Mobile Phone Company in Africa - Case Study Example

Case Study of a Mobile Phone Company in Africa Name Institution Course Date Table of Contents Running Head: САSЕ STUDY ОF А MОBILЕ РHОNЕ СОMРАNY IN АFRIСА 1 1 Table of Contents 2 Part One 3 Introduction 3 Mobile Telephony in Africa 3 Opportunities Enjoyed by Celtel in Africa 4 Challenges Faced by Celtel in Africa 5 Leadership for Organisation Development 6 Conclusion 7 Part Two 8 Background 8 Analysis 8 Conclusion 10 References 11 Part One Introduction Due to globalization and technological advancement, the business environment is volatile, uncertain and complex. It is very difficult to predict the future of this environment since the internal and external factors keeps on changing (Stacey, 2011). In order to remain competitive, companies are looking for opportunities in foreign markets. Mobile companies have realized the opportunities available in Africa which led them to access the market (Aker and Mbiti, 2010). Mobile telephony in Africa was considered the first modern telecommunication infrastructure that improved the lives of people and led to economic development. It is no long that mobile phones were new devices for many people living in Africa. However, in less than a decade, the situation has shifted as a result of entry of mobile telephony (Ibrahim, 2012). Mobile phone usage has increased over the years with more and more people owning the gadget. The introduction of mobile phones in Africa was attributed to the works of MO Ibrahim who battled the standard of people in Africa through telecommunication (Ibrahim, 2012). This report will highlight the opportunities and challenges faced by mobile telephony in Africa. It will also examine how leaders perceive value as a way of creating knowledge at different stages of organisational development. Mobile Telephony in Africa Mobile telephony has spread fast in the last decades and there is an estimate of about two mobile phones per person in Africa (Ibrahim, 2012). In 2000, Africa has limited number of fixed line networks. Mobile telephony providers such as Zain, Celtel and Airtel took advantage of this and implemented a diffusion strategy for mobile networks (Ibrahim, 2012). Mo Ibrahim saw an opportunity for mobile telephone in Africa and entered the telecommunication industry (Reid, 2015). Today, the coverage has reached about 90% of the continent. The introduction of mobile technology in Africa created many benefits to the territory as it enabled people to bank, shop, communicate as well as trade using their cell phones (James and Versteeg, 2007). In addition, the economy also improved and employment opportunities increased. In addition, countries in Africa have experienced development and increase in the GDP rates due to mobile telephony. The success of mobile telephony such as Celtel was attributed to lack of competition as well as inapplicability of licencing (James and Versteeg, 2007). Opportunities Enjoyed by Celtel in Africa According to James and Versteeg (2007), mobile industry in Africa is considered to have the biggest opportunities of the century. Research suggests that Africa is among the largest growing mobile telephone market. Mobile telephony industry is growing at a very fast rate and the total number of cell phones used is almost 1 billion in Africa alone (Molitoret al., 2011). Mobile telephone industry has attracted foreign as well as local players. On average, in 2011, the revenue gotten from mobile telephony industry was $40 billion. Across all social classes, people in Africa have embraced cell phones (Katungi, Edmeades and Smale, 2008). Cell phones are not only for people living in urban areas, Africans living in the rural areas now use cheap and basic cell phones. This offers an opportunity for mobile telephony to access larger market share. Africa is only dominated by the first wave of mobile phone. More than 50 per cent of people in the continent still use simple phones that use 2.5G technology (James and Versteeg, 2007). Research suggests that in some few years to come, Africa will be ushered with the second wave of mobile revolution partly due to the fall of internet price (James and Versteeg, 2007). More people in Africa will have a chance to use the internet through their cell phones. This will contribute to the growth of mobile telephony companies in Africa. Challenges Faced by Celtel in Africa Many countries in Africa are faced with high levels of corruption that affects operation of international businesses (Mullins and Rhodes, 2011). Celtel’s operation in Africa was challenged by corruption. To survive this, the company decided to establish credibility in the region. It sought to maintain transparency by establishing polices that guided its operations (James and Versteeg, 2007). This action led to the company gaining respect among people. Another challenge faced by mobile telephony in Africa is cultural differences. Cultural factors often act as barriers to effective operation of multinational corporations. Many challenges result when people from different races, cultures and values come together in a work setting (Martin and Terblanche, 2003). Communicating across cultures is considered a difficult task. Cultural stereotypes overexert the perception individuals have on other cultures which eventually results to misunderstanding. Stereotypes come about due to lack of knowledge of the groups which are major reasons for difference in opinions (Darley,Luethge and Blankson, 2013). Due to culture difference, many mobile telephony companies have struggled to remain relevant in Africa. For instance, when Celtel started its operation in Africa, expatriates experienced cultural shock that threatened their leadership capabilities. In order to solve this challenge, the company decided to hire local leaders and employees and train its expatriates (Hatem, 2016). This was a turning point for the company which saw growth year and year. Leadership for Organisation Development According to Hofstede, there are five culture