrated
markets, cyclical crises, and non-tariff barriers to trade, spread of pandemics, and new
security issues (Alon & Higgins, 2005).Hence the success of a firm lies in focusing its
strategic capabilities on the functions that are the sources of its core competence. The
other challenges that arise from globalization come in the form of inexperience, lack of
resources and capabilities, the market dominance of well-established rivals, and consumer
loyalty to existing brands (Cazurra & Genc, 2008). Some of the other difficulties may be
listed as differences in cultural, political, geographic, and economic factors (Ghemawat,
2008) as well as barriers to trade; complex and costly knowledge transfer; and insufficient
economies of scale (Ghemawat & Ghadar, 2000).
The term globalization has been viewed differently by several scholars in the past
decades. Bhagwati (2004) defines globalization as a process by which regional
economies, societies, and cultures have become integrated through a global network of
communication, transportation, and trade. Al-Rodhan and Stoudmann (2006) say that
globalization involves economic integration; the transfer of policies across borders; the
transmission of knowledge; cultural stability; the reproduction, relations, and discourses
of power; it is a global process, a concept, a revolution, and an establishment of the global
market free from sociopolitical control. Steers and Sanchez-Runde and Nardon (2010) see
globalization as an application of cross-cultural management practices.
All these definitions see globalization as an accelerating set of processes involving flows
that encompass ever-greater numbers of the world’s spaces and that lead to increasing
integration and interconnectivity among those spaces (Ritzer, 2007). In this sense, they
only see the processes of globalization as leading to increasing integration and interconnectivity (Bond & O’Byrne, 2014) but these come with a challenges. For example
Sheppard, Sarros and Santora (2013) posit that in a fast-moving global marketplace,
successfully managing people is a huge challenge for organizations i.e. in a global
1
competition within the flat and connected new world, decision making in organizations
has become increasingly intricate and convoluted (Kayode, 2012).
Hence globalization creates a need for collaborative leadership, which combines social
qualities, technical competencies and the fostering of frank dialogue, trust and self-worth.
Sheppard et al (2013) note that leaders in uncertain and rapidly changing conditions must
be experienced ‘‘all-rounders’’ who collaboratively encourage others to become
collectively responsible for decision making and change leadership.
On the other hand, change management which describes the process, tools and techniques
to manage the people-side of change process, to achieve the required outcomes, and to
realize the change effectively within the individual change agent, the inner team and the
wider system is the other challenge in the global expansion process (Nauheimer, 2005).
Similarly, conducting global, international, and cross-cultural business may be an
ordinary reality for most large organizations, but for startup small to medium enterprises
without global presence it may prove to be a nightmare. It is challenging for them to
manage on a daily basis because of the need for situation-specific attention, on one hand,
and the desire for standardization on the other (Hâllgren & Söderholm, 2010).
Despite the studies focusing on challenges of globalization, World Economic Forum
[WEF] (2014) recognizes an accelerating change in the 21st century which continuously
boosters productivity, create new opportunities and challenges. It particularly stresses on
the disruptions on the online environment and continuous turbulences in economies,
environment, geopolitical, societies and technology in general. This calls for a continuous
review of the prevailing conditions as regards the challenges that affect organizations that
expands globally (WEF, 2014). This is critical for international organizations as it will
assist in coming up with the most relevant and effective ways of managing the actual
prevailing challenges. This premises the study to find out the prevailing challenges that
affect TNC as it expands into African countries.
The Nature Conservancy (TNC) is a global Non-governmental organization with its
world office based in the United States founded in 1951. TNC works to preserve the
animals, plants and natural communities that represent the diversity of life on Earth—by
protecting the lands and waters they need to survive (TNC, 2014). TNC has provided
employment opportunities to locals and international staff in its offices located all over
2
the world. Its operations continue to grow with the expansion to all continents in the
world.
TNC is governed as a single, tax-exempt organization by a worldwide, volunteer Board of
Directors and is managed from its worldwide office in Arlington, Virginia USA and
because the Conservancy is organized as a single organization rather than as separate
local legal entities, ultimate responsibility for the operation of The Nature Conservancy
lies with its Board of Directors. Although the Board of Directors cannot delegate its broad
legal and fiduciary responsibilities, it does delegate responsibility for day-to-day
operations to the president and chief executive officer, who in turn delegates
responsibilities to his or her executive team (Connect, 2013).
TNC world office provides global expertise and the branch offices provide local
understanding. With nearly four thousand staff, TNC works in all fifty states in United
States and more than thirty countries across the globe (TNC, 2014). In Africa, TNC
started its operations in 2004 with Tanzania office as the regional office. The Kenya
office started operations in 2006 and the regional office moved to Nairobi. The global
TNC management has faulted the African region for not delivering results fast enough
(Connect, 2013).
TNC was chosen for this study because of the massive expansion it has gone through to
launch operations in Africa, Australia, Asia & Pacific Islands, Caribbean, Central
America, North America, South America and Europe working with different local and
international organizations to address the global challenges, global priorities. On the other
hand, no published studies have been done to clearly show the challenges currently
influencing the global activities of this organization in Africa.
This study therefore focused on highlighting the challenges that affect the expansion
prospects of TNC in Africa.
1.2
Statement of the Problem
The new age of globalization presents many challenges to international organizations.
Hence when aiming to win business or establish operations in an environment of
relentless pace of globalization especially in the third world and the growing economies,
managers who wish to operate effectively must demonstrate a clear understanding of the
3
prevailing challenges and a wide range of cross-cultural competencies in order to respond
to the challenges presented (Hurn, 2013).
Although earlier studies have been done on specific and overall challenges facing global
projects all over the world over period of time (Aarseth & Andersen, 2013),World
Economic Forum recognizes an accelerating change in the 21st century which calls for a
continuous review of the prevailing conditions as regards the challenges that affect
organizations that expands globally (WEF, 2014).
Despite the fact that several studies have been done to try and create an understanding of
the challenges that face Non-Governmental Organizations (NGOs) that are expanding
globally, there still lacks a mass of empirical evidence on the challenges that face
conservancy based NGOs especially TNC, Africa. Hossain and Sengupta (2009) while
studying the challenges of global expansion focused only on BRAC which is a nongovernmental organization of a Bangladeshi origin. The study focused only on finding the
challenges facing the organization’s microfinance programme’s expansion in limited
countries of Afghanistan, Liberia, Sierra Leone, Southern Sudan, Tanzania, Uganda, and
Pakistan. The findings may not precisely capture the challenges faced by TNC which is
an American organization focusing on nature conservancy in Kenya, Tanzania and
Zambia. For example Wang (2006) points out that there is an increased anti-Americanism
sentiment across the globe which may affect the perception towards organizations with
American roots.
In another study Smith and Lumba (2008) while highlighting the challenges of
internationally networked NGOs, only focused on knowledge management practices with
the scope of the study constituting comparative case studies of two centres (one in
Zambia and the other in the Netherlands) belonging to a single international network (one
world international).The study highlights important variation in diversity, gaps and
perceptions in managing knowledge between centres in the network that are based in
Europe and Africa. This is despite significant communality in knowledge management
processes and infrastructures. For conclusiveness, the highlighted variations therefore call
for more studies in other populations (outside Zambia and the Netherlands).
A study by Rehli (2011) on the other hand only looks at the challenges of international
non-governmental organizations/non-profit organizations through the lens of governance.
4
While acknowledging that the governance of International Non-Governmental
Organizations (INGOs) or Non-profit Organizations (NPOs) is very different from the
governance of private organizations or public entities because they do not have one
formal owner, such as the shareholders of for-profit enterprises, but rather multiple
owners such as donors and volunteers across the globe, he notes that the three main
governance challenges are; the power relation between the two main governance actors:
the non-profit board chair and the executive director. Two is the board nomination modes
and stakeholder representation. Three the board attributes and board composition. He
notes that all these are critical as the governance of INGOs and NPOs is linked to
organizational legitimacy, accountability, and performance. The national diversity of the
management and stakeholders’ interests in this respect pose a great challenge to those
organizations which are going global.
Despite these findings by Rehli (2011) we note that this study only focused on
international non-governmental organizations that operate within Switzerland as a
measure of keeping exogenous variables constant to be able to compare organizations
which operate under the same regulatory and economic environment. Hence it did not
cover the cross country challenges of globally expanding challenges as envisioned by the
current study.
In a study to find out what happens to non-governmental organizations as they go global,
Aldashev and Verdier (2009) dwells on the challenge of the strategic alignment between
the affiliates of global NGOs. They note that the missions of different affiliates might not
always be perfectly aligned, which create tensions and probably affect operations for
different projects. The tensions they attribute to the degree of independence of the
affiliates from the headquarter organization.
From the fore going literature review, several studies have captured various challenges
facing non-profit organizations under different geographical context and different sectors
of operations. On the other hand, no published studies have been done to show the current
challenges that affect TNC’s global expansion especially in Africa. Hence, this shows a
knowledge gap. It was therefore imperative to find out the current cultural, leadership and
political and challenges facing TNC in their global expansion approach.
5
1.3
Purpose of the Study
The purpose of this study was to determine the challenges that face organizations as they
expand their operations globally.
1.4
Research Questions
The study was guided by the following research questions
1.4.1
What are the cultural challenges that affect TNC’s expansion in Africa?
1.4.2
What are the leadership challenges that affect TNC’s expansion in Africa?
1.4.3
What are the political challenges that affect TNC’s expansion in Africa?
1.5
Importance of the Study
1.5.1
The Nature Conservancy
The findings of this study aimed to give empirical evidence on the current challenges that
affects TNC’s global expansion in Africa hence will be helpful to the organization in
informed decisions making on how to deal with the challenges.
1.5.2
Global Organizations
The findings will help other global organizations particularly the international nongovernmental organizations expanding or planning to expand their operations in Africa in
identifying the challenges paused by global and or international expansions in Africa and
strategies of management.
1.5.3
Academic Researchers
Academic researchers may need the study findings to stimulate further research in this
area of international expansion and as well use the findings as a point of academic
reference.
1.6
Scope of the Study
This study was limited to The Nature Conservancy. TNC is one of the largest global nongovernment conservation organizations with its Africa headquarters in Nairobi, Kenya.
The study population comprised the top level management team, the mid-level managers
and the general staff at TNC, Africa in the three countries namely; Kenya, Tanzania and
Zambia. A census of the entire population was carried. Of all the 53 staff across all the
three countries, responses were received from 52 of them indicating 98.1% responses
6
rate. The data collection was within one week, May 17, 2014 to May 26, 2014. This study
focused on the challenges faced by the organizations as a result of global expansion to
African countries.
1.7
Definition of Terms
1.7.1
Global Organization
Global organizations are multinational entities that have operations that cut across the
world. They maintain control of operations back in the home office meaning that
operations are controlled centrally and they view the world as a single market (Aldashev
& Verdier, 2009).
1.7.2
Global Expansion
The process of becoming adept at selling products and services and or launching business
operations in international markets rather than just concentrating on domestic market
(Aldashev & Verdier, 2009).
1.7.3
Globalization
Globalization involves an ever-growing number of global projects; projects that involve
individuals, teams, and organizations from diverse cultural contexts (Collaboratory
Research on Global Projects (CRGP), 2009).
1.7.4
Organizational Challenges
Unique encounters that do not appear in intra-national projects; challenges related to
differences in work practices, legal regulations, and cultural value which are brought by
interactions among individuals, organizations, and agencies from diverse national
backgrounds and cultural contexts, which, often lead to misunderstandings, increased
transaction costs, friction between project participants, and coordination and
communication difficulties (Mahalingam & Levitt, 2007).
1.8
Chapter Summary
Chapter one presents the background information on globalization and the challenges that
affect firms as they expand globally. The chapter identified the knowledge gap and
explained the significance of the study. The chapter also provided the definitions of
7
terms. Chapter two of this study presents the literature review of the subject of
organizational global expansion and its challenges.
8
CHAPTER TWO
2.0
LITERATURE REVIEW
2.1
Introduction
The objective of this chapter is to provide a literature review of studies on the challenges
facing organizations as they expand their operations globally. This chapter is divided into
three sections according to the research questions: The first section discuss the cultural
challenges. The second section focuses on global leadership challenges whereas the third
section discusses the political challenges affecting global expansion.
2.2
Cultural Challenges Affecting Global Expansion
According to Hofstede (2005) culture can be defined as that complex whole which
includes knowledge, belief, art, law, morals, customs, and any other capabilities and
habits acquired by man as a member of society. He noted that culture operates on an
emotional not on an intellectual level therefore it is not an intellectual thing and
educational level does not impact sensitivities. There is, however, a personality factor.
People who operate most successfully in an international environment are undoubtedly
more open minded to new ideas and feel less threatened by ideas that are different from
theirs. Their jobs bring both frustration and satisfaction – frustration when they don’t
succeed, and considerable satisfaction when they do manage to conclude good business
with people who come from a very different background (Hofstede, 2005).
