DANISH COMPETITIVENESS
CSR as a growth driver for
Development Projects and Export to Sub Saharan Africa
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Table of content
1 CONTENTS
1.
Foreword ..................................................................................................................................................... 6
2
Introduction ................................................................................................................................................ 7
3
Problem statement: ................................................................................................................................... 8
4
Delimitation ............................................................................................................................................... 11
5
Methodology and Scientific approach .............................................................................................. 13
6
THEORY ....................................................................................................................................................... 14
7
Part 1 – Danish competitiveness & GoGlobal Assessment .............................................................. 15
8
7.1
Entrepreneurship ............................................................................................................................. 18
7.2
GoGlobal Requirements ............................................................................................................... 22
7.3
GoGlobal Assessment.................................................................................................................... 25
7.3.1
Reliability ...................................................................................................................................... 26
7.3.2
Responsiveness ........................................................................................................................... 26
7.3.3
Assurance .................................................................................................................................... 26
7.3.4
Empathy - Sustainability and CSR ........................................................................................... 27
7.3.5
Tangibles ...................................................................................................................................... 28
Part 2 - Ghana and Kenya PEST analysis in export aspect .............................................................. 29
8.1
Introduction ..................................................................................................................................... 29
8.2
Political ............................................................................................................................................. 30
8.2.1
Stability and transparency........................................................................................................ 30
8.2.2 ............................................................................................................................................................ 31
8.2.3
Presidential Election ................................................................................................................... 31
8.2.4 ............................................................................................................................................................ 32
8.2.5
Registration, taxes and Duties – Import and Export ............................................................. 32
8.3
Bribery and Corruption in the business environment ............................................................... 33
8.4
Technical Aspect of Ghana ......................................................................................................... 35
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8.4.1
8.5
ITC .................................................................................................................................................. 35
Infrastructural development ......................................................................................................... 36
8.5.1
By road: ........................................................................................................................................ 36
8.5.2
By train: ......................................................................................................................................... 36
8.5.3
By Lake Volta: .............................................................................................................................. 37
8.6
Power and water supply ............................................................................................................... 37
8.7
Port Of Tema .................................................................................................................................... 37
8.8
Economic ......................................................................................................................................... 39
8.9
Social ................................................................................................................................................. 39
8.10
Environment ..................................................................................................................................... 40
8.11
Media Landscape .......................................................................................................................... 40
9
PEST analysis – Kenya .............................................................................................................................. 42
9.1
Political ............................................................................................................................................. 42
9.1.1
Stability and transparency........................................................................................................ 42
9.1.2
Registration, taxes and Duties – Import and Export ............................................................. 44
9.1.3
AL-Shabab – Terrorists just around the corner ....................................................................... 44
9.1.4
Bribery and Corruption .............................................................................................................. 45
9.2
Technical .......................................................................................................................................... 45
9.2.1
ICT .................................................................................................................................................. 45
9.2.2
Infrastructure................................................................................................................................ 46
9.3
Infrastructure .................................................................................................................................... 46
9.3.1
Roads ............................................................................................................................................ 46
9.3.2
Railroad ........................................................................................................................................ 47
9.4
Economic ......................................................................................................................................... 47
9.5
Media Landscape .......................................................................................................................... 48
9.6
Part Conclusion: My verdict of the SSA FMGC export market. ............................................. 51
10
10.1
Part 3 – CSR Perception and Projection ......................................................................................... 52
Introduction ..................................................................................................................................... 52
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10.2
Evolution of CSR as a term ............................................................................................................ 52
10.3
Definition of Right Approach ....................................................................................................... 52
10.4
Carroll’s CSR pyramid in African context ................................................................................... 53
10.5
Measuring CSR ................................................................................................................................ 54
10.6
Triple bottom line and CSR ........................................................................................................... 56
SCA – Sustainable Competitive Advantage.......................................................................................... 57
10.7
CSR – Corporate Social Responsibility ........................................................................................ 58
10.8
CSV – Creating Shared Value ...................................................................................................... 58
10.9
The CSR “BOMB”- Building On Mutual Benefits ......................................................................... 59
10.9.1
The synergy – Designing the model .................................................................................... 60
10.9.2
Tangibles .................................................................................................................................. 60
10.9.3
Intangibles ............................................................................................................................... 61
10.10 Part conclusion – Generating value ........................................................................................... 61
11
Conclusion ........................................................................................................................................... 63
12
Retrospect ............................................................................................................................................ 65
13
desk research: ..................................................................................................................................... 66
13.1
Articles: ............................................................................................................................................. 66
13.2
Homepages: .................................................................................................................................... 66
13.3
Web based reports......................................................................................................................... 67
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Abbreviations:
CSR – Corporate Social Responsibility
SCA – Sustainable Competitive Advantage
CSV – Creating Shared Value
BOMB – Building On Mutual Benefits
IFU – Investment Fund for Developing Countries
EKF – Denmark’s Export Credit Fund
DBP – Danida Business Program
MCC – Millennium Challenge Corporation
UNCTAD – United Nations Conference on Trade and Development
DAC – Development Assistance Committee
ODA – Official Development Assistance
FDI – Foreign Direct Investment
GNI – Gross National Income
UCN – University College Northjutland
SSA – Sub Saharan Africa
KPI – Key Performance Indicator
CRM – Customer Relations Management
SCM – Supply Chain Management
SBU – Strategic Business Unit
FMGC – Fast Moving Consumable Goods
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1. FOREWORD
This report is focused on Danish growth in Sub Saharan Africa in terms of export
to retail, development projects and finally how CSR is projected and perceived.
I would like to thank the institution and teachers of UCN, especially for including
me in the African program. I would also like to thank the Danish company that
took me in as intern and for sending me to Ghana and Kenya. And thank you
for reading.
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2 INTRODUCTION
During my Bachelor in International Marketing and Sales Management I have
focused on two primary aspects that will also be the pillars of this report:
The
emerging
markets
of
Sub
Saharan
Africa
and
Corporate
Social
Responsibility.
In the internship I went through in my last semester, at a well-known Danish
trading company, I was sent to the capitals of Ghana and Kenya to conduct
two very different market analyses/reports. Both reports concerned Ghana and
Kenya; one to clarify the potentials and pitfalls of trading/exporting FMGCs to
retail and distributional channels in both East and West Africa. The other report
had me analyzing specific public governmental procurement agencies for
Ghana and Kenya with the intention of developing a CSR initiative. As a result I
was able to conclude that the FMGC export to retail market of urban SSA is very
attractive and the potential is even supported by the buying behavior with a
growing awareness and demand of higher quality goods. But on the other hand
I could conclude that CSR projects are hard to initiate and it is a challenge to
coalesce all implicated parties to the same mindset under agreeable
circumstances.
During my research I found several new articles and official reports stating that
Denmark was not competitive on exporting goods to SSA compared to other
European countries. But with my very positive experiences regarding export to
retail in Ghana and Kenya, interviewing top managers of the biggest logistic,
retail and wholesale companies and chains of East and West Africa, I had hard
time figuring out why Danish goods had so little presence in the market which
set the ground for this report.
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3 PROBLEM STATEMENT:
Ever since the late C.K. Prahalad wrote his world famous book “The bottom of
the pyramid”1 the entire business world has tuned in on the emerging markets,
like a modern gold rush where USA and China are competing for the first prize.
And lately the financial institutes of Denmark, closely followed by different
media, have been focused on the state of Danish growth and competitiveness
on foreign markets in terms of a surprisingly low export to SSA compared to most
other European countries. Also Danida, IFU and EKF have experienced fewer
applicants for developing projects and partnerships among Danish companies
and a slowly diminishing interest in investing in the emerging marketss2.
As it is Denmark is far behind on exporting to SSA and engaging in CSR activities
in SSA are also stagnate with the pending question being;
How can Denmark improve?
Despite of the magnitude of the question I would still like to address it. To do so I
have chosen to narrow it down and attack it from two specific angles that I
believe are some of the primary growth drivers for Denmark, and thereby Danish
companies, in SSA:
Exporting FMGCs and engaging in Development Projects.
To support my premature postulate whilst setting the right perspective with a
coherent approach within my chosen areas of interest, I have divided my thesis
into three parts:
A book that opened the eyes of the global business world pertaining the enormous market
potential of cheap commodities residing within the low income emerging markets
2 Stated by the director at a UCN conference
1
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Part 1) Danish Growth in SSA
First I want to assess Denmark’s competitiveness in the scope of the public
institutions behind the Danish GoGlobal collaboration - Danida, EKF, Danish
Trade Council and IFU. They are Denmark’s official public business ambassadors,
key business drivers and links between the Danish government, Danish
companies and foreign markets. With that in mind I would like to analyze and
seek to identify any coherence between the low Danish export to SSA and the
promotional and service activities managed by the members of Goglobal, both
on the foreign markets as well as domestically.
Part 2) Analysis of Kenya and Ghana as urbanized FMGC export markets
Since Denmark is behind on exporting to SSA compared to all neighboring
countries and the fact that GoGlobal is only promoting rural SSA whilst also
demanding CSR, I would like to make an assessment on the market potential of
exporting FMGCs to the tradehubs for the East and West African regions. The
assessment will be based on my internship/business trip to Ghana and Kenya
regarding export to retail and wholesale.
Part 3) Bridge the gap between the CSR market and the export market
In the last part I want to assess the purpose and general perception, or
misperception, of CSR. The goal is to submit a proposition on how I believe CSR
should be projected towards Danish companies and more importantly; how CSR
should be perceived and developed from strategy to operational initiative. I will
start with an elaboration of CSR and it’s advancement over the last decades to
get a perspective on the dominating theories and arguments that have
affected the minds of managers of today.
With that in mind I will develop my own CSR model based on some of the most
acknowledged and modern theories supported by my experience with
developing a CSR project in Ghana and Kenya. This model will be my
contribution to how CSR should be apprehended, absorbed and appreciated.
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The intention is to bridge the gap between CSR and export to SSA with a flexible
model that can benefit both CSR project development as well as export
strategy development.
Focal questions:
What can GoGlobal do to improve on Danish competitiveness in Sub Saharan
Africa?
How should Danish companies perceive Sub Saharan Africa and CSR?
How to identify growth drivers and develop a sustainable and profitable CSR
project?
Finally, is it possible to bridge the gap between CSR projects and exporting?
