Impact of Regional Culture on the Growth Strategy of IBM in EMEA - Nigeria - Research Proposal Example

The Cultural strategy for IBM: Proposal Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Impact of regional culture on the growth strategy of IBM in EMEA: A case study of Nigeria Selected topic It is an apparent fact that the culture in a given region has extensive impacts on the way different companies choose their growth strategies. This is founded on the fact that the contemporary global economy is operating in real-time and the core of attaining and maintaining competitive advantage is founded on the necessity to function at the same pace while at the same time achieving maximum efficiency (SD Forum, 2005, p. 3). In this regard, companies seeking to engage in the process of internationalization are necessitated to employ robust processes to support their growth strategy. Among other factors, these companies ought to make profound considerations about how the local culture in a given region where they are seeking to expand will impact on their growth strategy. In this case, this topic fits into the context of strategic management through analyzing how the growth strategies of various firms around the globe are influenced by a prominent culture in a given region. This is more profound in the modern globalization era which has seen companies make extensive efforts to expand into other regions with distinct cultures aimed at elevating their competitive advantage and increasing their market share. This phenomenon has been apparent in IBM (International Business Machines) in its effort to penetrate and grow in the EMEA region (encompassing Europe, Middle East and Africa. (EMEA). In this case, the regional culture in Nigeria and how it has impacted on the growth strategy of IBM in this country will be primary to this analysis. The imperative role of this realm of investigation is founded on the fact that since IBM entered the Nigerian market in 1961, this company has played a key role in the development efforts of this country across diverse industries. From opening an IBM education centre in Nigeria to the collaboration with the government of Cross River State in the recent times, IBM has been extensively dedicated towards expediting the level of development in Nigeria (IBM, 2012, p. 1). However, based on this fact that this is a foreign company establishing its operations in Nigeria, it is necessary to expound on how the regional culture in this country has impacted on the growth of IBM. There are some integral terms which will be used in this analysis which requires some definition. Some of them are defined in the following section. Growth strategy: According to the Business Dictionary (2013, p. 1), this can be perceived as the strategy employed by a given business geared towards winning an increased market share. This is even at the expense of short-term earnings. Regional culture: In a generic sense, regional culture as conceived in this paper refers to a system of knowledge which is shared by a relatively large group of people in a particular region and is passed on from one generation to the other. Competitive advantage: Competitive advantage is perceived to be in occurrence when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitor. In this regard, a competitive advantage can only be considered to be sustained only when the efforts to duplicate it by competitors have ceased. Importance of this investigation From a theoretical point of view, many scholars in the realm of strategic management have pointed on the importance of strategy in the realization of organizational goals and objectives, most of which underpin growth as a primary goal. This is evidenced by Ferriani and Giuliani (2007, p. 12) who determined that a strategy plays an integral role in the creation of favorable conditions which are central in enabling a particular company to discover itself and therefore culminate in a better positioning within the opportunity space in the highly competitive market. In this regard, growth strategy creates an ideal avenue where an organization can be in a strategic niche of executing its diverse tactics aimed at increasing or maintaining its market share or as a response to extensive dynamics in the highly volatile market. As a result, different scholars have pointed to diverse strategies which can be adopted by different organizations in their growth endeavors. Nonetheless, it is imperative to note that these strategies are confronted by different challenges in their universal application which have been unearthed by subsequent researches. The above reality is epitomized whereby despite extensive empirical evidence which is in existence already pointing to the importance of networks as a primary driver of growth in a firm, for instance, works by Zaho and Aram (1995) and Tsang (2001) (cited by Ferriani & Giuliani, 2007, p. 3) among others, the literature from these works has been cited as having insufficient clarity in expounding the theoretical mechanism which governs this effect. Similarly, other scholars have pointed to the influence of a given culture in a particular region on the growth strategy of different organizations which are currently or intending