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    • ABSTRACTTraditional South African business tended towards the accumulation of power and decision-making in the hands of a few senior managers (usually white), with middle managers waiting inline to move up the corporate ladder over time. Post-apartheid, things have started to change —especially under the influence of the myriad of mncs which have flocked into the country — withhierarchies breaking down somewhat and younger middle-managers looking to become moreproactively involved in decision-making. Thus the best advice to give is for a manager to be seento be in command of the facts and the subject matter but to ask for input and opinions from theteam. Be authoritative but not authoritarian. The biggest change to have impacted at middlemanagement level over the last few years has been the introduction of a new cadre of blackprofessionals into most companies. This new breed of managers has been enabled to makecorporate progress through the use of affirmative action’ programmes, where companieshave actively sought to develop a more representative and racially diverse management team.It would, again, be very nice to pretend that these policies of affirmative action have beenuniversally well-received amongst existing white management teams and many whites willcomplain about inappropriate individuals being selected for a particular position simply becauseof skin colour, rather than ability, knowledge or aptitude. The issue of affirmative action is oneof the flash points of modern South African business and must be approached with great cautionand sensitivity. 2
    • INDEX1. ACKNOWLEDGEMENT…………………………………………………………………..…32. SOUTH AFRICAN BUSINESS ENVIRONMENT ………………………………………....43. SOUTH AFRICAN MANAGEMENT STYLE ……………………………………………...84. SOUTH AFRICAN MEETINGS5. SOUTH AFRICAN TEAMS6. SOUTH AFRICAN DRESS C0DE7. CROSS-CULTURAL MANAGEMENT IN SOUTH AFRICA ……………………….….118. THE EUROCENTRIC APPROACH9. THE AFROCENTRIC APPROACH10. THE SYNERGISTIC INSPIRATIONAL APPROACH11. PROBLEMS AND OBSTRACLES FACED BY SOUTH AFRICAN OGANIZATIONS ……………………………………………………………………………………………….....1212. AFRICAN MANAGEMENT METHODS ………………………………………………....1313. USING AFRICAN MANAGEMENT PRINCIPLES …………………………………......1714. BEING A MANAGER IN SOUTH AFRICA …………………………………………….…….......1915. FACTS AND STATISTICS ………………………………………………………………....2116. STANDARD BANK GROUP………………………………………………………………..2517. FIRSTRAND………………………………………………………………………………….2718. CONCLUSIONS……………………………………………………………………………...2919. BIBLIOGRAPHY…………………………………………………………………………….30 3
    • ACKNOWLEDGEMENTSWe have taken efforts in this project. However, it would not have been possible without the kindsupport and help of many individuals and organizations. We would like to extend my sincerethanks to all of them. We are highly indebted to Dr.Pallavi Srivastava for her guidance and constant supervision aswell as for providing necessary information regarding the project & also for her support incompleting the project.Princy SinghPriyanka Chowdhry 4
    • SOUTH AFRICAN BUSINESS ENVIRONMENTSouth Africa has enormous potential as an investment destination, offering a unique combinationof highly developed first world economic infrastructure with a vibrant emerging marketeconomy. It is also one of the most advanced and productive economies in Africa.Here are just some of the reasons for doing business in South Africa: Sound economic policies Favourable legal and business environment World-class infrastructure Access to markets Gateway to Africa Trade reform, strategic alliances Cost of doing business in SA Ease of doing business in SA Industrial capability, cutting-edge technology CompetitivenessSound economic policiesSince the advent of democracy in 1994, South Africas economy has been undergoing structuraltransformation, with the implementation of macro-economic policies aimed at promotingdomestic competitiveness, growth and employment and increasing the economys outwardorientation.Key economic reforms have given rise to a high level of macro-economic stability. Taxes havebeen reduced, tariffs lowered, the fiscal deficit brought under control, and exchange controlsrelaxed.Favourable legal and business environmentSouth Africa has a world-class, progressive legal framework. Legislation pertaining tocommerce, labour and maritime issues is particularly well developed, while laws relating tocompetition policy, copyright, patents, trademarks and disputes conform to international normsand conventions.World-class infrastructureSouth Africa has world-class infrastructure - including a modern transport network, relativelylow-cost and widely available energy, and sophisticated telecommunications facilities.And these are being significantly upgraded and expanded in preparation for the 2010 Fifa WorldCup. The government has identified massive infrastructure projects as key to boosting the 5
    • countrys economic growth rate and creating employment, and is spending billions of rands ongetting the investment ball rolling.Access to marketsLocated at the southernmost tip of the African continent, South Africa is ideally positioned foraccess to the 14 countries comprising the Southern African Development Community (SADC) –with a combined market of over 250-million people – as well as the islands off Africas eastcoast, and even the Gulf States and India. South Africa also serves as a trans-shipment pointbetween the emerging markets of Central and South America and the newly industrialisednations of South and Far East Asia.Gateway to AfricaNot only is South Africa in itself an important emerging market, it is also a minimumrequirement for accessing other sub-Saharan markets. The country borders with Namibia,Botswana, Zimbabwe, Mozambique, Swaziland and Lesotho, and its well-developed road andrail links provide the platform and infrastructure for ground transportation deep into sub-SaharanAfrica.Trade reform, strategic alliancesSince signing the Global Agreement on Tariffs and Trade in 1994, South Africa has become aplayer in the global trading system, and a series of trade reforms – including a tariff reductionand rationalisation programme – have been implemented.Market access has been enhanced through free trade agreements with the European Union andthe Southern African Development Community and the implementation of the Africa Growthand Opportunity Act by the United States.Cost of doing business in SASouth Africas exchange rate makes it one of the least expensive countries for foreigners to liveand do business in – with a first-world infrastructure and high living standards ensuring goodvalue for money.South Africas energy costs are still among the lowest in the world, and the country comparesfavourably for petroleum prices, with private sector and multinational oil companies refining andmarketing nearly all imported petroleum products in southern Africa. And telecommunicationscosts are coming down. South Africas unit labour costs are lower than those of other keyemerging markets, including Mexico, Hungary. South Africas corporate tax rate – down to 28%for 2008/09 – compares favourably against a number of developing companies, and the prospectsof further reductions are good. 6
