Managerial competence in Nigerian firms: An empirical
and comparative analysis
Multinational Business
Review; Detroit; Fall 2002; Emmanuel Erondu; Alex Sharland;
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Volume: |
10 |
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Issue: |
2 |
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Start Page: |
129-137 |
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ISSN: |
1525383X |
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Subject Terms: |
Management styles |
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Classification Codes: |
3400: Investment analysis & personal
finance |
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Geographic Names: |
United Kingdom |
Abstract:
The
economies of many African countries continue to struggle to attract external
private investment capital. Part of the problem is that external investors do
not perceive African companies to be as competent as western counterparts. This
study analyzes the issue of managerial competence in a multinational and
multicultural environment. Data is gathered from personnel managers to compare
how managerial competence is perceived in Nigeria and the UK. The results
indicate that both British and Nigerian managers perceive current competent management practice in a different light than
future competent management practice. The
implications of the results are discussed.
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Full Text: |
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Copyright St.
Louis University, John Cook School of Business, Boeing Institute of
International Business Fall 2002 |
[Headnote]
The
economies of many African countries continue to struggle to attract external
private investment capital. Part of the problem is that external investors do
not perceive African companies to be as competent as their western
counterparts. This study analyzes the issue of managerial competence in a
multinational and multicultural environment. Data is gathered from personnel
managers to compare. How managerial competence is perceived in Nigeria and the
United Kingdom. The results indicate that both British and Nigerian managers
perceive current competent management practice in a different light than future
competent management practice. The implications of the results are discussed.
Most African economies are starved of private investment capital (Cleeve 2001).
Equity capital is especially important for the development of small and
medium-sized businesses that form the core of a developing and developed
economy (Ndu et al 2001). Many potential investors are concerned about a number
of business risks, including absence of commercial codes of law and corruption
(Adams 1994). However, a major and significant investor concern is the
competence of African managers, especially when compared to the competence of
equivalent managers elsewhere. Until African managers can demonstrate they are
competent custodians of investor capital, they will struggle to receive private
investment funds, which will, in turn, inhibit company growth and the growth of
African economies. A study evaluating the relative competence of African
managers would be of considerable benefit to both African companies and to
external investors. However, competence is a contested term with multiple
meanings(Burgoyne, 1989). Before such a study can be made, first there must be
an agreed 'definition' of competence.
The following paper reports the results of a study designed to address the
issue of managerial competence of African managers compared to that of western
managers. The study focuses on the largest market in Africa (Nigeria), and uses
empirical data from transportation companies in Nigeria and similar companies
in Great Britain to evaluate the 'components' of competence.
The paper has three sections. The first reviews the literature focussing on
managerial competence and identifies the specific dimensions that are measured.
The second describes the methodology used in the study and presents the results
of the data analysis. The final section draws conclusions from the study and
examines the implications for practitioners and academics.
LITERATURE REVIEW
Nordhaug et al (1994) noted that the concept of competence has different
meanings, and it remains one of the most diffuse terms in the organizational
and occupational literature. Chappel (1996) suggests that competence is a
contested concept, the meaning of which is shaped by those who use it. This is
particularly problematic in a multi-cultural or multinational context, because
multiple meanings will make empirical analysis almost impossible. In order to
compare the competence of African managers to that of western managers, a
stable platform of measurable concepts and variables has to be established.
Competence Defined
For some researchers, competence appears to be an internal personality trait
residing within the individual (Bass 2000; Pascarella 1999, Goodstein et al
1998). That is, someone has a set of traits that make them more likely to be
'competent' than someone who does not possess these traits. From this
perspective, it could be claimed that someone is born with specific characteristics
that make them more likely to be 'competent'. Based on this approach, the key
to an organization's efficiency and effectiveness is to determine who within
the organization has these traits and who does not.
Under the perspective of competence as a personality characteristic, a
company would expect someone to be competent from the moment they joined the
organization. That is, because the "skill" resides within the person,
he or she will immediately be able to demonstrate competence. An additional
implication is that the organization itself can only 'build' competence through
recruiting people who have these skills.