To combine and co-support, but also differentiate, my report and presentation, I
have chosen to use the report as a top level assessment focused on strategic
management and the strategic aspect of Danish growth based on CSR. The
presentation will be an operational/hands-on approach towards combining
CSR with exporting an actual product to Kenya and Ghana complete with
sustainable parameter-mix and more. The goal is to make a common
trading/export idea technically suitable and accepted for GoGlobal funding
and support as an export example to Danish companies by the use of the BOMB
model and hopefully tie the final knot of the idea behind the report.
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4 DELIMITATION
I will not address independent entrepreneurs or enterprises since my focus is on
governmental institutions and investment agencies of the Danish GoGlobal
collaboration: Danida, EKF, Eksportrådet and IFU. And I will only address their
activities regarding SSA, more specifically Kenya and Ghana. North Africa and
the rest of the world will not be addressed since it would be too much for me to
cover. And I will not work directly with tenders even though they are the actu
I have not conducted any interviews with IFU, Eksportrådet or EKF so all
assessments on them will be based on desk research and input from attended
conferences, I have only interviewed Lars Jøker, from Danida in Ghana,
personally.
I have not deeply researched the case of diminishing Danish applicants or
Danida projects due to the fact that UCN had a conference with the managers
from GoGlobal expressing a dire need of activity and involvement from Danish
companies..
Even though I am focusing on governmental management and growth drivers
for Danish export, I will not analyze the derived effects on the public balance of
payments or other impacts on financial public or private matters.
In terms of trading and exporting I will primarily address it in terms of FMGCs to
retail and not technology, healthcare, machinery, know-how nor alike.
The primary perspective of SSA in this report is the urban areas, more specifically
the capitals of Ghana and Kenya - Accra and Nairobi respectively.
In the SERVQUAL I have chosen to focus primarily on the promotion gap/gap 5
since the other gaps would be too much. And since a quantitative survey is too
extensive I have chosen to take the qualitative approach. The flaw in that
decision is that the assessment will be too dependent on my perception and
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prioritization of matters. But despite that some aspects are based on my own
experiences in Ghana and Kenya most included data is based on desk research
in terms of articles about the GoGlobal partners and official reports from
financial institutes and alike.
Since my internship in Ghana and Kenya was sort of an undercover job I am not
permitted to supply the transcripts. I will bring my book of Business Cards to the
examination for investigation. But to be clear I will only use the interviews as
limited empirical evidence since the meetings were under “classified”
circumstances.
In terms of my own CSR BOMB model I have not been able to fully get valid
feedback so the critique of it is left over to me – and since it is my own idea and
I think it is a good one naturally I find it hard to be critical.
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5 METHODOLOGY AND SCIENTIFIC APPROACH
As a person I have a relativistic or interpretive world perception which naturally
affects the way I project my experiences and express my opinions but also how I
relate to fact finding. To me facts depend on the eyes of the beholder and no
less the given context and circumstances. Meaning that a shovel is truly a shovel
but it can also be the cause of and injury as well as a perfect tool depending on
time, place or person.
In terms of researching I find it hard to determine when things are officially true
because with the right attitude, conviction, power of persuasion or wallet size
anybody can be right.
If anything specific I would characterize myself as a relativist, not actively
seeking the answer but still aware of the fact that any answer sought is an
answer given in beforehand at some extent. Having an idea on beforehand as I
did naturally affected the way I
my problem statement and generally
addressed data.
The way I perceive facts and truth must be characterized as utterly subjective
since I regard facts to be circumstantial, cause-related and/or context based.
Like religion and Kopi Luwak 3 - it is a matter of taste, belief and degree of
enlightenment on the matter that defines the perceived value.
3
http://en.wikipedia.org/wiki/Kopi_Luwak
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6 THEORY
In terms of analyzing and measuring GoGlobal’s efficiency I will conduct an
internal analysis and Since Danida and the other members of GoGlobal
essentially are service institutions I will analyze the service quality
Regarding marketing and promotion I will touch the aspects of promotional
ambassadors and Word Of Mouth, as a lead generator and marketing tool
regarding GoGlobal’s promotion activities.
To analyze and assess the management, service and promotion of GoGlobal I
will use the 5 dimensions of service quality from the Integrated GAP model of
service quality also known as the SERVQUAL model. I have not put in any
specific source to the SERVQUAL since it has a long history with a lot of people
working together to develop it passed the last twenty years, but the main
architects are Parasuraman, Zeithaml and Bitner. The five generic dimensions
were introduced in collaboration with Iwaarden and the model is widely
acknowledged and accredited.
In terms of analyzing the environment for the export aspect of SSA I will develop
a PEST analysis for the urban Kenya and Ghana. I will not develop a PESTEL
analysis since I find them rather alike it is only a matter of interpretation adding
or subtracting the extra E and L. The choice of PEST as external analysis is only for
having an idea of structure in assessing the subject.
In regards to CSR I will make clarify the aspects of John Elkington’s Triple Bottom
Line to measure and calculate CSR and changing corporate paradigm, Carrol’s
CSR-pyramid and Wayne Visser’s retake on the CSR-pyramid, late C.K.
Prahalad’s Bottom Of the Pyramid. I will attempt to conclude that CSR is indeed
a valuable strategy or even philosophy for a core business that will contribute to
the bottom line – if done right that is, because in the end the level of success
depends on the angle of approach.
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7 PART 1 – DANISH COMPETITIVENESS & GOGLOBAL ASSESSMENT
The last 4 of years The World Economic Forum has published an annual report
called The Global Competitiveness Report. One the global scale Denmark is
doing rather good in terms of general competitiveness. As shown in the table
below Denmark is positioned as the 8th most competitive country in the world
based on a comprehending set of indicators, in the report referred to as pillars,
concerning both political and financial stability, ease of doing business, internal
and external growth and development, innovation, infrastructure healthcare,
higher education plus more.
TABLE 1 – SOURCE: WEF COMPETITIVENESS REPORT 2012 WEB-EDITION4
As shown in the table above several of our closest European neighbors are also
present in the top ten among most competitive countries in the world but where
Sweden, Germany and Netherlands have had to take a step down the ladder,
Denmark on the other hand has had the pleasure of going up in the rankings.
This is due to three factors in particular according to the World Competitiveness
4
HTTP://WWW3.WEFORUM.ORG/DOCS/WEF_GCR_REPORT_2011-12.PDF
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report. Institutional frameworks, an excellent infrastructure for transport as well as
electricity and telephony, our higher education and training system which has
provided the Danish workforce with internationally applicable skillsets needed to
reach high levels of technological adoption, innovation and labor market
flexibility. And in the scope that we are a quite small nation with high workforce
costs it becomes clear that Denmark is doing alright. But like any other
organization nothing is perfect and all processes can be improved whether
being in terms of ease of doing business, innovation and network developing,
value
or
supply
chain
management,
export
promotion
or
strategic
development.
Below I have put in a table from a new report from Denmark’s National Bank,
showing the degree of market shares of general exported goods compared to
imports in the respective receiving countries based on an index 100 in 2005. With
a quick look at the comparisons between the given countries it is quite obvious
that Denmark is not competitive in exporting goods.
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Market shares of exported goods compared to the respective receiving
countries’ import.
TABLE 2 - SOURCE: EXCERPT FROM DENMARKS COMPETITIVENSS AND EXPORT ABILITY REPORT 2012 – SEE APPENDIX 15
Denmark has been on a downward spiral over the last decade, with only minor
insignificant upswings regarding general export at least. And when comparing
to the other countries Denmark’s development has been by far the worst thus
giving a clean sign of export inadequacy.
In a recent publication from Danish Industry 6 it is stated that Danish export
specifically to Africa was way below average. The report also published the
following table on Danish export specifically to Africa compared to other
European countries, measured in export per capita (DKr) Average of 2005 2011:
Appendix 1 Denmark’s National Bank - Excerpt from Denmarks Competitiveness and Export
ability Report 2012
6 Appendix 2 Danish Industry – Africa Potential
5
Page 17 of 86
TABLE 3 - SOURCE: DANISH INDUSTRY REPORT ON AFRICA - OCTOBER 20127
As clearly visible in the table above Denmark is not at all competitive to our
European relatives. Denmark is even below half of average of EU15, the 15 best
performing countries in Europe, which is almost worthy of the Under-PerformerOf-the-Year Award. So allegedly with all the right competencies as a country
and seemingly an agile and innovative workforce it is strange that Denmark is
still underachieving on the export market of SSA. Some indicators can be found
but not in the report from World Economic Forum since it does not seem to
cover the aspects of exporting, entrepreneurship or networking.
7.1 ENTREPRENEURSHIP
From the 12th to the 18th of November the official GEW 2012 conference took
place. GEW, Global Entrepreneurship Week, is an international annual
conference with almost 24.000 participating organizations from 115 different
countries8 inviting entrepreneurs from all over the world to come together and
create networks and develop ideas. This year Denmark was in the highlight.
7
8
http://publikationer.di.dk/di/1857362180/
http://www.gew.org.uk/about/history
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Jonathan
Ortmans,
senior
partner
at
the
acknowledged
entrepreneur
organization with base in USA - The Kauffman Foundation, and founder and
chairman of The Global Entrepreneurship Week, recently stated the following on
his blog after this years conference:
“While most European executives are very risk-averse, those in the young startup
scene seem to be managing just fine without them and recruiting similar-minded
partners and talent. The problem is that these startups are too few in number.
According to the Global Entrepreneurship Monitor 2011 Global Report, “earlystage” entrepreneurs make up just 4.6% of Denmark’s workforce (compare that
to China’s 24% and Brazil’s 14.9%). And the OECD data on new starts here in
Denmark does not look much better – showing a decline.”9
And when going into OECDs database it becomes clear that Denmark is indeed
experiencing some kind of bottleneck situation. In the table below borrowed
from OECDs it is quite evident that the light blue dotted line, which represents
Denmark, is rather low in the diagram.
New enterprises, selected countries,
Number of new enterprises, trend cycle, 2006=100
http://jonathanortmans.com/2012/11/denmarks-leadership-the-outlook-for-europes-startupscene/
9
Page 19 of 86
TABLE 4 - SOURCE: OECD DATABASE10
The table clearly shows that the amount of new enterprises and thereby new
active entrepreneurs is below 100 per year and given that Denmark is still
among top ten of Competitive countries in the world the state and mindset of
Danish entrepreneurs seems to be one of the factors affecting the growth
development negatively since the two factors are practically opposites.
