Mba 6243-Case Study 1

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MBA 6243: CASE STUDY 1
Charles Martin in Uganda: What to Do When a Manager Goes Native
James Green, a vice President at U.S – based Hydro Generation (HG), was pondering
a specific question: Should he retain Charles Martin for the construction phase of a
major dam project in the African nation of Uganda? Martin had already completed his
assignment on the preliminary phase of the project, and Green couldn’t deny that
Martin’s results had been highly satisfactory – he’d finished every task on time and
within budget.
Green, however, was a ,little concerned with the means by which Martin tended
to achieve his ends. In Green’s opinion, Martin was too eager to accommodate
Ugandan ways of doing business, some of which ran counter both to HG’s
organizational culture and to its usual methods of operating in foreign environments. In
particular, Green worried that some of Martin’s accommodations with local stakeholders
might have unforeseen repercussions for the company’s presence in Uganda.
He also knew the philosophy and values of founder and current CEO Lawrence Lovell
who had been instrumental in shaping HG’s mission and culture. A devout Christian and
regular attendee of the National Prayer Breakfast, Lovell believed strongly that business
activities, though secular, should embody Christian values. As a manager, he believed
subordinates should be given full responsibility in making and implementing decisions,
but they should also be held accountable for the results.
Martin, however, wanted to stay in Uganda, and HG would be hard-pressed to find
someone else with his combination of professional training, experience with HG, and
familiarity with the host country. (Martin, though only 29, had already proved effective in
using his knowledge of local development issues to disarm critics of the power plant.)
Hiring Martin to handle all preconstruction operations represented a new approach for
HG. In this capacity, Martin, who’d been transferred to Uganda a year and a half earlier
as project liaison specialist, had been given a threefold task:
1. To gain local support for the project by working with both Ugandan authorities in
the capital of Kampala and villagers in the vicinity of the construction site.
2. To set up an office and hire office personnel to take charge of local purchasing
(including lower-level hiring), clearing incoming goods through customs,
securing immigration permissions for foreigners attached to the project,
overseeing the logistics of getting materials going from the airport in Kampala to
the dam site, and keeping inventory and accounting records.
3. To help foreign personnel (mainly engineers) get settled and feel comfortable
living and working in Uganda.

Martin was also responsible for establishing an operating structure that would spare
incoming managers that hassles of such mundane start-up activities as obtaining
licenses, installing telephones and utilities, and finding local people to hire for the
wide range of jobs that would be needed. In addition, although HG specialized in
power plants (it had built plants in 16 countries and retained ownership shares in
about half of them), the Uganda project was its first African venture.
Now, dam construction anywhere requires huge amounts of capital, and projects
often face opposition from groups acting on behalf of such local parties as the
people who will need to move because of subsequent flooding. Thus to forestall
adverse publicity and more importantly, activity that could lead to costly work
stoppages, HG needed as many local allies as it could get. Getting (and keeping)
them was another key facet of Martin’s job.
Martin, though still young by most standards, was well suited to the Ugandan
project. After high school, he’d entered the University of Wisconsin, where he
became fascinated with Africa through a course in its precolonial history. Graduating
with a major in African studies, he served with the Peace Corps in Kenya, where he
worked with small business start-ups and took side trips to Ethiopia and Tanzania.
Although he loved working in Kenya, Martin developed a disdain for the Western
managers and workers who isolated themselves in expatriate ghettos and
congregated in the capital’s first-class hotels. His own creed became “Don’t draw
attention to yourself and, above all, learn and respect the culture.”
At the end of his Peace Corps stint, Martin was determined to return to and work
some where in Africa. After earning an M.B.A, at the University of Maryland, he took
a job with HG, where he worked for two years on project bidding and budgeting.
Both when he was hired and when HG become involved in the Ugandan project,
Martin made sure his superiors knew he wanted the African assignment.
Not surprisingly, HG saw the advantage of someone who possessed both a homecountry corporate perspective and a knowledge of the host country’s economics,
politics, and culture. In Uganda, a country of about 25 million, English is the official
language, but many people speak only an indigenous language, mainly Bantu or
Nilotic languages of the Bugandas, Langos, Acholi, Teso, and Karamojong tribes.
Although about two-thirds of Ugandans are Christians (about evenly split between
Roman Catholics and Anglicans), there are large numbers of Muslims and
adherents of various animistic religions.
Since gaining independence in 1962, Uganda has had a largely unhappy history.
The ruthless dictatorship of Idi Amin included mass murder among its policies and,

