Case Summary

Uganda is a country of about 32 million people, gas English as its

official language. But many people speak only another language,
mainly Bantu or Nilotic languages of the Bugandas, langos, Acholi,
Teso and Karamojong tribes, There has been a strong separist
movement among the Bugandas. Although about two third of
Ugandans are Christians. From that perspective of a foreign company
wants to operate its business in Uganda then language for
communication is the main problem because of the different types of
language is here. For that reason a company engines many specialist
employees for speaking with different people by different languages.
On the other hand, Business in Uganda typically moves slowly. For
instance one may wait months to a phone installed. This is a country
where incomes are extremely low and there having on exorbitant
payment system

HG (Hydro Generation) is U.S.-based Company, specialist in power

plants (dams). Its values strongly built on the Christian culture. It has
built plants in 16 countries maintained an ownership in about half of
them. The Uganda project is its first anywhere in Africa. Because dam
construction involves huge amounts of capital and because many
groups oppose their construction on the grounds that they typically
displace large groups of people, HG wanted to build as many local
allies as possible for its Ugandan project in order to prevent adverse
publicity that could lead demonstrations and costly work stoppages. Its
employees have a high degree of empowerment, being fully
responsible for their actions. There is no code of conduct concerning
expatriates lifestyle, but its corporate culture was one that reflected
the lifestyle of a prosperous international company.

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Charles Martin was 29 year-old American. He was specialist in African
culture, graduating with a major in African studies and a professional
experience in Kenya, Ethiopia and Tanzania. He took a job in HG with
the purpose of being assigned to an African project after two years of
training and doing business in the U.S. He combined a home-country
corporate perspective and a deep knowledge of Uganda economic,
political and cultural aspects. He devoted of the philosophy of
integrating the African society, not drawing attention to oneself, but
learning and respecting its culture. He lived among middle-class
Ugandans and not in up-scale neighbourhoods where most
international managers live.
Charles Martin didn’t integrate himself within the expatriate’s
community. He made “extra payments” to local people to get things
moving faster. He hired staff closely related to Government officials
and participated in tribal rituals to get support from villagers affected
by the dam construction, although being employed in a company
embedded in Christian values. Some of Martin’s practices were
concerning James Green, the Vice President of Hydro Generation (HG)
such as, independent lifestyle, participation in tribal rituals, way of
achieving results, unethical practices, payments which might be illegal
under U.S. law, Martin’s distance from the expatriate community.

The Concept of the Case

This case shows how important it is for a foreign company to
understand and adjust to ever changing operating environments is an
integral part of operating environment. Culture refers to the learned
values, norms based on attitudes, values and believes of a group of
people. Because people simultaneously belong to different group that
have different culture. From this case we have found HG Company’s
culture and also the problems the company was faced because of
cultural differences and legal facilities. Basically all people have

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culturally ingrained responses to given situation and some times
expect that people from other cultures will respond the same way as
people in their own culture do.

Again this case heave also given a concept that an international

company must be sensitive to these cultural difference in order to
predict and control its relationship and operations. Finally it should
realize that it’s accustomed way of doing business might not be the
only on best way .when doing business in abroad a company should
first determine what business practices in a foreign country differ from
those it’s used to. Management then must decide what if any
adjustment necessary to operate efficiently in the foreign company.

Uganda
Uganda lies on equator and surrounded by the Victoria Lake. Arab
traders came here 1840’s in search of slaves and ivory then British
came here. Uganda became independent in 1962 from Britain became
republic in the following year. First prime minister was Milton Obote. In
1971 Obote’s government was toppled in military coup led by Idi Amin.
Amin was toppled in 1979 and Obote back in to power. At present
there is presidential form of government and Museveni is the president
of Uganda. Uganda is a country of about 32 million people, gas English
as its official language. There has been a strong separist movement
among the Bugandas. Although about two third of Ugandans are
Christians. From that perspective of a foreign company wants to

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operate its business in Uganda then language for communication is the
main problem because of the different types of language is here. For
that reason a company engines many specialist employees for
speaking with different people by different languages. On the other
hand, Business in Uganda typically moves slowly. For instance one
may wait months to a phone installed. This is a country where incomes
are extremely low and there having on exorbitant payment system. If
any comp any involves such activities then it is illegal under U.S law.
Not only that in Uganda nepotism is a norm and this country
considered one of the more corrupt in the world because. From the
root level to Government in all sectors conniption exists.

Language and Religion

English and Kiswahili are the official languages, but Luganda is most
widely spoken in the capital city of Kampala. Many Ugandans live
among people who speak different languages, especially in rural areas.
But many people speak only another language, mainly Bantu or Nilotic
languages of the Bugandas, langos, Acholi, Teso and Karamojong
tribes, there are more than 40 ethnic groups but no single ethnic
majority. Ugandan’s Population is approximately 84% Christian and
12% Muslim. Only 1% follows traditional religions.