    • Ease of doing business in SASouth Africa ranked 35th out of 178 countries in the World Bank and International FinanceCorporations Doing Business 2008 report, an annual survey that measures the time, cost andhassle for businesses to comply with legal and administrative requirements.South Africa was ranked above developed countries such as Portugal (37) and Spain (38), as wellas major developing economies such as Mexico (44), China (83), Russia (106), India (120) andBrazil (122).Industrial capability, cutting-edge technologySouth Africas industrial production growth is well above the average for developing markets.The countrys manufacturing output is increasingly technology-intensive, with high-techmanufacturing sectors – such as machinery, scientific equipment and motor vehicles – enjoying agrowing share of total manufacturing production since 1994.South Africas technological research and quality standards are world-renowned. The country hasdeveloped a number of leading technologies, particularly in the fields of energy and fuels, steelproduction, deep-level mining, telecommunications and information technology.CompetitivenessSouth Africa was ranked 44th out of 130 countries – ahead of Italy and India – in the WorldEconomic Forums Global Competitiveness Index for 2007/08. The highest ranked Africancountry was Tunisia, which placed 32nd with a score of 4.59. South Africas score, an average ofscores across 12 measures of competitiveness, was 4.42.A number of industrial support measures have been introduced since 1994 to enhance thecompetitiveness of South Africas industrial base. These include placing more emphasis onsupply-side than demand-side measures (such as tariffs and expensive export supportprogrammes). 7
    • SOUTH AFRICAN MANAGEMENT STYLETraditional South African business tended towards the accumulation of power and decision-making in the hands of a few senior managers (usually white), with middle managers waiting inline to move up the corporate ladder over time. Post-apartheid, things have started to change —especially under the influence of the myriad of mncs which have flocked into the country — withhierarchies breaking down somewhat and younger middle-managers looking to become moreproactively involved in decision-making. Thus the best advice to give is for a manager to be seento be in command of the facts and the subject matter but to ask for input and opinions from theteam. Be authoritative but not authoritarian. The biggest change to have impacted at middlemanagement level over the last few years has been the introduction of a new cadre of blackprofessionals into most companies. This new breed of managers has been enabled to makecorporate progress through the use of affirmative action programmes, where companies haveactively sought to develop a more representative and racially diverse management team.It would, again, be very nice to pretend that these policies of affirmative action have beenuniversally well-received amongst existing white management teams and many whites willcomplain about inappropriate individuals being selected for a particular position simply becauseof skin colour, rather than ability, knowledge or aptitude. The issue of affirmative action is oneof the flash points of modern South African business and must be approached with great cautionand sensitivitySouth African MeetingsAs would be expected in a country as diverse as South Africa, it is difficult to give an overviewof what to expect in a meeting situation in a few words. Meeting styles will differ dependingupon who you are dealing with — a traditional, white-dominated business, a start-up blackAfrican company or the subsidiary of a multi-national located in Johannesburg or Cape Town.However, it is possible to give few a simple tips which are worth bearing in mind. Firstly, SouthAfricans expect you to have a good idea of the current situation on the ground in South Africa.Show that you have done your research and that you have adapted your policies or ideas to meetthe local conditions. Secondly, take time in the meeting to try to develop a good relationship withthe people you are doing business with. This is important within all sections of South Africansociety as relationships have always formed the basis of good business — regardless of culturalbackground.Thirdly, avoid anything that could be considered a hard sell approach. It is much better to beunderstated and patient with South African contacts as being too pushy will probably alienatepeople. 8
    • South African TeamsSouth Africas self-style epithet of the Rainbow Nation is accurate and useful to bear in mind.Although all South Africans share a love of their country, within the one country there are anumber of diverse and distinct sub-cultures. All South Africans are acutely aware of the ethnicand racial divisions and these divisions can make it difficult to build teams which cross theseboundaries.People are not just white South African they are English or Afrikaner; they are not just blackSouth African they are Zulu or Xhosa. The rivalries cut many ways and are centuries old. It willtake a long time for these traditional thought processes to change and they can create serious andunforeseen tensions in the workplace. Putting teams together and making them work requires agreat deal of sensitivity and local knowledge.South African Dress CodeSouth Africa is a conservative society and it is best to err on the side of caution in terms of dress.Therefore, men are advised to wear a collar and tie and women to wear smart, business-likedresses or suits.If meeting business contacts on a social basis, it is possible to dress morecasually but not too casually.Cultural diversity and management challenges in South African organizationsWestern and non-Western people and cultures have for a long time lived in South Africa, butseperated ethnic development has led to a cultural patchwork rather than melting pot. With apopulation exceeding 41.2 millions of people, more than 75% are Blacks, about 12% are Whites,9% Coloreds and 3% Indians. The diversity goes further on when one recalls that Blacks aredivided into nine major different ethnies with distinct communities, often cultural practices andof course languages : the Zulu (majority), the Xhosa, the South Sotho and North Sotho, theTwana, the Venda, the Ndebele, the Swazi and the Tsonga. Amongst the Whites’ group areAfrikaans people, British origin people, and lots of other European origin people (Italians,Portuguese, Germans, French…).The new constitution promotes eleven official languages (9 Black languages, English, andAfrikaans) but English is the business language. Afrikaans, a Dutch creole, is spoken by theAfrikaners and many Blacks and Coloreds. Of the nine local languages, Zulu is the mostcommonly spoken, but many South Africans without formal education are fluent in severallanguages which they need to communicate in the multilingual townships or workplaces. Morethan 80% of the population is Christian, about 60% of Asians are Hindu and 20% Muslim. Thereis also a large white Jewish community. Respect and deference to seniors is shown by bothBlacks and Whites, the heritage of an authoritarian culture based on strict religious leaders andparents. 9