A second approach views competence as a set of skills or learned behaviors
(Bratton 1998, Brunner 1999, Parry 1998, Perry 1998). In this case, competence
is defined as internal to the individual, but learned over time. Analyzing the
situation further, researchers have tried to distinguish between skills and
behaviors (McAuley 1994, Armstrong et al 1995, and Elkin 1991). They have
focused on establishing a difference between identifiable skills and patterns
of behaviors. Ultimately, theirs may be a redundant path of research because
the only way to measure skill is as a behavior, building an inevitable
confound.
From the perspective that competence is learned, it is unlikely that someone
will be competent within the company immediately, but will learn how things are
done within the organization and their competence will increase over time. For
the organization, there are several implications. First, not only must
recruiting be exercised carefully, but there must also be a management training
structure in place to facilitate the development of competence skills. Second,
the prospect of 'growing' competent managers is possible under this approach. Therefore,
organic growth and hiring from within are not only possible but also desirable,
because an internal candidate already has knowledge of the internal systems and
does not have to relearn it.
This approach is supported by several professional organizations. They
contend that competence is attained by completion of a prescribed course of
study in management or the field of association. These associations teach
practicing managers to become more effective managers. In the United Kingdom,
The Management Charter Initiative (
MCI)
has published a generic competency model to describe the essential
characteristics of a competent manager. This has been used as a basis to
develop Occupational Standards for Managers at Levels I, II, and III.
A third perspective posits that competence is a standard of behavior that
does not reside within the individual, but is a function of how the
organization performs (Pitt et al 1999, Krohe 1997, Kochansk 1998, and Javidan
1998). Instead of focusing on the individual and evaluating how she or he
works, this perspective focuses on the work group/Strategic Business Unit and
uses an external benchmark of competence. The implication of this approach is
that not only must the organization seek out those with management skills and
'competence', but also structure itself to facilitate competent management and
develop evaluation systems to ensure that standards are being maintained. The
concept of competence being measured by an external standard is attractive
because it means comparability is possible. Improvement can be achieved through
benchmarking. However, this type of competence only is germane to
selfsufficient business units. One cannot compare people or sub-units with
measures designed for companies or strategic business units.
A Synthetic Definition of Competence
Based on the preceding review of literature, the following definition of
competence can be developed.
Management Skills + Firm Environment + Performance = Competence
(personality trait) + (learned behavior) + (standard)
In effect, this approach returns to that originally offered by Boyatzis
(1982). Instead of isolating specific characteristics of competence, this
perspective views each subarea as contributing to overall competence. That is,
competence is a multi-dimensional construct. The empirical measurement of such
a construct requires the broadest definition in exploratory research in order
to determine its boundaries. There is prior support in the literature for a
holistic or open-systems approach. For instance, Kanungo et al (1990) recognize
that management assessment must recognize the impact of culture on the
organization. Therefore, managers are immersed in a cultural setting that
impacts the way they make decisions. Any factor that alters or changes a
decision will have an impact on the outcome of the decision and, therefore, performance
and Managerial Competence.
For instance, African managers are more likely to see the world as a place
where the business environment determines whether a decision or strategy will
be successful (Versi 1998). In this research, Africans see themselves as part
of a holistic system over which they have little control. In contrast, western
managers see themselves as independent and are more likely to interpret their
skills and competence as determining factors in the outcome. Consequently,
African managers are Inclusives, and western managers Exclusives (Versi 1998).
Following the logic of Kanungo et al (1990) and Versi (1998), African
managers may be more passive in responding to resource deficiencies or
environmental turbulence. In contrast, western managers may be more
active/proactive.
Based on the above literature review, the following points can be made.
1) It appears that there is little empirical research comparing and
contrasting the relative competence of African versus western managers. Given
the need for Africa to attract private investment capital, a study addressing
this area seems necessary.
2) A holistic, broader definition of managerial competence is a stronger
definition for the purposes of analyzing the current research question.
3) An exploratory definition of Managerial Competence must recognize it as a
multidimensional construct that is a function of learned skills, personal
qualities, company environment, and performance standards. The following
empirical study uses the above points as a springboard for the study reported
below.