Population
Uganda has 31 million people, and 47% are age 15 or younger. (Texas
is 3 times the size of Uganda with 22 million people.). The HIV/AIDS
infection rate is 5% today due in large part to the Government’s
political commitment to HIV prevention and care. Uganda is currently

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the only country to reduce its HIV/AIDS rate by double digits. In
comparison, the HIV/AIDS infection rate in Washington DC is estimated
between 3-5%. Uganda has 250,000 refugees from Sudan, the Congo,
and Rwanda.

Economy
Agriculture employs 80% of the work force. Coffee and fish is the
largest export. Foreign investment has slowly returned after the reign
of brutal corrupt dictator Idi Amin (1971-1979). Uganda is a lower
income country where 4 out of ten people live on less than a dollar a
day.

Hydro-Generation
HG (Hydro Generation) is U.S.-based Company, specialist in power
plants (dams). Its values strongly built on the Christian culture. It has
built plants in 16 countries maintained an ownership in about half of
them. The Uganda project is its first anywhere in Africa. Because dam
construction involves huge amounts of capital and because many
groups oppose their construction on the grounds that they typically
displace large groups of people, HG wanted to build as many local
allies as possible for its Ugandan project in order to prevent adverse
publicity that could lead demonstrations and costly work stoppages. Its
employees have a high degree of empowerment, being fully
responsible for their actions. There is no code of conduct concerning
expatriates lifestyle, but its corporate culture was one that reflected
the lifestyle of a prosperous international company.

“Case Study on International Business” 5

Charles Martin
Charles Martin was 29 year-old American. He was specialist in African
culture, graduating with a major in African studies and a professional
experience in Kenya, Ethiopia and Tanzania. He took a job in HG with
the purpose of being assigned to an African project after two years of
training and doing business in the U.S. He combined a home-country
corporate perspective and a deep knowledge of Uganda economic,
political and cultural aspects. He devoted of the philosophy of
integrating the African society, not drawing attention to oneself, but
learning and respecting its culture. He was working with Ugandan
governmental authorities and with villagers to gain support and
necessary permissions for the dam’s construction. He was establishing
an office and hiring people who would be responsible for local
purchases, clearance of incoming goods through customs, immigration
permissions, and logistics of materials. He was helping foreigner
visitors become accommodated and oriented when visiting Uganda.

Charles Martin’s Assignments

He gained support and necessary permissions from the Ugandan
governmental authorities and affected villagers for the dam
construction and builds an operating structure and facility, with people
responsible for local purchases and hiring, customs, immigration
affairs, logistics of materials and record keeping. He helped foreign
visitors and HG expatriates to become accommodated and oriented
when visiting/arriving at Uganda.

Charles Martin’s Practices

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He lived among middle-class Ugandans and not in up-scale
neighbourhoods where most international managers live. He didn’t
integrate himself within the expatriate’s community. He made “extra
payments” to local people to get things moving faster. He hired staff
closely related to Government officials and participated in tribal rituals
to get support from villagers affected by the dam construction,
although being employed in a company embedded in Christian values.

Problems with Charles Martin

Some of Martin’s practices were concerning James Green, the Vice
President of Hydro Generation (HG) such as,

 Independent lifestyle,
 Participation in tribal rituals,
 Way of achieving results,
 Unethical practices,
 Payments which might be illegal under U.S. law,
 Martin’s distance from the expatriate community.

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Company and Management Orientation
Whether and how much a company and its managers adapt to foreign
cultures depends not only on the conditions within the foreign cultures
but also on the attitude of the companies and their managers. This can
be explained by the following three such attitudes or orientations-
Polycentrism, Ethnocentrism, and Geocentrism,

Polycentrism
In polycentric organizations, control is decentralized so that managers
feel free to conduct business in what he thinks. In other words,
business units in different countries have a significant degree of
autonomy from the home office and act very many like local
companies. Because many discussions of international business focus
on the unique problems that companies have experienced abroad, it is
understandable that many companies develop a polycentric
orientation. Polycentrism may be, however, an overly cautious
response to cultural variety. A company that is too polycentric may shy
away from certain countries or may avoid transferring home-country
practices or resources that may, in fact, work well abroad. When

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practices do not work abroad, management may point to the unique
foreign environment. If the foreign environment is not the cause, the
company might erroneously take a more polycentric orientation.

In intercultural competence the term polycentrism is understood as

attitude and openness towards other cultures, opinions and ways of
life: when intercultural actions and correlations are interpreted not only
with the background of own cultural experiences, but when the
independence of other cultures is recognized and appreciated and
when cultural values are relativized and seen in the whole context.