    • In a period of rapid changes, the polarization of relationships largely depends on racial lines, butnot only. Oppositions that go along the racial lines are between: (a) the Third World and Firstworld, (b) unskilled and skilled workers, (c) Trade Unions and Corporate management, (d)workers and managers. Some other cultural oppositions may include a polarization ofrelationship between: (e) males and females, (f) rural and urban populations, and finally (g)between the new and older generations. Within this highly multicultural and transitionaleconomic environment, the South African management popular literature has done much toagree upon the fact that the survival of South African companies is intrinsically conditionned bytheir capacity to integrate cultural diversity positively, that is to develop unity in diversity. Othermajor related challenges concerning human management in South African companies includemanaging change, Organizational Development, and education and training. But the corechallenge of the new SA is to find creative solutions for integrating economic growth anddevelopment in parallel with overcoming deeply entrenched discriminatory practices and socialdivision. 10
    • CROSS-CULTURAL MANAGEMENT IN SOUTH AFRICAContrary to Triad economies management styles, the management of African organizations hastraditionnaly been neglected by the mainstream international management literature. It issurprisingly all the more true for cross-cultural management issues in African organization.Three management aproaches have been identified in the literature that can possibly be observedin South African.A) the Eurocentric approachEurocentrism is the practice of viewing the world from a European perspective and with animplied belief, either consciously or subconsciously, in the preeminence of European culture.The term Eurocentrism was coined during the period of decolonisation in the late 20th centuryand is only used critically.The Eurocentric approach is the traditional dominant western and in fact a White Anglo-SaxonProtestant style of management. It is globally consistent with western value systems in which theprimacy is given to individualism and related self-centered concepts (self-fulfilment, self-development).B) the Afrocentric approachAfrocentrism is an ethnocentric ideology which emphasizes the importance of African people,taken as a single group and often equated with black people, in culture, philosophy, and history.Radical Afrocentrism is a project of historical revisionism, includingvarious pseudohistorical claims, such as suggestions that ancient Greece and ancient Egypt wereoriginally black civilizations, and that Africans were responsible for many of the greatinnovations in ancient philosophy, science, and technology, which were later stolen by MiddleEastern European peoples.C) the synergistic inspirational approachThe third management approach that can be observed in SA is based on the acknoledgment thatSA must understand and take profit its dual heritage. It means consciously integrating traditionalAfrican management practices, values and philosophies with Western management techniques.Lessem (1989, 1996) shows the need for reconciliation in a creative tension of the four differentcultural worlds present in SA : Western competition and Eastern cooperation, Northerncoordination and Southern cocreation (community based management). Koopman (1994)describes the new South African organization to be developed under a « Pragmatic humanism »approach in which the way to incorporate inclusivism is to seek unity in diversity. It meansbuilding trust and respect for different values, building common values, and learning. 11
    • PROBLEMS AND OBSTACLES FACED BY SOUTH AFRICANORGANIZATIONSThe vision of cultural diversity.South African organizations share a vision of cultural diversity dominated by an « ethnocentricapproach », in which the « my way is the best way » predominates. Each group tend to attachpositive traits to the in-group and negative traits to the out-groups (defined first along raciallines). Besides, it is a assimilation vision of diversity in the sense that it is more often necessaryto non-Whites to assimilate White cultural references to succeed in the company (like dressingcodes, languages used). Many cases also highlight a crawling racism in the attitudes, behaviorsand values observed on the workplace. Thus the removal of legislated discrimination has notmeant pervasive removal of racial prejudice and social discrimation in practice.The dominant management style.The style of management largely reflects the traits of a dominant eurocentric approach :autocratic (« the Chief »), hierarchical and authoritarian (disciplinary procedures), individualistic(competition oriented). Decisions are not really discussed and the information system is moretop-down. The organization is generally centralized and the hierarchical structure shows a heavyhierarchy and a large power distance. This description is consistent with the description ofJackson (1999).As a corollary of the eurocentric dominant vision and management style, the « we-them »syndrom is largely beeing observed in South African companies. It is conceived as the directresult of the apartheid socialization of people along the identification of races and the lack oftrust towards the cultural alien. 12
    • AFRICAN MANAGEMENT METHODSAn American professor asked an African CEO exactly how his firm was structured. The CEOsaid it had no structure. Amused, the professor asked why he lied. Unruffled, the African repliedthat he gives the same answer to every white American who asks, since he has given upexpecting them to grasp the facts. "Our firms are not structured in ways whites understand. It iseasier to respond as they expect and say we have no structure. None."How many American managers believe African management principles belong to a primitivepast? How many feel African firms just copy Western management methods, or have none at all?This type of thinking is commercially convenient. If both assumptions were true, we would haveno need to analyze their system, nor would we need to adjust when launching an Africanbusiness venture; we would only need to deal with Africans in Western ways.There are reasons for this type of thinking. Africa is our commercial blind spot—a mote in ourglobal vision. We know little of their current business methods, and even less of theircommercial past. The basic reason for this relates to our cultures own history. Having tacitlyaccepted the racist "dark continent" and "Tarzan" mythologies since childhood, we ignore therichness, complexity, and effectiveness of Africas 1000 years of mercantile success. Withoutthat knowledge, why would one care about their present methods?Yet Africa is a closet millionaire, hiding