METHODOLOGY
Operationalization of Concepts and Instrument Development
The literature review conceptualizes Managerial Competence as a
multi-dimensional construct, with at least three 'approaches'. The first
context (competence as an internal personality trait) is a difficult if not
impossible platform on which to develop empirical work unless the specific
personality traits of managers are known. Only then can managers be surveyed to
determine the presence or absence of those traits. The third context
(competence as an external standard) is very difficult to use because work
group and SBU performance is subject to the influence of many variables,
including the competence of managers. For these reasons, the current research
adopts the second approach; that is, Managerial Competence as a set of skills
or behaviors. The skills/behaviors measured are presented in Appendix A.
A series of concepts and variables used in prior literature served as the
basis for developing empirical measures of managerial Competence. In
particular, the work of Boyatzis (1982), Kotter (1982, and Mintzberg (1990)
were used for the operationalization procedure. These researchers identify the
skills a manager must have in order to be considered 'competent'. For each
skill, an item was developed for inclusion in the final survey.
Drawing especially on the work of Mintzberg (1990), the competence items
were grouped around four basic managerial levels; a) Individual Skills, b)
Supervisory Skills, c) Line management Skills, and d) Strategic Management
Skills. The instructions asked the respondent to answer the survey based on the
current level of management practice, and the skills that would be required in
the future.
In order to address concerns of internal validity, the survey instrument was
evaluated by a group of academics with experience in the field and senior
practitioners. The suggestions of this review group were used to improve the
survey.
Sample
The purpose of the research is to determine whether Managerial Competence in
the African business environment is similar to that in the 'western'
environment. The functional area (within almost any business) with the best
perspective of Managerial Competence and its components is the Human
Resources/Personnel Department. Line managers are skilled in their specific
tasks but may not have an awareness of the overall skill base of the company's
management. Human Resource/Personnel managers, by necessity, have to understand
the level of competence required by a broader range of managers in order for
the business to succeed. This is the same for both the Nigerian and British
business environment.
The names and addresses of transportation companies operating in Nigeria and
Great Britain were obtained as the basis of the sample. This industry has
similar characteristics in both countries and many managers in Nigeria are
trained using British methods and techniques. The researchers identified 130
Nigerian companies and 200 British companies with similar characteristics. The
personnel managers in those companies constitute the overall sample frame for
the research.
Survey Administration
To enhance the response rate, a differential administration method was used.
For the Nigerian group, the surveys were delivered by hand to the address of
the company and collected by hand. Distribution was conducted this way to avoid
the problems with the local mail system, and to fit with cultural issues, such
as knowing the background of the researcher, and purpose of the research. For
the British group, a standard mail-out methodology was used. British managers
are more used to receiving anonymous requests for information for educational
research. Therefore, it was anticipated that British managers would be able and
willing to complete the survey without knowing or meeting the researchers.
Response Rate
For the Nigerian group, a total of 130 surveys were distributed. Every
manager responded, but only 125 were usable for the research. For the British
group, 150 usable responses were received; a response rate of 75%. Given these
response rates, concerns with respect to non-response, or self-selection bias
appear to be unfounded.
RESULTS
Appendix A shows the items used in the questionnaire. Respondents were asked
to respond to each item in the context of current capabilities and future
requirements. The following sections focus on specific aspects of the data in
the context of the discussion above. In particular, there is analysis of "in-country"
results (where the data is examined across time; current to future competent
management practice), and across-country results (where the comparison is
between Nigeria and UK managers..
Comparisons Within Country Nigeria: Table 1 reports the data results
comparing Nigerian managers over current and future management practice. In
terms of 'absolute' response levels, Nigerian HR/Personnel Managers consider
the skills in the survey to be below 'Average Importance' for current competent
management practice. The mean for the first three skill bases are barely above
the 'Not Very Important' level (2.13, 2.41, and 2.11 respectively). Only
Strategic skills approach the 'Average Importance' level (mean 2.86).
In contrast, Nigerian HR/Personnel Managers consider the skills in the
survey to be more than 'Above Average Importance' for future competent
management practice. That is, the Individual, Supervisory, Line Management, and
Strategic skills were 4.10, 4.11, 4.14, and 4.13 respectively (where 4.00 represents
'Above Average Importance').
At each skill level (Individual, Supervisory, Line Management, and
Strategic), there is a significant difference (at the 0.05 level) between
current and future practice. That is, HR/Personnel Managers in Nigeria consider
the components of competence included in the survey to be much more important
for future competent management practice than for current management practice.