Adler (2002) relates cross-cultural to the understanding and improvement of the
interaction of co-workers, managers, executives, clients, suppliers and alliance partners
from countries and cultures around the world. A number of authors, including Ochieng
and Price (2010); Marrewijk (2010) agree that the situation is made considerably more
complex for multicultural project teams that are widely separated geographically and that
have dissimilar organizational and regional cultures.
Okoro (2012) posit that corporate cultures of global businesses impact how managers deal
with the competitive environment, especially with basic communication etiquette. He
explains that in preparing managers for multinational assignments, their training should
include cultural sensitivity, understanding the importance of maintaining business
relationships, and impression management. They should be informed about the
complexities in international culture and human resources management. This is due to the
9
fact that as businesses globalize, there continues to be a compelling need for crosscultural awareness, knowledge of business etiquette, culture-specific management styles,
and intercultural exchanges, as managers find themselves faced with multiple challenges
emanating from domestic cultural issues and traditional systems.
The cultural challenges that affect organizations that expand globally range from
language barriers to different values and attitudes; different education systems; different
manners and customs.
2.2.1
Language Barriers
One of the challenges business faces globally is that of communications (Al-Hyari, AlWeshah & Alnsour, 2012). The increasing globalization implies further distribution of
operations, product, processes and trade across national, cultural and linguistic
boundaries. Language boundaries may occur within the constituent parts of an
international business and between the business and its environment or market. While
English may be the language of international business for transactions between business
people, it is questionable whether it is so in every part of the world (Vielba &Edelshain,
1997).
Vielba and Edelshain (1997) points out that growth of international activity also means
that language boundaries increasingly are to be found within organizations. He continues
that language is associated intimately with culture which is recognized as a key
determinant of organizational behavior. The cultures of an organization and the quality of
its internal communications have both been identified as critical success factors in a
competitive world.
Communication is largely language-dependent and the quality of one is related directly
the degree of development of the other. Furthermore, neither language nor culture is
neutral or value-free. Language may also reinforce barriers between managers and lower
level employees in the international company where senior staff are brought in from
abroad and do not speak the local language. Language is not only embedded in culture but
symbolizes power and national identity (Vielba & Edelshain 1997). Loss of hegemony in
multicultural nation states and powerful regional undercurrents are leading to linguistic
fragmentation in many parts of the developed world. Such fragmentation creates tensions
10
between support for minority languages and an economic thrust towards globally
significant languages.
According to Nickerson (2005), a global organization which consists of headquarters and
branch units which are spatially separated are often embedded in different language
environments. Consequently, he posits that internal organizational communication
involves crossing language boundaries and operating at the interface between several
languages including those of the home country and the host country, the corporate and
company languages.
In the context of cross multiple languages, international organizations mostly adopt
unique corporate languages which are administrative managerial tool which are derived
from the need of an international board of directors and top management in an
international organization to run global operations smoothly (Sørensen, 2005).It is seen to
provide a common ground for internal communication between organizational units that
are often embedded in different language environments. Basically, the common corporate
language is intended to increase efficiency by overcoming misunderstandings, reducing
costs, avoiding time-consuming translations and creating a sense of belonging and
cohesion within the firm (Sørensen, 2005).
2.2.2
Different Values and Attitudes
Up to date, researchers have found significant differences across countries in people’s
attitudes and values. Across the globe there are varied cultural values and attitudes among
consumers and organizational employees dependent on individual cultures. For example
with respect to consumer perception on marketing, Cui, Lui, Chanthe and Joy (2012)
notes that cross-cultural differences in consumer attitude towards products affect
multinational corporations (MNCs) this is especially with standardization or
customization of their international products when they expand in markets that are at a
different stage of economic and consumerism development.
Looking at the values and attitudes of employees, Alas (2008) points out that that the
keywords concerning today’s economy include a changing environment and a divergent
work force. She notes that attitudes are important in an organisational context and values
have a motivational characteristic by influencing and directing ones choices and actions.
Values are defined in this context as the principles or standards that people use,
11
individually or collectively, to make judgements about what is important or valuable in
their lives. Values are shaped by personal beliefs and developed through study,
introspection and consultation with others and a lifetime of experience (Hofstede, 1980).
Alas (2008) notes that many studies have shown the value differences of different nations
and comparative studies of values indicate significant differences in Chinese and the USA
evaluations of value statements.
The cultural diversity in terms of values and attitudes has an important place in the
communicational problems in multinational or global businesses (Oya, 2006).For
example incomplete information about cultural values and attitudes; structure and
properties of an employee group causes wrong estimations in the period of performance
evaluation, measurement and, in general, the decision making of management (Oya,
2006).
In most global businesses difficulties are encountered in the performance evaluations of
employees because of cultural needs of showing diversity. For instance, Americans prefer
the announcement of their performance results directly to themselves, whereas Asians
generally prefer indirect ways. Thus, development of a standard performance evaluation
system applicable in all departments of most multinational or global businesses would not
be realistic (Oya, 2006).
According to Hicks-Clarke and Iles (2000) individuals who perceive that diversity is
supported and encouraged in their workplace are likely to hold positive attitudes towards
their organization, their job and their career at the same time such workplaces are
characterized as having a positive atmosphere or climate for diversity, where this term is
conceived of as the extent to which human resource diversity is valued and in which
employees from diverse backgrounds feel welcomed and included.
2.2.3
Different Education Systems
In the 21st century, knowledge is widely recognised as the single most important factor in
creating and sustaining superior organisational performance and the effective creation of
knowledge depends upon knowledge transfer (formal education), knowledge sharing and
organisational learning (Li-Hua, 2007).
12
A study on the learning society in the global context (Cisco, 2010)notes that the current
existing education systems are importantly different around the world, reflecting the
distinctive challenges of different regions creating different countries need to think
differently about their route to economic success and social cohesion. The study faults
this scenario as with globalization, labour needed to manufacture a product can now be
bought from almost anywhere. Now, jobs are transferred from one side of the world to the
other with remarkable speed and consumers and researchers are able to look across the
world for the best product.
Lack of standardized education systems across the world presents a significant challenge
to international organization management as whereas in the past, education systems could
produce people who were “good enough”, or research that met local needs, globalization
demands deeper knowledge and broader skills (Cisco, 2010). Zhiwen and van der Heijden
(2008) argue that globalization and internationalization of the labour market bring
forward new requirements such as global thinking and cross-cultural communication
skills. The multinationals also need globally thinking managers and employees who have
the “savvy” to operate well with foreign counterparts.
Globalization has created more mobile international labour markets for both those with
learning credentials and those without. People with learning credentials (portable
qualifications that are valued and recognized around the world) have higher status and
more opportunities as a result. People without such learning credentials do not. They tend
to enter more informal labour markets, with lower status and lower pay. Hence
international organizations and social investors should lead governments and businesses
in a long-term process to develop legitimate, standard credentialing systems that offer the
prospect of portable qualifications that are recognized around the world (Lehner &
Wurzenberger, 2013: Cisco, 2010).
2.2.4
Different Manners and Customs
Scholars across communication disciplines have emphasized the vital role and challenges
of manners and customs in international business management context as well as in crosscultural communication situations, because the ability to manage a multicultural
workforce requires proper conduct of oneself at all times (Okoro, 2012). He continues to
say that in today’s hectic and competitive society, etiquette (manners) which includes a
variety of behaviours, habits, and specific aspects of nonverbal communication might be
13
taken for granted or seen as outdated concept, but it affects perceptions and decisions
people make in the global context of management. It has never been over-emphasized that
the ways a manager conducts himself/herself and interacts with colleagues have a
profound effect on a company’s goodwill or credibility. In addition to effective crosscultural communication and negotiation skills, knowledge of business etiquette accounts
for success of domestic and global managers.
For example in China most people are reserved much unlike in the United States. A
United States businessperson sees personal relationship as separate from business.
Friendships are quickly formed and dissolved. Hence, many view the U.S. business
relationship as shallow and short-lived, while business relationships in China are treated
as lifetime commitments (Martin &Chaney, 2011). Further Business etiquette in Great
Britain is based on a strong sense of identity and nationalism. The English businessperson
tends to be very matter-of-fact and tends to be very deadline oriented in business
negotiations and traditions and customs (etiquette) are very important to the British, as
they tend to be reserved and expect others to act accordingly. Unlike businesspersons
from the U.S., business friendships are not necessary (Martin & Chaney, 2011).
While business etiquette in Germany is based on the formal culture of Germany that
defines behavioural expectations in great detail, providing its participants with the
knowledge of what to do and when to do it. German businesspersons respect authority
and hierarchical differences. They prefer a hierarchical organizational structure because it
avoids uncertainty, where power is ensured within the organization (Carte & Fox, 2008).
Therefore overcome the challenges of cross cultural manners and customs and to
communicate effectively in international organizations requires that managers develop
cultural sensitivity, be careful in encoding their messages, thoughtful in decoding and
analyzing content and context and selective in choosing channels for transmission of
messages (Okoro, 2012). The increasing mobility of workers in global markets, expansion
of international joint ventures and strategic alliances, and the presence of global
entrepreneurs in developing nations makes cross-cultural communication competence
inevitable.
14
2.3
Leadership Challenges Affecting Global Expansion
According to Binder (2007) the transferability of management theories and practices
across national borders and different cultures represent a huge challenge and each global
organization has its own series of global leadership challenges which vary depending with
organization.
2.3.1
Motivating Multi Cultural Workforce
Linder (1998) defines motivation as an as inner force that drives individual to accomplish
personal and organizational goals. With diversity in global workforce, there is a never
ending ways of different factors that employees can be motivated. This relies on the
expectancy theory. The theory is based on four assumptions (Lunenburg, 2011). One
assumption is that people join organizations with expectations about their needs,
motivations, and past experiences. These influence how individuals react to the
organization. A second assumption is that an individual’s behaviour is a result of
conscious choice. That is, people are free to choose those behaviours suggested by their
own expectancy calculations. A third assumption is that people want different things from
the organization (e.g., good salary, job security, advancement, and challenge). A fourth
assumption is that people will choose among alternatives so as to optimize outcomes for
them personally (Lunenburg, 2011).
Hence the greater pressure being placed on human resources to motivate diverse groups
of workers often with wildly divergent values and attitudes (Greengard, 2004).As one
way of solving this challenge, White (2009) proposes that in order to accommodate the
needs of globally diverse employees, corporations may offer flexible benefits plans, also
known as cafeteria plans. He explains that with this plan individuals may choose the
benefits that are best suited to their particular needs. In addition, a cafeteria plan would
prevent benefits from being wasted on employees who have no need for them and thus of
no motivational value.
2.3.2
Creating Teams Across Diverse Workforce
According to Bergiel, J., Bergiel, B. and Balsmeier (2008) management scholars agree
with the proposition that teams are the primary unit of performance in any organization.
In a study to understand how to manage diversity in an international perspective, Shena,
Chandaa, D’Nettob and Mongaa (2009) posit that through effective diversity
15
management, diverse teams which are a major characteristic of global organizations, aim
at achieving greater innovation and creativity, enabling them to outperform homogenous
teams. Shena et al (2009) while acknowledging the evidence that short-term progress is
affected by conflict and communication problems, they note that by bringing a wider
range of perspectives to problem solving, diverse teams foster speed and innovation and
produce substantially higher quality solutions over whole development cycles. Moreover,
by bringing equality to employment relations, organizations tend to attract and retain an
adequate and qualified workforce.
Diversity in the global environment has forced modern business to re-evaluate their
approach to workforce team management. Multinational organizations have even been
forced to adopt the use of technology to create teams across geographical boundaries.
Hence the emergence of a new team process called the virtual teams or virtual teaming
(Bergiel et al, 2008). They posit that since the mid-1990s, the concept of virtual teaming
has evolved and today, organizations are capable of rapidly creating teams of talented
people who can respond to the needs of their customer in the competitive and complex
global economy of thanks to the use of information technology.
Shachaf (2008) explains that the use of information and communication technology (ICT)
in a globalised environment has led to the development in organizational design with the
introduction of team‐based structures. In the new design, the virtual organization, of
which virtual teams are the building blocks, the virtual team members are often dispersed
world‐wide and uses technology to facilitate communication and the sharing of
information among team members. He continues to say that by employing global virtual
teams, organizations can combine the best expertise available for task performance
regardless of geographic location and as a result, use of global virtual teams gives
organizations access to a larger pool of skills, which can reduce development time,
increase organizational performance, lateral communication, and employee participation.
Despite this, global virtual teams face communication challenges as traditional
communication mechanisms are lost or distorted, and vocal and nonverbal
communication cues are often missed. Similarly, members in multiple time zones,
logistics are more complex and as a result, building trust among team members and
overcoming feelings of isolation and detachment becomes a challenge. Thus ICT use in
global organizations increases teamwork complexity and may impact its effectiveness.