This opinion is supported by an article brought in Mandag Morgen d. 19/11/2012
with the title “Fewer Entrepreneurs Means Fewer Workplaces”11, stating that the
diminishing export and low entrepreneurial activity is also causing jobs to
disappear slowly sending Denmark into a downward spiral. To work against that
development requires an insight into what it is that affects the entrepreneurial
spirit and motivation.
Erhversstyrelsen in Denmark annually publishes an online report as the likes of
GEW, on Danish Entrepreneurship. This year they developed a framework to
support entrepreneurship in Denmark with a model to identify and highlight the
http://www.oecd.org/std/entrepreneurshipandbusinessstatistics/businessstartupratesdivergingacrossoecdeconomies.htm
11 https://www.mm.dk/f%C3%A6rre-iv%C3%A6rks%C3%A6ttere-giver-danmark-f%C3%A6rre-job
10
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areas where entrepreneurs experience roadblocks or pitfalls when developing a
project in Denmark12.
The closing comment of the model being that it is especially in terms of
insufficient competencies and distorted culture among Danish entrepreneurs
that is the biggest problem. But in the Ease of Doing Business Index 201313, where
Denmark remains the official 5th easiest country in the world to do business in,
several parameters have changed and sadly not for the benefit of
entrepreneurs as shown in the table below.
TABLE 5 - EXCERPT FROM WORLD BANK’S DOING BUSINESS 201314
Starting a business, which is the key indicator regarding entrepreneurship, has
dropped a surprisingly 3 points or 30 percent points, clearly affecting the
motivation and acceleration of entrepreneurial activities. Also the parameter of
Investor Protection has dropped, meaning that getting loans and funds
See appendix 3 for a full overview. Can also be found under Sources; online reports.
Annual report by The World Bank assessing the ease of doing business in the 142 most
developed countries
14 http://www.doingbusiness.org/data/exploreeconomies/denmark/
12
13
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becomes harder for entrepreneurs due to perceived higher risks for loan giver.
Contract Enforcing and Insolvency Resolving have also dropped a point which
ultimately affects the contractual development between parties implicated in a
project seeking a loan.
So it is not only the entrepreneurial spirit that is soulless but the framework that
should support it is also inadequate. In my perception a soldier, in this case the
entrepreneur, is only as strong as he is trained and only as well-equipped as his
superiors have sought to. So rather than assessing the role of entrepreneurs I
want to analyze the role of the mentor, being the state of Denmark in the sense
of the GoGlobal members with their focus on SSA, CSR and Export which are the
three pillars of my report.
Since Danida, EKF, IFU and the Danish Trade Council actually are the official
service providers of foreign market entry and export assistance, country and risk
analysis along with funding and general consultancy, it seems only fitting to
analyze the primary services that they develop. But due to my schooling in
marketing management I will assess it in a strategic marketing scope. To put the
development of given services in perspective I have chosen to use the
integrated gap model, also known as the SERVQUAL 15 analysis, as a guiding
framework. But before assessing the different gaps within the SERVQUAL model I
will look at the general requirements that the GoGlobal partners has set towards
partnerships and potential funding or loans.
7.2 GOGLOBAL REQUIREMENTS
EKF, Danida and IFU are the supporting partners that finance the majority of the
Danish development projects being executed outside of Denmark and until a
few years ago danish tenders were reserved for danish companies but since
Denmark joined the EU directive of open tendering IFU and Danida has
experienced a drop in Danish applicants. Last year at UCN we had the director
15
See Appendix 4 – SERVQUAL model
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of IFU speaking at a conference saying that IFU was not doing as good as earlier
and was in need of a reform. This was related to their own rules and regulations
and they needed to change he said and he was speaking on the behalf of
GoGlobal. Since then all 4 members of the GoGlobal has implemented CSR
strategies, policies and evaluation parameters. Danida has shown some
progressiveness in the way they evaluate their incoming applications and
requests for projects and partnerships. Today all applications and potential
projects are evaluated in the view of Danida’s own model depicted in the
figure below:
TABLE 6 - FIGUR 1 - DANIDA'S CIRCLES OF PROJECT EVALUATION - TAKEN FROM DANIDA'S HOMEPAGE16
This model is what Danida uses for measuring the value and connected risk
amongst all applications and applicants. The circle titled “Increase productivity
and reduce costs” is hardcore business, but most of the other circles like “Adapt
16 http://ghana.um.dk/en/~/media/Ghana/Documents/Requirements20September202011ashxas
hx.jpg
Page 23 of 86
new business models and engage with the poor” and “Partner with local
companies and organizations to build capacity among workers” are both
demanding social engagement and corporate responsibility. As described in
the yellow box innovative solutions to social and environmental issues are
favored. So in the end it all comes down to the correct way of perceiving and
describing a project with the right humanitarian and value driver coherence,
and then projecting that image to fit into the CSR machinery of Danida and IFU.
This model is also an evidence of Danida’s focus on sustainability and CSR, but
the signal value it sends makes
During my visit to Ghana I spoke with Lars Jøker, Head-Coordinator for Danida
Business Program Ghana, and he stated that Danida was still not efficient
enough and
that
they needed
to
again attract the attention and
entrepreneurial spirit of Danish companies. Today Danida’s loaning system has
been slightly reconfigured into two different contract types – large contracts of
500.000 to 900.000 small contracts from 250.000 to 500.000 and they both receive
smaller grants and thereby have to pay back a larger amount in terms of paying
back the loan over time but the most substantial change has been the core
implementation of CSR into the corporate structure as well as funding
requirement standard. A simple overview of Danida’s loan and grant structure
can be found in appendix 517, which also contains contains a short pdf with
Danida’s official requirements and a short pdf of the Ghana specific SPSD II
program by Danida.
Given that Lars Jøker, Danida Business Program Manager Ghana, said that
Danida would never finance any kind of normal trading or ordinary business
initiative, it is crucial to develop and promote projects to enforce the general
infrastructure, empowering governance, strengthening rural finance, improving
ICT and the general competitive edge of Ghana or Kenya for that matter if
17
Appendix 5 – Danida Requirements, loan and grant structure and SPSD II program
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applying for funding. To achieve funding from Danida, EKF or IFU a project has
to empower the local population in a selection of specific matters like in
Danida’s circles presented on last page. As it is Danida does not support more
than maximum 900.000 kroner per project normally. IFU, the Danish investment
fund for developing countries can provide loans up to the sum of 100 million
kroner. A visual example can be found in appendix 618.
7.3 GOGLOBAL ASSESSMENT
To assess the promotion of GoGlobal I decided to use the SERVQUAL model of
measuring service quality as springboard and focus on the 5th gap primarily,
since the 5th gap, of 7 in total, is known as the promotion gap which focuses on
the gap between Expected Service and Perceived Service. Besides that the
model also consists of these 5 dimensions that are used to assess the 7 gaps:
TABLE 7 - SOURCE: ADAPTED FROM ZEITHAML & BITNER, SERVICE MARKETING (MCGRAW HILL 2000)
18
Appendix 6 - IFU
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7.3.1 RELIABILITY
During my bachelor degree, with focus on the sub Saharan countries of Africa,
we had several lectures from various people with experience from different parts
of SSA. We were told about extreme market potentials mixed with the term
“Ghana Maybe-time” one too many times, in the same breath as African
people being generalized as lazy thieves. The latter might be true in some
aspects but it is not how it is generally – far from it. Ultimately it projects the
wrong image of Africa in terms of doing business, directly affecting Danish
companies incentives to explore the African markets and thereby the
motivation of entrepreneurs and evidently the competitiveness of Denmark.
7.3.2 RESPONSIVENESS
Networking is also one of the most important growth drivers but it is still a factor
that is quite intangible and therefor hard to measure in terms of impact and
volume.
But
business
conferences,
joint
ventures
and
entrepreneurial
partnerships are strong contributors to networking and entrepreneurial activities.
7.3.3 ASSURANCE
The 11th of June 2011, Berlingske newsmagazine published an article revealing
that IFU and Danida were playing with tax workarounds with their funds 19. Also
Danida was in Operation X20, a Danish television show on a mission to uncover
fraud, accused for cheating with the funding of projects. And thus severely
hurting their own images of transparency which affects the perceived value
and degree of trust gained from Danish companies.
http://www.b.dk/nationalt/flere-danske-fonde-bruger-skattely-0
http://tvtid.tv2.dk/nytomtv/article.php/id-50947226:operation-x-afsl%C3%B8rerdanidasvindel.html
19
20
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7.3.4 EMPATHY - S USTAINABILITY AND CSR
It is no secret that Denmark is a huge contributor of foreign aid. On a global
level Denmark is the 4th biggest contributor to foreign aid when measuring per
capita as shown in the table below. And for many years we have had public
and private funding channels and social events even aid subscriptions and
Christmas presents.
TABLE 8 - ADAPTED FROM OECD DATABASE 2012 - HTTP://DATA.WORLDBANK.ORG/INDICATOR/DT.ODA.ODAT.PC.ZS
And there is a reason that Denmark and the other countries are financing aid in
what can seem to be large sums. The black line at 0.7 is the UN Target, which is
set for all OECD countries as a goal to reach as a part of the Global Compact
program21. As it is Denmark is well above as Denmark strives to profile itself as
fully CSR adapted. And if a country exceeds the goal it is a strong signal saying
that we are socially aware and responsible as a country, evidently it has a hint
of philanthropic spin. But as a society Denmark is built on strong ethical beliefs
21
http://www.unglobalcompact.org/ - Global CSR initiative
Page 27 of 86
of equality, mutual responsibility and respect of humanitarian rights, and that
mindset is also easy to identify in the policies of Danida.
7.3.5 T ANGIBLES
As far as tangibles go IFU, EKF, Danida and Danish Trade Council all develop a
lot of publications promoting different programs and market possibilities. As an
example EKF has provided the latest initiative, which is the Vitus Vækst
Program 22 , where one of the requirements is to have between 5 and 150
employers to be suitable for the export program, which by the way also costs
almost 85.000 Danish kroner. It is quick to determine that this does not fit new
entrepreneurs. And with an entrance fee of 85.000 even medium-sized
companies might be reluctant to participate.