dimensions that can explain the differences between national cultures; power distance, masculinity versus femininity, uncertainty avoidance, collectivist versus individualism, and long term and short term orientation. These dimensions explain the differences that exist between countries (Gottffredon and Aguinis, 2016). There are a number of differences between Western and African countries. These differences make it hard for expatriates from other countries to lead employees in Africa. For instance, most African countries have high power distance. They have respect for elders and decisions made by a leader cannot be questioned by the subordinates. This is different from Western countries (Turner and Muller, 2010). In order to survive in such environment, mobile companies such as Celtel developed an experienced senior management team which included local people from Africa (James and Versteeg, 2007). Such a team was able to effectively tackle the challenges in Africa including corruption (Yeboah et al., 2016). The transparent and explicit goals of Celtel as well as Zain outlined to stakeholders were able to reduce corruption and guide the organisation success. Celtel established an effective leadership team that was best suited locally and internationally. The understanding of the African culture by the founder, Mo Ibrahim also contributed to the success of the company (Yunus and Weber, 2010). In addition, Ibrahim created shared value in Africa through different initiatives. For instance, he established schools, hospitals and training grounds for employees (Ibrahim, 2012). Such relationship with the stakeholders contributed to the success of Celtel. Celtel, under the leadership of Ibrahim created social capital through forming network of relationships which enhanced its efficiency and innovation (Nahapiet and Ghoshal, 1998). Overall, Ibrahim understood the importance of creating social capital and shared value, managing cultural diversity and establishing good leadership in the success of mobile telephony in Africa (Porter and Kramer, 2011). Conclusion Mobile telephony companies have experienced success in Africa due to lack of competition. Today, the number of people using mobile phones has increased considerably and these companies have enjoyed high revenue levels. However, challenges such as cultural differences and corruption threatened to disrupt the operation of Celtel but due to good leadership and other efforts put forth, the company has been able to survive. The leadership in Celtel comprised of a team of people who are able to involve the stakeholders in creating value for the company. Part Two Background From this assignment, I have learnt that the success of mobile telephony in Africa was aspired by Mo Ibrahim. He was the root of the success of these companies due to his leadership skills and personality (Ibrahim, 2012). Coming from a small country in Africa, Ibrahim took advantage of the opportunities presented in the region to establish mobile telephony in Africa (Ibrahim, 2012). I have learnt that the success of any business has its roots from the leader. Effective leaders are very essential to the success of any work. A leader aspires for productivity and change in employees towards a desired objectives and goals. The qualities of good leadership are the same. Good leadership is founded on respectable personality and unselfish commitment to the employees and the organisation (Knapp et al., 2014). Under the leadership of Ibrahim, Celtel was able to create shared value in Africa. I have learnt that leadership plays a vital role in ensuring success of any work, through selection and creation of capable teams in ensuring that the company meets the predetermined goals (Darr, 2010). Leadership is able to enhance continuous empowerment of the employees involved in the execution of work through training and motivating team to work towards set objectives. In addition, leadership is important as it creates a vision for the company, institutes a strategic plan and influence teams towards achieving vision (Darr, 2010). Also, leadership establishes effective communication between the managers and team members during any operation. Analysis I have a long-standing interest in becoming a manger and from the case of mobile telephony in Africa; there are so many lessons I have learnt that will impact me in future. It is my belief that not everyone can become a leader (Darr, 2010). There are a number of skills that leaders must have in order to lead a team to success. Specifically for international companies, leadership skills are essential in overcoming challenges present in foreign markets. Leaders are expected to think proactively. An effective manager is able to initiate proactive thinking when leader a team of employees. Interpersonal skill is also an important skill that leaders should possess (Amy, 2008). As a leader, I would be required to build a strong relationship with the employees in order to motivate them. The quality of the relationship between a leader and the employees determine the success of any operation. Therefore, from the case study of Imo Ibrahim, I have learnt the importance of investing time in people in order to yield value (Amy, 2008). Leadership skills required among managers is evolving fast due to globalization (Northouse, 2010). The world is becoming one and companies can now trade freely due to few trade restrictions. This will increase the number of international operations. The growing number of Multinational Corporation will promote diverse workforce. Leading a diverse workforce is different from leading a group of employees from the same cultural background. And as such, leaders are required to enhance their leadership skills in order to be able to lead in a diverse work environment (Robinson and Rose, 2004). I have learnt that leaders require diversity management skills in order to take advantage of global opportunities. Diversity management can be termed as the gaining of relevant knowledge and skills to manage