both mineral wealth and agricultural potential. Its oil,diamonds, gold, copper, hydro-electric power, chromium, platinum, uranium, and millions offertile acres suggest the possibility of great wealth. Historically, much of Africa was alwaysrather wealthy. Until the Europeans intruded after the 1500s, vast regions were not composed oftribes, but of stable, organized, middle-sized kingdoms equal in every way to the stable,organized, middle-sized kingdoms emerging in Europe. Both sets of kingdoms had hereditaryroyalty, nobility, priest-hoods, traders, soldiers, craftsmen, peasants, and serfs. Like Europeanroyalty, African royalty thrived on trade. As a result, African traders developed complex,sophisticated commercial principles that extend back over 1000 years.Notwithstanding, most of us studiously ignore these principles. African management methodsare never taught in U.S. business schools. Corporate trainers do not know they exist. Businesstext books ignore them, as do popular books on overseas trade. In any U.S. bookstore one willtypically always find books on Japanese and European management methods, but none on thoseof Africa. "Global" titles are the most misleading. One, entitled "The World Class Executive"deals with Europe, Asia, South America and the Arab nations, but not with Africa. Anotherexample, "Doing Business Abroad," examines Russians, Chinese, and Arabs. A third,"International Business Women of the 1990s," speaks of coping with (male) Europeans, Arabs,Asians, and Latin Americans but not with Africans. In short, the African contribution to globalbusiness principles is systematically ignored. 13
    • It would be useful here to analyze the management methods of a "typical" African firm. In fact,no firm on this vast continent is typical. Each displays peculiarities that reflect its regionalhistory, tribal origins, linguistic structure and even family background. Thus the firms consideredin this research, drawn from East, West, Central, and Southern Africa, differ strikingly from oneanother. Nonetheless, many African enterprises in many African countries organize, manage, andfinance their enterprises in surprisingly similar ways. These principles are rooted in centuries oftradition. They have become behavioral ideals, toward which most Africans aspire, and thusform a basis for the methods with which they actually do business. Six of these principles are ofparticular interest to Americans—for we can use them ourselves.THE KINSHIP PRINCIPLEAmerican firms are organized like American armies, using principles we have learned fromancient Rome. African firms are structured like African families, using principles based onkinship. In Africa, families are defined as all of those people who are descended from a singlefounder. Many trace their ancestors back 400 years, and some even 1000 years. Thus one familymay extend over several living generations, to include scores or even hundreds of members—each of whom know their precise relationship to everyone else. Many of these extended familieshave entered commerce, first locally, then across national borders and today into Europe,America, and beyond.THE CHAMELEON PRINCIPLEThe chameleons ability to change color allows it to blend with new surroundings. A secondAfrican management principle is to blend outwardly with foreign business settings, whileretaining an African commercial core. This method developed from centuries of whitedomination, which forced blacks to adopt Western behaviors while preserving indigenousbeliefs. As a result, some contemporary African companies have what informants describe as"white skins and black (African) hearts,"—that is, they present a Westernized external imagewhile retaining an African core.Sometimes, both styles function simultaneously, as when African firms move into Euro-styledwork places, with desks set up in tidy lines, while supervisors work from corner offices andbehind closed doors.THE PRINCIPLE OF AGEAge is a primary principle of African management. Advanced age is equated with authority. Webase leadership on merit, whether derived from education, training or genius. Africans baseleadership solely on age. Authority flows from older to younger employees, making noexceptions for those with foreign language-skills, commercial training, university education, orsheer brilliance. Thus, no nephew can supervise an uncle, regardless of ability or training. A 14
    • Kenya proverb reflects this, "Show me a people where calves teach the bulls, and I will showyou a nation of madmen."This principle is based on a philosophy, found across Africa, that equates greater age withgreater experience and thus greater wisdom. Africans believe that aging "cools" the blood, thusallowing elders to consider problems rationally rather than in the heat of emotion. Socially, thismeans elders must cool (judge) the conflicts inevitably generated by the "hotter" blood(emotionalism) of youth. Thus, in contemporary firms as with traditional societies, the youngcreate conflicts while the aged use their greater wisdom to cool and thus resolve them.THE TIMELESSNESS PRINCIPLEAfrican decision making is actually based on three interwoven management methods:timelessness, consultation, and consensus. Unfortunately, these three principles clash with threeof our own managerial expectations.We seek individual decision makers, especially within commercial settings. Americans admirethe ability to make decisions individually, and thus seek that same capacity in those with whomwe trade. We dismiss decisions made collectively as vague. Or too difficult to achieve, preferringthe swiftness of either authoritarian decisiveness or majority rule. We also seek timeliness.Americans admire swift decisions, even in unstructured situations. In U.S. slang, we "wing it,""think on our feet," and "take off." Finally, we admire individual risk-takers. Instead of asking,"why" when faced with hard decisions, we often ask "why not," assuming that each misstep willbe correctable.In contrast, most Africans prefer decisions to emerge through timeless consultation, untilparticipants can reach consensus. To be sure, an African executive can make snap judgements asswiftly as Americans can. Nonetheless, he is likely to remain aware of obligations to hisextended family or clan. By acting alone, he flaunts that clans collective wisdom. By consulting,he honors it.THE NEPOTISM PRINCIPLEHiring kin is an African management principle. Equating the African firm with a fictional familyapplies to both staffing and firing. This clashes with our expectation of hiring on the basis ofmerit, but our firms are not often families. African staffing relationships are thus conditioned byprior family status, rather than Western-imported law. In hiring, the firm simply extends itsexisting family structure, either by incorporating additional members of its own group or thosefrom allied families. In fact, these are fictional kin, in that they have no blood ties to the familyand firm they join. Nonetheless, they behave throughout the remainder of their employment asthough that kinship were real. 15