Part conclusion
To follow up on the gap between Perceived Service VS Expected Service it is
very clear that it is Denmark’s projection and perception of Africa that is not
keeping up-to-date with Africa’s market development. With Denmark as one of
the most competitive markets, a strong foundation for entrepreneurs and an
relatively easy access to funding the issues with entrepreneurial inactivity seems
to be caused by a general misperception of SSA among Danish companies and
GoGlobal’s failure of communicating the real value of SSA towards Danish
companies.
22
See Appendix – Vitus Vækst
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8 PART 2 - GHANA AND KENYA PEST ANALYSIS IN EXPORT ASPECT
8.1 I NTRODUCTION
From Danish competitiveness and GoGlobal to export to Sub-Saharan Africa.
PEST analysis – Ghana
TABLE 9 - SOURCE: HTTP://WWW.DOINGBUSINESS.ORG/DATA/EXPLOREECONOMIES/GHANA/
The closer to the core the better the business circumstances and as it is clearly
visualized Ghana has one of the most stable business environments in all Africa.
Page 29 of 86
8.2 POLITICAL
8.2.1 STABILITY AND TRANSPARENCY
It is important to empathize that Ghana is the key trade-hub in West Africa. The
cities of Accra, Tema, Kumasi and Takoradi are clearly not for tourists but for
expanding companies, traders and sales agents. The business environment in
Ghana has experienced an increasing cooperation between various cross
national, regional and international organizations and associations to develop
the West African countries in terms of political, infrastructural, technical, human
and financial growth and stability. The most significant amongst the local
departments and agencies are:
GIPC
– Ghana Investment Promotion Centre
ECOWAS
– The Economic Community of West African States
AGI
– Association of Ghana Industries
ICA
- Infrastructure Consortium of Africa
GQO
– Ghana Quality Organization
WTO
- World Trade Organization
GFZB
– Ghana Free Zones Board
All these departments are actively working to better the business environment in
West Africa along with its associated partner-countries. The problem with the
implementation and core efficiency lies in the fact, that all these departments
are managed by the various governments and thus is the victim of some degree
of corruption and lack of transparency. This is where private companies should
anticipate some setbacks but nonetheless still look for supporting information
since many of these governmental bodies are mandatory to work with if
building a business in Ghana or other West African countries.
September last year the government of Ghana signed a contract with an
Page 30 of 86
United States Government organization, concerning Open Government
Partnerships 23 – An initiative which sole purpose is to improve government
transparency, reliability, accessibility and accountability. The means to get there
is by implementing ICT, shortening process periods and making all governmental
issues publically shared and attainable. If respected and abided by, this
initiative will strongly improve the political stability as well as the fundamental
trust between population and government and subsequently minimize the
degree of corruption.
8.2.2
8.2.3 PRESIDENTIAL ELECTION
According to Business Monitor International, “we should expect Ghana to be a
major economic outperformer over the coming years on both a regional and
global level – a view that looks even stronger with the onset of domestic oil
production. With a solid backdrop of political stability, which is especially
important in West Africa, following a succession of, by all accounts, peaceful
democratic transitions, Ghanaians are going to get a lot richer over the next few
years. This bodes well for poverty levels and income inequality – both of which
currently exert a drag on Ghana’s political risk ratings”.24 The general population
in Ghana has shown a will to develop and has steadily grown in democratic
stability during the past elections and changes in government, even when
former president Atta Mills died everything went by calm and peacefully without
affecting the business environment. But one should still be aware that elections
in Ghana, despite of the public order and democratic approach, often takes a
lot of focus and resources, resulting in a wide array of election inspired
advertisements and banners throughout the city-scape supported by a lot of
airtime in almost every single radio station. This makes it harder and more
expensive to promote ones products and reach out to get the attention of the
23http://www.opengovpartnership.org/countries/ghana
24Meamonitor.com
– Business Monitor International - Vol 12 Issue 8 August 2011 - Ghana
Page 31 of 86
buying segment, especially if entering the market with new products wanting to
create awareness and brand-recognition.
8.2.4
8.2.5 REGISTRATION , TAXES AND DUTIES – I MPORT AND EXPORT
The government of Ghana has through the years taken a lot of legislative
actions to accommodate economic growth as country and population in
different ways. On one hand there has been a huge focus on attracting foreign
investors and international companies and making it possible for them to
develop and expand their markets in Ghana. On the other side the government
has initialized several protective legislations like the requirement of a
local/national ownership or management and also various import duties and
clauses depending on country of origin.
The destination inspection companies (DIC) licensed by the Ghanaian
government account for the longest delay in import clearance. A 2008 study on
port fees revealed that, out of the total transaction time of 69 hours for import
clearance, destination inspection accounts for 45 hours. Ghana Customs has
established a Customs Management System (CMS) to take over the valuation
and classification of imported goods from the DICs. The new system is expected
to reduce the time for import clearance because key steps associated with
customs entry processing, payments, and clearance will be automated whereas
under the current system hard copies of documents are physically submitted to
the offices of the DICs.
Ghana has issued its own standards for most products under the auspices of its
testing authority, the Ghana Standards Board (GSB). The GSB has promulgated
more than 343 Ghanaian standards and adopted more than 1,362 international
standards for certification purposes.
The GSB requires that all food products carry expiration or shelf life dates and
requires that the expiration date at the time it reaches Ghana should be at least
two-thirds the shelf life. Goods that do not have two thirds of their shelf life
Page 32 of 86
remaining are seized at the port of entry and destroyed. Questions have been
raised regarding the consistency of this requirement with the Codex Alimentarius
Commission General Standard for Labeling of Pre-packaged goods.25
8.3
BRIBERY AND CORRUPTION IN THE BUSINESS ENVIRONMENT
– The lower the CPI rate the higher the level of corruption. The Corruption
Perception Index26, that rates the perceived levels of corruption in 183 countries,
estimates the value of Ghana CPI to have dropped from an estimate of;
4.1 in 2010 (number 62nd) to 3.9 in 2011 (number 69th)
This is a mediocre to low position especially compared to Denmark in top with a
9.3 rating due to very little corruption. But despite the fact that the corruption
seems to get worse, Ghana is seemingly doing better than all surrounding
countries in West Africa. To put it in perspective; Togo, Ivory Coast and Burkina
Faso are rated 2.4, 2.2 and 3.0 respectively, so in the midst of it all Ghana is
actually trying to improve and is actually perceived to be less corrupt in
comparison to i.e. “old” members of the EU like Italy or Greece. Even when
compared to the world’s largest economies/markets of Brazil, China and India,
Ghana is evaluated to be more honest and transparent in its business
environment. Even though, with a quite low score, Ghana is perceived as a
country with a certain presence of bribery and corruption and this is a wellknown problem for many of the emerging countries where growth is taking its
toll. To work against the development of corruption several initiatives have been
established. Several actual laws have been developed to create sets of
standards of what to expect from government officials and how to conduct
excerpt from The Office of the United States Trade Representative
http://www.ustr.gov/sites/default/files/Ghana_0.pdf
26 http://cpi.transparency.org/cpi2011/results/
25
Page 33 of 86
ones official obligations without discriminating ones societal responsibilities.
Removing bribery and corruption is also a very popular political selling-point due
to its strong support from the public opinion.
GACC – Ghana Anti-Corruption Coalition
-
An organization made of private, public and civil society groups actively
working against corruption in the government27 of Ghana with a strong
collaboration with other ECOWAS countries for a cross national effort.
-
Underneath are all the programs, initiatives and collaborations that GACC
is involved in. A description of each can be found on GACC’s
homepage28:
WACMP – West Africa Contract Monitoring Programme
BIPFAC – Building Partnerships in the Fight Against Corruption
MCGAPC – Monitoring Corruption & General Anti-Corruption Process
TICP – Training & Institutional Capacity Building
ACAPC – Awareness Creation & Advocacy for Policy Change
SID – Secretariat Institutional Development
GII – Ghana Integrity Initiative
“The residual effects of a highly regulated economy and lack of transparency in
certain government operations create an added element of risk for potential
investors. Entrenched local interests sometimes have the ability to derail or delay
new entrants, and securing government approvals may depend upon an
applicant’s local contacts”.29
http://www.ghana-anticorruption.org/
http://www.ghana-anticorruption.org/programmes.php
29 excerpt from The Office of the United States Trade Representative
http://www.ustr.gov/sites/default/files/Ghana_0.pdf
27
28
Page 34 of 86
With a lot of different initiatives and governmental bodies to apprehend the
development of corruption in government, one might wonder how come
Ghana is going back in the ratings of the CPI –> It all boils down to poor
implementation, lack of transparency, inadequate documentation and
insufficient control of the established forces and acts, which all can be
improved once the government implements proper ICT.
8.4 TECHNICAL A SPECT OF GHANA
8.4.1 ITC
Despite of an extremely well developed mobile-industry in Ghana, most
government offices have yet to implement PC’s and intranets. In many cases
the documentation and filing is managed by handwritten pieces of paper
stored in old-school file cabinets. Not suitable when you have a lot of different
cases pending. Many foreign companies have experienced huge setbacks
when awaiting approval of a simple application in any given ministry.
TABLE 10 - CELLULAR PHONES IN GHANA30
The amount of cellular phones in Ghana is very big – close to 18 million cellular
phone users in Ghana in 2010. Almost every single person has a cellular phone or
30
Page 35 of 86
even two and the network providers are far ahead of European standards in
terms of technical and financial services including phone banking, easy and
free of charge money transferring, credit management, easy access to
Facebook and Youtube and internet in general. So despite of the low frequency
of household PC’s the Ghanaian people has no problems connecting with the
global web societies from their phones. Most importantly these tables are now
two years old and compared to the rapid growth in both technology and
buying power the last 5 years, we can safely anticipate a much bigger
percentage of household PC’s and even more phone users today too.
8.5 INFRASTRUCTURAL DEVELOPMENT
One of the biggest issues when working with Africa, and Ghana is no exception,
is the state of the infrastructure. The main roads in the capital are adequate but
this only pertains to the main roads. General inner city distribution can be very
challenging. Distributing goods up-country and outwards from Ghana leaves
three options:
8.5.1 BY ROAD :
Another big issue regarding infrastructure and its lack of efficiency is the amount
of checkpoints and the following time loss and bribery costs. Appendix X is a
map showing the frequency and type of control points to expect throughout
West Africa. Truck and driver requirements with more specifics on the road
conditions can also be found in the appendix31.