diversity differences effectively and easily (Amy, 2008). Due to the ever changing nature of business environment, diversity issue has affected organisations across the world (Webb, 2007). Therefore, managers have the responsible of managing diversity by minimizing the drawbacks and maximizing the benefits of diversity in the workplace in order to enhance social cohesion and organisational effectiveness. However, successful management of the cultural diversity issue is a challenge in many companies. Many managers lack the skills to lead in the international market and this affects the success of an organisation (Scouller, 2011). Therefore, it is very essential for companies to effectively manage cultural diversity and assist employees overcome cultural barriers in order to succeed. As a result of cultural diverse workforce, companies will be required to become more refined in solving cultural differences by implementing diversity management programs (Maak, 2007). As a future leader, I will need to undergo training to equip myself with the relevant skills to lead a group of diverse team. Conclusion From the assignment, I have learnt that leadership is an important driver of organisational success. Good leadership is founded on having the necessary skills to lead a team of employees and empower them to work towards set objectives. The growing number of multinational corporations has increased diversity in the workplace. Operating internationally requires a leader to have diversity management skills. Leaders should be able to effectively manage cultural diversity and assist employees overcome cultural barriers. Personally, to succeed as a leader, I will have to think proactively, possess interpersonal skills, motivate the employees and manage a diverse workforce. Diversity management is important in succeeding in the international market. References Aker, JC & Mbiti, IM 2010, Mobile phones and economic development in Africa. The Journal of Economic Perspectives, vol. 24, no. 3, pp. 207-232. Amy, A. H 2008, Leaders as facilitators of individual and organizational learning. Leadership & Organization Development Journal, 29(3), 212–234. Darley, W., Luethge, D & Blankson, C 2013, Culture and International Marketing: A Sub-Sahara African context. Journal of Global Marketing, vol. 26, no. 4, pp. 188-202. Darr, K 2010, Introduction to Management and Leadership Concepts, Principles and Practice. In Burke, R. E. & Friedman, L. (Eds.). Essentials of Management and Leadership in Public Health. (pp. 7-24). Burlington, MA: Jones & Bartlett Learning. Gottfredson, RK & Aguinis, H 2016, Leadership behaviors and follower performance: Deductive and inductive examination of theoretical rationales and underlying mechanisms: Leadership Behaviors and Follower Performance. Journal of Organizational Behavior, doi: 10.1002/job.2152. Hatem, O 2016, ‘The Challenge of Becoming a Successful Entrepreneur in a Hostile Context: The Example of Mohamed Ibrahim, the Founder of MSI and Celtel’, in L Alchtenhagen and E Brundin (eds), Entrepreneurship and SME Management Across Africa, Frontiers in African Business Research, Edinburgh, UK. Ibrahim, M 2012, Celtel's founder on building a business on the world's poorest continent. Harvard Business Review, vol. 90, no. 10, pp .41-44. James, J & Versteeg, M 2007, Mobile phones in Africa: how much do we really know? Social Indicators Research, October, vol. 84, no. 1, pp. 117-126. Katungi, E., Edmeades, S & Smale, M 2008, Gender, social capital and information exchange in rural Uganda. Journal of International Development, vol. 20, no. 1, pp. 35-52. Knapp, M., Honig, M., Plecki, M., Portin, B & Copland, M 2014, Learning-focused leadership in action : improving instruction in schools and districts, New York, Routledge, Taylor & Francis Group. Maak, T 2007, Responsible Leadership, Stakeholder Engagement, and the Emergence of Social Capital. Journal of Business Ethics, vol. 74, pp. 329-343. Martins, EC & Terblanche, F 2003, Building organisational culture that stimulates creativity and innovation. European Journal of Innovation Management, vol. 6, no. 1, pp. 64-74. Molitor, F, Rossi, M, Branton, L & Field, J 2011, Increasing social capital and personal efficacy through small-scale community events. Journal Of Community Psychology, vol. 39, no. 6, pp. 749-754. Mullins, J & Rhodes, T 2011, ‘Managing Ethically in Corrupt Environments’, Business Strategy Review, Winter, 2011, vol. 22, no. 4, pp. 50-55. Nahapiet, J & Ghoshal, S 1998, Social Capital, Intellectual Capital, and the Organizational Advantage. Academy of Management Review, vol. 23, no. 2, pp. 242-266. Northouse, P 2010. Leadership: Theory and Practice, Thousand Oaks, Sage Publications. Porter, ME & Kramer, MR 2011, Creating Shared Value. Harvard Business Review, vol. 89, no. 1-2, pp. 62-77. Reid, S 2015, Africa calling: A conversation with Mo Ibrahim. Foreign Affairs, vol. 94, no. 1, pp. 24-30. Robinson, G & Rose, M 2004, A Leadership Paradox: Influencing Others by Defining Yourself: Revised Edition, Bloomington, Indiana, AuthorHouse. Scouller, J 2011, The three levels of leadership : how to develop your leadership presence, knowhow, and skill. Cirencester: Management Books 2000. Stacey, RD 2011, Strategic management and organisational dynamics: the challenge of complexity to ways of thinking about organisations, 6thedn. Prentice Hall, Harlow, England. Turner, J & Müller, R 2010, Project-Oriented Leadership, Farnham, Surrey, UK Burlington, VT: Gower Publishing, Ltd. Webb, K 2007, Motivating Peak Performance: Leadership Behaviors That Stimulate Employee Motivation and Performance. Christian Higher Education, 6(1), pp. 53-71. Yeboah-Assiamah E, Asamoah K, Bawole J, & Musah-Surugu I 2016, A socio-cultural approach to public sector corruption in Africa: key pointers for reflection. Journal of Public Affairs, vol. 16, no. 3, pp. 279-293. Yunus, M & Weber, K 2010, Building social business: the new kind of capitalism that serves humanity's most pressing needs, Public Affairs, New York. Read More