Ethnocentrism
Ethnocentrism is the belief that one’s own culture is superior to others.
In international business, it describes a company or individual so
imbued with the belief that what worked at home should work abroad
that it ignores environmental differences. Ethnocentrism takes three
general forms,

• Managers overlook important cultural factors abroad because

they have become accustomed to certain cause-and-effect
relationships in the home country.
• Management recognizes the environmental differences but still
focuses on achieving home-country rather than foreign or
worldwide objectives. The result may be diminished long-term

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 competitiveness because the company does not perform as well
as its competitors and because opposition to its practices
abroad.
• Management recognizes differences but assumes that the
introduction of its new products or ways to produce and sell
them is both necessary and easy to achieve when it is really a
complex process. Ethnocentrism is not entirely bad. Much of
what works at home will work abroad. However, excessive
ethnocentrism may cause costly business failures.

Geocentrism
Geocentrism is between the extremes of polycentrism and
ethnocentrisms are business practices that are neither the home
operations nor the host-country company’s but a hybrid of the two.
When the host-country environment is substantially different from
home, the international company must decide whether to persuade
people in that country to accept something new (in which case, the
company would be acting as a change agent) or to make changes in
the company itself. Geocentrism is when a company bassets
operations on an informed knowledge of home- and host-country
needs, capabilities, and constraints. This is the preferred approach to
business dealings with another culture because it increases
introduction of innovations and decreases the likelihood of their
failures.

Discussion on Questions

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Question 1: Describe Ugandan cultural attributes that might
affect operations of a foreign company operating there?

Answer:
Uganda is a country in central Africa with a population of about 25
million people. Uganda is ethnologically diverse, with at least 40
languages in usage. Luganda is the most common language. English is
the official language of Uganda, even though only a relatively small
proportion of the population speaks it. Access to economic and political
power is almost impossible without having mastered that language.
The East African Swahili is relatively widespread as a trade language
and was made an official national language of Uganda in September
2005. Luganda, a language widespread in central Uganda, has been
the official language in education for central Uganda for a long time.

Two thirds of Ugandan’s are Christians who are mainly divided

between Roman Catholics and Anglicans. There are also a large
number of Muslims and also people following animistic religions.
Attributes that might affect the operations of a foreign company trying
to operate in Uganda.

Language Barrier
Uganda is a country which has a multi ethnic, multi religious and multi
language background. Even though it is stated that English is the
official language as mentioned above many people speak indigenous
languages such as Bantu and Nilotic. Hence resulting in a risk to the
operations of the company by not being able to communicate with the
locals, thus resulting in a language barrier.

Religious Concerns
Uganda is also a multi religious country with people practicing many
religions. This would mean the company will have to hire employees fit

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to work from any religion and also respect those belonging to all
religious groups in order to avoid discrimination of the workforce.

Violent Political History, Political Instability and

Nepotism
Uganda is a country of about 25 million people, gas English as its
official language. But many people speak only another language,
mainly Bantu or Nilotic languages of the Bugandas, langos, Acholi,
Teso and Karamojong tribes, There has been a strong separist
movement among the Bugandas. Although about two third of
Ugandans are Christians. From that perspective of a foreign company
wants to operate its business in Uganda then language for
communication is the main problem because of the different types of
language is here. For that reason a company engines many specialist
employees for speaking with different people by different languages.
On the other hand, Business in Uganda typically moves slowly. For
instance one may wait months to a phone installed. This is a country
where incomes are extremely low and there having on exorbitant
payment system.

If any company involves such activities then it is illegal under U.S law.
Not only that in Uganda nepotism is a norm and this country
considered one of the more corrupt in the world because. From the
root level to Government in all sectors conniption exists. Here the main
problems in Uganda for a foreign company have shown as like some
key points, we find out whishes.

• Different types of communication language

• Higher and lower class discrimination

• Nepotism is a norm for employment staffs

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 • Restructuring of rules and international law

• People are involve with corruption

• Lack of the legal opportunity

• People of Uganda's are too much devout to their religion and

beliefs and culture

Question-2: Would you describe Green’s and Martin’s attitudes

as being ethnocentric, polycentric or geocentric? What
factors do you think have influenced their attitudes?

Answer:

HG’s corporate philosophy embraces the idea that although secular,

HG’s business activities should embody strong Christian values.
Further, subordinates should be given full responsibility in making and
implementing decisions, but they should also be held accountable for
their results. By choosing to live in a middle-class Ugandan
neighborhood while shunning the expatriate community, by paying
extra for service, by hiring recommended relatives, and by paying fees
and participating in tribal ceremonies, Martin exhibited a more
polycentric (autonomous) attitude, while Green seemed to be more
geocentric in his approach. While Martin was more concerned about
his effectiveness with respect to his assignment in Uganda, Green was
more concerned with corporate-level issues.

