GLOBALIZATION AND MANAGEMENT IN AFRICA

ABSTRACT

Globalization affects virtually all aspects of management in Africa. This paper examines
globalization and its influence on management in Africa. The relationship between globalization
and management in Africa will be drawn with a focus on opportunities and challenges of their
relationship. This paper addresses globalization as a challenge and opportunities in the context of
management. It is argued that globalization appears inevitable in Africa and has affected
management practices in the continent.
 INTRODUCTION

Though as old as the history of humanity, globalization in its current waves has become a
phenomenon in all ramifications in the discussion of major developmental issues in recent years.
It has acquired considerable emotive and evaluative force such that it is being associated rightly
or wrongly, with the development of the advanced northern countries of North America, Western
Europe and South East Asia; and the underdevelopment of countries of the south in the regions
of Southern America, Latin America, Asia and Africa. Consequently, globalization has been
portrayed by its proponents as a challenge which the developing world particularly Africa must
meet in order to surmount its crisis and contradictions of management and related predicaments.
They urge Africans to adjust to rapid globalization of international trading and financial system
by increasing their exports and pushing much harder to integrate markets within Africa, lest they
suffer risk of marginalization (GCA, 1992).

Even before the era of globalisation, Africa faced unfair trade relationship with the developed
world. One problem that remains the same is that African countries mostly import manufactured
goods and export raw materials, mainly agricultural and mineral products. The prices of African
exportation have continued to fall while the value of importation has continued to rise.
Furthermore, the markets for African goods continue to shrink as the developed countries use all
types of barriers, tariff and non-tariff. This has been made worse by the fact that the developed
countries use global as well as regional trade organisations to their own advantage.

We see the same thing now being played out on the question of debt. African countries are being
asked to impose austerity measures on the populations, to sell state-owned enterprises to foreign
multinationals and give up more and more of their political independence. Those who accept
these conditions are offered some more loans and shown as good examples to the rest. Those
who do not are subjected to more subtle economic pressure. Some of the measures directed at the
Third World countries are meant to prevent them from presenting a united front in their fight
against the debt. The debt burden is the worst problem weighing on the African continent. It
slows down the fight against AIDS, delays economic development and devastates African
societies.

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Just consider the situation of Zimbabwe, Nigeria and Kenya. In order to qualify for more aid and
loans, the governments in the three countries have implemented one austerity measure after
another. The governments have only refused to implement more measures when it became
politically explosive with workers organising protests and strikes. Note the recent strike in
Nigeria.

In Zimbabwe the government has been asking for an IMF and World Bank Loan. For almost five
years now, these institutions have demanded that the government cut food subsidies, reduce
expenditure on education and collect more money through taxation. As well the government is
asked to privatise state owned factories and mines. Another demand has been that the
government withdraw troops from the Democratic Republic of Congo.

The same story is repeated in Nigeria. Here the government has been asked to reduce fuel
subsidies, cut spending on schools and hospitals and speed up the privatisation of state owned
companies, especially the oil industry. Nigeria has been required to allow foreigners to monitor
the sales and revenues of its oil. When the government went ahead and cut fuel subsidies and
raised fuel prices by 50 per cent, the workers and students organised a week-long strike and
forced President Obasanjo to lower the increases to 10 per cent. A similar situation has occurred
in Kenya where the government has imposed a wage and hiring freeze on teachers. Health care
has been hit by cost sharing programmes, just to mention a few.

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 THE CONCEPT OF GLOBALIZATION

‘Globalization’ was first coined as a term in 1980s’and the term ‘global village’ was ventilated
by the distinguished scholar, Marshal Mcluhan. The concept of globalization is perhaps today the
most recurrent term employed by scholars and world leaders alike to rationalize the development
and underdevelopment of the various parts of the world. Globalization touches people in
different ways, for better or for worse, and means different thing to different people, evokes
different emotions and different reactions from different people. As a result of these, it has
assumed the status of an essentially contested concept and put on the toga of a recurring decimal
in the North/South dialogue.