United Kingdom: Table 2 presents a similar comparison for UK managers. The
major difference between the Nigerian and UK managers is that British
HR/Personnel Managers consider the skills in the survey to be of 'Average
Importance' for current competent management practice. The mean of each skill
set clusters around the 3.00 mark (2.85, 3.01, 3.12, 3.09 respectively).
In terms of future competent management practice, British managers again
have a higher mean for the skill sets included in the survey. That is, for each
skill cluster, the mean was significantly higher for future competence than it
was for current competence (4.47, 4.54,, 4.60, 4.61 respectively).
Comparison Across Countries
Tables 3 and 4 present the comparison between the countries. In the
"Current" context, at each skill level personnel managers consider
each skill attribute to be more important than their Nigerian counterpart. The
differences in the perception are significant (at the 0.05 level) for three out
of the four categories. Only Strategic competence skills are approximately
equivalent across countries.
In Table 4, the comparison is between Nigerian and UK managers' perceptions
of future competence attributes. Although the mean UK response is higher than
the mean Nigerian response in each skill group, these differences are not
statistically significant.
In general, it appears that Nigerian HR managers consider the skills
included in the survey in a different context than British HR managers. That
is, For a manager to be 'currently' competent in Nigeria, s/he does not need to
perform well at the skills included in the survey. For a British manager, these
skills are more important in terms of demonstrating current management
competence. However, in the context of future management practice, the skills
are approximately equally important in both countries.
CONCLUSIONS AND IMPLICATIONS
The original premise of the study is to determine whether managerial
competence has a 'universal' definition, especially as it pertains to African
managers. Based on the results of the current empirical study, the answer is
"Yes" and "No". In short, the study succeeded in
identifying that managerial competence (future orientation) is made up of
similar components both in the UK and in Nigeria. However, in the context of
current managerial competence the variables included in the study were not good
measures.
The skills of managerial competence included in the survey are perceived by
Nigerian HR managers to be of 'Less than Average Importance' in the current
context, whereas British HR managers consider these skills to be of 'Average
Importance'. Therefore, there is a difference between Nigeria and the UK how
managerial competence is defined or perceived. In contrast, the skills in the
survey are considered to be of approximately equal importance (at least Above
Average Importance) in both countries in the future context. Therefore, the
problem before us is to consider why the difference exists between Nigerian and
British perceptions of current competent management practice and why the
variables included in the study are not adequate measures of managerial
competence.
With respect to the adequacy of the measures, current managerial competence
needs to be conceptualized using more variables. It is possible that managerial
competence in the short term is results oriented. Therefore, the ability to
deliver good performance is a critical issue. Performance criteria were not
discussed in the literature and therefore not included in the study.
In terms of the difference between the UK perspective and the Nigerian
perspective, it could be that Nigerian managers start at such a low level of
managerial competence that the skills in the survey are not considered to be a
reasonable target in the immediate context. This suggests that in Nigeria many
managers learn to be competent on the job. It may indicate that schools and
universities do not provide the skills necessary for young people to move
easily into businesses.
A better explanation may be found in comparing the UK to the Nigerian
results. That is, although the Nigerian HR managers considered the skills to be
of 'Below Average Importance' in the current context, the British managers'
results were only just above the Nigerian results. Neither group considered the
skills to be of 'Above Average Importance' or 'Very Important'. This indicates
that managerial competence in the current context is not the same as that in
the future context. The literature in the field is focused on variables that
managers consider to be long run issues, but not vital for current operations.
Furthermore, it implies that all managers are expected to grow into their jobs
and develop the skills laid out in the survey. In that case, there is an
implicit responsibility for the company to provide the resources necessary for
that development to take place.
Determining the reason for the difference is crucial because if the
diagnosis is wrong then any proposed remedy may also be wrong. If the issue is
school-based, then the government has to be involved in the solution.
If the issue is a faulty research design, then the only solution is to reevaluate the skills associated with competent management practice and revisit the issue with a different approach in future studies.
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[Reference]
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[Author note]
Emmanuel
Erondu (mktaps@hofstra.edu)
Alex Sharland
Hofstra University