16
Finally, the culturally heterogeneous composition of many teams adds to their complexity
as cultural biases may distort communication (Shachaf, 2008).
2.3.3
Information Management
Information defines the processed data that has been equipped with meaning. When
information is put into use it becomes knowledge which may be tacit and explicit
knowledge. Tacit knowledge, (dormant or more actively acquired for example through
experiences), resides in people’s minds, while explicit knowledge represents knowledge
that has been codified and is held in books, manuals, databases (Makani, 2008).
Hence according to Makani (2008) one of the key factors to knowledge management
success is therefore attributed to the degree to which organizational tacit knowledge can
be captured and transformed into explicit knowledge. He stresses that a global work
environment with diverse nationalities requires information and knowledge to be shared
across national and cultural boundaries. Therefore cultural diversity plays a significant
role in information and knowledge management, success or failure. This is because
knowledge management is not simply about managing information, but involves deeper
consideration of human, social and cultural factors. In this way cultural influences affect
organizational knowledge management processes both directly and indirectly as diverse
national cultures cause disparities that greatly influencing the knowledge sharing
behaviour.
Further Huang and Trauth (2007) citing Cramton (2001) who studied globally dispersed
student teams across four countries pointed out that maintaining mutual knowledge is a
central problem of dispersed collaborations. They note that one of the problems that may
lead to the failure of establishing mutual knowledge is the difficulty of understanding the
“silence” in communication. Therefore unless global managers clearly understand the
intricate of information management in a diverse environment, it would remain a major
challenge to these managers.
2.3.4
Encouraging Action Innovation
Innovation is a process where ideas are generated and transformed for implementation to
business products and services through the four stage model of idea generation, screening,
feasibility and implementation (Job & Sanghamitra 2007). It is also generally understood
simply as the introduction of a new thing or method or the embodiment, combination, or
17
synthesis of knowledge in original, relevant, valued new products, processes, or services
(Jan, 2008). Innovation can be classified as incremental innovation and radical innovation
and for this to thrive there must be innovation friendly strategy, supportive organizational
structure, top management style and support, middle management support and effective
modes of managing innovation to enhance competitive excellence of the organization. In
this context creativity is seen as the front end of the innovation process (Job &
Sanghamitra, 2007).
Agbor (2008) points out that creative and innovation in effective organizations do not
emerge by accident. They require leaders to drive and control deliberate changes in
structure, culture, and process in order to transform them into creative, innovative,
effective, and productive ones. He notes that leaders can successfully encourage
organizational creativity and innovation by designing the organization to foster an
environment that is conducive for creativity to flourish, build friendly and inclusive
working conditions for the members of the organization i.e. when the social structure of
the organization helps workers feel secure and accepted it brings out their creativity.
Consequently, organizational leaders must respect, value, and harness the richness of
ideas, backgrounds, and perspectives of every employee and allow them to use their
unique personal assets and experiences to work for the organization(Agbor,
2008).Moreover the leadership must value creativity themselves and be enthusiastic about
encouraging new developments support; must be effective in encouraging creativity by
treating organizations as living systems filled with the innovative dynamics and potential
that exists in all of the people; must stimulate innovation.
At the core of global organization is the diversity. This is because they deal with diverse
environments across numerous foreign markets (Knight & Cavusgil, 2004).The diversity
lies at the heart of an organization’s ability to innovate. Hence according to Agbor (2008)
diversity poses a major challenge to global leaders in innovation management and the
leaders must actively encourage creativity and innovation through creating a more
conducive environment for diversity to thrive. The purpose of which is to harness the
differences of the followers for a more efficient functioning of the organization. This
means that leaders must design the social structures of the organization in such a way that
all of the workers have a sense of belonging, make all members of the organization feel a
sense of worth, security, and acceptance which allows them to give much more of their
18
talents and creativity to the organization. This requires the organizational leaders to
understands, values, and makes the most of the individual differences found in every
person with a view of eliminating organizational barriers that prevent people from
contributing all their skills, ideas, and energies to the organization’s success by allowing
full commitment and contribution.
2.4
Political Challenges Affecting Global Expansion
Erramilli, (1993) posit that business is conducted in societies governed by political
ideologies which are, almost always, intertwined with economic philosophy. Political
systems dictate fundamental economic themes under their control. There are two main
political systems namely democracy (rule by majority) and totalitarianism (rule by
minority). According to Rugman (2005) political systems typically create the
infrastructure within which the economic system functions through policies and
regulations. Certain import regulations such as high tariffs or low quota limits can
encourage investment. Also governments may enact laws that ban certain types of
investment outright. Political systems thus create the necessary environments that can
promote or inhibit business and ensure sustained economic growth. Political leadership
sets policies, regulations, concessions and ensures stability & security that impact directly
on business performance (Hill & Jones, 2003).
Quinn (1991) observed that broadening political support is a critical, essential and
conscious proactive step in major strategy implementation. Implementation of strategic
decisions like internationalization looks up to politics for three reasons: It is in the realm
that managers must search to discover what purpose are deemed publicly valuable;
second, political institutions grant managers resources they need to accomplish their
operational functions and third, it is politics and law that public managers are both
theoretically and practically account
2.4.1
Threat of nationalization
According to Jakobsen (2012) many scholars seem to acknowledge that policy changes
and government intervention constitute the most important class of political risk
outcomes. He posits that the most well-known form of government intervention is
expropriations and nationalizations. He continues that nationalization is most evident
where many governments quite simply aim to secure for themselves or their nation a
19
larger share of the proceeds from the foreign investment once assets are sunk in the host
country and this can be achieved, for example by breaching contracts or demanding that
they be renegotiated; by increasing corporate taxes or royalties; by imposing bans or taxes
on trade, production, or investment; or by implementing rigid price controls on specific
industries to limiting the number of expatriates who can be posted to the foreign nations
and limiting the amount of proceeds which can be repatriated to the organizations mother
country.
In some cases there are forceful over take and even setting limits on share percentages
which must be owned by the locals. In this way, politics as the art of governing is
important in ensuring that local firms and people gain or maintain dominance in certain
market areas and promoting business. Political leadership normally ensures that local
firms gain or maintain dominance in the domestic market while simultaneously
supporting them up against opposing barriers in the foreign markets (Quinn, 1991).
2.4.2
Government/Political Stability
Political stability represents the risk level an organization will be exposed to in the
foreign market. Stable political systems; even if they are frequently changed tend to
encourage direct foreign investment but unstable political system discourages direct
investment. Koch (2001b) further notes that political leadership, of either form, and their
entrenched policies present one of the greatest challenges to internationalization of firms.
It is the stability of the political regime and economical regulations that promote
investments. The political normalization or tension within a region could highly impact
the trade across the borders (Mamaghani, 2010). Developed nations overcame these
conflicts by developing collaboration models that serve all involved. However, the
developing nations divert their internal political and economic pressure and leads to
external conflicts and confrontations. The mounting internal pressure could be due to
poverty, deficient health care, inflation, unemployment, lack of freedom of expression
and political frustration (Mamaghani, 2010). The economic divide between neighboring
countries could cause similar challenges to political regimes. This political and economic
divide will create an artificial barrier to free trade and free travel between such countries
leading to a regional economic suffering (Lederman, Olarreaga & Payton, 2010).
20
Political stability provides the necessary environment for firms to prosper and grow
through increased business confidence brought about by stable, predictable, and reliable
political processes. A political system that thrives on orderly and transparent transition of
power in governance ensures the continuity of government services, including the
maintenance of peace and order as preconditions for building a sound and stable
environment for business and investment (Fogel, 2006).
Political stability has been noted as one of the critical formal government institutions that
impact on entrepreneurship development (Puffer, 2010). A politically unstable country
can be characterized by a weak, tumultuous and often times transitory political system,
where succession of power and authority is unpredictable and marred by violence.
Political instability increases risks, transaction costs and uncertainty in doing business,
stifles entrepreneurial activities, deters entry of foreign investments and ultimately
inhibits economic growth (Roe & Siegel, 2011).
The other stability issue is with crime and theft which are a function of the capability of
the government and its agencies, such as law enforcement agencies, to maintain peace
and order in the community and to prosecute criminals in an efficient and timely manner.
The prevalence of criminal activities increases the cost of maintaining security in business
premises and can negatively impact on business performance through increased
transaction costs (Fogel, 2006). Businesses often have to resort to private means of
protection against crime and theft for their employees and property in countries where
crime and theft is out of control.
The high cost of crime has been noted as one of the major institutional deficits
undermining business confidence, growth and development and discouraging foreign
investment (Mbonyane& Ladzani, 2011; C. Rogerson &J. Rogerson, 2010).The new
global context and its related challenges and opportunities also require a fundamentally
different concept of governance, based not only on checks and balances between various
governance powers but on partnering between them and stakeholders in order to elaborate
economically, socially and ecologically sustainable solutions. It is often called
collaborative government (Zadek, 2008).
For example in developing countries, in general, lack the institutional regime, of which is
the legal system that could be weak, resulting in corruption and high-crime rates. The
type of regulations mandated by the local government impacts the enterprise either
21
directly or indirectly. The regulations were the shield for protecting local manufacturing
base (Organization for Economic Co-operation and Development (OECD), 2009).
However, unstable and/or dynamic regulatory system makes it difficult to anticipate
enterprise's future. Political pressure or demand in developing countries could institute a
new regulation in no time regardless of the consequences. If done without enough
studying and planning, a complete sector could be endangered, (Nichter & Goldmark,
2009)
2.4.3
International relations
With a traditional perspective, diplomacy – the conduct of relations between nations –was
carried out strictly through official channels and ‘‘government-to-government’’
interactions. With the increasing exchange of information and migration of people on the
global scale, the inter-governmental club model is giving way to the multi-actor model in
international relations (Wang, 2006). He notes that diplomatic communication has
subsequently expanded to ‘‘government-to-people’ contacts as well
Wang (2006) gives a standard definition of public diplomacy as a government’s process
of communicating with foreign publics in an attempt to bring about understanding for its
nation’s ideas, its institutions and culture, as well as its national goals and current
policies. Giving an example of countries engaged in national branding and antiAmericanism sentiments across the globe, Wang (2006) indicate that a nation’s
reputational capital is significant, both politically and economically as it affects the
country’s ability not only to pursue and achieve international political objectives but also
to attract in-flow of foreign investment as well as tourism. It may also influence consumer
perceptions and purchase decisions with regard to products from certain countries of
origin.
2.4.4
Government bureaucracy
According to Papaconstantinou, Tsagkanos and Siriopoulos (2013) bureaucracy is the
structure and set of regulations in place to control activity, usually in large organizations
and government i.e. the administrative execution and enforcement of legal rules are
socially organized. Therefore it is represented by standardized procedure (rule-following)
that dictates the execution of most or all processes within an organization, formal division
22
of powers, hierarchy, and relationships. In practice the interpretation and execution of
policy can lead to informal influence.
In study to identify movement of goods, Jalali (2012) ranks bureaucracy requirements and
competition in overseas markets as the most active factors in international goods
movement barriers. Luo (2008) posit that government bureaucracy remains largely unimproved over decades in most emerging economies consequently lowering the country
competitiveness and business performance and retarding economic growth and
entrepreneurial development. He posits that such bureaucracies increases transaction costs
and uncertainty and undercuts speed and flexibility.
Government bureaucracy is also majorly presented in form of amount of licenses and
documentation requirements for cross border operations. For example a survey by East
Africa Business Community indicated cross border business registration and licensing
procedures in East Africa as provided for by the respective national laws has caused
significant negative impacts which include the need for business people to travel to
national headquarters to apply for registration thus incurring extra costs and time loss as
these services can only be acquired from specific offices at the country headquarters
through specific and long process (EABC, 2013).Similarly, the survey has also identified
physical border controls which require additional approvals for cross border operations.
In many cases the approvals go through numerous government institutions.
2.5
Chapter Summary
This chapter covered the literature review based on the three research questions. It
provides a theoretical background on the challenges facing organizations as they expand
their operations globally. This chapter is divided into three sections according to the
research questions: The first section discuss the cultural challenges. The second section
focuses on global leadership challenges whereas the third section discusses the political
challenges.
The following chapter represents the research methodology of this study.
23
CHAPTER THREE
3.0
RESEARCH METHODOLOGY
3.1
Introduction
This chapter outlines the overall research methodology for this study. The research design
is discussed, the population and sample used in the study is analyzed and data collection
method outlined. The chapter further outlines the research procedures to be applied in the
study as well as data analysis and presentation. The chapter concluded with a chapter
summary.
