Case Study 1:

Charles Martin in Uganda: What to Do When a Manager Goes Native

James Green, a vice president at U.S.-based Hydro Generation (HG),
was pondering a specific question: Should he retain Charles Martin for the
construction phase of a major dam project in the African nation of Uganda?
(See Map above for the location of Uganda in Africa and of the dam project in
Uganda). Martin had already completed his assiqnrnent on the preliminary
phase of the project, and Green couldn't deny that Martin's results had been
highly satisfactory-he'd finished every task on time and within budget.
Green, however, was a little concerned with the means by which Martin
tended to achieve his ends. In Green's opinion, Martin was too eager to
accommodate Ugandan ways of doing business, some of which ran counter
both to HG's organizational culture and to its usual methods of operating in
foreign environments. In particular, Green worried that some of Martin's
accommodations with local stakeholders might have unforeseen
repercussions for the company's presence in Uganda.
He also knew the philosophy and values of founder and current CEO
Lawrence Lovell who had been instrumental in shaping HG's mission and
culture. A devout Christian and regular attendee of the National Prayer
Breakfast, Lovell believed strongly that business activities, though secular,
should embody Christian values. As a manager, he believed subordinates
should be given full responsibility in making and implementing decisions, but
they should also be held accountable for the results. Martin, however,
wanted to stay in Uganda, and HG would be hard-pressed to find someone

else with his combination of professional training, experience with HG, and
familiarity with the host country. (Martin, though only 29, had already
proved effective in using his knowledge of local development issues to
disarm critics of the power plant.)
Hiring Martin to handle all preconstruction operations represented a
new approach for HG. In this capacity, Martin, who'd been transferred to
Uganda a year and a half earlier as project liaison specialist, had been given
a threefold task:
1. To gain local support for the project by working with both Ugandan
authorities in the capital of Kampala and villagers in the vicinity of the
construction site.
2. To set up an office and hire office personnel to take charge of local
purchasing (including lower-level hiring), clearing incoming goods
through customs, securing immigration permissions for foreigners
attached to the project, overseeing the logistics of getting materials
going from the airport in Kampala to the dam site, and keeping
inventory and accounting records.
3. To help foreign personnel (mainly engineers) get settled and feel
comfortable living and working in Uganda.
Martin was also responsible for establishing an operating structure that
would spare incoming managers the hassles of such mundane start-up
activities as obtaining licenses, installing telephones and utilities, and finding
local people to hire for the wide range of jobs that would be needed. In
addition, although HG specialized in power plants (it had built plants in 16
countries and retained ownership shares in about half of them), the Uganda
project was its first African venture.
Now, dam construction anywhere requires huge amounts of capital,
and projects often face opposition from groups acting on behalf of such local
parties as the people who will need to move because of subsequent flooding.
Thus to forestall adverse publicity and, more importantly, activity that could
lead to costly work stoppages, HG needed as many local allies as it could
get. Getting (and keeping) them was another key facet of Martin's job.
Martin, though still-young by most standards, was well suited to the
Ugandan project. After high school, he'd entered the University of Wisconsin,
where he became fascinated with Africa through a course in its precolonial
history. Graduating with a major in African studies, he served with the Peace
Corps in Kenya, where he worked with small business start-ups and took side
trips to Ethiopia and Tanzania. Although he loved working in Kenya, Martin
developed a disdain for the Western managers and workers who isolated
themselves in expatriate ghettos and congregated in the capital's first-class
hotels. His own creed became "Don't draw attention to yourself and, above
all, learn and respect the culture."
At the end of his Peace Corps stint, Martin was determined to return to
and work somewhere in Africa. After earning an M.B.A. at the University of
Maryland, he took a job with HG, where he worked for two years on project
bidding and budgeting. Both when he was hired and when HG became
involved in the Ugandan project, Martin made sure his superiors knew he
wanted the African assignment.