more recently, Uganda has been forced to absorb huge numbers refugees fleeing
bloodshed in Rwanda, Zaire, and the Sudan. Nepotism is the norm, and the
government is considered one of the most corrupt in the world. On the positive side,
foreign companies that want to do business in Uganda aren’t heavily regulated, and
because less than 5 percent of the population has access to electricity, the Ugandan
government strongly favored the HG power plant project.
Now, 18 months later, Martin was completing his liaison assignment for the
preconstruction phase of the project and Green was reviewing his performance.
Specifically, he was concerned not only about some of Martin’s business practices
but also about certain aspects of his lifestyle, not the least of which was his
participation in local tribal local rituals. HG had no formal guidelines on the lifestyles
of expatriate managers in its employ, but the company culture tended to encourage
standards of living that were consistent with the values of a prosperous international
company. With what HG paid him, Martin could certainly afford to live in one of the
upscale neighbourhoods that were home to most foreign managers working in and
around Kampala. Martin, however, preferred a middle-class Ugandan
neighbourhood and declined to frequent the places where fellow expatriates
typically gathered, such as churches and clubs.
As far as Green was concerned, not only was Martin’s lifestyle inconsistent with HG
culture, but also his preference for isolating himself from the expatriate community
made him of little use in helping colleagues adapt to the kind of life that would be
comfortable for them in the alien environment in Uganda.
As for Martin’s business-related practices, Green was ready to admit that business
in Uganda usually moved at a leisurely pace. It could take months to get a phone
installed, supplies delivered, or operating licenses issued. Martin however had
quickly learned he could speed things up by handing out tips in advance. Nor could
Green argue that such payments were exorbitant: In a country where per capita
GDP is about $1,300 a year, people tended to take what they could get.
It was also a fact of local life that unemployment was high and so-called job
searches were generally conducted through word of mouth, especially among family
family members. Martin had developed the practice of mentioning openings to local
people and then interviewing and hiring the relatives they recommended. In a
country like Uganda, he reasoned, such family connections could come in handy.
Hiring the niece of a high-ranking customs officer couldn’t hurt when it came to
getting import clearances.
To Green, however, although such practices were both normal and legal in Ugandan
business dealings, they bordered on the unethical in a U.S organization. He also

worried about a variety of long-term practical consequences. For instances, what if
word got out that HG was paying extra for everything (and, inevitably, it would)?
Wouldn’t everyone start to expect bonuses for every littleservice?
What’s worse, if word reached the higher echelons of the Ugandan government, HG
would probably find itself dealing with people in a position to demand large
payments for such services as, say, not finding some excuse to delay the project.
Not only would these payments start to get costly, but they might be illegal under
U.S law. What about adverse international publicity that could negatively affect HG’s
operations in other countries?
Finally, Green wasn’t comfortable with Martin’s hiring practices. He had no reason to
doubt the competence of any given hiree, but nepotism comes with risks. An
employee’s close connection with some government official for example might
encourage the employee to participate more actively in the extortion process. What
if a woman hired to work on import clearances decided to go into business with her
uncle the customs officer to charge a little extra for every import approval? In
addition, given Uganda’s history of political instability, the company ran the risk that
today’s friends in high places might be tomorrow’s enemies of the state.
Then there was the issue of the tribal rituals. That dam would displace about 700
villagers, and during early negotiations with the Ugandan government (and before
Martin’s transfer to Uganda), HG assembled a resettlement package that included
the renovation of schools and health centers in the new location. HG executives
understood that the package, valued at millions of dollars, was acceptable to the
people who were affected. Shortly after Martin’s arrival, however, two tribes living
close to the Bujagali Falls site of the dam proclaimed the river home to sacred
spirits. One leader likened the site to the tribe’s Mecca.
As news of the claims reached the international press, worldwide support for the
tribes began to grow. With permission from HG headquarters, Martin hired a
specialist in African religions, who advised HG to work with the religious caretakers
of the falls to find a solution. When contacted, the official caretaker revealed that the
spirits could not be moved, they could be appeased at the right price. For a fee of
$7,500 he sacrificed a sheep, two cows, four goats, and a slew of chickens, pinning
them down on hot coals while 40 diviners prayed and danced. For the finale, blood
was sprinkled on some sacred trees. Unfortunately, the spirits were not appeased. It
seems that Martin had not participated in the ceremony. So Martin paid another fee
of about $10,000 to repeat the ceremony, in which he took part, evidently appeasing
the spirits.

Green was concerned about Martin’s part in the second ceremony, which he himself
considered pagan and probably a sham. Granted, Martin’s participation had allowed
work to continue, but Green worried the episode could not only damage HG’s image
but also could offend Uganda’s Christian majority and the many Charistians
missionaries in the country. On top of everything, Martin’s participation might be
construed in some quarters as a mockery of tribal customs, thereby contributing to a
hostile environment for HG.
Having thoroughly considered the Charles Martin case, James Green now had to
make decisions about staffing the next phase of the project. He knew he needed to
transfer a number of technical personnel to Uganda, and he’d already begun
interviewing senior HG managers for the position of project director. But he was still
left with one critical question: How much would the new director benefit from the
presence of an American who, like Martin, could be a valuable source of advice
about Ugandan culture? And if he had to have someone in that role, was Martin still
right for the part?

Questions
1. Describe Ugandan cultural attributes that might affect the operations of a
foreign company doing business there.
2. How would you describe the respective attitudes of Martin and Green:
ethnocentric, polycentric, or geocentric? What factors do you suspect of
having influenced their respective attitudes?
3. Who was right, Green or Martin, about Martin’s more controversial actions in
facilitating the project? How might things have turned out if Martin had not
been a member of the project team?
4. In the next phase of the project- constructing the dam itself-should HG
employ someone whose main function is that of liaison between its corporate
culture and the culture of its host country? If so, is Martin the right person for
the job?

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