Generally globalization encompasses the increasing interaction among persons and institutions
across the globe. It refers to the growing interactions in world trade, national and foreign
investment, capital markets and the ascribed role of government in national economics (Ojo,
2004: 70; Aluko, 2004: 36). According to Obadan (2004:3) globalization is about increasing
interconnectedness and interdependence among the world's regions, nations, governments,
business, institutions communities, families and individuals. It fosters the advancement of a
"global mentality" and conjures the picture of a borderless world through the use of information
technology to create partnership to foster greater financial and economic integration.
Globalization is therefore a process hinged on technological advancement that could lead to a
greater uniformity in a wide range of aspects broadly related to economic life. One important
area is information technology, which facilitates the ease of data communication, and
transmission of digital data especially through computers, Internet, E-banking and E-governance
(See Akinboyo 2004: 191 – 196; Olayiwola and Ogundiran, 2004:209 – 217; Wade 2000: 374 –
378).

Globalization is a process of advancement and increase in interaction among the world’s

countries and peoples facilitated by progressive technological changes in locomotion,
communication, political and military power, knowledge and skills, as well as interfacing of
cultural and value systems and practices. Globalization is not a value-free, innocent, self-
determining process. It is an international socio-politico-economic and cultural permeation
process facilitated by policies of governments, private corporations, international agencies and

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civil society organizations. It essentially seeks to enhance and deploy a country’s (society’s or
organization’s) economic, political, technological, ideological and military power and influence
for competitive domination in the world. Prominent drivers or institutions of globalization
includes the World Bank (WB), the International Monetary Funds (IMF), General Agreement on
Tariffs and Trade (GATT) and World Trade Organization (WTO).

Theories used alongside globalization includes the Neo Liberalism theory which is a set of
economic policies whose effects in Africa makes the rich grow richer and the poor grow poorer.
Neo-liberalism has been imposed by powerful drivers of globalization like the International
Monetary Fund (IMF), the World Bank and the Inter- American Development Bank, with its
shrinking profit rates, inspired the corporate elite to revive economic liberalism. Also the worlds
system theory was adopted which is the historical social system of interdependent parts that form
a bounded structure and operate according to distinct rules, or a unit with a single division of
labor and multiple cultural systems.

DIMENSIONS OF GLOBALIZATION

Globalization has been examined from various dimensions such as political, economic, cultural,
social, technological, management among others.

POLITICAL SECTOR: African countries have accepted the policy of political liberalization
(democratization) which is widely spread. Africans have accepted democracy as the best type of
government. In the case of Nigeria, Ghana and Republic of Benin to mention a few, people
become very interested in democracy, liberal participation, voting behaviour and the likes.

ECONOMIC SECTOR: the economic situation has been enhanced by the contribution from
IMF for investment. Reform of deregulation and privatization of government, companies or
organisations for their effective and efficient use and the adoption of neo – liberal policy or
reforms.

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SOCIAL SECTOR: Languages like English, French, German, Arabic among others has
dominated the globe to ease and speed interaction and communication. To complement this, the
computer gives different options of language to choose from while communicating. Most
organizations in Africa communicate and interact in English as a standard and acceptable
language.

TECHNOLOGICAL SECTOR Globalization in technology has improved transport system

and communication; these two components remain the driving force of globalization.

CULTURAL SECTOR: the diffusion of culture across all global places has become a way of
life of many people. Globalization has much influenced the mode of dressing and food of the
people, there has been exchange of values across borders. Way of life has changed to modern
way, food , as a result of exposure to the modern world, there is existence of restaurants like Mc
DONALDS’s, KFC, BURGER KINGS, MR BIGGS, UAC all over Africa. In organisations in
most African countries, western dress code or uniform is the order, that is, shirts, suits, ties and
the likes.

CONCEPT OF MANAGEMENT

Management is defined as the manner, or practice of managing, handling, supervision, control

and process of harnessing resources for achieving specific goals. Put differently, management is
defined as the process of designing and maintaining an environment in which individuals,
working together in groups, efficiently accomplish selected aims. The nature of management is
quintessentially the process, derived from Henri Fayol's theories of planning, organizing, leading
and controlling the organization through the use of available resources to achieve organizational
goals.

Effective utilization and coordination of resources, such as capital, plant, materials, and labour to
achieve defined objectives with maximum efficiency. It is the process of achieving the objectives
of the business organization by bringing together human, physical, and financial resources in an
optimum combination and making the best decision for the organization while taking into
consideration its operating environment.

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From the above definition, we have the man, machine, material, money (capital) and machine,
among which man is the most important and independent of all.

Man: is the labour and manpower used in the organization. Human efforts provided in the
creation of products, as the primary factor of production, since it is required to produce capital
goods and to utilize the gifts of nature. labour is human exertion, mental or physical, in
production. Man is the most strategic element of management. Training was approved for men
on the job to acquire more skills within and outside the state using F.W Taylor’s theory of
motivation.