3.2
Research Design
A case study research design was used for this study. Research design is the conceptual
structure within which research is conducted and that it constitutes the blue print for the
collection, measurement and analysis of data (Kothari, 2007). A case study involves the
study of a unit/person or small group, a situation or a specific case. Kothari (2007)
further describes a case study as a form of qualitative analysis that involves a careful and
complete observation of a social unit which may be a person, family or institution. The
design was appropriate for this study due to its holistic approach which aims to capture all
the details of a particular individual or group as presented in real life situation. This was
necessary in analyzing and understanding how the globalization strategy adopted at TNC
which is an institution is affected by culture/leadership/politics. The case study had five
important elements; a study‘s question; its proposition, if any; its unit(s) of analysis; the
logic linking the data to the propositions; and the criteria for interpreting the findings
(Yin, 2009). The independent variables in this study included culture, leadership and
politics while the dependent variable was the global expansion initiatives.
3.3
Population and Sampling Design
3.3.1
Population
A population refers to the total collection of elements about which one wishes to make
inferences (Cooper& Schindler 2008). The population is the larger set of observations
while the smaller set is called the sample. According to TNC Human Resource Handbook
2013 the total number of employees that work for the TNC in Africa region is 53 of
24
which 31 are based in Kenya, 9 in Tanzania and13 in Zambia (TNC, 2013). The 53
formed the target population for this study.
3.3.2
Sampling Design
3.3.2.1 Sampling Frame
Sampling frame is the list of elements from which the sample is actually drawn (Kothari,
2007) or list of ultimate sampling entities, which may be people, households,
organizations or other units of analysis of which can be represented by the entire target
population or a section of it (Garson, 2012).Since for this study the total population was
small (53) no sampling was done but a population census was carried out. This included
all the 53 TNC employees working for the TNC Africa region.
3.3.2.2 Sampling Technique
Sampling is a means of selecting some part of the targeted population to represent the
entire population of interest. A sample allows for generalizations about the populations.
Census was carried out for this study. Census is where the entire population is targeted to
participate in a study (Garson, 2012). In this study all the 53 employees who work for
TNC Africa region were involved in the study. The list providing the names and contacts
of the 53 employees was derived from the TNC human resource hand book (TNC, 2013).
3.3.2.3 Sampling Size
Table 3.1: Sample Size Distribution
Country
Kenya
Category
Total Population
% Sample size
Actual sample size
Senior Management
10
100%
10
Middle Management
9
100%
9
12
100%
12
Senior Management
2
100%
2
Middle Management
5
100%
5
General staff
2
100%
2
Senior Management
3
100%
3
Middle Management
7
100%
7
General staff
3
100%
3
53
100%
53
General staff
Tanzania
Zambia
GRAND TOTAL
25
3.4
Data Collection Methods
The data collection method which was used in this research was a structured
questionnaire for primary data collection. The choice questionnaire as tool for data
collection was its ability to be able to collect large volumes of information and a large
population over s short period of time (Harris &Brown, 2010).
The questionnaire was both open ended and closed ended. The closed ended questions
were structured in a five point Likert scale to seek the respondents’ level of opinion. The
first section of the questionnaire was designed to address the respondents’ demographic
information the second one addressed the cultural challenges, third section addressed the
leadership challenges and the fourth addressed the political challenges.
3.5
Research Procedures
The questionnaire was developed by the researcher based on the research questions. An
introductory letter from the University was obtained to facilitate data collection.
Authorization was sought from the Director of Field Programs, TNC Africa for data
collection from the employees. The questionnaire was then pre-tested using a small
sample of five selected staff in Kenya office selected randomly before the actual study to
ensure that there was clarity and understandability of the questions by the respondents.
Once the pretesting was completed, corrections arising out of this stage were made.
The questionnaire was then administered by sending copies to the respondents via email
to Zambia and Arusha offices and hand delivery to Kenya office. A cover letter detailing
the research objective and confirming anonymity of the respondent’s identity was
attached to the questionnaire before sending out the questionnaires via email. The
respondents’ addresses were identified through the employee listing at TNC the Africa
Regional office. A reminder was then sent to those who did not respondents within one
week through email. For the Kenyan region, 30 filled hard copies where collected from
the respondents. For the Tanzania and Zambia, 22 filled questionnaires were received via
email.
3.6
Data Analysis Methods
The primary data after collection was coded before analysis. Frequency distributions and
percentages were utilized in the descriptive part of this study. The analysis also included
26
one-way analysis of variance (ANOVA) to determine the relationship between various
variables and thus draw conclusions. Statistical Package for Social Sciences (SPSS) was
used as data analysis tool.The research findings were presented using tables, graphs and
percentages.
3.7
Chapter Summary
The chapter describes the methodology that was used to carrying out data analysis and
presentation in this the study. It has indicated the research design used as a case study.
The population has also been identified as the employees of The Nature ConservancyAfrica. The chapter has indicated that no sampling was done but a population census was
carried out due to the small size of the population. The chapter has also shown the
research procedure and data analysis methods used. Chapter four of this study presents
the findings of the study.
27
CHAPTER FOUR
4.0
RESULTS AND FINDINGS
4.1
Introduction
The purpose of this study was to determine the challenges that face organizations as they
expand their operations globally. The chapter is organized in line with the research
questions. The first section, 4.1 offers an introduction. Part 4.2 the findings on the
demographic characteristics of the respondents. Part 4.3 the cultural challenges, part 4.4
the leadership challenges and part 4.5 the political challenges. Finally part 4.6 the chapter
summary.
The population comprised of all the 53 staff of TNC-Africa. A census for the entire
population was carried out. Fifty three questionnaires were sent via email of which 52
responses were received back. This gave a 98.1% response rate.
4.2
Demographic Characteristics of the Respondents
4.2.1
Country of Operation
Figure 4.1 shows that 58% of the respondents were based in Kenya while 25% were
based in Zambia and 17% in Tanzania.
Zambia
25%
Kenya
58%
Tanzania
17%
Figure 4.1: Country of operation
28
4.2.2
Department
Figure 4.2 indicates that 38.5% of the respondents were from finance and operations
department, 36.6% from conservation department and 25% from water and agriculture
program.
38.50%
36.50%
25%
Finance and
operations
Conservation
Water fund and
agriculture
programme
Figure 4.2: Department
4.2.3
Gender of the Respondents
Figure 4.3 indicates that 67% of the respondents were males while females were 33%.
Female
33%
Male
67%
Figure 4.3: Gender of the respondents
4.2.4
Age
Figure 4.4 shows that 33% of the staff at TNC-Africa were aged between 31-40 years,
29% at 41-50 years, 23% aged above 50 years and 15% aged between 25 and 30 years.
29
Above 50
years
23%
25-30 years
15%
31-40 years
33%
41-50 years
29%
Figure 4.4: Age of the respondents
4.2.5
Management Position
Figure 4.5 indicates 42.3% of the respondents were non-management staff, 32.2% in
middle level management and 25% in top management. This shows a pyramid like
organizational structure.
42.30%
32.20%
25%
Top level
management
Middle level
management
Non-management
staff
Figure 4.5: Management position
4.2.6
Years Worked for TNC
Figure 4.6 shows that 32.7% of the respondents had been with the organization for
between 3-5 years, approximately 27% had been with the organization for 6-8 years, 25%
for less than 2 years and 15.4% for more than 9 years.
30
32.70%
25%
Less than 2 years
26.90%
3-5 years
6-8 years
15.40%
9 years and
above
Figure 4.6: Years worked for TNC
4.3
Cultural Challenges Affecting Global Expansion
The study sought to find out the cultural challenges facing organizations as they expand
globally. It focused in finding out how language difference; values and attitudes
difference; education systems difference; customs and manners difference; affect global
expansion activities. The results are as shown below.
4.3.1
Language Barriers
Table 4.1 indicates that 48.1% of the respondents disagreed that they could not
communicate with other colleagues directly due to language barrier and 32% of the
respondents strongly disagreed that they failed to fully express views due to language
differences.
Table 4.1: Language Barrier
Percentages (%) N=52
Statement
Can’t communicate with other
colleagues directly due to
language barrier (LB1)
Miss out on important
information at TNC staff
functions due to language barrier
(LB2)
Language barrier limits employee
postings(LB3)
Fail to fully express views due to
language differences (LB4)
Strongly
Disagree
disagree
Neutral
Agree
Strongly
agree
38.5
48.1
9.6
3.8
0
34.6
48.1
7.7
9.6
0
23.1
44.2
23.1
9.6
0
32.7
32.7
26.9
7.7
0
31
Figure 4.7 indicates that 58% of respondents from Zambia disagreed that language
barriers affect the organization. This compares differently with the respondents from
Tanzania where only 25% were in disgreement with 39% being neutral.This shows that
even though language barrier seems not to affect the global expansion of TNC, in
Tanzania the level of disagreement is relatively low.
Strongly dis agree
Disagree
Neutral
Agree
Strongly agree
58%
43%
39%
37%
33%
25%
19%
17%
14%
8%
7%
2%
Kenya
Tanzania
Zambia
Figure 4.7: Country versus Language Barrier
Analysis of variance was then carried out to find out if the difference in opinions held by
staff from different countries were statistically significant. Significance level was set at
95% where p < .05 level.
Table 4.2 indicates that the difference in opinions held by different staff members from
different countries on whether the respondents could not communicate with other
colleagues directly due to language barrier, respondents missed out on important
information at TNC staff functions due to language barrier and language barrier limited
employee postings were statistically significant at p value <.05 level.
32
Table 4.2: One-Way Analysis of Variance on Language Barrier by Country
One-Way Analysis of Variance by Country
Language Source
SS
df
MS
F
Barriers
LB1
Between Groups
4.707
2
2.354
4.442
Within Groups
25.966
49
530
Total
30.673
51
LB2
Between Groups 6.123
2
3.062
4.218
Within Groups
35.569
49
.726
Total
41.692
51
LB3
Between Groups 7.685
2
3.842
5.474
Within Groups
34.392
49
.702
Total
42.077
51
LB4
Between Groups .653
2
.326
.349
Within Groups
45.867
49
.936
Total
46.519
51
P
.017*
.020*
.007*
.707
Note: LB1; LB2; LB3 *p<.05.
4.3.2
Different Values and Attitudes
Table 4.3 shows that 55.8% of the respondents were in agreement that at work they were
not judged at face value, 53.8% of the respondents agreed that they were given an
opportunity to explain themselves and 52.9 % of the respondents agreed that they were
given opportunities to do things differently.
Table 4.3: Different Values and Attitudes
Percentages (%) N=52
Statement
At work am not judged at face value
I am offered an opportunity to explain
what I mean at TNC
At TNC, I have the opportunity to solve
problems in more than one way
My superior considers my feelings when
handling job matters
Strongly
disagree
9.6
Disagree
Neutral
Agree
21.2
3.8
55.8
Strongly
agree
9.6
7.7
21.2
3.8
53.8
13.5
0
13.7
9.8
52.9
23.5
3.8
30.8
15.4
38.5
11.5
Figure 4.8 shows that 60% of the staff from Zambia agreed that different values and
cultures don’t present a challenge to TNC’s global expansion, followed by Tanzania at
53% and lastly Kenya at 45%.
33
Strongly Disagree
Disagree
Neutral
8%
16%
7%
Strongly Agree
60%
53%
45%
24%
Agree
25%
14%
8%
Kenya
2%
15% 12%
Tanzania
12%
Zambia
Figure 4.8: Country versus Different Values and Attitudes
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.4 indicated lack of statistical
significance on differences in values and attitudes in Kenya, Lusaka and Tanzania.
Table 4.4: One-Way Analysis of Variance on Values/Attitudes by Country
One-Way Analysis of Variance by Country
Source
SS
df
MS
Values/
Attitudes
VA1
Between Groups
Within Groups
Total
VA2
Between Groups
Within Groups
Total
VA3
Between Groups
Within Groups
Total
VA4
Between Groups
Within Groups
Total
2.303
71.466
73.769
1.535
71.291
72.827
2.277
41.762
44.039
1.368
63.863
65.231
2
49
51
2
49
51
2
48
50
2
49
51
F
P
1.152
1.458
.790
.460
.768
1.455
.528
.593
1.138
.870
1.308
.280
.684
1.303
.525
.595
Note: VA1; VA2; VA3; VA4 p<.05.
4.3.3
Different Education Systems
Table 4.5 shows that 69.2% of the respondents disagreed that TNC retrain her staff before
posting and 50% disagreed that the current staff training levels limited their posting
anywhere in the world
34
Table 4.5: Different Education Systems
Percentages (%) N=52
Statement
Highly
disagree
Disagree
Neutral
Agree
Highly
agree
7.7
69.2
19.2
3.8
0
28.8
50.0
13.5
3.8
3.8
15.4
42.3
32.7
9.6
0
26.9
40.4
17.3
13.5
1.9
TNC retrains her staff before
posting to other countries
My training doesn’t allows me to
be posted anywhere in the world
My colleagues from other
countries are more skilled than
me
I am less skilled when it comes to
the latest technology
Figure 4.9 indicates that 24 % of staff from Kenya strongly disagreed that different
education systems affect TNC expansion followed by Tanzania at 17% and Zambia at 13
%.