8.5.2 BY TRAIN:
The railroad of Ghana has not been kept up to date. There have been several
attempts to revive the railroad but due to the fact that the railroad is limited to
Ghana only, with no entries into surrounding countries, makes it rather
redundant compared to the alternatives. Still the railroad can be used to
transport heavy machinery to very few remote areas inside Ghana.
31
See Appendix “Drivers Guide to Ghana”
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8.5.3 BY L AKE VOLTA:
The waterway of Lake Volta is a potential alternative to transportation by roads.
Two years ago Danish entrepreneurial company Grontmij A/S, former Karl Bro,
was funded by MCC – Millenium Challenge Corporation, to develop the
waterway transport opportunities of Lake Volta32. They expanded and improved
the efficiency of the docks along the river while VRA – Volta River Authority,
instated better vessels. This is a more secure and time-wise stable way of
transporting goods inland33.
8.6 POWER AND WATER SUPPLY
The general supply of power and water in Accra and Tema is quite sporadic.
Often there is no water because somebody might have tapped your water tank
or it has simply vaporized by heat or the supplier of water is unreliable, but more
important; many electricity outages, which makes it very hard to communicate
and in many cases even get any work done. Therefore it is crucial to be selfsufficient in as many ways as possible as focal company, but also to expect it
from the up and down stream parts of the supply-chain regarding all potential
partners like raw-material providers, warehouses or distributors. In short – it is wise
to develop a self-sufficient contingency plan when working in Africa. Also when
establishing partnerships with e.g. a warehousing provider it is important to make
sure that your products are safe and, if frozen goods, remains frozen despite of
power shortages. Many low practical issues arise when electricity disappears.
8.7 PORT OF TEMA
As stated by Mr. Naved Zafar, Managing Director of Maersk Ghana, the port of
Tema suffers severely from technical and physical limitations at least as much as
32
33
http://npinvestor.dk/boersmeddelelser/erria-a-s-nr-05-2008-2-248356.aspx
See appendix ”Lake Volta Ferry Capacity”
Page 37 of 86
it suffers from corruption and implied patronage for quicker processing and
clearing as expressed by Mogens Mathiassen at a conference at UCN.
TABLE 11 – TEMA PORT ACTIVITY - HTTP://GHANAPORTS.GOV.GH/GPHA/TEMA/MORE_STATS.PHP
A very clear example of the practical inadequacy is the fact that Tema Port
only has one cargo scanner available. This means that only one container can
be serviced at a time which is simply too inefficient when looking at the growth
in imports over the last 10 years presented in the table above. And with a
growing port-activity it will become very hard to keep up with demand. As
shown below the activity in the ports of Ghana is steadily rising, but the facilities
have yet to be updated. This is now an actual bottleneck problem in regards of
getting goods cleared through customs that will also affect and empower the
possibility and motivation to bribe the port-managers to get first through
customs.
Frequent backlogs of cargo at the port hurt the business climate. The Customs
Service phased in an automated customs declaration system that was
established in the last quarter of 2002 to facilitate customs clearance. Although
the new system has reduced the number of days for clearing goods through the
Page 38 of 86
ports, the desired impact has yet to be realized because complementary
services from government agencies, banks, destination inspection companies,
and security services have not been established.
8.8 ECONOMIC
Start business in Africa can be a challenge for European companies because of
development situation in the country. According to the Ease of Doing Business
Index, Ghana is one of the most accessible African markets.
Over the many years, starting business in Ghana has been getting easier.
Comparing 2004 with 2012 the number of procedures per year decreased from
11 to 7, time for registering has decreased 10 days – from 22 to 12, and the costs
of procedures decreased 78.5 percent ( from 80.5 % to 17.3 % per capita).

GDP is growing year to year. In 2012 it is more than 402 USD per capita.
During the 2011-2012 economic grew almost 13.4 % because of export of
oil revenues. Moreover, the biggest part of GDP is contributed by service
sector (51.4 %) and it was the fastest growing sector in 2010.

Consumer price index in 2012 June, consumption index was 9.5 %.

Ghana imports in the fourth quarter reached the volume of 4392 Million
USD. Imports into Ghana are mostly FMGCs, capital in terms of FDIs,
hardware and industrial supplies. The main importers in Ghana are China,
United States, Belgium, United Kingdom and France as seen in part 1
assessing Danish export.
Ghana exports in 2011 fourth quarter were 2989 Million USD. Gold, cocoa, beans
and timber products are the main Ghana’s exports. Countries such as
Netherlands, Burkina Faso, South Africa and United Kingdom are the main export
partners in Ghana.34
8.9 SOCIAL
34
http://www.tradingeconomics.com/ghana/exports
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Population in Ghana increased to 25.24 million (July 2012) and growth rate is
1.8%, which shows that population is growing very fast in the same way quantity
of consumption. There are 36.5 % of 0-14 people, 60 % 15-64 years, where
number of female and male is almost equal, the rest of population is 65 and
over (3.6%). 35The working force is the biggest in population, but in the same way
unemployment rate is 11%. Minimum wage is 81 USD.36
8.10 ENVIRONMENT
Ghana faces a huge problem with collecting and processing waste. Accra and
other Africa cities generate 80 % organic waste; 10% plastic, glass and metal
waste and less than 12 % paper waste per day. Most of this waste is not properly
collected in a safe and healthy manner. Ghana has major waste management
and disposal problem that can be a deterrent to economic development.
Companies, coming to the Ghana market should take into account how they
could be eco-friendly to the environment and recycle waste of their production.
There could include in their CSR policy to keep land clean.
8.11 MEDIA LANDSCAPE
Internet and Facebook users in Ghana 201237:
http://www.indexmundi.com/ghana/demographics_profile.html
http://www.mywage.org/ghana/home/salary/minimum-wages/minimum-wage-timeline
37 http://www.internetworldstats.com/stats1.htm#africa
35
36
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Table 12 - http://www.internetworldstats.com/stats1.htm#africa
As depicted in the table above it is safe to say that the internet and the social
media is growing rapidly in usage making the platforms even more interesting in
terms of promotional platforms. Today social media is the strongest WOM
generator and thereby lead converter. It runs in real-time and the level of user
interactivity is entirely up to the focal company using the platform. Proving that
internet and especially the social media is a valuable channel and asset to any
company advertising in Ghana.
Reporters Without Borders (RSF) ranked Ghana at 41th (out of 179 countries) in its
2012 global Press Freedom Index, achieving some of the best rates in Africa 38.
The press freedom is a good indicator of the religious, promotional and political
freedom in the country. Ghana enjoys a high degree of media freedom and the
private press and broadcasters operate without significant restrictions meaning
that the media are free to criticize the authorities without fear of repercussions.
Radio is still Ghana's most popular medium, although it is being challenged by
increased access to TV with the rising group of middle income families.
See the appendix39 for details about different media channels and promotional
possibilities.
http://en.rsf.org/IMG/CLASSEMENT_2012/C_GENERAL_ANG.pdf - Reporters Without Borders
2012 Press Freedom Index
39 Appendix Media Landscape for Africa
38
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9 PEST ANALYSIS – KENYA
TABLE 13 - HTTP://WWW.DOINGBUSINESS.ORG/DATA/EXPLOREECONOMIES/KENYA/
In the table above it is obvious that the business environment is getting worse, or
at least that other countries are progressing quicker. Getting credit is quite easy,
but both West and East Africa has experienced a boom in the banking industry
with pan-african banks establishing offices a lot of places.
9.1 POLITICAL
9.1.1 STABILITY AND TRANSPARENCY
Just like Ghana is the key trade-hub in West Africa, so is Kenya the trade-hub
into East Africa.
The business environment in Kenya has experienced an increasing cooperation
between various cross national, regional and international organizations and
Page 42 of 86
associations to develop the East African countries in terms of political,
infrastructural, technical, human and financial growth and stability. The most
significant amongst the local departments and agencies are:
Comesa
- Common Market for Eastern and Southern Africa
EAC
- East African Community (including Customs Union)
KEBS
- Kenya Bureau of Standards
KRA
- Kenya Revenue Authority
WTO
- World Trade Organization
KPA
- Kenya Ports Authority
ACP/EU
- Cotonou Partnership Agreement
All these departments are actively working to better the business environment in
West Africa along with its associated partner-countries. The problem with the
implementation and core efficiency lies in the fact, that all these departments
are managed by the various governments and thus is the victim of some degree
of corruption and lack of transparency. This is where private companies should
anticipate some setbacks but nonetheless still look for supporting information
since many of these governmental bodies are mandatory to work with if
building business in Ghana or other West African countries.
The private companies that I visited all had implemented PC’s and intranets.
In September last year the government of Ghana signed a contract with an
American
organization,
supported
by
the
United
States
Government,
concerning Open Government Partnerships40 – An initiative which sole purpose
is
to
improve
government
transparency,
reliability,
accessibility
and
accountability. The means to get there is by implementing ICT and making all
governmental issues publically shared and attainable but most important
documented and registered. If respected and abided by, this initiative will
40
http://www.opengovpartnership.org/countries/kenya
Page 43 of 86
strongly improve the political stability and subsequently also affect the
Corruption Perception Index positively and thus positively affecting the business
environment.
9.1.2 REGISTRATION , TAXES AND DUTIES – I MPORT AND EXPORT
When importing goods into Kenya, there are several requirements in terms of
registrations, forms and applications to fill out before being able to actually
import the goods. A step-by-step guide with a flowchart illustrating how to
approach Kenya as an importer can be found in the appendix41. Entering the
Kenyan market requires VAT registration and comes with excise duties
depending on the classification of the imported goods42.
Also when importing into Kenya it is legally required to fill out a selection of
specific applications - Follow these links to find all applications at KRA’s
homepage:
http://www.kra.go.ke/index.php/downloads/customs-downloads/customsdownloads
http://www.kra.go.ke/index.php/customs-services/downloads/eac-forms
9.1.3 AL-SHABAB – TERRORISTS JUST AROUND THE CORNER
Despite of the fact that Nairobi, capital of Kenya, seems very calm and
peaceful, one should still be aware of the pending threat that resides within the
presence of the African version of Al-Queda; Al-Shaabab in southern Somalia43.
