It is publication day for Prof Stephanie Decker — Postcolonial Transition and Global Business History: British Multinational Companies in Ghana and Nigeria (Routledge 2022) is out now!
British multinationals faced unprecedented challenges to their organizational legitimacy in the middle of the twentieth century as the European colonial empires were dismantled and institutional transformations changed colonial relationships in Africa and other parts of the world. This study investigates the political networking and internal organizational changes in five British multinationals (United Africa Company, John Holt & Co., Ashanti Goldfields Corporation, Bank of West Africa and Barclays Bank DCO). These firms were forced to adapt their strategies and operations to changing institutional environments in two English-speaking West African countries, Ghana (formerly the Gold Coast) and Nigeria, from the late 1940s to the late 1970s. Decolonization meant that formerly imperial businesses needed to develop new political networks and change their internal organization and staffing to promote more Africans to managerial roles. This postcolonial transition culminated in indigenization programmes (and targeted nationalizations) which forced foreign companies to sell equity and assets to domestic investors in the 1970s. Managing Postcolonial Transitions is the first in-depth historical study on how British firms sought to adapt over several decades to rapid political and economic transformation in West Africa.
Stephanie Decker is professor of Strategy at the University of Birmingham Business School, UK, and visiting professor in African Business History at the University of Gothenburg, Sweden. She is joint editor-in-chief of Business History, on the editorial board of Organization Studies, Journal of International Business Studies and Accounting History, and Co-Vice Chair for Research & Publications at the British Academy of Management.
Table of Contents
- Organizational Legitimacy and the Development Discourse.
PART 1 – Managing Postcolonial Transitions Externally .
- Corporate Political Activities before and after Independence.
- Indigenization Programmes and Organizational Legitimacy.
PART 2 – Managing Postcolonial Transitions Internally.
- Africanization in Companies and in the Civil Service.
- African Managers in British Businesses.
This chapter introduces the book and provides an overview of key terms and the historical context, the companies selected for the study, and the country context. The term postcolonial transition describes the changes in countries like Ghana and Nigeria during decolonization and the first two decades of independence. Multinationals became increasingly aware of the need to build goodwill with domestic stakeholders. The book details their legitimization strategies, especially in terms of corporate political activities (Part 1) and Africanization (e.g., promoting African staff to positions of responsibility, Part 2). The introduction reviews the relevant literature, covering several different topics, such as decolonization and development thinking, economic nationalism and expropriations, Africanization and business historical studies of corporate legitimacy.
2. Organisational Legitimacy and the Development Discourse
Development economics emerged as a discipline out of World War 2 and its aftermath. Development ideas came to shape the legitimization strategies of imperial business during decolonization and continued to do so after independence. This chapter traces the nature of this development discourse internationally, specifically in West Africa, and how it shaped corporate responses to political and economic change. The influence of development discourse went beyond corporate strategies to foster political goodwill. It influenced commercial strategies such as refocusing activities and expansion beyond urban areas. By the late 1960s, this development discourse was under strain, and with it, multinationals found it more challenging to maintain the legitimacy of their subsidiaries.
3. Corporate Political Activities Before and After Independence
Corporate political activities became a major focus for British multinationals in West Africa as decolonization became a political reality. This chapter outlines how firms framed their key concerns over time and how this changed during decolonisation and after independence. Companies varied their legitimisation strategies from building personal networks to collective action. Whilst their focus was on colonial officials in the late 1940s and early 1950s, many companies began developing contacts with nationalist politicians and traditional rulers in Ghana and Nigeria in the 1950s. This strategy continued after independence, even though firms faced greater criticism in the 1960s and 1970s.
4. Indigenization Programmes and Organizational Legitimacy
This chapter focuses on the expropriations and indigenization programmes of the late 1960s and 1970s in Nigeria and Ghana. It traces the complex sequence of different types of local content legislation and analyzes the corporate responses to these programmes. The Nigerian Enterprise Promotion Decrees were amongst the most comprehensive of these programmes in Africa. They were introduced when Nigeria realized windfall profits from its oil and petroleum industries, and thus multinationals were paying close attention. Expropriations of foreign companies in West Africa and beyond have been of interest to researchers in economic sociology, law, international business, and history. The final section engages with these debates based on the archival evidence from multinationals in Ghana and Nigeria.
5. Africanization in Companies and the Civil Service
In this chapter, the progress of Africanization in the civil service and in companies is compared to understand better what were the drivers and constraints of these changes. Progress in the private sector also varied between industries and companies, reflecting different legitimization strategies espoused by firms. Whilst Africanization progressed fastest in commercial companies, UAC was certainly more advanced than Holts. Banking generally lacked behind the commercial sector, and the archival records from BWA were not sufficiently detailed for a comparison. Mining was slowest; this may reflect AGC being particularly resistant under the leadership of Edward Spears to Africanize. Finally, this chapter investigates some of the factors that limited effective Africanization: high staff turnover due to significant skills shortages, ceilings to African advancement, and colonial salary structures that continued with limited reform into the independence period.
6. African Managers in British Businesses
Promoting African staff in formerly imperial British multinationals required significant changes to internal operations in organizations shaped by expatriate leadership. This chapter first discusses the changing relationship between expatriates and Africans and how companies constructed the notion of cultural and social distance between these two groups of employees. Many firms opted to develop staff training schemes to imbue corporate cultures and expectations to prepare Africans for management. British business leaders were concerned about whether they could trust their African staff, especially at times of rising anti-colonial and nationalist sentiment. As a group of employees, African staff also became more fractured in their interests – those who were promoted to managerial positions and better benefits and those who were not. In mining, the question of whom the African trade unions could represent and whether that included African managers led to conflicts. The rising economic nationalism of the 1970s created more opportunities for African managers in senior leadership positions in multinationals and to go alone in an entrepreneurial venture, sometimes competing with their former employers.
This chapter concludes the book and summarizes its main arguments: the type of legitimization strategies firms espoused to manage the postcolonial transition period in Ghana and Nigeria strategically. They relied on the then-dominant development discourse to frame their commercial activities, expanded their political networks, and began to advance their African staff to more responsible positions. As the post-war development framework lost its relevance in the face of economic difficulties, multinationals found their organizational legitimacy undermined. Expropriations and indigenization decrees often required multinationals to rely even more on their African managers, who benefitted from these opportunities for investment and advancement. Whilst the debate has usually focused on the question of control over foreign-dominated sectors of the economy, this book argues that legitimacy theory provides a better understanding of the strategies and constraints that multinationals were facing in West Africa and beyond.
Photograph of Richard Dyson (on the left) of Barclays Bank meeting Samuel Akintola, Premier of Nigeria’s Western Region, in 1964. Reproduced with kind permission of Barclays Group Archives.