Strongly disgaree
Disgaree
50%
Neutral
Agree
Strongly sgree
52%
50%
24%
15%
Kenya
17%
9%
29%
23%
6%
3%
13%
Tanzania
Figure 4.9: Country versus Education System
35
6%
Zambia
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.6 indicated lack of statistical
significance on different education systems in the three countries.
Table 4.6: One-Way Analysis of Variance on Education Systems by Country
One-Way Analysis of Variance by Country
Source
SS
df
MS
F
Education
Systems
ED1
Between
Groups
Within Groups
Total
ED2
Between
Groups
Within Groups
Total
ED3
Between
Groups
Within Groups
Total
ED4
Between
Groups
Within Groups
Total
.710
2
.355
19.367
20.077
.478
49
51
2
.395
47.445
47.923
1.959
49
51
2
.968
36.099
38.058
2.298
49
51
2
.737
54.932
57.231
49
51
1.121
.239
.979
1.149
P
.899
.414
.247
.782
1.329
.274
1.025
.366
Note: ED1; ED2; ED3; ED4 p<.05.
Hence the findings of the ANOVA are corroborated by Figure 4.9 with country of
operation indicating that the opinion in Table 4.5 is held almost equally across the three
African states. This variation is attributed to pure chance as the p values in Table 4.6
don’t show any statistical significance. Therefore the different education systems do not
present a challenge to TNC’s global expansion.
4.3.4
Different Customs and Manners
Table 4.7 indicates that 49% of the respondents disagreed that TNC’s corporate social
responsibilities are based on the views of the locals with no respondent agreeing that they
are allowed time off to participate in cultural activities, 34.6% disagreed that TNC
promotes local cultures.
36
Table 4.7: Different Customs and Manners
Percentages (%) N=52
Statement
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
3.8
23.1
26.9
44.2
1.9
40.4
46.2
3.8
9.6
0
23.1
34.6
19.2
17.3
5.8
19.6
49.0
11.8
17.8
2.0
TNC respects her employees way
of life
I am allowed time off to
participate in cultural activities
TNC promotes local cultures
TNC’s CSR is based on the views
of the locals
Figure 4.10 shows a limited variation in the opinions across the three states, 47% of
respondents in Tanzania disagreed that customs and manners present a challenge to TNC
global expansion followed by Zambia at 38% and Kenya at 35 %.
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
47%
38%
35%
25%
22%
22%
17%
14%
23%
17%
11%
3%
Kenya
21%
3%
Tanzania
Zambia
Figure 4.10: Country versus Customs and Manners
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.8 indicated lack of statistical
significance on different customs and manners held by the different countries.
37
Table 4.8: One-Way Analysis of Variance on Customs and Manners by Country
One-Way Analysis of Variance by Country
Source
SS
df
MS
Customs &
Manners
CM1
Between Groups
Within Groups
Total
CM2
Between Groups
Within Groups
Total
CM3
Between Groups
Within Groups
Total
CM4
Between Groups
Within Groups
Total
1.753
43.689
45.442
.943
40.499
41.442
.845
72.136
72.981
2.250
53.083
55.333
2
49
51
2
49
51
2
49
51
2
48
50
F
P
.877
.892
.983
.381
.472
.827
.571
.569
.422
1.472
.287
.752
1.125
1.106
1.017
.369
Note: CM1; CM2; CM3; CM4 *p<.05.
4.4
Leadership Challenges Affecting Global Expansion
4.4.1
Supervision/Direction Setting
Table 4.9 shows that 50% of the respondents indicated that their supervisors were always
available for a two way communication, About 36.5% of the respondents agreed that
common goals were clearly demonstrated by all leaders On the other hand, 48.1% of the
respondents disagreed that that supervisors understand employee feelings, needs and
concerns.
Table 4.9: Supervision/Direction Setting
Percentages (%) N=52
Statement
Supervisors are always available
for a two way communication
Supervisors
at
all
levels
understands employee feelings,
needs and concerns
Common goals are clearly
demonstrated by all leaders
Superiors have fostered and
sustained
commitment
to
excellence
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
5.8
28.8
7.7
50.0
7.7
5.8
48.1
13.5
30.8
1.9
1.9
23.1
19.2
36.5
19.2
3.8
19.2
23.1
36.5
17.3
38
Figure 4.11 shows on average the four questions, those from Tanzania disagreed that
there is clearer direction setting as indicated by 44% of the respondents who were in
disagreement.
Strongly disagree
Disagree
44%
Neutral
Agree
Strongly agree
44%
25%
40%
31%
25%
13%
6%
17%
12%
3%
Kenya
15%
11%
12%
2%
Tanzania
Zambia
Figure 4.11: Country versus Supervision
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.10 indicated a statistical
significance at p value <.05 level for whether common goals were clearly demonstrated
by all, whether superiors fostered and sustained commitment to excellence and
supervisors did not understand employee feelings, needs and concerns..
Table 4.10: One-Way Analysis of Variance on Supervision/Direction Setting by
Country
SD1
SD2
SD3
SD4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
1.497
2
.749
Within Groups
64.253
49
1.311
Total
65.750
51
Between Groups
6.253
2
3.127
Within Groups
47.497
49
.969
Total
53.750
51
Between Groups
3.956
2
1.978
Within Groups
59.025
49
1.205
Total
62.981
51
Between Groups
3.669
2
1.834
Within Groups
59.158
49
1.207
Total
62.827
51
Note: SD2; SD3; SD4 *p<.05.
39
F
.571
P
.569
3.226
.048*
1.642
.024*
1.519
.029*
The findings indicate that the challenge of creating clear supervision/direction setting at
TNC is faced more in Tanzania.
4.4.2
Motivating Challenge
Table 4.11 indicates 36.5% of the respondents strongly disagreed that they are happy with
their pay. It also shows that 40.4% of the respondents indicated that they are neutral on
the matter. 38.5% of the respondents indicated that they are not frequently consulted on
matters affecting their jobs and 57.7% of the respondents were not happy with carrier
advancement opportunities.
Table 4.11: Motivation
Percentages (%) N=52
Statement
I am happy with my pay at TNC
I am frequently consulted on
matters affecting my job
I am satisfied with other benefit
programs such as medical cover
and pension at TNC
I am happy at TNC because of the
carrier advancement opportunities
Strongly
disagree
36.5
Disagree
Neutral
Agree
9.6
40.4
13.5
Strongly
agree
0.00
38.5
21.2
3.8
25.0
11.5
44.2
36.5
3.8
13.5
1.9
57.7
13.5
1.9
15.4
11.5
Figure 4.12 indicates that on average the feelings expressed in Table 4.10 seem not to
apply across the three states. In Zambia 40% of the respondents strongly disagreed; 53%
of the respondents from Tanzania strongly disagreed while 43% of the respondents from
Kenya strongly disagreed.
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
53%
43%
40%
31%
21%
11%
Kenya
18%
17% 17%
7%
3%
11%
13% 13%
2%
Tanzania
Figure 4.12: Country versus Motivation
40
Zambia
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.12 indicated statistical
significance at P (.039) <.05 level for whether staff are frequently consulted on matters
affecting their jobs and whether staff were satisfied with other benefit programs such as
medical cover and pension at p (.035) <.05 level.
Table 4.12: One-Way Analysis of Variance on Motivation by Country
M1
M2
M3
M4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
.719
2
.359
Within Groups
62.358
49
1.273
Total
63.077
51
Between Groups
2.864
2
1.432
Within Groups
112.136
49
2.288
Total
115.000
51
Between Groups
2.360
2
1.180
Within Groups
59.332
49
1.211
Total
61.692
51
Between Groups
.830
2
.415
Within Groups
115.689
49
2.361
Total
116.519
51
F
.282
P
.569
.626
.039*
.974
.035*
.176
.229
Note: M2; M3 *p<.05
4.4.3
Creating Teams
Table 4.13 indicates that 38.5% of the respondents felt that the organization form teams
across diverse background and 51.9% of the respondents were in agreement that teams at
TNC are easy to work with.
Table 4.13: Creating Teams
Percentages (%) N=52
Statement
My organization forms teams
across diverse backgrounds
There is a deliberate attempt by
management to form dynamic
teams at my work place
Teams at my work place are easy
to work with
In my organization there is strong
sense of team work
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
9.6
23.1
25.0
38.5
3.8
5.8
21.2
30.8
38.5
3.8
3.8
19.2
15.4
51.9
9.6
5.8
21.2
19.2
36.5
17.3
41
Figure 4.13 shows that 69% staff members from Zambia agreed that team creation and
team environment is favorable compared to staff members from Kenya where only 33%
were in agreement.31% of the staff members in Tanzania disagreed that team creation
and team environment at TNC is favorable
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
69%
33%
28% 28%
25% 23%
19%
13%
8%
31%
11%
3%
Kenya
8%
Tanzania
4%
Zambia
Figure 4.13: Country versus Creating of Teams
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.14 indicated statistical
significance at p value <.05 level for whether the organization forms teams across diverse
backgrounds; teams at TNC are easy to work with and whether there is strong sense of
team work at TNC.
Table 4.14: One-Way Analysis of Variance on Creating Teams by Country
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
4.470
2
2.235
CT1 Within Groups
55.453
49
1.132
Total
59.923
51
Between Groups
2.571
2
1.286
CT2 Within Groups
47.486
49
.969
Total
50.058
51
Between Groups
4.937
2
2.469
CT3 Within Groups
49.890
49
1.018
Total
54.827
51
Between Groups
5.129
2
2.565
CT4 Within Groups
65.179
49
1.330
Total
70.308
51
Note: CT1; CT3; CT4 *p<.05.
42
F
1.975
P
.002*
1.327
.539
2.425
.038*
1.928
.048*
4.4.4
Information Management
Table 4.15 shows that 42.3% of the respondents agreed that they can easily access work
related information from other divisions in other countries and 41.2% of the respondents
were strongly in agreement that it is easy to access employee blogs from other countries.
On the contrary, 38.5% of the respondents disagreed that they get free access to mentors
within the organization from any part of the world.
Table 4.15: Information Management
Percentages (%) N=52
Statement
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
11.5
28.8
1.9
42.3
15.4
13.7
7.8
2.0
35.3
41.2
28.8
38.5
9.6
13.5
9.6
32.7
42.3
1.9
5.8
17.3
I easily access work related
information from other divisions
in other countries
I easily access employee blogs
from other countries
I get free access to mentors
within the organization from any
part of the world
Information is freely shared at
TNC regardless of the division
Figure 4.14 indicates that the highest level of disagreement was exhibited by staff from
Zambia at 40% followed by Tanzania at 34%.
Strongly disagree
32%
20%
23%
Disagree
31%
Neutral
Strongly agree
40%
34%
23%
20%
19%
15%
11%
5%
Kenya
Agree
21%
4%
Tanzania
Zambia
Figure 4.14: Country versus Information Management
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.16 indicated statistical
43
significance p (.040) <.05 level for whether the staff can easily access employee blogs
from other countries and whether staff can access mentors from other divisions p (.009)
<.05 level.
Table 4.16: One-Way Analysis of Variance on Information Management by Country
IM1
IM2
IM3
IM4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
4.920
2
2.460
Within Groups
85.753
49
1.750
Total
90.673
51
Between Groups
4.176
2
2.088
Within Groups
95.236
48
1.984
Total
99.412
50
Between Groups
9.883
2
4.942
Within Groups
76.174
49
1.555
Total
86.058
51
Between Groups
10.143
2
5.072
Within Groups
95.299
49
1.945
Total
105.442
51
F
1.406
P
.150
1.052
.040*
3.179
.009*
2.608
.156
Note: IM2; IM3 *p<.05.
4.4.5
Encouraging Creativity and Innovation
Table 4.17 shows that 59.6% of the respondents agreed that they are offered an
opportunity to try new innovations at work. 88.5% of the respondents disagreed that that
they get a financial reward whenever they introduce something new at work.
Table 4.17: Encouraging of Creativity/Innovation
Percentages (%) N=52
Statement
I am offered an opportunity to try
new innovations at work
Authority to try innovations by
staff can be granted at the local
TNC office
We are encouraged to adopt local
solutions in solving work related
issues
I get a financial reward whenever I
introduce something new at work.
Strongly
Disagree
disagree
Neutral
Agree
Strongly
agree
11.5
7.7
1.9
59.6
19.2
19.2
55.8
9.6
11.5
3.8
19.2
65.4
3.8
7.7
3.8
88.5
9.6
1.9
0.00
0.00
44
Figure 4.15 shows that on average all the staff from the three countries indicated that
there is a challenge of active encouragement of creativity and innovation. 42% of the
respondents in Zambia disagreed that there is encouraged for creativity and innovation,
39% of respondents from Tanzania also disagreed and in Kenya 37% of the respondents
strongly disagreeing.
