South Africa’s Mannie Hirsch established The Gestalt Group in 1998 to help emerging entrepreneurs connect with mainstream economies. This involves building partnerships with local and transnational corporates in pursuit of profitable returns for both.
Hirsch is outspoken regarding what he tongue-in-cheek calls “the divine right of internationals” to stake their claim in the global village. This carries with it an echo of African concerns of economic neo-colonialism, although in Mannie’s view there are possibilities for different outcomes.
To him, the key lies in an adaptive model in which multinationals align themselves with host countries in terms of local cultures. Africans are no longer prepared to play second fiddle. They are increasingly demanding that their economic partners play more than mere lip service to enterprise development, corporate social investment, employment equity, and hard skills development to certification level.
Some large multinationals have failed to adjust to this, and are still trying to nail down their own cultures everywhere they go. According to a report to the Belgian Senate there is a risk of the movement falling out of favor as it did in the 1960s, when American corporates were seen as hell bent on dominating the world stage. This is understandable when Wal-Mart’s turnover is on par with the 25th largest economy in the world exceeding 157 smaller ones in the process.
The Zimbabwe experience has shown that widening gaps between the “haves” and “have-nots” can cause a backlash leading to partial and even total nationalization. The way to avoid this is real partnerships between multinationals and the countries which they serve in. While the idea of “service” may seem alien to some conglomerates to the north, it rings true to the African tradition of Ubuntu that says that nobody exists in isolation, and that pain to one is pain to all.
This belief lies at the core of South Africa’s BEE model in terms of which indigenous people hold 50% + 1 of corporate ownership. Whether this is good or bad for that country’s economy is an open question. However the policy is fast becoming reality.
Nonetheless Africa continues to welcome foreign investment because of the undoubted benefits it brings. This is especially true of money put into local mobile enterprise developments because they are the key to growth. There are great opportunities in Africa for multinationals that work within the African paradigm. Those who fail to, may yet feel the wrath of an awakening giant.
REFERENCES
http://finweek.com/2012/10/10/the-divine-right-of-multinationals-in-africa/
http://www.entrepreneurmag.co.za/author/mannie_hirsch/
http://www.businessinsider.com/25-corporations-bigger-tan-countries-2011-6?op=1
http://en.wikipedia.org/wiki/Ubuntu_%28philosophy%29
http://www.mckinsey.com/insights/economic_studies/new_horizons_for_multinational_company_investment
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