A publication that examines influence of cultural dimensions on foreign businesses in Nigeria

1. ...advancing business
Enterprations
Weekly
Strategy
www.enterprations.com
Four Dimensions
That Kill Foreign
Businesses in
Nigeria

2. 1 May 2017 Enterprations Weekly Strategy
cultural differences while conversing on issues. Discussionompany expands to another market based on
of issues with superiors, skills and competencies utilizationdifferent reasons. Such reasons require making
and corporation and collaboration during new productstrategic choice among the available indicesC development occurred mostly within individualism andpremised on social, economic, technological and political
collectivism dimension. This indicates high level of sensefootings of the markets. Within social indicator, cultural
of belonging and collective goals attainment among thedifferences between the company's present location and
employees. Foreign senior employees' management andfuture markets is vital in navigating the competitive
motivation of the Nigerian employees on what is right andenvironment and consumerism towards sustainable
wrong, and values is the dominant cultural element underprofitability or otherwise. In the last decade, businesses
uncertainty avoidance dimension. Promotion and prompthave been witnessing the rise of frontiers and emerging
salary payment on merit constituted the main element formarkets.
masculinity/femininitydimension.To enter these markets, understanding what
Under uncertainty avoidance dimension,consumers want and employees' needs within cultural
arguments on whether the new products had advantagedimensions, particularly when it becomes necessary to
over the competitive products, meeting the customers'have locals as part of employees working with those of the
socio-cultural features and the originality, freshness andcompany's origin location and develop new products and
uniqueness pervaded prominently. Decisiveness andservices. On the foregoing, we studied an Asia-based
assertiveness of the foreign managers in their decisions wascompany which entered Nigeria's Fast Moving Consumer
the main element within masculinity/femininityGoods industry in 2012 and folded up in 2015. We referred
dimension. “Foreign employees are traditionally notthe company as INK. INK made the move because growth
in the country's economy and
changes in political indicators which
favoured the industry. INK brought a
significant number of employees
from the Asia, the continent which
differs culturally with Nigeria and
worked with Nigerians at corporate,
business and functional levels. Our
analysis of socio-cultural factors that
contributed to INK's failure in terms
of products acceptability and
working relationship among the
employees was modelled on the
Geert Hofstede's cultural dimensions
theory. He came about the
dimensions through his seminal
study published in 1980. He
specifically investigated cultural
values among the IBM's employees engaging and confrontational on issues. Rather, they keep
acrossinternationalboundaries. mute, pretend that they are flowing with conflicting views
In the study, he sees power distance as the extent to and still execute their plans as originally intended,” one of
which the less powerful members of institutions and the employees said. Thus, employees had various issues
organisations within a country expect and accept that capable of having negative effects on the products
power is distributed unequally, individualism/collectivism acceptability by the consumers. Across the three
as the degree of interdependence a society maintains employees levels; corporate, business and functional,
among its members, masculinity/femininity as the market-walk through (taking foreign employees to the
fundamental issue here is what motivates people, wanting consumers to understand people's needs), policy
to be the best (Masculine) or liking what you do (Feminine) invocation and 'guerrilla phone conversation' were the core
and uncertainty avoidance as the extent to which the strategies employed by the Nigerian managers when
members of a culture feel threatened by ambiguous or cultural issues emerged. This indicates that non-
unknown situations and have created beliefs and assertiveness and assertiveness are adopted by the
institutions that try to avoid these. We considered the dominantculturegroup(Nigerianemployees).
dimensions appropriate in understanding the impact of When products' attributes swerve from consumers'
differences in national culture, measured as cultural values. When consumers cannot associate their social
distancebetweenthehomecountryofINK andNigeria. values with the products' communicated social values;
Between expatriates and Nigerian employees . pack design, thickness, size and taste the company failed to
Four dimensions among others identified by Hofstede have substantial share of the market which formed part of
affected company's products acceptability and usage, and factors contributed to her failure. Thickness was linked
working relationship among the employees. We found that with three products while size was associated with two
Nigerian employees tolerated their foreign superiors' products out of the overall nine products. Information

3. May 2017 Enterprations Weekly Strategy2
consumers received regarding the new products from the sociocultural contexts with the countries within the
media helped them the most in buying or not buying the continent inside the power distance, uncertainty avoidance,
company'sproducts,especiallythenewones. and masculinity dimensions mostly {see Figure 1}. This
How to map sociocultural contexts. Companies in the becomes imperative because these dimensions resonate
Asia continent that are likely to pursue their business goals between Nigeria and countries in the continent more than
and objectives in Nigeria in the future have a lot to learn collectivism. has the right tools to make
from INK. It clearly shown employees' and sociocultural companies understand the cultural drivers and expectations
differences between the company's home location and of the people they will be doing business with in Nigeria
Nigeria are not properly analysed before making the entry. andconsumerswho willbuytheirproductsorservices.
One approach to mapping sociocultural differences is for
companies to modify their business models to suit the new
market seek to enter. Mark Herdon has substantiated this
when he said “Culture may eat strategy for breakfast, but if
you're not careful, business model will eat culture's lunch."
In specific term, culture and values are part of the business
model. Failure to make the two parts of the model means the
human being that designs, shapes and makes the business
work and the customer who has to buy into the new value
proposition and pay are missing. Companies like INK
coming from Asia continent should map Nigeria
Enterprations
Contact
F15, Lagos City Mall, Onikan, Lagos State
Www.enterprations.com
info@enterprations.com
+2348141374490
Source: Enterprations Compilation, 2017
When consumers cannot
associate their social values
with the products'
communicated social
values...the company failed to
have substantial share of the
market....