.
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
42%
39%
37%
33%
31%
30%
25%
25%
16%
10%
8%
Kenya
6%
Tanzania
Zambia
Figure 4.15: Country versus Creativity/ Innovation
Analysis of variance was then carried out to find out if the observed differences in the
country on creativity and innovation were statistically significant. Table 4.18 indicated
lack of statistical significance at p values >.05 level.
Table 4.18: One-Way Analysis of Variance on Creativity/Innovation by Country
ICI1
ICI2
ICI3
ICI4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
6.920
2
3.460
Within Groups
68.522
49
1.398
Total
75.442
51
Between Groups
3.702
2
1.851
Within Groups
50.048
49
1.021
Total
53.750
51
Between Groups
1.360
2
.680
Within Groups
43.948
49
.897
Total
45.308
51
Between Groups
.691
2
.346
Within Groups
7.367
49
.150
Total
8.058
51
Note: ICT1; ICT2; ICT 3; ICT 4 p<.05.
45
F
2.474
P
.095
1.812
.174
.758
.474
2.298
.111
4.5
Political Challenges Affecting Global Expansion
The study sought to find out the impact of nationalization policies, government stability,
international relations and government bureaucracies on the global expansion of TNC.
4.5.1
Nationalization Policies
Table 4.19 showed that the majority at 54% agreed that restrictive human resource laws
on the maximum number of expatriates to be employed in certain countries discourage
TNC from fully globalizing. Similarly a majority at 44% indicated that restrictive fund
repatriation laws discourage TNC from venturing in some countries. On the contrary, the
majority at 72% disagreed that demand for local share in the organization discourages
TNC from full globalization as well as 54%, who disagreed that laws limiting
conservancy activities to governments is a major hindrance to TNC globalization.
Table 4.19: Nationalization Policies
Percentages (%) N=52
Statement
Conditions set on the maximum
number of expatriates to be
employed in certain countries
discourages TNC from fully
globalizing
Restrictive fund repatriation
laws discourages TNC from
venturing in some countries
Demand for local share in the
organization discourages TNC
from full globalization
Laws limiting conservancy
activities to governments is a
major hindrance to TNC
globalization
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
6.0
24.0
16.0
54.0
0.00
6.0
36.0
10.0
44.0
4.0
14.0
72.0
10.0
4.0
0.00
18.0
54.0
16.0
12.0
0.00
Figure 4.16 show that respondents from the three countries were in disagreement that
nationalization policies hindered TNC’s globalization. The strongest level of
disagreement was exhibited in Kenya where 50% of the respondents disagreed, followed
by Zambia at 43% then Tanzania at 31%. This would mean Kenya has less
nationalization policies compared to Tanzania and Zambia.
46
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
50%
43%
33%
31%
20%
13%
17%
13%
17%
10%
3%
1%
Kenya
41%
Tanzania
Zambia
Figure 4.16: Country versus Nationalization Policies
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.20 indicated statistical
significance at p value <.05 level for whether conditions set on the maximum number of
expatriates to be employed in certain countries discourages TNC from fully globalizing
and restrictive fund repatriation laws discourages TNC from venturing in some countries
Table 4.20: One-Way Analysis of Variance on Nationalization Policies by Country
NP1
NP2
NP3
NP4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
7.460
2
3.730
Within Groups
41.920
47
.892
Total
49.380
49
Between Groups
12.176
2
6.088
Within Groups
47.744
47
1.016
Total
59.920
49
Between Groups
.038
2
.019
Within Groups
19.882
47
.423
Total
19.920
49
Between Groups
1.932
2
.966
Within Groups
36.648
47
.780
Total
38.580
49
Note: NP1; NP2 *p< .05
47
F
4.182
P
.021*
5.993
.005*
.045
.956
1.239
.299
4.5.2
Government Instability
Table 4.21 shows that 64% of the respondents agreed that government instability hinders
TNC’s global expansion, 54% of the respondents strong agreed that terror attacks are a
major hindrance to TNC global expansion.
Table 4.21: Government Instability
Percentages (%) N=52
Statement
Frequent change of governments
is a major hindrance to TNC
global expansion
Terror attacks is a major
hindrance
to
TNC
global
expansion
Civil strife is a major hindrance to
TNC global expansion
Political coups have greatly
hindered
the
TNC
global
expansion
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
6.0
12.0
6.0
64.0
12.0
6.0
14.0
2.0
24.0
54.0
6.0
12.0
4.0
22.0
56.0
6.0
12.0
4.0
30.0
48.0
Figure 4.17 further confirms that the challenge of government instability was expressed
by all the respondents across different countries with Zambia being the most assertive as
79% of the respondents agreed , followed by Tanzania at 50% strongly agreeing and
finally Kenya at 37 % agreeing.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
79%
47% 50%
37%
25%
22%
10%
21%
6%
3%
Kenya
Tanzania
Zambia
Figure 4.17: Country versus Government Instability
48
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.22 indicated statistical
significance at p value <.05 level for whether frequent change of governments was a
major hindrance to TNC global expansion; Terror attacks was a major hindrance to TNC
global expansion ; Civil strife was a major hindrance to TNC global expansion and
Political coups have greatly hindered the TNC global expansion.
Table 4.22: One-Way Analysis of Variance on Government Stability by Country
GS1
GS2
GS3
GS4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
12.404
2
6.202
Within Groups
41.116
47
.875
Total
53.520
49
Between Groups
23.106
2
11.553
Within Groups
59.714
47
1.271
Total
82.820
49
Between Groups
20.855
2
10.428
Within Groups
59.645
47
1.269
Total
80.500
49
Between Groups
18.600
2
9.300
Within Groups
58.380
47
1.242
Total
76.980
49
F
7.090
P.
.002*
9.093
.000*
8.217
.001*
7.487
.002*
Note: GS1; GS2; GS3; GS4 *p< .05
4.5.3
International Relations
Table 4.23 shows that 60% of the respondents agreed that poor international relationship
between USA which is the TNC’s mother country and some foreign governments has led
to limited funding of projects in some foreign countries.50% of the respondents disagreed
that poor relations between USA and some foreign countries has restricted movement of
TNC staff to open divisions in some countries.
49
Table 4.23: International Relations
Percentages (%) N=52
Statement
Strongly
Disagree
disagree
Poor international relationship
between TNC mother nation
(USA) has led to closure of
some divisions in foreign
countries
Poor international relationship
between USA and some foreign
governments has led to limited
funding of projects in some
foreign countries
Foreign countries normally
deny registration of TNC
divisions due to their poor
international relations with the
USA
Poor relations between USA
and some foreign countries has
restricted movement of TNC
staff to open divisions in some
countries
Neutral
Agree
Strongly
agree
12.0
40.0
12.0
30.0
6.0
14.0
16.0
4.0
60.0
6.0
28.0
50.0
16.0
2.0
4.0
26.0
50.0
18.0
2.0
4.0
Figure 4.18 indicates that in all the three countries, there was a general disagreement with
the minimum level of the respondents observed in Kenya at 31%, Zambia 56% and
Tanzania 42%
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
56.0%
42.0%
31.0%
24.0%
17.0%19.0%
22.0%
9.0%
Kenya
35.0%
31.0%
6.0%
Tanzania
2.0%
6.0%
Zambia
Figure 4.18: Country versus International Relations
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.24 indicated lack of statistical
50
significance at p value >.05 level on whether international relations was a challenge.
Hence the observed differences were purely by chance.
Table 4.24: One-Way Analysis of Variance on International Relations by Country
IR1
IR2
IR3
IR4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
5.464
2
2.732
Within Groups
63.116
47
1.343
Total
68.580
49
Between Groups
2.724
2
1.362
Within Groups
71.356
47
1.518
Total
74.080
49
Between Groups
1.555
2
.778
Within Groups
42.365
47
.901
Total
43.920
49
Between Groups
3.665
2
1.832
Within Groups
40.015
47
.851
Total
43.680
F
2.034
P
.142
.897
.415
.863
.429
2.152
.128
49
Note: IR1; IR2; IR3; IR4 p <.05
Hence the study showed that international relations presents a challenge to TNC’s
globalization to the extent of poor international relationship between USA which is the
TNC’s mother country and some foreign governments which leads to limited funding of
projects in some foreign countries. Results of ANOVA indicate that these views cut
across the three states, Kenya, Tanzania and Zambia.
4.5.4
Government Bureaucracies
Table 4.25 shows a high level of neutrality with the impact of government bureaucracies.
34% of the respondents were neutral that too many forms filled for registration has
discouraged TNC from venturing into some jurisdictions.34% of the respondents agreed
that too lengthy registration of international organizations was a major hindrance of
globalization at TNC .32% of the respondents agreed that demand for home government
support has hindered TNC from achieving full globalization.
51
Table 4.25: Government Bureaucracies
Percentages (%) N=52
Statement
Too many forms filled for
registration has discouraged
TNC from venturing into some
jurisdictions
Demand for responsiveness to
many layers of governments
limits TNC’s globalization
Too lengthy registration of
international organizations has
be
a major hindrance of
globalization at TNC
Demand for home government
support has hindered TNC from
achieving full globalization
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
8.0
30.0
34.0
26.0
2.0
8.0
22.0
24.0
36.0
10.0
12.0
14.0
40.0
34.0
0.0
24.0
26.0
12.0
32.0
6.0
Figure 4.19 shows that 54% of respondents from Zambia were in agreement that
government bureaucracy hinders TNC from achieving full globalization.
Strongly disagree
Disagree
Neutral
Agree
Strongly Agree
54.0%
33.0%
32.0%
22.0%
25.0%
15.0%
27.0%
25.0%
22.0%
19.0%
13.0%
7.0%
Kenya
4.0%
Tanzania
2.0%
Zambia
Figure 4.19: Country versus Government Bureaucracies
Analysis of variance was then carried out to find out if the observed differences in the
country percentages were statistically significant. Table 4.26 indicated statistical
significance at p (.047) <.05 level for whether too many forms filled for registration
discouraged TNC from venturing into some jurisdictions and p (.011) <.05 level for too
lengthy registration of international organizations was a major hindrance of globalization
at TNC.
52
Table 4.26: One-Way Analysis of Government Bureaucracies by Country
GB1
GB2
GB3
GB4
One-Way Analysis of Variance by Country
Source
SS
df
MS
Between Groups
3.946
2
1.973
Within Groups
42.774
47
.910
Total
46.720
49
Between Groups
2.687
2
1.343
Within Groups
60.693
47
1.291
Total
63.380
49
Between Groups
3.066
2
1.533
Within Groups
44.854
47
.954
Total
47.920
49
Between Groups
.809
2
.405
Within Groups
83.691
47
1.781
Total
84.500
49
F
2.168
P
.047*
1.040
.361
1.606
.011*
.227
.798
Note: GB1; GB3, *p<0.05
4.6
Chapter Summary
The chapter captured the findings from the foregoing study. It highlighted those factors
that affect globalization of TNC. It has also shown those factors that do not have
significant impacts. The following chapter gives the summary, discussions, conclusions
and recommendation drawn from the current study.
53
CHAPTER FIVE
5.0
DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS
5.1
Introduction
The purpose of this study was to determine the challenges that face organizations as they
expand their operations globally. The chapter presents the study summary discussions,
conclusions and recommendations.
5.2
Summary
The study was guided by the following research questions: What are the cultural
challenges that affect TNC’s expansion in Africa? What are the leadership challenges that
affect TNC’s expansion in Africa? What are the political challenges that affect TNC’s
expansion in Africa?
A case study research design was used for this study. The design was appropriate for this
study due to its holistic approach which aims to capture all the details of a particular
individual or group as presented in real life situation. The study population was limited to
The Nature Conservancy. The study population comprised of a total of 53 members of
staff based in Kenya, Tanzania and Zambia categorized into the top level management
team, the middle level managers and the general staff. A census of the entire population
was carried. Frequency distributions and percentages were utilized in the descriptive part
of this study. The analysis also included analysis of variance (ANOVA) and bivariate
analysis to determine the relationship between various variable and thus draw
conclusions. The findings were presented using tables, graphs and percentages.
The findings on the cultural challenges revealed that language barrier did not present a
global expansion challenge to TNC (75% disagreed) but staff from Tanzania are mostly
likely to be affected by language barriers in the global arena (41.7% were in
disgreement). This difference on how language barriers affect staff from different
countries was statistically significant at p (.017) <.05 level
on the challenge of
communicating with other colleagues directly due to language barrier and statistically
significant at p (0.02) <.05 level for the challenge of missing out on important
information at TNC staff functions due to language barrier. The study also showed that
54
different values and attitudes do not present a global expansion challenge to TNC (64.7%
disagreed). Similarly the study showed that different education systems do not present a
challenge to TNC’s global expansion (70.2% in disagreement).