“Case Study on International Business” 13

Question 3: Who was right, Green or Martin, about the
controversial actions Martin took in the Ugandan
operation? What might have been the results if he had
not taken those actions?

Answer:

Martin was right about the controversial actions he took in the Uganda
operation. Because, HG saw the wisdom of having someone with both
a home-country corporate perspective and a knowledge of Uganda’s
economic political and cultural complexity. Charles Martin was 29 still
young by business standards had a background that seemed well
suited to the Ugandan project. After high school, he entered the
University of Wisconsin-Madison where he becomes fascinated with
African while taking a course about its pre-colonial history. After
graduating with a major in African studies, he joined the Peace Corps
and served in Kenya. His duties involved working with the start up of
small business. So he had some knowledge and experience how to
working with the start up of any business and Uganda project for HG

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was first any where in Africa. Further for that reason Martin quickly
learned that by paying tips in advance to the responsible people, he
could speed completion of HG’s requirements such as phone installed,
supplies delivered on operating licenses issued. To handle import
clearances Martin hired the niece of high-ranking custom’s officer.
From the perspective of Uganda’s culture and economic situation
Martin wanted to give the exorbitant payments and participated in the
second ceremony of tribal by respecting their believes. Not only had
that he also hired a specialist in African religions. Because Martin know
that how to operate business as a foreign company in a country, that
company must gives respect and considered their culture, norms and
beliefs,

Arguments can be made for the positions of both Green and Martin.
Certainly Martin had achieved the desired results in a timely fashion.
However, Martin’s rejection of the typical expatriate lifestyle ran
counter to Green’s idea of a desirable corporate image; Green further
felt that this might create assimilation problems for future HG
expatriates assigned to the project. Tipping for services could easily
have led to the expectation of increasingly larger payments as the
project progressed. His dealings with the official caretaker of the
sacred site, who was willing to appease the spirits for increasingly
higher fees.

Further, Martin’s participation in the tribal ritual could have been

construed as a mockery of tribal customs and also have been seen as
an affront by Uganda’s Christian majority. Finally, the close connection
between HG’s local Ugandan employees and government officials
represented an invitation to corruption. Nonetheless, had Martin
chosen to ignore local customs, the project could easily have fallen
behind schedule at any point. The result if Martin had not taken those
actions would be:

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 • HG’s business operation would move slowly

• One may wait months to get a phone installed, supplies

delivered on operating licenses issued without paying tips

• Without exorbitant payments and family connections hiring

people or staffs will be difficult because Nepotism is a norm in
Uganda

• Without hiring a specialist in African religions and participation in

the ceremony by Martin. HG would not continue its operation and
displace the villagers where the dam will be built

• Every task would not be computed on time within the total

budget

Question 4: In HG's next phase, the dam construction, should it

employ some one whose main function is to be a liaison
between HG’s corporate culture and the culture of
Uganda? If so, should Martin be the person for the job?

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Answer:
If in HG's next phase, the dam construction employ some one whose
main function is to be a lesion between HG's coronate culture and the
culture of Uganda without considering the Uganda's culture then the
same problem will occurred which was occurred earlier in Charles
Martin case. Because, culture includes norms based on learn attitudes,
values and beliefs whishes are vary from one country to another
country or if in one country then one place to another place. So Martin
should be the right person for the job. Given the importance and the
size of the project, as well as the many pitfalls that will surely be
encountered along the way, it seems only logical to employ someone
who is extremely well versed in the culture of Uganda to serve as a
liaison with HG’s headquarters. Whether that person is Martin or
someone else, however, HG must establish clear guidelines that reflect
both U.S. law and corporate policy to guide the managers of their
foreign operations.

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Conclusion
After analyzing the case we can come to the following conclusion,

• The internationalization of business requires thorough research

of the other country’s culture
• There is a need for accommodation to the different standards of
doing business by the host company in the foreign country
• It is necessary to, above all, respect the other country’s cultural
beliefs,
• People working in a foreign environment should try to become
geocentric.

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References
• International Business Environments and
Operations, John D. Daniels and Lee H. Radenbaugh, 11th
Edition.
• International Business, Alan H. Rugman and Richard M.
Hodgetts
• http://docentes.fe.unl.pt/FE/.../2_2_Charles_Martin_in_Ug
anda_G31.ppt
• http://docentes.fe.unl.pt/FE/.../2_2_Charles_Martin_in_Ug
anda_G23.ppt
• www.mba.biu.ac.il/stfhome/bijaoui/891/case/2009/uganda.
pdf

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