This area has been very insecure for some years with incidents of pirating,
abductions, bombings and gunfights on daily basis. The Gulf of Aden is the
waterway for transporting goods from Europe to East Africa, whereas the
Arabian Sea is where ships will cross from Asia and middle-east – Both of them
41
42
43
Appendix – Step by step Guide to Import to Kenya
HTTP://WWW.PWC.COM/EN_RW/RW/PDF/EAST-AFRICAN-TAX-GUIDE-2011-2012.PDF
http://topics.nytimes.com/top/reference/timestopics/organizations/s/al-shabab/index.html
Page 44 of 86
are just at the coastline of Somalia where the presence of Al-Shaabab is by far
the strongest. Due to that threat the East African communities have joined in
forces and established the EA “Peacekeepers”, who have done a very good
job along with Kenyan militia in collaboration with Somalian militia. Despite of
the threat seemingly growing smaller it is still a very serious matter to take into
consideration when shipping goods past Somalia – one should expect high
insurance prices and maybe even fear and direct reluctance towards
transporting goods in that area.
9.1.4 BRIBERY AND CORRUPTION
– The lower the CPI rate the higher the level of corruption. The Corruption
Perception Index44, that rates the perceived levels of corruption in 183 countries,
estimates the value of Kenya CPI to have dropped from an estimate of;
2.2 in 2010 (number 154nd) to 2.2 in 2011 (number 154th)
The perceived level of corruption experienced a minor improvement from the
year before but still has a rather bad rating on the full index. Kenya remains to
be the victim of governmental bureaucracy in many aspects even despite of
several initiatives, laws and governmental bodies working against corruption. But
being surrounded by countries like Somalia and Ethiopia with very bad scores,
Somalia actually the worst of all, makes it very hard to create results.
9.2 TECHNICAL
9.2.1 ICT
Just as in Ghana the information technology has exploded the last 5 to 10 ten
years. But in Kenya you can see that over 10 million people, or approximately
25% of the entire population, have access to a PC in 2010 which means even
44
http://cpi.transparency.org/cpi2011/results/
Page 45 of 86
more today. And the cellular phone users are up at 25 million people thereby
simply exceeding the population.
9.2.2 I NFRASTRUCTURE
The roads in Kenya are just like in any other African country = quickly improving
in the most urbanized areas but still scarcely inadequate in the rural areas. The
three main roads in Nairobi have all been undergoing reconstruction; Thika
Road just finished and was officially opened the first of November this year,
Langata Road is currently in development and is supposed to be ready around
March next year, just before the next election, and Mombasa Road is also to be
improved. All the contracts for improving the infrastructure have fallen in the
hands of Chinese construction companies. As soon as the entire road grid is
optimized the inner city congestion in Kenya will drop severely and thus
improving the efficiency of general distribution which ultimately will spare
resources and lower costs in terms of shorter lead times, less gas consumed per
truck and also smaller costs for drivers individual salary when not wasting
important “transit” time in traffic.
9.3 INFRASTRUCTURE
At first hand it seems like Kenya has a quite well developed infrastructure. But
spending 4 hours almost every day to drive 5 kilometers through the inner city
proves that congestion is as valid problem in Kenya that affects the logistic
efficiency for everybody. But all the main roads are under construction to ease
the traffic from the inner city.
9.3.1 ROADS
In the urban area the focus is on developing the infrastructure to minimize the
congestion, but in the rural areas you will find mostly dirt roads. Follow the link
beneath to find classification and description of all the roads in Kenya.
http://www.kenha.co.ke/index.php?option=com_content&view=article&id=46&
Itemid=54
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9.3.2 R AILROAD
Far from adequate – it has not been managed properly for over a decade,
lacks funding and travels at very low speed due to the poor maintenance of the
railroad and has lost most costumers to the strong competition provided by the
matatu taxis. 45 At this state it is no use for transportation of FMGC’s but the
official plan is to develop the railroad grid both for people as well as goods over
the next couple of years, but until it is completely finished there is no value in
using the railroads for transporting goods.
9.4 ECONOMIC
In economies around the world, trading across borders has become faster and
easier over the years. Governments have introduced tools to facilitate trade—
including
single
windows,
risk-based
inspections
and
electronic
data
interchange systems. These changes help improve the trading environment and
boost firms‘ international competitiveness. Kenya extended the opening hours of
customs and port authorities and reduced the number of inspection points
between Nairobi and Mombasa. It also introduced an electronic system
allowing traders to submit their documents online. Kenya speeded up trade by
implementing an electronic cargo tracking system and linking this system to the
Kenya Revenue Authority‘s electronic data interchange system for customs
clearance.
45
http://www.bbc.co.uk/news/world-14151372
Page 47 of 86
Talking about economic data in the country, GDP growth rate in 2011-2012 was 5
% and the same growth is forecasting for year 2013. GDP per capita in 2011 was
reported 476.88 US dollar. In the table below you can see how this increasing or
decreasing during the period 2002-2012.
Population in Kenya is 41.61 million people which increased 2.63 % from 2010.
Unemployment rate is huge reaching a level of 40% in 2011. While from 1999 to
2011 average unemployment rate was 22.43 %. This shows that there are many
people under poverty and have low buying power. The reasons for such a huge
unemployment are rapid population growth rate in Kenya which is generating
rapid growth in the labor force. Also inappropriate education system doesn’t
prepare people for the jobs, which are available in the country. Seasonal nature of
labor demand, imperfection in the labor market and others reasons grow
unemployed amount of people in Kenya.46 But despite this fact, middle class in the
country is slowly growing and in the same way their buying power.
9.5 MEDIA LANDSCAPE
Depending on the target group and area there are several very tangible
opportunities of direct target promotion; concerning billboards, radio, internet and
TV. In appendix 1 there is an overview of the various possibilities in terms of
directing demographic and geographic targeting.
Reporters Without Borders (RSF) ranked Kenya at 84th (out of 179 countries) in its
2012 global Press Freedom Index. The press freedom is a good indicator of the
promotional freedom in the country also.
Television is the main news source in cities and towns. The spread of viewing in rural
areas has been slower, hampered by limited access to mains electricity. A
switchover to digital TV is slowly under way. The main satellite pay-TV platforms are
46
http://www.kenyaplex.com/resources/3556-causes-of-unemployment-in-kenya.aspx
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South Africa's MultiChoice and its Kenyan rival Wananchi Group, which operates
Zuku TV.
Radio remains the main medium in rural areas, where most Kenyans live. The
highly-competitive press sector is the most sophisticated in the region. The print
media are dominated by two publishing houses, the Nation and Standard.
Internet use is high by regional standards, and submarine cables have boosted
Kenya's global connectivity. The widespread use of mobiles enables millions to
access the web. The mobile platform is particularly important in rural areas.
Internet and Facebook users Kenya 201247
TABLE 14 - HTTP://WWW.INTERNETWORLDSTATS.COM/STATS1.HTM#AFRICA
As depicted in the table above it is safe to say that the internet and the social
media is growing rapidly in usage making the platforms even more interesting in
terms of promotional platforms. Today social media is the strongest WOM
generator and thereby lead converter. It runs in real-time and the level of user
interactivity is entirely up to the focal company using the platform. Proving that
internet and especially the social media is a valuable channel and asset to any
company advertising in Kenya.
Urban areas
When it comes to advertising and commercializing inside Nairobi and the other big
cities, the strongest impact will be achieved through the various huge billboards
that are present along all the bigger roads and highways in the urban
environments of Kenya. Combined with radio spots and an occasional TV-spot
47
Appendix - http://www.internetworldstats.com/stats1.htm#africa
Page 49 of 86
would secure a proper impact but not necessarily be very cost-efficient.
According to Trensoque Mwungi, employee at a marketing bureau in Kenya, the
strongest impact will be achieved through the huge billboards along the biggest
roads on Nairobi: Thika Road, Mombasa Road and Langata Road. All the following
companies have been identified by me by driving through Nairobi nonstop for 14
days and taking notes. They have been sorted by size and location with the
biggest and most potential service providers first:
The billboards are managed by the following companies:
Magnate
– The market leader with most bill boards and best positions
Euphoenix
– The only provider of digital billboard I saw in Nairobi
ENG Outdoor
- Also big - has benches all over town, billboards, rooftops +.
A1 OutDoors Media
- Part of the ZEK group
Consumer Link Comm - They also work with telemarketing and direct mails etc
Think Outdoor Media - Part of Standards Group
Alliance Media
- Has billboards in all of Africa with expertise in Airport
advertising
Pelican Signs
- The homepage is old but they have a lot of billboards in
Nairobi
Adsite
- Local company with a handful of billboards
Outlook Media
- Few billboards, can also make all kinds of street advertising
– cars, walls etc.
Other interesting channels to look into
IMS
- Direct SMS/Cellular phone advertising
Sematime
- Kenya biggest SMS advertising agency
Because of the high frequency of cellular phones per capita the direct SMS/text
message channel is a very valuable promotional possibility.
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9.6 PART CONCLUSION: MY VERDICT OF THE SSA FMGC EXPORT MARKET .
In a recent press release from the World Bank48 is says the following: “Of Africa’s 48
countries, 22 states with a combined population of 400 million people have
officially achieved middle-income status; while another 10 countries representing
another 200 million people today would reach middle-income status by 2025 if
current growth trends continue or with some modest growth and stabilization.”
That statement very much supports my perception of the SSA export markets as
very potential both in Ghana and Kenya offering huge populations with growing
buying power and urbanization. And with the easy internet and social media
access by cellphone combined with the extreme rate of cellphone users it also
makes a very potential market for advertising and spreading product awareness.
With Ghana and Kenya both being emerging and quite progressive African
countries, measured on both the common economic parameters as well as the
Human Development Index-parameters, it is still necessary to be apprehensive and
aware of all surroundings when doing business.
http://www.worldbank.org/en/news/2012/10/04/despite-global-slowdown-african-economiesgrowing-strongly-world-bank-urges-countries-spend-new-oil-gas-mineral-wealth-wisely
48
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10 PART 3 – CSR PERCEPTION AND PROJECTION
10.1 INTRODUCTION
CSR is today a well-known term, viewed by many as the corporate trend of the
modern day business world. But Perceptions and opinions of CSR are many and for
both a new entrepreneur with a good idea but no knowledge about CSR, or be it
a company set in a dominant logic where CSR is viewed as a cost. Either way it
can be very difficult to see the value of CSR if not perceived properly.
