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Personal Finance

Cultures that hurt enterprise in Kenya

thank you
Saying thank you is a good way to appreciate your customers. FILE PHOTO | NMG 

Many years ago in the 1950s in a small village near Mt Kenya lived a man who believed in educating girls, when education was generally frowned upon. For his faith, he endured mockery and scorn from peers.

Why waste money instead of marrying them off? He was asked. However, he did not relent, he supported and educated his girls to the end.

This is the story of my grandfather.

Today, some of his daughters are highly educated women, who have passed the same ideals to their children. He had the last laugh.

From this story, I learnt, it is okay to drop some of the hindering aspects of culture in order to grow. The same applies to business.

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A lot of businesses, especially family owned enterprises (FEPS), are influenced by culture, especially when it comes to succession planning and corporate governance.

In Kenya, African culture plays a big role in management and succession planning of FEPS. Many aspects of the African culture are good for governance, for example respect. However, many hinder good governance and succession planning.

On the other hand, many family enterprises in the United Kingdom and the US have survived generations.

Some examples include the In N Out Burger and several others that have managed to last at least three generations.

Asian-owned companies have also seen several generations, even reaching past the fourth generation. Japanese-owned companies have been reputed to be the oldest living enterprises globally.

The oldest hotel in the world is a Japanese hotel called Nishiyama Onsen Keiunkan which was founded more than 1,000 years ago and spans 52 generations.

Although the definition of culture is vague, it refers to patterns of thinking and mind-set that influence a group of people. It includes values. There have been several indexes to measure culture, including the power index culture (PDI), masculinity index, and uncertainty avoidance index.

Some Kenyan FEPS are influenced by the African culture. African culture has a high power distance index and low uncertainty index. All these mean that power is concentrated in the hands of a few people and a big distance between those in power and those who do not have power.

Therefore, when it comes to FEPS, founders rarely mentor potential successors due to the high PDI. Power is usually concentrated on the older generation and males.

On the other hand FEPS in UK, US and Japan have a low power distance, meaning that the gap between those in power and those without is small. It allows for mentorship and participation of the younger generation who are the potential successors of the estate. It even allows for their early involvement in the FEP.

When it comes to uncertainty avoidance, African FEPS have a lower uncertainty index, meaning they are likely to avoid investments in things with uncertain returns such as technology while UK and US, such businesses have higher uncertainty indexes.

In Japan, positive aspects of the culture have a role to play in success of the FEPS. Japanese view personal success as family success and, therefore, the drive to succeed is higher. They groom children on creativity and work. Their culture is highly customer-driven. Words such as irrashaimase (welcome) and domo arigato (thank you) are common.

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