Machine: This includes machinery, equipment, technology, buildings, computers, and other
goods that are designed to increase the productive potential of the economy for future years.

Material: is something that is acted upon or used by or by human labour or industry. For use as a
building material to create some product or structure, examples are iron ore, logs, and crude oil,
dimensional lumber, glass and steel.

Money (Capital): including the financial capital raised to operate and expand a business. It
means goods that can help produce other goods in the future, the result of investment. It refers to
roads, factories, schools, infrastructure, and office buildings which humans have produced in
order to produce goods and services.

Methods: man use money or capital to produce. In organizations, decision makers must
understand that neither too much labor per unit of capital nor too much capital per unit of labor is
acceptable since either way efficiency is not achieved. The two elements must come around
someplace that both of them contribute equally to the final economic value realized.

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 THEORTICAL FRAMEWORK

The discourse on management features in various theories including the Theory X Management,
the scientific management theory of F.W Taylor and Western influence while the theories used
alongside globalization includes the Neo Liberalism theory which is a set of economic policies
whose effects in Africa makes the rich grow richer and the poor grow poorer. Neo-liberalism has
been imposed by powerful drivers of globalization like the International Monetary Fund (IMF),
the World Bank and the Inter- American Development Bank, with its shrinking profit rates,
inspired the corporate elite to revive economic liberalism.

Also the worlds system theory was adopted which is the historical social system of
interdependent parts that form a bounded structure and operate according to distinct rules, or a
unit with a single division of labor and multiple cultural systems.

However, systems of management are mostly representative of a post-colonial heritage,

reflecting a Theory X style of management (from McGregor) which generally mistrusts human
nature with a need to impose controls on workers, allowing little worker initiative, and rewarding
a narrow set of skills simply by financial means. Quite often the literature conveys this as a
monolithic system of management that is discernable throughout Africa, and even throughout the
‘developing’ world.

The scientific management theory of Taylor believed that the industrial management of his day
was amateurish, that management could be formulated as an academic discipline, and that the
best results would come from the partnership between a trained and qualified management and a
cooperative and innovative workforce. Each side needed the other, and there was no need for
trade unions. While the Western Influences is a belief, within the Africa and the Western world
paradigm, reflecting the convergence theory of Kerr et al (1960) and contingency theory of
Hickson and Pugh (1995), is that the developing world, through industrialization, should become
more like the western world. This is reflected in the trend for ‘western’ approaches to
management to be imported into African countries through multinational companies, and
‘western’ approaches to be sought out by managers who are increasingly being educated within
western or western-style management courses, and being trained in western traditions. This may
not only affect organizations in the private sector, but also those in the public and parastatal
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sectors and those recently privatised enterprises which are in the process of refocusing as a result
of downsizing and other major organizational change. This may reflect also a disparaging of
‘African’ (i.e. post-colonial) ways of organizing and managing.

AREAS OF MANAGEMENT

Strategic management: it can be used to determine mission, vision, values, goals, objectives,
roles and responsibilities which has clear mission statement or sense of direction that is result
and objective oriented generated through improvement in education and training.

Financial management: entails planning for the future of a person or a business enterprise to
ensure a positive cash flow. It includes the administration and maintenance of financial assets.
Besides, financial management covers the process of identifying and managing risks.

Industrial management: Industrial management, in its most comprehensive meaning, refers to

the systematic management of all aspects of the factory, and more specifically, to early studies of
production efficiency known as scientific management. The term came into use the turn of the
twentieth century, when the Industrial Revolution dramatically shifted methods of generating
output from craftsmanship to mass production and automation. Massive centralized production
facilities, like those of the Nigerian Breweries, Dangote group, brought with them the
unprecedented need to understand work that had become increasingly complex.

Human Resource management: it is the strategic and coherent approach to the management of
an organization's most valued assets - the people working there who individually and collectively
contribute to the achievement of the objectives of the business. Human Resource Management is
the organizational function that deals with issues related to people such as compensation, hiring,
performance management, organization development, safety, wellness, benefits, employee
motivation, communication, administration, and training.

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 OPPORUNITIES OF GLOBALIZATION

With inflow of capital, Globalization making fund available in the economy, invention of new
and expansion of existing companies was made possible, accompanied with opening of
trade barriers to other continent which makes raw material and machines accessible for
management’s use. With high technology invented, there had been change in method of
production as technical and human resources in industrial machineries are more
sophisticated, and skills are getting more specialised. Training of staff by Taylor was also
encouraged within and outside Africa to improve on management’s productivity.