10.2 EVOLUTION OF CSR AS A TERM
In Appendix49 I have gathered a timeline, which shows that ideas of corporate
social responsibility dates back to the late 1800s when Andrew Carnegie first
expressed his views on society and the relationship within. Over the latest century
various scholars have discussed the issue with their different views on how social
issues in the society should be addressed and its co-dependent relations with
companies. These Ideas have inspired my work, and led to my own definition of
the right approach to CSR.
10.3 DEFINITION OF RIGHT APPROACH
To define and determine the right approach, and in the process establish a potent
fundament with strong pillars throughout the company’s activities based on CSR
and sustainability, is the most important factor when entering the African continent
with a wish of growing ones business. With that in mind, I still find it crucial to
emphasize the fact that, whether or not you would characterize your company as;
CSR-minded, sustainable, fair trade, holistic, philanthropic, humanistic or maybe
even indifferent to all above - it all depends on HOW you do things and not so
much why, because when establishing business abroad all eyes are on you and all
actions are responded with reactions that affect the degree of successful
49
Appendix?
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implementation. The focus on HOW is generated through my view on approach as
the most important factor.
On the matter of understanding and implementing CSR on a corporate level,
especially Carroll has developed a theory that tries to depict the proper
approach, called the CSR pyramid.
10.4 CARROLL’S CSR PYRAMID IN AFRICAN CONTEXT
The CSR pyramid is a model that shows the different priorities of the four parts of
CSR which is economical
responsibility, legal
responsibility, ethical-, and
philanthropic responsibility. The research that made the basis for this model mainly
comes from American context50. It has been suggested from the beginning that
culture plays a big part in how the priorities are perceived, and because of some
business similarities between European and American culture the model has been
seen fit for European context. When analyzing the CSR pyramid there is no doubt
why the economical factor has the biggest priority regardless of the culture, since
the economics is the cornerstone of business. If there is no profit there is no
business. But while creating profit is important, the job of CSR is to ask if the business
that is being done is responsible in all ways, corporately but also socially where the
company is located.
No matter where business is being done, creating jobs in the community where
the company is located is one of the main ways of being economically
responsible. Instead of hiring workers from one’s home country; creating jobs
locally is a great way of helping workers in developing countries to make an
income for themselves. Also paying taxes in the country where you are located
enriches the country’s ability to build society. But while in Europe companies are
expected to fulfill legislative requirements before both ethical- and philanthropic
responsibilities, according to Dr. Wayne Visser, in an African context, philanthropic
responsibilities come before legislative and ethical responsibilities 51. This idea can
50
51
Appendix ?: Revisiting Carroll’s CSR pyramid by Wayne Visser
Appendix ?: Revisiting Carroll’s CSR pyramid by Wayne Visser
Page 53 of 86
be confirmed especially when companies from abroad establish their business in
Africa and are located in rural areas. The company then needs to think of how
they can benefit the local community, through philanthropic initiatives. The people
in the villages will not think that because the company is paying its taxes and
keeping the legal laws of the country, it benefits them because they think locally. If
the companies do not obtain local support and favor, then it will be very difficult
for the company to do effective business. Legal aspects are less prioritized
because legal enforcement and legal infrastructure is not as developed as in the
Western world.
But though the CSR pyramid looks different in the African context compared to
the Western world, western companies are expected to both fulfill the priorities of
the African CSR pyramids priorities while still keeping up with the standards of
Europeans CSR priorities. This means that a Danish company that wants to enter
Ghana and do business there are not expected to “neglect” legal and ethical
responsibilities, because there is pressure from the African side, that they need to
set a good example in both areas. On the other hand from Danish side they are
pressured, to not just go to Africa and do business like they do in Africa, where
ethical and legal rights are being neglected, compared to economic and
philanthropic responsibilities. Because of this tension from the two different cultures
and CSR philosophies, we indicate a different CSR model which is not a pyramid
and not hierarchical.
10.5 MEASURING CSR
Companies that plan to do business in SSA need to be aware of different aspects
where they can do good CSR. When it comes to education and health there is
always ways which a company can support these in SSA. But giving good wages
and providing good conditions for your workers is just as important a part of CSR. It
is not enough to just respect the law, if the law of the country does not give many
rights to the workers, but to think ethical and therefore give the workers the rights
that they ethically should have. Many companies view CSR as a good marketing
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tool and image management, but forget that CSR is first and foremost a theory on
how to run a business in a sustainable way while still being socially responsible. So in
essence companies need to think CSR as a mutual beneficial way of creating
shared value, rather than what the community can give them.
In the same way they must think how they can build up society even if it doesn’t
give them profit. Major mining companies in Ghana have been criticized for
creating too much dependency upon their business and operations. Because of
this the mining companies are also responsible for having a sustainable exit
strategy. In other words to help build communities that are independent,
sustainable and self-sufficient.
A report made on CSR in Ghana focusing on the mining industry concluded with
the following: “There is a very fine line between CSR that creates dependency and
CSR that develops a community or region in a sustainable way. The challenge for
mining companies therefore is to develop CSR programmes that maintain good
will for the company and address the long-term developmental needs of
communities in a sustainable way, without creating a culture of dependency.”52
This balance of creating jobs for local community while still making sure they are
not too dependent on the particular business seems like something that is not
directly the responsibility of any business. But CSR demands businesses to operate
in a way, which will create a good development for the community even after
they are not present anymore. This is the social responsibility of any company if you
have a strict interpretation of the CSR theory. The mining industry in Ghana has
been criticized, even though many of them have several CSR programs where
they contribute to the local society through health and educational programs.
They do this even though it is not required by law, so the question is how much
socially responsible do you need to be, while still doing business and not charity.
How do you measure CSR in order to know when you have reached the goal of
real CSR? This can be a difficult question to answer because there are different
52
Appendix 5: CSR in Ghana - Lessons from the mining sector – Boon & Ababia
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expectations from different kinds of people what kind of ethical- and philanthropic
convictions they have. Naturally legal responsibility is defined by keeping the law,
but even with economical responsibilities there can be different views on how
responsible you need to be. There is for example no law that says that McDonald’s
has to pay corporate taxes in Denmark, because they find some legal ways not to
do it, and instead pay their taxes somewhere where corporate taxes are very low.
This happens because they do not generate any profit in Denmark, as they make
sure the profit stays outside a country like Denmark because the taxes are so high
here.
53
It is not only McDonalds doing this in Denmark but around 1200
multinational companies like Nestlé and Q8. Many would question if this is
economically responsible but since they are not breaking any law it is up to the
individuals ethical standards to judge if that is how they want to do business. So
CSR leaves a lot of room for the individual company to decide how responsible
they want to be. Not until 2007 did McDonald’s pay taxes in Denmark after 26
years operating in Denmark.54 Even IFU has been discriminated for working around
taxation and thereby not
10.6 TRIPLE BOTTOM LINE AND CSR
Many people have also responded to Carroll’s take on manifesting CSR. The most
commonly acknowledged opposition has to be Wayne Visser as described prior in
this report. With a lot of valuable responses making good points I recognize the
need for a revision on the CSR pyramid.
In adherence to CSR it is my belief that it is the accumulated value of all corporate
attachments and strings that makes out the bottom line, meaning that CSR should
not be characterized as a costly tool but instead as a profitable core value.
According to John Elkington, the originator of the Triple Bottom Line theory55, you
can actually measure your CSR value by dividing the bottom line into three
different aspects. In Elkington’s book they are described as the three P’s as follows:
http://www.information.dk/72982
http://politiken.dk/erhverv/ECE950259/historisk-mcdonalds-betaler-skat/
55 Appendix Trple Botom Line
53
54
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
Profit bottom line – Actual ROI and capital income.

People bottom line – Investments in training and educating staff, social
investments also known as social capital.

Planet bottom line – Environmental, ecologic, sustainability and related
investments.
The basic parameter for this theory to hold proof depends on if you believe that
People and Planet actually contributes to the bottom line in terms of generating
shared value. And in Elkington’s
With a great idea on how to perceive, control and utilize CSR, John Elkington’s
arguments makes an effort to make CSR seem measurable, tangible and
profitable.
The thoughts behind the TBL in terms of shift in corporate paradigms lead to the
perspective of the three most important aspects when concentrating on
sustainable business establishment. The model is visualized below.
CSR
SCA
CSV
Source: Carsten Bovbjerg
Each circle represents the core values of my idea of a sustainable business
structure. The reason they are used is due to
SCA – S USTAINABLE COMPETITIVE ADVANTAGE
For an international company to thrive in an exceedingly competitive market, a
sustainable competitive advantage is a much desired ability and position for any
company. A reliable SCA secures a great market share channel but craves a
competitive mindset encompassing emerging strategies on an ever evolving
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market. This is a very hard task to accomplish especially on a foreign market with
unfamiliar and diverse cultures, customs, norms, laws, regulations and unwritten
rules.
10.7 CSR – CORPORATE SOCIAL RESPONSIBILITY
In all the articles I have read and reflected upon, I found a lot of different takes on
CSR both negative as well as positive. CSR is, as I have depicted in the Google
Insights appendix56, a popular phrase, that can be misused as a cheap marketing
tool and even a demand composed criteria related to buying behavior and
competitiveness. On the other hand CSR have been applied with the best
intentions but failed to succeed due to miscomprehension, implementation failure
or simply limited resources but evidently it all boils down to insufficient strategies.
The reason I am conducting this research is to give a simple, functional and
exoteric input on sustainable and profitable CSR commitments in SSA. One of the
main objectives when doing CSR business is to keep a high level of commitment,
transparency and honesty throughout the organization which builds trust and
prospects, and thereby adds to the perceived value as TBL’s take on
accumulating value via the three P’s in this case the “Peoples bottom line”.
10.8 CSV – CREATING SHARED VALUE
This aspect is based on the reflections in the article “Creating Shared Value”57 by
Kramer and Porter, stating that profitable CSR in many ways is best obtained by
creating shared value between all implicated parties. Meaning that any focal
company should include all potential stakeholders when developing a project or
strategy. And that value is the center of business whether being social capital,
pure profit or perceived value. The exact same view on value is applied in the
development of my CSR model. Value is an intangible that can be measured in
many ways in different perspectives.
56
57
Appendix 6: “Google Insights” documentation
Appendix 7: Harvard Business review ”Creating Shared Value” By Kramer and Porter
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10.9 THE CSR “BOMB”- BUILDING ON MUTUAL BENEFITS
The three theories combined make the starting point of my CSR business model
which should be able to suit all businesses due to the models flexibility in
interpretation. This leads to the sub-conclusion that CSR as such is not only a good
act, it is not only a tool for the company, it is a mandatory part of doing business in
a modern world, given the aim is to do sustainable business.
