that affect operations of a foreign company operating
Alice Li (李丹阳)
School of Business Administration
SOUTH CHINA UNIVERSITY OF TECHNOLOGY
International business includes people from different cultures, and every business function is subject to potential cultural problems. An international company must be sensitive to these cultural differences in order to predict and control its relationship and operations. Hydro Generation (HG), the multinational company, was also faced with a new cultural environment in Uganda due to its first dam project in Africa. The present study was conducted to describe Ugandan cultural attributes that might affect operations of a foreign company operating. The paper starts with conceptual study, in which major dimensions of cultural attributes were summarized as well as the way they affecting a foreign company, then it came to a detailed discussion in cultural attributes based on Uganda’s background. Finally it was concluded that the international business requires thorough research of the other country’s culture and there is a need for the multinational company to accommodate to different standards of doing business in the foreign country.
Increased global activity has led firms around the world often in collaboration with partners to seek new markets for their products, new sources of raw materials, parts, and components, and new, more cost-effective locations for manufacturing and assembly operations, some of these foreign ventures succeed, but many do not, and the inability of firms and their managers to adjust to the demands of the international business environment has been advanced as a primary cause of international business failures (Apud et al., 2003). Indeed, a best-selling compilation of international business failures (Ricks, 1999) is now in its third edition and, in many documented cases, a major factor in the failure was the inability if managers to understand the local culture of a subsidiary and to interact effectively with their counterparts overseas, rather than a lack of ability in the technical aspects of their job. The cultural differences may create ambiguities in the relationship, which may lead to conflict and even dissolution of the venture (Barkema et al., 1996). In the present case, HG（Hydro Generation）is a U.S.-based company, specialist in power plants, the Uganda project was its first anywhere in Africa. HG got into trouble soon after it came there because many groups opposed their construction on the grounds that they typically displaced large groups of people, HG was extremely worried about adverse publicity that could lead to demonstrations and costly work stoppages. But problems were far more than these, which involve a lot of cultural differences in today’s international business environment. Relevant research in cultural environment facing business mostly focused on the dimensions of cultural differences, including the famous Hofstede's cultural dimensions theory, and the cross-cultural management in international business. This study is conducted to discuss cultural attributes in Uganda that might affect operations of a foreign company operating, which will help to the decision-making and assessment of firm performance. Literature review
Culture is a broad and blurry concept because it is associated differently depending on the context. More than 150 definitions of culture have been identified by Kroeber and Kluckhohn (1952). Still, many of the definitions have a common theme. For example, Hofstede (2005) considers culture to be the “collective programming of the mind” while Schein (2004) suggests that a group learns “a pattern of shared basic assumptions.” Facing the variety of culture conceptualizations, we define the scope of culture by differentiating between two defining elements: One element is the scope of the referenced group. Regarding the...