The findings on the leadership challenges revealed that motivation was a challenge to
TNC in its global operations but the challenge was most manifested in Zambia (71%).
The country difference was statistically significant at P (.039) <.05 level for whether staff
were frequently consulted on matters affecting their jobs and p (.035) <.05 level for
whether staff were satisfied with other benefit programs such as medical cover and
pension at TNC. Likewise encouraging of creativity and innovation was a challenge to
TNC’s global operations since even though employees were offered a chance to try new
things, there was lack of local authorization of such; lack of active encouragement to
adopt local solutions in solving work related issues and lack of reward system for
innovations which discourages local creativity and innovation. On the contrary the study
showed that supervision/direction setting did not affect TNC’ global expansion in general
as 50%, indicated presence of clear supervision and direction setting but the challenge
was faced in Tanzania (47.2%, agreed). This country difference in opinion with regard to
the challenge of supervision/direction setting was statistically significant at p (.048) <.05
level for whether common goals were clearly demonstrated by all, statistically significant
at p (.024) <.05 level for whether superiors fostered and sustained commitment to
excellence and statistically significant at p (.029) <.05 level for whether supervisors did
not understand employee feelings, needs and concerns. The challenge of creation of teams
and team environment was only faced in Tanzania as affirmed by a majority at 38.9%.
The different opinion held by staff from different countries as to whether creation of
teams posse a challenge was statistically significant at p (.002) <.05 level for whether the
organization forms teams across diverse backgrounds, statistically significant at p (.038)
<.05 level for whether teams at TNC were easy to work with and statistically significant
at p (.048) <.05 level for whether there was a strong sense of team work at TNC. Finally
TNC leadership faces organizational information management challenge in form of
limited cross boundary mentorship and information sharing in Tanzanian (64.9%
disagreed) and Zambia (59.6% disagreed). The country difference on the opinions on
information management was statistically significant at p (.040) <.05 level for whether
the staff could easily access employee blogs from other countries and p (.009) <.05 level
for whether staff could access mentors from other divisions.
55
The findings on political challenges revealed that government instability hindered TNC’s
global expansion and this was statistically significant at p (.027) <.05 level for whether
conditions set on the maximum number of expatriates to be employed in certain countries
discouraged TNC from fully globalizing and statistically significant at p (.05) <.05 level
for whether restrictive fund repatriation laws discouraged TNC from venturing in some
countries. The international relations was a challenge to TNC’s globalization to the extent
of poor international relationship between USA which is the TNC’s mother country and
some foreign governments which leads to limited funding of projects in some foreign
countries. The impact of nationalization policies on globalization at TNC is only to a
limited scale to the extent of restrictive human resource laws on the maximum number of
expatriates to be employed in certain countries and restrictive fund repatriation laws in
some countries. Lastly despite that fact there lacked sufficient empirical evidence from
this study to generalize that government bureaucracy affected TNC’s global expansion
due to high level of response neutrality, staff from Zambia were in agreement (56.3%)
that government bureaucracy hindered TNC from achieving full globalization. This
difference in opinion across countries on the effects of government bureaucracy was
statistically significant at p (.047) <.05 level for whether too many forms filled for
registration discouraged TNC from venturing into some jurisdictions and statistically
significant at p (.011) <.05 level for whether too lengthy registration of international
organizations was a major hindrance of globalization at TNC.
5.3
Discussion
5.3.1
Cultural Challenges
The study showed that different customs and manners was a challenge to TNC’s
expansion in Africa. This was in line with sentiments by Okoro (2012) that the increasing
mobility of workers in global markets, expansion of international joint ventures and
strategic alliances, and the presence of global entrepreneurs in developing nations makes
cross-cultural communication competence inevitable. This is further supported by Oya
(2006) who pointed out that incomplete information about cultural values and attitudes;
structure and properties of an employee group causes wrong estimations in the period of
performance evaluation, measurement and, in general, the decision making of
management. In Africa specifically there are multiple tribes or groupings of people who
hold different customs and prefer different manners in their engagements. Each country
56
literally has different groupings of people with unique backgrounds which may present a
challenge to international organizations. Therefore to overcome the challenges of cross
cultural manners and customs and to communicate effectively in international
organizations requires that managers develop cultural sensitivity, be careful in encoding
their messages, thoughtful in decoding and analysing content and context and selective in
choosing channels for transmission of messages (Okoro, 2012).
The study also showed that language barrier was not a global expansion challenge to TNC
in an overall but staff members from Tanzania are mostly likely to be affected by
language barriers in the global arena compared to those from Zambia and Kenya. Vielba
and Edelshain (1997) posit that language boundaries may occur within the constituent
parts of an international business and between the business and its environment or market.
They continue that while English may be the language of international business for
transactions between business people, it is questionable whether it is so in every part of
the world. His is supported by Nickerson (2005) who indicated that a global organization
which consists of headquarters and branch units which are spatially separated are often
embedded in different language environments. Consequently, he posits that internal
organizational communication involves crossing language boundaries and operating at the
interface between several languages including those of the home country and the host
country, the corporate and company languages.
The study also showed that different values and attitudes did was not a global expansion
challenge to TNC. The different values and attitudes are expected to arise from varied
cultural values and attitudes among consumers and organizational employees dependent
on individual cultures e.g. with respect to consumer perception on marketing (Alas,
2008). Cui, Lui, Chanthe and Joy (2012) further notes that cross-cultural differences in
consumer attitude towards products affect multinational corporations this is especially
with standardization or customization of their international products when they expand in
markets that are at a different stage of economic and consumerism development. Looking
at the three countries studied, they are all neighbours. Kenya borders Tanzania to the
North West while Zambia borders Tanzania to the South West. Kenya and Tanzania fall
in the same East Africa bloc with extensive political, social and economic integration.
Zambia is a land-locked country with its access to the sea through Tanzania’s port of Dar
Salem through rail and road networks. Likewise Zambia and Tanzania are members’
57
states to the South African Development Community (SADC). These integrations would
mean a lot of commonality in the three states thus similar value and attitudes to
international organizations.
Similarly the study showed that different education systems was not a challenge to
TNC’s global expansion. This goes against the general expectation that education systems
vary and lack standardizations across the world which presents significant difference
views from different countries (Cisco, 2010). This study further goes against the
sentiments by Lehner and Wurzenberger (2013) that globalization has created more
mobile international labour markets yet the current existing education systems are
importantly different around the world, reflecting the distinctive challenges of different
regions creating different countries need to think differently about their route to economic
success and social cohesion. The study showed that the education systems in the three
countries are sufficient for the staff to be posted and work anywhere in the world.
The difference on how language barriers affect staff from different countries was
statistically significant at p (.017) <.05 level. Likewise the difference in opinions across
different countries on the challenge of communicating with other colleagues directly due
to language barrier was statistically significant at p (0.02) <.05 level. Further the study
showed that different values and attitudes did not present a global expansion challenge to
TNC.
5.3.2
Leadership Challenges
The study showed that motivation was a challenge to TNC in its global operations; it also
showed that there was a variation with respect to country, department, age group and
management position. The challenge was most manifested in Zambia. This was in line
with the argument by Lunenburg (2011) that with diversity in global workforce, there is a
never ending ways of different factors that employees demand to be motivated. Most
international organizations are faced with the challenge of designing motivation strategies
that cover the varied interest groups. Thus White (2009) proposes that in order to
accommodate the needs of globally diverse employees, corporations may offer flexible
benefits plans, also known as cafeteria plans. He explains that with this plan individuals
may choose the benefits that are best suited to their particular needs. In addition, a
cafeteria plan would prevent benefits from being wasted on employees who have no need
for them and thus of no motivational value.
58
Encouraging of creativity and innovation was also a challenge to TNC’s global operations
since even though employees are offered a chance to try new things, there was lack of
local authorization of such; lack of active encouragement to adopt local solutions in
solving work related issues and lack of reward system for innovations which discourages
local creativity and innovation. This goes against the findings by Knight and Cavusgil
(2004) that at the core of global organization is the diversity because they deal with
diverse environments across numerous foreign markets and the diversity offers an
opportunity and ability to innovate. Agbor (2008) further notes that creativity and
innovation in an effective organization do not emerge by accident but require leaders to
drive and control deliberate changes in structure; culture; and process. He notes that
leaders can successfully encourage organizational creativity and innovation by designing
the organization to foster an environment that is conducive for creativity to flourish, build
friendly and inclusive working conditions for the members of the organization. Lack of
local authorization of innovative initiatives delays process; lack of active encouragement
to adopt local solutions in solving work related issues shows lack of motivation; and lack
of reward system for innovations would discourage local creativity and innovation. This
means that TNC does not have favourable environment where creativity and innovation
can flourish.
On the contrary the study showed that supervision/direction setting did not affect TNC’
global expansion in general but was experienced in Tanzania. Finally TNC leadership
faced organizational information management challenge in form of limited cross
boundary mentorship and information sharing in Tanzanian and Zambia. This is in line
with Huang and Trauth (2007) who posited that maintaining mutual knowledge is a
central problem of dispersed collaborations and one of the problems that may lead to the
failure of establishing mutual knowledge is the difficulty of understanding the “silence”
in communication. Therefore unless global managers clearly understand the intricate of
information management in a diverse environment, it would remain a major challenge to
these managers. On the other lack of mentorship points to failure by the organization to
adopt what Makani (2008) say that the conversion of organizational tacit knowledge into
explicit knowledge is critical in that tacit knowledge, (dormant or more actively acquired
for example through experiences), resides in people’s minds, and strategies such as
mentorship and active cross division is necessary to transfer this knowledge to other
59
within the organization. There is also the need for codification of the same knowledge
into books, manuals, databases.
The study revealed that motivation was a challenge to TNC in its global operations but it
was most manifested in Zambia. The country difference was statistically significant at p(
.039) <.05 level for whether staff were frequently consulted on matters affecting their
jobs and statistically significant at p (.035) <.05 level for whether staff were satisfied with
other benefit programs such as medical cover
and pension at TNC. Secondly,
encouraging of creativity and innovation also presented a challenge to TNC’s global
operations since even though employees were offered a chance to try new things, there
was lack of local authorization of such; lack of active encouragement to adopt local
solutions in solving work related issues and lack of reward system for innovations which
discouraged local creativity and innovation. Similarly TNC leadership faces
organizational information management challenge in form of limited cross boundary
mentorship and information sharing in Tanzanian and Zambia. The country difference on
the opinions on information management was statistically significant at p (.040) <.05
level for whether the staff could easily access employee blogs from other countries and
statistically significant at p (.009) <.05 level for whether staff could access mentors from
other divisions.
On the contrary the study showed that supervision/direction setting did not affect TNC’
global expansion in general but was experienced in Tanzania. This country difference in
opinion with regard to the challenge of supervision/direction setting was statistically
significant at p (.048) <.05 level for whether common goals were clearly stated,
statistically significant at p (.024) <.05 level for whether superiors fostered and sustained
commitment to excellence and statistically significant at p (.029) <.05 level, for whether
supervisors did not understand employee feelings, needs and concerns. Similarly the
challenge of creation of teams and team environment was only faced in Tanzania. The
different opinion held by staff from different countries as to whether creation of teams
posed a challenge was statistically significant at p (.002) <.05 level for whether the
organization formed teams across diverse backgrounds, statistically significant at p (.038)
<.05 level for whether teams at TNC were easy to work with and also statistically
significant at p (.048) <.05 level for whether there was strong sense of team work at TNC.
60
5.3.3
Political Challenges
The findings on political challenges showed that government instability hindered TNC’s
global expansion. It showed that frequent change of governments; terror attacks; civil
strife; and political coups are some of the government instability hindrances to global
expansion at TNC. The findings also revealed that respondents from Zambia were most
assertive on this issues followed by Tanzania and finally Kenya. This is in line with the
arguments by Koch (2001b) that unstable political system discourages direct investment.
He notes that political leadership, of either form, and their entrenched policies present one
of the greatest challenges to internationalization organizations. Fogel (2006) expects that
political stability provides the necessary environment for organizations to prosper and
grow through increased operational confidence brought about by stable, predictable, and
reliable political processes. A political system that thrives on orderly and transparent
transition of power in governance ensures the continuity of government services,
including the maintenance of peace and order as preconditions for building a sound and
stable environment for investments.
The international relations was a challenge to TNC’s globalization to the extent of poor
international relationship between USA which is the TNC’s mother country and some
foreign governments has led to limited funding of projects in some foreign countries.
This is in line with Wang (2006) who while giving an example of countries engaged in
national branding, indicate that a nation’s international relations with other countries and
reputational capital is significant, both politically and economically as it affects the
country’s ability not only to pursue and achieve international political objectives but also
to attract in-flow of foreign investment as well as tourism. Thus with the increasing
exchange of information and migration of people on the global scale, the intergovernmental relations give more way to the multi-actor model in international relations
implying international relations would have an effect not only on the government
diplomacy but other sectors of the economy and international organizations.