CSR
SCA
CSV
Trust and stability
Network and
KPI
reliability
KPI
Commitment and
engagement KPI
Source: Carsten Bovbjerg
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10.9.1 The synergy – Designing the model
In my work with researching in CSR I have mainly concentrated on Carroll’s CSR
pyramid, Wayne Visser’s response, Porter’s CSV, Elkington’s TBL and a few others of
interest. I have chosen to use them as inspiration since it is more likely to make my
revision easier to follow for people acquainted with CSR if it is comparable to
acknowledged theories. The visual redesign of the model is due to the
connotations one associates with pyramids, giving the impression of a rigid and
static ladder, whereas circles indicate synergy, unity and flexibility. The economic
aspect is still a square but as an internationally known sign of value that should
give the impression of profit, which is due to my perception of economy as the one
crucial denominator which fuels the other three aspects but only in strong
expectation of a return.
10.9.2 T ANGIBLES
Philanthropy is representing the focal company and its partners, Ethics is
representing the local population and community and Legal is representing the
local government and public authorities. They are all visualized as circles to
empathize the fact that these are first and foremost equals in the development of
a CSR project, but at the same time open for interpretation based on the given
resources, needs and expectations of company, government and community. The
thoughts behind the joined connections of the implicated parts emphasize the
natural relationship and bond between them to reinforce each other and most
importantly empower the economy and value center as the growing bearing
structure. Just like the fundament of a house where the growth drivers; the Legal,
Philanthropic and Ethical aspects, will all be the bearing walls supporting the roof,
which is pictured as the goal of a sustainable CSR initiative in the image of a dollar.
But regarding the walls it is necessary to emphasize that, as in any other building,
the walls are the bearing structure, and despite of the fact that some walls are
strategically more important or might even be broader or wider they all still need
to match to each other to fit the roof properly as intended and thus developing
and completing the structure in a sustainable way. The three growth drivers are the
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tangibles which can be measured, affected and developed. But the success of
the growth drivers is very much dependent on the bond/relationship that exists
between them, depicted as the red line running through the growth drivers. That
red line is what I call the intangibles.
10.9.3 I NTANGIBLES
With the growth drivers specified as tangibles connected by the intangibles as KPIs
as made obvious in the model above.
The
relationship
between
Legal
(host
government)
and
Ethics
(host
community/population) is the Key Performance Indicator that is evaluated in trust
and stability between parties.
The relationship between Legal (host government) and Philanthropy (focal
company) is the Key Performance Indicator evaluated in Network value and
reliability.
The relationship between Philanthropy (focal company) and Ethics (host
community/population) is the Key Performance Indicator evaluated in the aspect
of commitment strength and engagement durability.
The intention, and subsequently suggestion, within the model is to examine each
area and coalesce efforts to match. It is no coincidence the model has a red ring
connecting the growth drivers – it is to show that the relationship between the
tangible factors is a matter of cyclic co-dependency.
10.10
Part conclusion – Generating value
When building business strategies based on common business models there is a
tendency to become static and resolute in the ways of viewing foreign markets.
With complex and very different countries like Ghana and Kenya compared to
Denmark that kind of dominant logic can become an actual hindrance and the
diversity in cultural aspects is crucial to be aware of. The importance of
philanthropic, legal, and ethical responsibilities when engaging abroad is
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undeniable, but evidently the success comes from combining them symbiotically
from a value driven perspective. All three are equally important for succeeding in
doing business in SSA and with the world growing smaller by the day and supply
chains evolving even quicker, it seems obvious that doing business requires a
competitive
and
innovative
strategy
that
regards
socio-environmental
participation as a natural part of the constantly progressing and evolving business
markets.
Ultimately it is a matter of strength and a sustainable relationship between security,
maturity, needs, resources and expectations of all implicated parties - focal
company, partners up and down-stream, governmental bodies and local
population. And it has to be built on the pillars of commitment, trust and
transparency to be mutually beneficial. To support this reasoning I would like to
refer to one of the critics of CSR that seems not to understand the real value and
actual theory of CSR58. With a realistic and practical mind towards the strategic
and operational approach one can limit the chance of pitfalls and rate of failures.
To know what to focus on requires strategic planning, a realistic view on the
current market situation, the political issues, the economic state and what else that
might be able to affect the activities.
58
Appendix : The social responsibilities of Business is to Increase its Profits - Milton Friedman
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11 CONCLUSION
As described in the preliminary analysis, Denmark is doing quite well on the
international market. But we can always do better. Despite of the fact that Danida
and the other founding members of GoGlobal are progressive in ways of loaning
and evaluating it is nonetheless safe to conclude that the management might be
focusing too much on CSR as a philanthropic concept instead of a core code of
conduct or simply a way of generating value. All focus is on developing projects
and even EKF and IFU have declarations and requirements pertaining CSR.
Regarding IFU’s tax workaround and cases alike it seems like CSR is a banner under
which one can claim high ethical standards without projecting the actual idea
value growth drivers and with articles claiming that GoGlobal members are
corrupt both devaluates the perception of Denmark from outsiders as well as
affect the trust between GoGlobal and Danish companies in a bad way.
Danida and the rest of GoGlobal clearly have some gaps when it comes to their
service and promotional activities. Too little emphasis is put on the difference
between rural and urban SSA and the actual maturity of the urbanization, which
distorts the market perception and causes potential Danish companies to be
apprehensive about exporting or engaging in projects in SSA. Neither of the
GoGlobal partners has published any valuable reports on the vast potentials of the
export to retail markets of Ghana or Kenya or arranged any export to retail
conferences. To promote CSR projects is a good business incentive, but when only
projecting SSA as countries in dire need of assistance and in the meantime
infected with corruption and desperate thieves it becomes hard for Danish
companies to identify the value of engaging in exports or CSR projects in Sub
Saharan Africa. And whether or not it is true, GoGlobal seems to think of CSR as
the most sustainable competitive advantage to achieve in the modern markets of
today. So to be competitive on a global market as a Danish company with a
desire to team up with GoGlobal, you will have to embrace and empower CSR as
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a growth driver and regard stability, commitments and networks as important
criteria for success both when developing projects in SSA or exporting goods from
Denmark to SSA.
For CSR to be efficient to companies it should be perceived in the same way as a
religion evaluates its believers - Faith and good deeds should not be proclaimed
but obvious through actions. Basically be good, but not just good in terms of doing
good things or doing things right, it as much regards doing good business from a
profitable point of view. For now at least, Denmark’s competitive advantage lies
within CSR as a code of conduct.
Therefore I found it compelling to develop a model that could both visually and
value-wise illustrate a mutually beneficial way of perceiving CSR without losing
focus of the primary objective – profit. The reason why is because I think that the
export to retail market of SSA indeed is an enormously underestimated business
adventure, because like any good adventure there will be possible pitfalls. But to
collect the prize at the finish line companies have to be aware of any given
surroundings, create a strong network and develop a contingency plan. But most
importantly be able to adapt.
Finally – For the presentation I will make an example of exporting a FMGC to retail
in the scope of the BOMB model to see if it can fit the evaluation circle of Danida.
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12 RETROSPECT
Once again, to my big regret and dissatisfaction, I have been overpowered by the
complexity of establishing and developing a structure around an idea and
problem statement. Three days before hand-in I was in a structural dilemma and
had to change course, which is not just bad planning but a sign of poor time
management.
And in retrospect I can see that both the GoGlobal analysis as well as the SSA
analysis could have been much more thorough in various aspects. If I could I
would have focused only on the CSR aspect and concentrated on the
explanation of the BOMB model.
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13 DESK RESEARCH:
13.1 ARTICLES:
HTTP :// RESEARCH .NORDEAMARKETS .COM /EN/2012/11/22/ DANSK -PRIVATFORBRUG -I TOMGANG /
http://tvtid.tv2.dk/nytomtv/article.php/id-50947226:operation-x-afsl%C3%B8rer-danidasvindel.html
http://research.nordeamarkets.com/en/2012/11/09/fortsat-solidt-overskud-pabetalingsbalancen/
http://borsen.dk/nyheder/avisen/artikel/11/37307/artikel.html
http://borsen.dk/nyheder/avisen/artikel/11/37308/artikel.html
http://www.royaldanishfish.com/nyheder/royal-danish-fish-group-nomineret-til-csrpris.aspx
https://www.mm.dk/f%C3%A6rre-iv%C3%A6rks%C3%A6ttere-giver-danmarkf%C3%A6rre-job
http://npinvestor.dk/boersmeddelelser/erria-a-s-nr-05-2008-2-248356.aspx
http://di.dk/Marked/Markeder/Afrika/pages/danmarkliggerlangtundereugennemsnittetforeksporttilafrika.aspx
http://jonathanortmans.com/2012/11/denmarks-leadership-the-outlook-foreuropes-startup-scene/
13.2 HOMEPAGES :
http://www.csrkompasset.dk/
http://hbr.org/ - as a member
http://um.dk/da/danida/
http://um.dk/da/eksportraadet/
www.ifu.dk
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www.ekf.dk
www.entrepreneurship.org
http://www.worldbank.org
www.transparency.org
www.doingbusiness.org
http://www.kauffman.org/
http://www.gemconsortium.org/
www.di.dk
13.3 WEB BASED REPORTS
http://unctad.org/en/PublicationsLibrary/wir2012_embargoed_en.pdf
http://www.erhvervsstyrelsen.dk/file/291799/Ivaerksaetterindeks-2012-endeligversion.pdf
http://ghana.um.dk/en/~/media/Ghana/Documents/Requirements20September2
02011ashxashx.jpg
http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf
http://publikationer.di.dk/di/1857362180/
http://siteresources.worldbank.org/INTAFRICA/Resources/Africas-Pulsebrochure_Vol6.pdf
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APPENDIX
Appendix 1
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Appendix 2
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Appendix 3
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Appendix 4
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Appendix 5
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Appendix 6
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Appendix 7
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Appendix 8
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Appendix 9
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Appendix 10
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Appendix 11
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Appendix 12
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Appendix 13
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Appendix 14
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Appendix 15
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Appendix 16
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Appendix 17
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Appendix 18
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