    • Under these circumstances, filling a post means doing a favor for kinsmen—real or fictional. Inthe U.S. if you asked a fellow colleague to hire a relative, they might do so, but only in the eventof an actual vacancy and after confirming the individuals skills. An African could ask a distantkinsman to hire that same relative, and that know he would.THE "HOMEBOY" PRINCIPLEAfrican firms use what Americans might call a "homeboy" principle, both to acquire newclientele and retain old ones. This is based on the premise that new clients (like new employees)represent additions to the extended family. Each client represents a new relationship. Each newrelationship represents an extension of that firms commercial reach, and thus its economicsecurity. When Americans expand their business, they promote economic security by seekingnew sources of long-term profit. When Africans do this, they seek new long-term relationships.In Africa, wealth is not only counted in currency, but in the number of people to whom one is soclosely linked that they will aid one another on request. A Congolese proverb reflects thisprinciple: "You must not die alone. Money cannot weep for you. Money cannot bury you. Onlypeople can."In consequence, many African companies market goods and services both to and throughexisting homeboys. Ideally, no firm wishes to market to anyone outside their net of kin andcomrades, thus creating an economic Eden in which all transactions occur in a climate of trust.Since this ideal is unattainable, all firms move beyond their circle of kinsmen and in-laws,competing to recruit (actual or potential) homeboys as fictional kin. The goal is to extend theircommercial reach, social influence, economic power, and potential clientele at the expense ofother competing families.THE FUTURE FAVOR PRINCIPLEThe "future favor" is the primary tool of African management. It is a strategy to acquire clients,suppliers, distributors, etc., by placing them under obligation. The system is more complex theneither doing something nice for someone, or even an exchange of services. This system addsdegrees of kinship and dimensions of time that have no American parallels. It is therefore worthyof examination.One method is to exchange favors between equals. It begins when one person provides anotherwith a favor on request, without asking for repayment. The recipient, though grateful, may notreturn a comparable favor until asked. Such an appeal may not come for weeks, months, years, orentire generations. When it does come, however, the recipient will feel a moral obligation torespond. That response does not cancel the interaction, however, as it might in the U.S. Rather, itre-obligates the original provider to reciprocate in turn, thus continuing an exchange of servicesexplicitly intended to last indefinitely. Relationships emerge from the inner feelings generated bythis constant giving and receiving, reflecting ties far stronger than would result if one individual 16
    • had simply paid the other for a service. Over time, these same relationships generate far deepertrust than can be achieved by any written contract.THE RULES/EXCEPTIONS PRINCIPLEOne final management principle is to make exceptions to existing rules, thus once more placingothers under obligation. Americans, however, believe in rules. We prefer to do businessaccording to rules. When entering new business situations, we ask what rules exist, then try tofollow them. Where no rules exist, we tend to create them, believing they will add predictabilityand therefore pleasure to our lives. We also try to avoid exceptions to those rules. While wedisagree with many of them, we believe in rules per se. We are all familiar with the American"proverb" that best reflects this: "If I make an exception for you, then I must make an exceptionfor everyone."In contrast, many Africans do business through a system of exceptions. They apply what rulesexist, but make exceptions for kin and homeboys. By doing this, they both obligate recipientsand strengthen their relationships. Consider this example: An African manager learned that his(homeboy) employee had stolen company funds. The (Western) law required punishment. Inconsequence, the (European) owners were not informed. Instead, as the stolen sum had beenspent, the manager solicited funds from other (homeboy) employees so that repayment could bemade.Here, the relationships between manager, thief, and the other workers were more important thanthe rules. Thus, an exception was made. In consequence, the manager gained prestige. The thiefcould eventually repay the funds (in the form of future favors) to nonjudgmental peers. Theworkers were pleased to have a brother in their debt. Here, making an exception for onehomeboy strengthened the relationships of every African within the firm.USING AFRICAN MANAGEMENT PRINCIPLESThe purpose in learning these principles is to actively use them in African commercial settings.The African need for personal involvement and the desire to draw "useful" individuals into anextended family net can also work for American businesspeople. By applying the local rules, youmay create homeboy status for yourself. As an American, there are therefore four logical stepsfor you to take on starting an African business venture:MAKE CONTACTS: SEEK ALLIES.Put your project aside for the first six weeks in Africa. Since you will lack first hand knowledgeof local markets, begin by making contacts, then developing the best of them as company allies. 17
    • Do this by interviewing local notables in business hours, then socializing with them at night. Asknot only how local business is conducted but who conducts it, who can help you, who mightharm you, and then ask to meet them all. Many Americans focus on product presentation fromthe moment they arrive. Their interest lies in closing deals. Africans, in contrast, focus onidentifying both local rules and major players. Their interest is in forming ties that will allowthem to fit in. Only then do they consider positioning their product.DO FAVORS: PLAY "BIG MAN."In cultures where placing others under obligation has become a business tool, use generosity togenerate allies. There are only two rules. Give first. This sends a signal that you seek a long term business relationship, rather than a short term, one time sale. By placing someone under obligation, you let him know that you expect reciprocal favors in the future. Keep Giving. In nations marked by massive gaps between rich and poor, it is recurrent acts of generosity that symbolize wealth and thus confer status. Since American firms that mean to market in these countries both have wealth and seek status, it seems wiser to give than receive. Moreover, it seems wisest to give often, if by so doing you both show respect for local custom and seek alliances on local terms.ASK FAVORS: PLAY "LITTLE BROTHER."You may initially believe that you prefer the big man role. Notwithstanding, that of little brothermay prove more useful. As a new arrival, use your on-site inexperience as a business tool. Asyou ask questions, ask favors. Take on obligations. By playing little brother, you transform localnotables into big men. By doing that, you make allies.BECOME A HOMEBOY: AFFILIATE WITH LOCAL CLANS.Link your enterprise with one (or more) African family firms, on local terms. Why not developthe best of your business relationships into lifelong bonds, and become a homeboy and thusfictional kin to a thriving African mercantile clan? While it is true that homeboys share acommon past, that need not shut you out. One individual, an ex-Peace Corps volunteer, is"homegirl" to 90 Gambians. Another American is "homeboy" to a Kenyan minister, Botswananambassador, and Congolese refugee, all by virtue of having attended the same universities. If youlack a common past, work to create a common present, by becoming "family" to members a localfamily firm. Visit, host, do favors, take favors, play big man, little brother, and dear friend. That,in turn, will mean you have succeeded in approaching African business from an Africanperspective. 18