to roll out their operations in a specific region. Nonetheless, most of these scholars have provided limited evidence in terms of how regional cultures in specific regions affect the growth strategies of organizations, mostly the international ones in these regions. Against this backdrop, this project seeks to address this gap and evidence how the regional culture in the EMEA region, specifically in Nigeria has impacted on the growth strategy of IBM. From a practical point of view, it is imperative to note that the advent of globalization which marked increased market liberalization has impacted on the level of business competition at the international platform. This is based on the fact that market liberalization played a central role in reducing the level of monopoly by specific firms in different regions. As a result, different companies have made extensive efforts to internationalize their operations aimed at expanding their market share, a fact epitomized by the increased presence of IBM in Africa, most notably in Nigeria, despite the company being founded and headquartered in the United States. Nonetheless, most of these companies have failed to profoundly address the impact of the cultures predominant in the regions where they seek to expand on their growth strategy. As a result, some of these companies have failed to achieve their internationalization goals which has diabolical impact on their operations. In the efforts to address this trend, this project seeks to expound on the impact of regional culture in Nigeria on the growth strategy of IBM. This can be applied in other organizations seeking to expand into this region or other African countries with similar cultural characteristics, and eventually to the wider EMEA region. This project will be beneficial to the objectives of IBM based on the fact that it will identify some of the gaps which IBM needs to address in order to maintain its competitive advantage in this region. Additionally, it will propose an ideal Monitoring and Evaluation mechanism (M&E) aimed at assessing the impacts of cultural changes in this region which is key in the realignment of IBM’s growth strategy. Literature review Newman and Nollen (cited in Nafie, 2010, p. 1) pointed out that the culture in a given country or region is deeply embedded in the everyday life of the population in these places and has been perceived as having relative resistance to change. Consequently, practitioners as well as scholars in different realms of academia have increasingly cognized the growing importance of regional culture in the growth strategy and eventual success of companies which operate outside the borders of their mother countries. In addition, several research studies have arrived at a consensus that multinational firms ought to adjust and realign their strategic management practices to the national and regional cultures under which their operate in if at all they have to realize high financial performance. This is evidenced by the finding that work units which are usually managed in consistency with the national and regional cultural expectations are bound to exhibit better performance when juxtaposed with work units whose management practices fail to fit in the cultural orientations in a specific regions or countries (Nafie, 2010, p. 1). Additionally, Edward et. al. (2004, p. 3) in their cultural approach determined that the multinational companies often bear the cultural legacy derived from their countries of origin which tend to mold the extent of diffusion in the host countries in which they operate. Other studies, for instance Bae et al. (1998) and Ngo et al. (1998) (cited by George and Oweyemi, 2012, p. 4) have extensively demonstrated how culture in a given country plays an integral role in shaping the diffusion of employment relations practices. This is mostly in regard to how the culture of the home country gives the MNCs a new identity. In the context of Nigeria, there has been limited analysis on the different ways in which the national culture in this country impacts on growth strategies of different firms. Nonetheless, some scholars have attempted to expound on the generic national political culture in this country and its impacts on of foreign direct investment (FDI). This is evidenced by Oriakhi and Osemwengie (2012, p. 88) who determined that killings, kidnappings and corruption seem to be the politico-economic and cultural trinity which has detrimental impacts on contemporary Nigeria. Nonetheless, amid the challenges in this established national culture, it is imperative to remember that Chinese companies have drastically elevated their presence in Africa, a reality which is epitomized by Nigeria. According to Egbula and Zheng (2011, p. 9), Nigeria has risen to occupy the second position (on second to South Africa) among the rankings of African countries which host Chinese FDI between 2003 and 2009. As a result, the Chinese FDI stocks in Nigeria reached a cumulative total of USD 1.03 billion in this period, compared to the FDI stocks of the larger African continent which were USD 9.3 billion. Furthermore, there is a wide alley of research which has shown the gradual paradigm shift of African countries from having absolute