BRIEF DESCRIPTION OF AFRICA

Africa is the world's second-largest and second most-populous continent, after Asia. Africa is
not Homogeneous in nature as it has different group of people with different characteristics
found in different places having different culture, language, food and beliefs. The language
of Africa represents a unity of character as well as diversity, as it manifests in all the
dimensions of Africa. We have the Zulu in South Africa, The Dagon in Southeastern Mali
and Burkina Faso, the Kikuyu and Maasai in the East Africa, the Ibo, Fulani, Wolof,
Hausa, Yoruba, Fon and Senufo in the West Africa and the Tuareg in North Africa.

The perceptions created by this conceptualization of ‘African management’ within a developed-

developing world paradigm may not be useful (fatalistic, resistant to change, reactive, short-
termist, authoritarian, risk reducing, context dependent, associative and basing decisions on
relationship criteria, rather than universalistic criteria) when directly contrasted with
management in the ‘developed’ world, however much it may reflect the realities of many
organizations operating in Africa (although bearing in mind differences derived from different
colonial legacies, and differences among public and private sectors). There is co-existence
between African culture and management practices adopted from the west. This situation makes
Africa receptive to globalization.

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RELATIONSHIP BETWEEN GLOBALIZATION AND MANAGEMENT IN AFRICA

With globalization, different strategic method has been used in organization management. Not
just one old method of doing work, but various options of cost minimization and profit
maximization was revealed. Foreign investment was also facilitated.

Economy and Financial Management: Globalization has helped Africans to improve the
financial management sector through cash inflows in the economy, management can get
loans from banks to improve and expand their organization and its operations.
Globalization in the financial management, facilitates the flow of capital, allowing
financial planning and financial control. Financial planning seeks to quantify various
financial resources available and plan the size and timing of expenditures. Financial
control refers to monitoring cash flow. In the globalized world of today, land and raw
materials are marginal determinants of the location and nature of production. Capital, in
terms of machinery and equipment, are even secondary to the quality of labour and
technology. The global economy is a knowledge – based one.

Technology and Industrial Management: Globalization in the industrial sector is as a revolution

dramatically shifted methods of generating output from craftsmanship to mass production
and automation. Globalization has eased international trade and commerce. Examples
include Breweries, Flour mills etc. Thus at the core of successful management is the
quality of staff, with even the firms or organizations becoming a “learning organization.”
The movement of financial capital at the speed of a “click” means that the manager’s
access to finance is in his backyard bank is no longer a certainty, material resources both
locally and internationally. E.g. Dunlop Tyres and Michelin obtain or get materials from
abroad since we have inadequate materials locally.

Globalization has enhanced organizations to send workers for training and retraining.
Organizations also employ expatriates e.g. UAC Foods, Procter & Gamble, Fan Milk Plc. With
Globalization, manpower is adequately supplied to work in the organization, through internet and
media, recruitment and employment process was much easier to perform. With F.W. Taylor’s
theory of management, training of men was adopted for effectiveness and efficiency in the areas.

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Practical case is the Royal Niger Company who was in charge of the oil rivers protectorate at the
early stage of British colonialism in Nigeria. The Royal Niger Company was replaced by the
united African company (UAC). Subsequently, various private sector organisations emerged in
line with the ethos of bureaucracy. Other African societies have similar experience, although at
different time and different administrations.

THE EFFECT OF GLOBALIZATION ON MANAGEMENT IN AFRICA

It is more important to be clear about the negative aspects of globalization and the fact that its
benefits are very unevenly shared and its costs are unevenly distributed among, across and within
countries. This is very true especially when seen in the light of African countries. Both in
concept and in practice, for every positive aspect of globalization, there is negative side: “While
globalization has positive, innovative, dynamic aspects, it also has negative, disruptive,
marginalizing aspects” (UNDP Human Development Report 1999, page 25).

With Information and communication technologies which eased interaction among countries and
peoples and has made work more easily. The world is now divided between the connected, who
know and who have a monopoly on almost everything, and the isolated, who do not know and
who practically have nothing.
Capital as the most free out of all the factors of production has affected all sectors of the
organization as fund is been made easily available and across countries through e- payments, e-
transfers, credit cards and others, in effect of these injection of fund has resulted to devaluation
of African currency and inflation in the society. Machine and material are also free as
organization can order goods from other countries to ease their productivity level which has
encouraged illicit trade in drugs, prostitution, pornography, human smuggling, dumping of
dangerous toxic waste and depletion of the environment by unscrupulous entrepreneurs. The
most important of factors of production, Labour is not free in the global village. Labour is
restricted. There is no free movement of labour as visas, resident permits are required for entry
into other countries. Even with required documents labour are still denied of entering into these
western countries from all Africa countries.