    • BEING A MANAGER IN SOUTH AFRICASuccessful cross cultural management is more likely is you understand the importance ofspending time developing personal relationships and getting to know your colleagues. Becausethe country was closed to outside influences for many years, some older Afrikaners remainsuspicious of anyone who might dilute their culture, including foreigners.There are strong regional differences that affect the way business is conducted. There may be alack of time urgency in cities such as Cape Town that is best explained by the phrase "just now",which means immediately, just past, now, later, or sometime in the future; whereas business canbe quite fast paced in Johannesburg.The white "Old School Tie" or "Old Boy" network that ran major businesses two decades ago isslowly being replaced by a new generation of executives who are more interested inaccomplishment than where someone went to school. This is a country in transition andsuccessful cross cultural management is more likely is you understand that you should expect tofind many different management styles. Often the behavior you experience will be more a matterof personality than cultural dictate.The Role of a ManagerThe purpose of meetings in South Africa is to share information among co-workers. There is nota great deal of emphasis placed on position or status. All present are assumed to have value andtherefore have value to contribute. The agenda will be set by the leader, and the leader will guidethe pace and content of discussions, but all present have both an obligation and a right tocontribute.Meeting schedules are not rigid in South Africa. There may be an agenda, but it serves as aguideline for the discussion and acts as a springboard to other related business ideas. Asrelationships are highly important in this culture, there may be some time in the meeting devotedto non-business discussions. Time is not considered more important than completing a meetingsatisfactorily, so meetings will go on until they come to a natural ending.Approach to ChangeSouth Africa’s intercultural adaptability and readiness for change is apparent. South Africa isseen to have a medium tolerance for change and risk. It is important for innovations to have atrack record or history noting the benefits if they are to be accepted and implemented.The fear of exposure, and the potential of embarrassment that may accompany failure, bringsabout aversion to risk. Because of this attitude, intercultural sensitivity is going to be required, 19
    • especially when conducting group meetings and discussing contributions made my participatingindividuals.Approach to Time and PrioritiesSouth Africa is a controlled-time culture, and adherence to schedules is important and expected.In South Africa missing a deadline is a sign of poor management and inefficiency, and will shakepeople’s confidence.Since South Africans respect schedules and deadlines, it is not unusual for managers to expectpeople to work late and even give up weekends in order to meet target deadlines. Successfulintercultural management will depend on the individual’s ability to meet deadlines.Decision MakingAs with many other aspects of South African business, the relationship between managers andsubordinates is changing. Afrikaner managers were known for being autocratic; however, themanagement style is becoming increasingly collaborative. That is not to say that hierarchicalrelationships are not respected.Boss or Team PlayerIn South Africa, groups collaborate well together as teams. Members are generally chosen toparticipate based on tangible skills or the knowledge base they bring, and are equally welcome tocontribute to any discussion that may arise.The success of the cross cultural manager will depend on the individual’s ability to harness thetalent of the group assembled, and develop any resulting synergies.Communication and Negotiation StylesWomen have yet to attain senior level positions. If you are a woman, you can expect toencounter some condescending behavior and to be tested in ways that a male colleague wouldnot. Do not interrupt a South African while they are speaking. South Africans strive forconsensus and win-win situations. Include delivery dates in contracts as deadlines are oftenviewed as fluid rather than firm commitments. Start negotiating with a realistic figure. Decision-making may be concentrated at the top of the company and decisions are often made afterconsultation with subordinates, so the process can be slow and protracted. Patience may be anecessary cross cultural attribute. 20
    • FACTS AND STATISTICSLocation: Southern most tip of Africa, bordering Botswana 1,840 km, Lesotho 909 km,Mozambique 491 km, Namibia 967 km, Swaziland 430 km, Zimbabwe 225 kmCapital: PretoriaClimate: mostly semiarid; subtropical along east coast; sunny days, cool nightsPopulation: 42,718,530Ethnic Make-up: black 75.2%, white 13.6%, Coloured 8.6%, Indian 2.6%Religions: Christian 68% (includes most whites and Coloreds, about 60% of blacks and about40% of Indians), Muslim 2%, Hindu 1.5% (60% of Indians), indigenous beliefs and animist28.5%Government: republicLanguages in South AfricaSouth Africa has 11 official languages. English is the language of administration and is spokenthroughout the country. The other official languages are: Afrikaans, Ndebele, Northern Sotho,Southern Sotho, Swazi, Tsongo, Tswana, Venda, Xhosa and Zulu.South African Society & CultureThe Rainbow NationSouth Africa is one of the most multicultural countries in the world. In urban areas manydifferent ethnic groups will make up the population. In addition to the indigenous black peoplesof South Africa colonialism and immigration have brought in white Europeans, Indians, Indo-Malays, Chinese and many more.As such it is difficult to generalise at all on South African etiquettes and culture due to thediversity.The Family in South Africa 21