dependence on the western countries and turning to the East, mostly in China. This has been the case with Nigeria whereby the trade of this country previously had strict focused on European and North American countries. However, despite this drastic shift, there are still some western companies like IBM which have continued to exhibit their masterly of the Nigerian market overtime despite the eminent threat from the Chinese technological companies. It is worth noting that IBM was founded in 1911 after a successful merger of three companies which dated to 1890 (Applegate, et. al. 2009, p. 2) and Gingerich (2011) expound on the diverse operations of this company at the international spectrum. The continued presence of IBM in Nigeria amid the previously mentioned threat is commendable. Its operations in Nigeria have continued to expand over the years and its influence has grown to encompass diverse sectors. This has been the case in the Nigerian banking sector whereby in 2010, three major banks in Nigeria consulted IBM to provide robust technology which would be integral in supporting the transformations of their different operations. This was part of the extensive reforms on the banking sector of this country (IBM, 2010, p.1). It is thus evident from the above instance that IBM has been able to develop a formidable growth strategy to support the expansion of its operations in Nigeria. Nonetheless, a clear investigation into the research evidence to inform the contribution of the wider national and regional culture on the growth strategy of different western firms like IBM in Nigeria unearths shortage of formidable literature. This is founded on the fact that a greater deal of emphasis has been given to the impacts of FDI by multinational companies on the Nigerian economy. However, the specific information on the influence of the national culture in this country on the entry modes as well as strategies of growth by diverse multinational companies is limited. Against this background, this project seeks to address this information gap on the comprehensive impact of the cultural orientation in Nigeria on the growth strategy of multinational companies, with specific attention to IBM. Initial Bibliography Applegate, LM., et. al., 2009, ‘IBM's Decade of Transformation: Turnaround to Growth’, Harvard Business School, pp. 1-31. Bae, J., Chen, S. and Lawler, J., 1998, ‘Variation in HRM in Asian Countries: MNC Home Country and Host Countries Effects’, International Journal of Human Resource Management, Vol. 9, No. 4, pp. 653-70. Edwards, T. , Colling, T. & Ferner, A., 2004, ‘Comparative Institutional Analysis and the Diffusion of Employment Practices in Multinational Companies’ retrieved 01 April, 2013, . Egbula, M., & Zheng, Q., 2011, China and Nigeria: A powerful south-south alliance, Sahel and West Africa Club Secretariat, Paris. Ferriani, S., & Giuliani, A., 2007, ‘The Management of Growth Strategies in Firm Networks: A Stylized Model of Opportunity Discovery via Network Ties’, in G. Dagnino (ed), Handbook of Research on Competitive Strategy, Edward Elgar, Cheltenham. George, O. & Oweyemi, O., 2012, ‘Impact of National Culture on the Management of Multinational Businesses: The Case of Cadbury Worldwide’, International Journal of Business and Management Tomorrow, Vol. 2, No. 7, pp. 1-9. Gingerich, E., 2011, ‘Smart’ change in strategy: IBM’s response to changing times’, The Journal of Value Based Leadership, Vol. 4, No. 1. IBM, 2010, ‘IBM Supports Transformation of Nigerian Banking Industry’, retrieved 01 April 2013, IBM, 2012, ‘Services, Software and Systems for Nigeria’, retrieved 01 April 2013, < ww.ibm.com/ibm/ng/en/ibm.html>. Nafie, RM., 2010, ‘National Culture Transformation and its impact on Multinational Corporate Culture: Case study of Egypt’, retrieved 01 April, 2013, . Newman, K & Nollen, S 1996, 'Culture and Congruence: The fit between Management Practices and National Culture', Journal of International Business Studies, vol. 27, pp. 753-779. Ngo, NY., Turban, D. Lau, S. & Lui, S., 1998, ‘Human Resource Practices and Firm Performance of Multinational Corporations: Influences of Country of Origin’, The International Journal of HRM, Vol. 9, No. 4, pp. 632-652. Oriakhi, D., &Osemwengie, P., 2012, ‘The Impact of National Security on Foreign Direct Investment in Nigeria: An Empirical Analysis’, Journal of Economics and Sustainable Development, Vol. 3, No. 13, pp. 88-96. Research questions i. What is the current growth strategy of IBM in Nigeria? ii. What is relationship between the national culture in Nigeria and the growth strategy of IBM in this country? iii. To what extent does the cultural orientation of Nigeria promote or impede the growth strategy of IBM? iv. How does the current Monitoring and Evaluation mechanisms primed at IBM affect the future growth strategy of this company in Nigeria? Research design and data collection In regard to the research design, this project will be descriptive and will assume a case study approach. IBM company which is situated in Nigeria will be the case study and the survey will be aimed at answering the research questions as outlined in the preceding section. The data for this study will be attained from both the primary and