Not surprisingly, HG saw the advantage of someone who possessed

both a home-country corporate perspective and a knowledge of the host
country's economics, politics, and culture. In Uganda, a country of about 25
million, English is the official language, but many people speak only an
indigenous language, mainly Bantu or Nilotic languages of the Bugandas,
Langos, Acholi, Teso, and Karamojong tribes. Although about two-thirds of
Ugandans are Christians (about evenly split between Roman Catholics and
Anglicans),
there
are
large
numbers of Muslims and adherents of various animistic religions.
Since gaining independence in 1962, Uganda has had a largely
unhappy history. The ruthless dictatorship of Idi Amin included mass murder
among its policies and, more recently, Uganda has been forced to absorb
huge numbers of refugees fleeing bloodshed in Rwanda, Zaire, and the
Sudan. Nepotism is the norm, and the government is considered one of the
most corrupt in the world. On the positive side, foreign companies that want
to do business in Uganda aren't heavily regulated, and because less than 5
percent of the population has access to electricity, the Ugandan government
strongly favored the HG power plant project.
Now, 18 months later, Martin was completing his liaison assignment for
the preconstruction phase of the project and Green was reviewing his
performance. Specifically, he was concerned not only about some of Martin's
business practices but also about certain aspects of his lifestyle, not the least
of which was his participation in local tribal rituals. HG had no formal
guidelines on the lifestyles of expatriate managers in its employ, but the
company culture tended to encourage standards of living that were
consistent with the values of a prosperous international company. With what
HG paid him, Martin could certainly afford to live in one of the upscale
neighborhoods that were home to most foreign managers working in and
around Kampala. Martin, however, preferred a middle-class Ugandan
neighborhood and declined to frequent the places where fellow expatriates
typically gathered, such as churches and clubs.
As far as Green was concerned, not only was Martin's lifestyle
inconsistent with HG culture, but also his preference for isolating himself
from the expatriate community made him of little use in helping colleagues
adapt to the kind of life that would be comfortable for them in the alien
environment of Uganda .
.
As for Martin's business-related practices, Green was ready to admit
that business in Uganda usually moved at a leisurely pace. It could take
months to get a phone installed, supplies delivered, or operating licenses
issued. Martin, however, had quickly learned he could speed things up by
handing out tips in advance. Nor could Green argue that such payments
were exorbitant: In a country where per capita GDP is about $1,300 a year,
people tended to take what they could get.
It was also a fact of local life that unemployment was high and socalled job searches were generally conducted through word of mouth,
especially among family members. Martin had developed the practice of
mentioning openings to local people and then interviewing and hiring the

relatives they recommended. In a country like Uganda, he reasoned, such

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

could not only damage HG's image but also could offend Uganda's Christian
majority and the many Christian missionaries in the country. On top of
everything, Martin's participation might be construed in some quarters as a
mockery of tribal customs, thereby contributing to a hostile environment for
HG.
Having thoroughly considered the Charles Martin case, James Green now
had to make decisions about staffing the next phase of the project. He knew
he needed to transfer a number of technical personnel to Uganda, and he'd
already begun interviewing senior HG managers for the position of project
director. But he was still left with one critical question: How much would the
new director benefit from the presence of an American who, like Martin,
could be a valuable source of advice about Ugandan culture? And if he had
to
have
someone in that role, was Martin still right for the part?
Questions
1. Describe Ugandan cultural attributes that might affect the
operations of a foreign company business there.
2. How would you describe the respective attitudes of Martin and
Green: ethnocentric, polycentric or geocentric? What factors do you
suspect of having influenced their respective attitudes?
3. Who was right, Green or Martin, about Martin's more controversial
actions in facilitating project? How might things have turned out if
Martin had not been a member of the project?
4. In the next phase of the project - constructing the dam itself - should
HG employ someone whose main function is that of liaison between its
corporate culture and the culture of its host country? If so, is Martin the
right person for the job?