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Multinational companies in Africa like chevron, shell, first, they look to establish or contract
operations (production, service and sales) in countries and regions where they can exploit
cheaper labour and resources. While this can mean additional wealth flowing into those
communities, this form of 'globalization' entails significant inequalities. It can also mean large
scale unemployment in those communities where those industries were previously located. The
wages paid in the new settings can be minimal, and worker's rights and conditions poor as they
enjoy paying less than what they pay employee doing the same job in the western countries.
Labour are been maltreated. They prefer employing expatriates even when their capable
employee in Africa for the job. Training as advised by Taylor is not followed since most
employees are employed as casual staff, yet as productivity increases, with cheap labour and
resources in Africa, excess profit are being transferred to the home countries.

The structural adjustment programme as advised by the western countries adopted in Nigeria led
to increase in unemployment and retrenchment of workers, and anti labour practice. This also
affected the poverty level and standard of living of individuals.

Drain on the human capacity: Globalization has opened borders and relatively freed labor
movements. But for African countries this has aggravated the problem of brain drain, which has
existed for a long time. Although most African countries with appropriate financial policies
receive remittances from their nationals working abroad, it is not clear whether the contribution
of some of the most qualified to the process of developing their countries would not be more
than the remittances they send back home from “exile”. It is noted, however, that this problem
should not be over simplified. Some of the most qualified Africans ran away from their countries
because of the negative behavior of the regimes themselves. In other words, this human capacity
in some instances is frightened away by brutal regimes rather than being attracted by
globalization forces as such.

In Nigeria, the structural adjustment programme introduced did more evil than good as it proved
to be a hardship. Inflation consumes the small salaries that most people earn. Crime, disease,
strikes and lockouts and widespread hunger was on high.

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Overstretched capacity to regulate and protect the environment. However, as global actors invest
and expand their activities, especially related to industrial, agricultural, mining, forest
exploitation and fishing, the regulatory capacity of public administration in African countries,
which is already limited in many respects is becoming overstretched. The State is getting caught
in the middle of its need to speed development through industrialization, agricultural
modernization, exploitation of natural resources, etc. and the pressure of local and global
environmentalist groups.

Overstretched capacity to handle international and computer-based crime: The African State and
its forces of law and order were used to handle “traditional crimes”. However, with globalization
there has been an increase in crimes (drugs, pornography, international corruption etc.) that had
been at lower magnitude. In addition, progress in Information technology has facilitated the
emergence and growth of computer-based crimes, especially fraud. The strong challenge posed
by the powerful criminals on the State creates an atmosphere of uncertainty and insecurity in the
public, thus reducing the required confidence that would attract both local and foreign
investment. There is need to strengthen the capacity of the forces of law and order, especially in
the areas of detecting and handling sophisticated crime. If this does not happen, the sophisticated
criminals will find ready-made comfortable hiding places in Africa. This will be a big insecurity
problem for the rest of the world.

Making the task of poverty eradication more difficult: As global actors pressurize African
governments to open up more and more to maximize foreign investment and capital inflows, and
as big multinationals and local enterprises utilize this environment to cater for their interests, the
government is having less and less room to pay attention to the abject poverty amongst its poor
people. Evidence that shows the widening gap between the poor and the rich both in country and
between countries is increasingly becoming abundant.

Globalization opens people’s lives to other cultures and all their creativity and to the flow of
ideas and values. As cultures interact, some cultures are being diluted and/or destroyed at the
expense of others and negative values are being spread all over the world with relative ease.

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 CONCLUSION

This paper has successfully examined how globalization affected or influenced aspects of
management in Africa. Having established the relationship between the duo, with the
opportunities and challenges of their relationship discussed. Globalization is on-going and
inevitable in management practices in Africa.

The conclusion here is that globalization has posed enormous challenges for the African
management. It has put demands on their capacities (institutions, structures, skills, knowledge,
networks, technology, facilities, equipment, etc.), which as everyone knows, has always been
very weak, the systems themselves being still nascent. Managing globalization effectively to
benefit the African people, especially the poor, calls for new attitudes and leadership.

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