secondary data sources. Primary data will be acquired through extensive fieldwork while the secondary data will be acquired from published sources. Questionnaires will be used as the primary data collection tool. A survey questionnaire will be designed which will entail structured and unstructured questions due to both the nature of data being collected and also the research design. In addition, in-depth interviews will be conducted which will aid in the collection of qualitative data. This will necessitate designing intensive interview schedules to be administered on respondents who are employed in IBM Nigeria or work closely with this institution. These data collection will be ideal since they will result in the attainment of both qualitative and quantitative data which will be paramount in informing the study. It is imperative to note that there are some practical issues which might arise in this study, for instance, restriction on access of organizational information as well as the fear of intimidation by the respondents from the IBM, Nigeria. In both of these cases, authorization to conduct the research will be acquired from the learning institution as well as the Head office of IBM in Nigeria which will be chief in reducing the level of victimization fear among the respondents as well as limiting the restrictions on information access. The ideal sample will be acquired both in IBM Nigeria and outside the organization. In this case, a total of 25 respondents will be selected from various departments in the organization and various sampling methods like snow-balling and quota sampling will be used. The gender ration will be 1: 1 and a representation of the basic characteristics of the population in terms of age, occupation and educational level among other criteria. Thus, the sample will be representative in terms of gender, age, education level and occupation. This fact is supported by Higgins, Kotrlik and Bartlett (2001) who cited that a common goal of survey research is to collect data representative of a population. In addition, 5 respondents will be sampled from the consumers of this organization who will basically be accessed through convenient or random sampling. Analysis and presentation of data Data analysis entails examining the collected data in order to elicit viable inference and provide practical recommendations. The raw data will be cleaned, edited and coded through a predetermined coding scheme and responses analyzed according to the research question. The collected data will be entered using MS Excel. Survey data collected will be subjected to appropriate electronic analyses using the Statistical Package for the Social Sciences (SPSS). Data presentation tools and analysis will include graphs, tables, pictorials and pie charts. References Applegate, LM., et. al., 2009, ‘IBM's Decade of Transformation: Turnaround to Growth’, Harvard Business School, pp. 1-31. Bae, J., Chen, S. and Lawler, J., 1998, ‘Variation in HRM in Asian Countries: MNC Home Country and Host Countries Effects’, International Journal of Human Resource Management, Vol. 9, No. 4, pp. 653-70. Business Dictionary, 2013, ‘Growth strategy’, retrieved 01 April, 2013, < http://www.businessdictionary.com/definition/growth-strategy.html>. Edwards, T. , Colling, T. & Ferner, A., 2004, ‘Comparative Institutional Analysis and the Diffusion of Employment Practices in Multinational Companies’ retrieved 01 April, 2013, . Egbula, M., & Zheng, Q., 2011, China and Nigeria: A powerful south-south alliance, Sahel and West Africa Club Secretariat, Paris. George, O. & Oweyemi, O., 2012, ‘Impact of National Culture on the Management of Multinational Businesses: The Case of Cadbury Worldwide’, International Journal of Business and Management Tomorrow, Vol. 2, No. 7, pp. 1-9. Gingerich, E., 2011, ‘Smart’ change in strategy: IBM’s response to changing times’, The Journal of Value Based Leadership, Vol. 4, No. 1. Higgins, C., Kotrlik, J., & Bartlett, J, 2001, ‘Organizational Research: Determining Appropriate Sample Size in Survey Research’, Information Technology, Learning, and Performance Journal, Vol. 19, No. 1, pp. 43-50. IBM, 2010, ‘IBM Supports Transformation of Nigerian Banking Industry’, retrieved 01 April 2013, IBM, 2012, ‘Services, Software and Systems for Nigeria’, retrieved 01 April 2013, < ww.ibm.com/ibm/ng/en/ibm.html>. Nafie, RM., 2010, ‘National Culture Transformation and its impact on Multinational Corporate Culture: Case study of Egypt’, retrieved 01 April, 2013, . Newman, K & Nollen, S 1996, 'Culture and Congruence: The fit between Management Practices and National Culture', Journal of International Business Studies, vol. 27, pp. 753-779. Ngo, NY., Turban, D. Lau, S. & Lui, S., 1998, ‘Human Resource Practices and Firm Performance of Multinational Corporations: Influences of Country of Origin’, The International Journal of HRM, Vol. 9, No. 4, pp. 632-652. Oriakhi, D., & Osemwengie, P., 2012, ‘The Impact of National Security on Foreign Direct Investment in Nigeria: An Empirical Analysis’, Journal of Economics and Sustainable Development, Vol. 3, No. 13, pp. 88-96. SD Forum, 2005, ‘Something Ventured: How IBM’s VC Strategy Drives Growth’, SD Forum Journal, Vol. 8, No. 5, pp. 1-24. Read More