The impact of nationalization policies on globalization at TNC is only to a limited scale
to the extent of restrictive human resource laws on the maximum number of expatriates to
be employed in certain countries and restrictive fund repatriation laws in some countries.
These are manifested only to a limited scale in Zambia. This tends to support the
argument that politics as the art of governing is important in ensuring that local firms and
61
people gain or maintain dominance in certain economic areas (Quinn, 1991).
Nationalization is most evident where many governments quite simply aim to secure for
themselves or their nation a larger share of the proceeds from the foreign investment once
assets are sunk in the host country and this can be achieved, for example by limiting the
number of expatriates who can be posted to the foreign nations and limiting the amount of
proceeds which can be repatriated to the organizations mother country (Jakobsen, 2012).
Lastly despite that fact there lacked sufficient empirically evidence from this study to
generalize that government bureaucracy affects TNC’s global expansion due to high level
of response neutrality, staff from Zambia were in agreement that government bureaucracy
hinders TNC from achieving full globalization. Limited effect of bureaucracy in both
Kenya and Tanzania goes against Jalali (2012) argument that bureaucratic requirements
ranks as the most active barrier for international operations. Similarly it goes against Luo
(2008) argument that government bureaucracy remains largely un-improved over decades
in most emerging economies consequently lowering the countries’ competitiveness and
business performance and retarding economic growth and entrepreneurial development.
The current study would point to a case of improved situation as regards government
bureaucracies in these states.
Politically the study showed that government instability hindered TNC’s global expansion
and this was statistically significant at p (.027) <.05 level for whether conditions set on
the maximum number of expatriates to be employed in certain countries discouraged
TNC from fully globalizing and statistically significant at p (0.05) <.05 level for whether
restrictive fund repatriation laws discourages TNC from venturing in some countries. It
showed that frequent change of governments; terror attacks; civil strife; and political
coups are some of the government instability hindrances to global expansion at TNC. The
international relations was a challenge to TNC’s globalization to the extent of poor
international relationship between USA which is the TNC’s mother country and some
foreign governments which leads to limited funding of projects in some foreign countries.
The impact of nationalization policies on globalization at TNC is only to a limited scale
to the extent of restrictive human resource laws on the maximum number of expatriates to
be employed in certain countries and restrictive fund repatriation laws in some countries.
Lastly despite the fact there lacks sufficient empirically evidence from this study to
62
generalize that government bureaucracy affects TNC’s global expansion due to high level
of response neutrality, staff from Zambia were in agreement that government bureaucracy
hinders TNC from achieving full globalization. This difference in opinion across
countries on the effects of government bureaucracy was statistically significant at p (.047)
<.05 level for whether too many forms filled for registration discouraged TNC from
venturing into some jurisdictions and statistically significant at p (.011) <.05 level for
whether too lengthy registration of international organizations was a major hindrance of
globalization at TNC.
5.4
Conclusions
5.4.1
Cultural Challenges
Different customs and manners was a challenge to TNC’s expansion in Africa. Increasing
mobility of workers in global markets, expansion of international joint ventures and
strategic alliances, and the presence of global entrepreneurs in developing nations makes
cross-cultural communication competence inevitable. Each country literally has different
groupings of people with unique backgrounds which may present a challenge to
international organizations. Therefore to overcome the challenges of cross cultural
manners and customs and to communicate effectively in international organizations
requires that managers develop cultural sensitivity, be careful in encoding their messages,
thoughtful in decoding and analysing content and context and selective in choosing
channels for transmission of messages
5.4.2
Leadership Challenges
The study revealed that motivation was challenge to TNC Africa as it expanded its
operations. Diversity in global workforce indicates that there is a never ending ways of
different factors that employees demand to be motivated. Most international organizations
are faced with the challenge of designing motivation strategies that cover the varied
interest groups. In order to accommodate the needs of globally diverse employees,
corporations may offer flexible benefits plans where by individuals choose the benefits
that are best suited to their particular needs. Thus preventing benefits from being wasted
on employees who have no need for them and thus of no motivational value.
63
Creativity and innovation in an effective organization do not emerge by accident but
require leaders to drive and control deliberate changes in structure; culture; and process.
Leaders can successfully encourage organizational creativity and innovation by designing
the organization to foster an environment that is conducive for creativity to flourish, build
friendly and inclusive working conditions for the members of the organization.
5.4.3
Political Challenges
Unstable political system discourages direct investment. A political system that thrives on
orderly and transparent transition of power in governance ensures the continuity of
government services, including the maintenance of peace and order as preconditions for
building a sound and stable environment for investments. A nation’s international
relations with other countries and reputational capital is significant, both politically and
economically as it affects the country’s ability not only to pursue and achieve
international political objectives but also to attract in-flow of foreign investment as well
as tourism. Thus with the increasing exchange of information and migration of people on
the global scale, the inter-governmental relations give more way to the multi-actor model
in international relations implying international relations would have an effect not only on
the government diplomacy but other sectors of the economy and international
organizations.
5.5
Recommendations
5.5.1
Recommendations for Improvement
5.5.1.1: Cultural Challenges
The study recommends that as a measure of managing cultural challenges, organizational
managers should be properly prepared for the multinational assignments and their training
should include cultural sensitivity, understanding the importance of maintaining
relationships, and impression management. International employees should be informed
about the complexities in international culture and human resources management. This is
due to the fact that as businesses globalize, there continues to be a compelling need for
cross-cultural awareness, knowledge of business etiquette, culture-specific management
styles, and intercultural exchanges, as managers find themselves faced with multiple
challenges emanating from domestic cultural issues and traditional systems.
64
5.5.1.2: Leadership Challenges
The study recommends that TNC can improve its leadership by promoting staff within the
organization’s ranks and finally use of research and development. Senior management
support should be encouraged to enable staff to perform their best.
5.5.1.3: Political Challenges
The political challenges highlighted such as the nationalization policies would be
addressed through structured negotiations either with the support of the home nation or
directly with the host nations.
5.5.2
Recommendations for Further Studies
The current study was a case study of TNC with the respondents only from three African
states. Further studies on other organizations and across the globe would be welcome to
ensure that the findings can be generalized.
65
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Appendix A: Cover Letter
CELL: +254724482444
EMAIL: ritahmutui@yahoo.com
P.O. Box 14634, 00800
NAIROBI
DATE:
Dear Respondent,
RE: RESEARCH QUESTIONNAIRE
I am a graduate student at United States International University pursuing an Executive
Master of Science in Organization Development (EMOD). I am currently conducting a
research on the challenges facing organizations as they expand their operations globally.
This is a requirement in partial fulfillment of the Executive Master of Science in
Organizational Development (EMOD) degree program at United States International
University (USIU).
The study will be based on The Nature Conservancy which is recognized as global
organization and you have been selected as one of the respondents to participate in the
survey. The results of the survey will be instrumental for TNC in identifying the
prevailing global challenges and the best strategies to manage them.
This is an academic research and confidentiality will strictly be adhered to. Your name
will not appear anywhere in the report. Kindly spare 10 minutes to complete the
questionnaire attached. The questionnaire has four sections.
Yours faithfully
Ritah Esther Mutui
74
Appendix B: Questionnaire
PART 1: DEMOGRAPHIC INFORMATION
Kindly answer all the questions by ticking in the boxes or writing on the spaces provided.
1. Kindly indicate the country you are working in………………………………………
2. Which department do you work in?
Finance and Operations
Conservation
Water Fund and Agriculture Program
3. Gender
Male
Female
4. What is your age bracket
24 or below
25-30
31-40
41 -50
Above 50
5. Please indicate your management position
Top level management
Middle level management
Non-management Staff
6. How long have you worked for The Nature Conservancy (TNC)
Less than 2 years
3-5 years
6-8 years
9 years and above
75
PART II: CULTURE AND GLOBALIZATION
Please indicate the degree to which you agree or disagree with the following cultural
challenges. Use a scale of 1-5 where 1 is strongly disagrees, 2 disagree, 3 neutral, 4 agree
and 5 strongly agree fill the empty boxes using a (√) or (X).
Statement
Strongly
disagree
(1)
1 Language barriers
I can’t communicate with other
colleagues from other divisions
directly due to language barrier
I sometimes miss out on important
information at TNC staff functions
due to language barrier
Language barrier limits my posting
to other countries
I sometimes fail to fully express
my views due to language
differences
2 Different values and attitudes
upheld by different employees
across the globe
At work am not judged at face
value
I am offered an opportunity to
explain what I mean at TNC
At TNC, I have the opportunity to
solve problems in more than one
way
My superior considers my feelings
when handling job matters
3 Different education systems
across the globe
TNC retrains her staff before
posting to other countries
My training doesn’t allows me to
be posted anywhere in the world
My colleagues from other countries
are more skilled than me
I am less skilled when it comes to
the latest technology
4 Different customs and manners
upheld by different employees
across the globe
TNC respects her employees way
of life
I am allowed time off to participate
in cultural activities
TNC promotes local cultures
TNC’s CSR is based on the views
of the locals
76
Disagree
(2)
Neutral
(3)
Agree
(4)
Strongly
Agree
(5)
PART III: LEADERSHIP IN A GLOBAL ENVIRONMENT
Please indicate the degree to which you agree/disagree with the following statements
concerning leadership challenges in your organization. On a scale of 1 to 5 where 1 is
strongly disagrees, 2 disagree, 3 neutral, 4 agree and 5 strongly agree by filling the empty
boxes by using a (√) or (X).
Statement
1.
2.
Strongly
Strongly
Disagree Neutral Agree
disagree
Agree
(2)
(3)
(4)
(1)
(5)
Supervision/Direction setting
At TNC, my supervisors are always
available
for
a
two
way
communication
My supervisors at all levels of the
organization normally understand my
feelings, needs and concerns
Common
goals
are
clearly
demonstrated by all leaders at TNC at
all levels of the organization
My superiors at TNC have fostered
and sustained commitment to
excellence at all level of the
organization
Motivation
I am happy with my pay at TNC
I am frequently consulted on matters
affecting my job
I am satisfied with other benefit
programs such as medical cover and
pension at TNC
I am happy at TNC because of the
carrier advancement opportunities
3.
Creating Teams
My organization forms teams across
diverse backgrounds
There is a deliberate attempt by
management to form dynamic teams
at my work place
Teams at my work place are easy to
work with
In my organization there is strong
sense of team work
4.
Information Management
I easily access work related
information from other divisions in
other countries
I easily access employee blogs from
other countries
77
5.
I get free access to mentors within
the organization from any part of the
world
Information is freely shared at TNC
regardless of the division
Encouraging
creativity
and
Innovation
I am offered an opportunity to try
new innovations at work
Authority to try innovations by staff
can be granted at the local TNC
office
We are encouraged to adopt local
solutions in solving work related
issues
I get a financial reward whenever I
introduce something new at work.
78
PART IV: POLITICS AND BUSINESS GLOBALIZATION
Please indicate the degree to which you agree/disagree with the following statements
concerning politics and business globalization in your organization .On a scale of 1 to 5
where 1 is strongly disagrees, 2 disagree, 3 neutral, 4 agree and 5 strongly agree where ;
by filling the empty boxes by using a (√) or (X).
Statement
1.
2.
Strongly
Strongly
Disagree Neutral Agree
disagree
Agree
(2)
(3)
(4)
(1)
(5)
Nationalization Polices
Conditions set on the maximum
number of expatriates to be employed
in certain countries discourages TNC
from fully globalizing
Restrictive fund repatriation laws
discourages TNC from venturing in
some countries
Demand for local share in the
organization discourages TNC from
full globalization
Laws limiting conservancy activities
to governments is a major hindrance to
TNC globalization
Government Stability
Frequent change of governments is a
major hindrance to TNC global
expansion
Terror attacks is a major hindrance to
TNC global expansion
Civil strife is a major hindrance to
TNC global expansion
Political coups have greatly hindered
the TNC global expansion
3.
International Relations
Poor
international
relationship
between TNC mother nation (USA)
has led to closure of some divisions in
foreign countries
Poor
international
relationship
between USA and some foreign
governments has led to limited
funding of projects in some foreign
countries
Foreign countries normally deny
registration of TNC divisions due to
their poor international relations with
the USA
Poor relations between USA and some
foreign countries has restricted
movement of TNC staff to open
divisions in some countries
79
4.
Government Bureaucracy
Too many forms filled for registration
has discouraged TNC from venturing
into some jurisdictions
Demand for responsiveness to many
layers of governments limits TNC’s
globalization
Too
lengthy
registration
of
international organizations has be a
major hindrance of globalization at
TNC
Demand for home government support
has hindered TNC from achieving full
globalization
In your opinion, kindly indicate any other political factors not listed above that limits
TNC from expanding globally
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
THANK YOU FOR YOUR TIME
80