    • The basic unit of South African society is the family, which includes the nuclear family and theextended family or tribe. In traditional African society, the tribe is the most importantcommunity as it is the equivalent of a nation. The tribe provides both emotional and financialsecurity in much the same way the nuclear family does to white or coloured South Africans.The coloured and more traditional Afrikaans cultures consider their extended family to be almostas important as their nuclear family, while the English-speaking white community places moreemphasis on the nuclear family. The nuclear family is the ultimate basis of the tribe. The tribaland family units are being disrupted by changes in the economic reorganization of the country.As more people move into the urban areas, they attempt to maintain familial ties, includingproviding financial support to family members who have remained in the village.The Rural/Urban DichotomyThere are vast differences between the values of the rural and urban dwellers. The majority ofthe whites living in rural areas are Afrikaner farmers who are descended from the Calvinists.Their views on the world are sometimes narrow. At the same time they value human decencyover materialism. City dwellers live life in the fast lane, which affects their outlook. People fromJohannesburg can quite often be regarded as having materialistic values, and being moreinterested in what you own rather than who you are. They prefer to see themselves as urbane andtheir country cousins as less sophisticated. People from Cape Town are very proud of their city,and often appear to have a superior attitude about their city versus the rest of the country. Familyties, long-term friendships and social standing are all important to Capetonians. The many ruralblack communities are still rooted in the traditions of their heritage, whereas the increasinglyurban black community combines their roots with the urban environment and internationalinfluences that surround them.Etiquette & Customs in South AfricaMeeting EtiquetteThere are several greeting styles in South Africa depending upon the ethnic heritage of theperson you are meeting. When dealing with foreigners, most South Africans shake hands whilemaintaining eye contact and smiling. Some women do not shake hands and merely nod theirhead, so it is best to wait for a woman to extend her hand. Men may kiss a woman they knowwell on the cheek in place of a handshake. Greetings are leisurely and include time for socialdiscussion and exchanging pleasantries.Gift Giving Etiquette 22
    • In general, South Africans give gifts for birthdays and Christmas. Two birthdays - 21 and 40 -are often celebrated with a large party in which a lavish gift is given. It is common for severalfriends to contribute to this gift to help defray the cost. If you are invited to a South Africanshome, bring flowers, good quality chocolates, or a bottle of good South African wine to thehostess. Wrapping a gift nicely shows extra effort. Gifts are opened when received.Dining EtiquetteIf you are invited to a South Africans house. Arrive on time if invited to dinner. Contact thehostess ahead of time to see if she would like you to bring a dish. Wear casual clothes. This mayinclude jeans or pressed shorts. It is a good idea to check with the hosts in advance. InJohannesburg, casual is dressier than in other parts of the country. Do not wear jeans or shortsunless you have spoken to the hosts. Offer to help the hostess with the preparation or clearing upafter a meal is served.Business Etiquette and ProtocolRelationships & CommunicationSouth Africans are transactional and do not need to establish long-standing personal relationshipsbefore conducting business. If your company is not known in South Africa, a more formalintroduction may help you gain access to decision-makers and not be shunted off to gatekeepers.Networking and relationship building are crucial for long-term business success. Relationshipsare built in the office. Most businessmen are looking for long-term business relationships.Although the country leans towards egalitarianism, businesspeople respect senior executives andthose who have attained their position through hard work and perseverance. There are majordifferences in communication styles depending upon the individuals cultural heritage.For the most part, South Africans want to maintain harmonious working relationships, so theyavoid confrontations. They often use metaphors and sports analogies to demonstrate apoint. Most South Africans, regardless of ethnicity, prefer face-to-face meetings to moreimpersonal communication mediums such as email, letter, or telephone.Business Meeting EtiquetteAppointments are necessary and should be made as far in advance as possible. It may be difficultto arrange meetings with senior level managers on short notice, although you may be able to doso with lower-level managers. It is often difficult to schedule meetings from mid December tomid January or the two weeks surrounding Easter, as these are prime vacation times. Personalrelationships are important. The initial meeting is often used to establish a personal rapport andto determine if you are trustworthy. After a meeting, send a letter summarizing what was decidedand the next steps. 23
    • Business NegotiationsIt is imperative to develop mutual trust before negotiating. Women have yet to attain senior levelpositions. If you send a woman, she must expect to encounter some condescending behaviourand to be tested in ways that a male colleague would not. Do not interrupt a South African whilethey are speaking. South Africans strive for consensus and win-win situations. Include deliverydates in contracts. Deadlines are often viewed as fluid rather than firm commitments. Startnegotiating with a realistic figure. South Africans do not like haggling over price. Decision-making may be concentrated at the top of the company and decisions are often made afterconsultation with subordinates, so the process can be slow and protracted.Dress Etiquette Business attire is becoming more informal in many companies. However, for the first meeting, itis best to dress more conservatively. Men should wear dark coloured conservative businesssuits. Women should wear elegant business suits or dresses. 24
    • Standard Bank GroupRank in Africa: 1Forbes Global Rank: 266Country: South AfricaIndustry: BankingSales ($Bil): 18.41Profits ($Bil): 1.54Assets ($Bil): 137.97Market Value ($Bil): 17.39Profile: Founded in South Africa in 1862, Standard Bank Group is Africa’s largest company andoperates in 38 countries around the world, including 18 in Africa. 2007 was a busy year for thecompany, with the company acquiring controlling interest in IBTC Chartered Bank in Nigeria inAugust 2007. This gave subsidiary Stanbic Bank Nigeria Limited significant presence in theNigerian market.In the same month, Standard Bank Group also acquired a 67% share of the Turkish bank DundasÜnlü Securities and now operates in Turkey under the name of Standard Ünlü.In October 2007 the Industrial and Commercial Bank of China acquired a stake of about 20% inStandard Bank for US$5.5bn. Half the stake will come from ICBC acquiring existing shares andhalf from new shares. ICBC will also get two seats on the board of directors.The Human Resources division fulfils the intellectual capital needs of our continuously evolvingorganisation. As strategic partners to the different business divisions, we promote organisationalsuccess with a range of initiatives and processes including: recruitment and selection process;talent and career management; performance management; culture and employee branding;reward and recognition; and learning and development.Teamwork is the key element in HR, and to prosper in this division you will need to be highlyorganised, an accomplished communicator, and an excellent project manager. We valueemotionally intelligent and adaptable people who can function effectively across differentregulatory environments, working with very diverse employee groups. Our teams work across alllevels of the organisation so we encourage a true understanding of our global business, with theability to explore and evaluate specific issues in each country. 25
    • We look for people with relevant HR experience, a flexible and responsive approach, with aclear insight into corporate culture, organisational structure, profiling and people managementpractices. We welcome applications from people with a broad range of academic qualifications,so if you relish the challenge of the global banking arena, and can find solutions within complexcompliance frameworks and across diverse geographies, then you are ideally suited to thisdivision.Globalisation and technology continue to transform financial services, with emerging marketstaking centre stage. As a pioneer in this sector, Standard Bank is ideally placed to realise truevalue for our clients in economies with high growth potential.Our continuing success relies on solid teamwork - effective collaboration between all of ourpeople around the world. This embodies our approach to business, as we bring togetherspecialists from different divisions and countries to expertly develop and deliver products thatfulfil the needs of our clients. We are recognised worldwide for our ability to innovate anddevelop local markets through our leading-edge products.Corporate and Investment Banking attracts passionate and energetic professionals drawn to anenvironment that is fast-paced and dynamic, where talent is recognised and rewarded. We arehardworking, ambitious, professional and focused on achieving outstanding results, whilenurturing a supportive and enthusiastic culture.With our headquarters in South Africa and a vibrant global presence in emerging markets, weuphold our responsibility to build demographically and culturally representative employeeteams, and appreciate both the commercial and social value of such diversity. By blendingdifferent perspectives and abilities together we create exciting, relevant, and sustainablesolutions.With operations across the globe, Standard Bank employs a remarkable array of talent fromdifferent countries, varied backgrounds and expert specialisations.Every year we make significant investments to foster and maximise the potential of our people,helping them to build career paths that will fulfil their professional ambitions as well as theirpersonal goals.We endeavour to help individuals optimise their performance and unlock their true potential,while mentoring is widely available to accelerate career development and ensure smoothtransitions within the business. 26
    • FirstrandRank in Africa: 2Forbes Global Rank: 308Country: South AfricaIndustry: BankingSales ($Bil): 18.41Profits ($Bil): 1.54Assets ($Bil): 137.97Market Value ($Bil): 17.39Profile: firstrand was created in April 1998 through the merger of the financial service interestsof Anglo American Corporation of South Africa Limited (AAC) and RMB Holdings Limited(RMBH).With International operations on all the continents, firstrand has a strong presence in SouthAfrica, where it employs 42 882 people and has a retail franchise footprint of 766 branches and4997 ATMS in Southern Africa alone.As one of the largest corporate donors in South Africa and a leader in CSI in the financialservices sector, the firstrand Foundation has invested more than R700 million in corporate socialinvestment projects since its inception in 1998. The operating companies within the firstrandGroup, FNB, RMB, wesbank and Momentum contribute 1% of after tax profits to the firstrandFoundation, a stand-alone legal entity, which then channels the funds to a variety of causes.Firstrand takes a programmatic approach to its CSI, focussing on giving more substantial andstrategic grants towards fewer organisations. As well as supporting a few flagship initiatives at anational level. In this way the Foundation is able to engage with programmes in a morestructured and meaningful way. This also has the added benefit of developing high-qualitypartnerships and ensures a more meaningful impact on the projects it supports. 27
    • The Foundation considers support for non-profit organisations and institutions and focuses on theEducation, HIV/Aids, Disability, Agricultural Livelyhoods, Arts, Culture and Heritage,Environmental and Community Care sectors.The firstrand Foundation website is a comprehensive point of reference providing details of ourCSI strategy, focus areas and lists all the organisations we support.Firstrand Foundation won the Corporate Social Investment award in the 2010 African BusinessAwards.As a critical pillar to its CSI strategy, firstrand introduced the firstrand Volunteers Programme in2003, providing employees with innovative and creative opportunities to ‘give back’. Over thepast 6 years, employees have donated over R12.3million in both time and money to variouscharities and this amount was matched with a further R 12.3 million by the firstrand Foundation.Annually 22% of the 43 000 employees in the firstrand Group participate in the firstrandVolunteers Programme. 28
    • CONCLUSIONBased on the above management culture in SA and on the results of our study, severalconclusions can be made to be further analysed in South African companies. Probably the firstone is that polarization of relationships on the workplace is still very much grounded on ethnicalorigin. From that perspective, the study suggests that the main obstacles and barriers to buildinga corporate multicultural identity in South African organizations could first be mental barrierswhich tend to find an expression in the implicit (norms, values, perception of the others) andexplicit (management styles) behaviors. In spite of the legal improvements in particular, indirectand subtle barriers may remain.Many SA companies (including the majority of the cases studied) have instituted multiculturalworkshops, but their efficiency can be questioned in the light of the enduring cross-culturaldifficulties observed on the workplace. Change must be managed from a holistic approach inwhich it is necessary to change organizational practices as well as individual attitudes and valuesto ultimately improve organizational effectiveness. 29
    • BIBLOGRAPHYWww.google.comWww.scribd.comWww.wikkipedia.comWww.bing.com 30