Expatriates' Perceptions of Corrupt Business Practices: the Magendo Phenomenon in Uganda

Expatriates’ Perceptions of Corrupt Business Practices: The Magendo Phenomenon in Uganda

Mulumba Matthias Sebuttemba

B.A (A), Makerere University – Uganda. M.Sc., Norwegian School of Management, BI – Norway.

A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Management

February 2020

School of Business Faculty of Business and Law The University Of Newcastle, NSW Australia

STATEMENT OF ORIGINALITY This thesis contains no material which has been accepted for the award of any other degree or diploma in any university or other tertiary institution and, to the best of my knowledge and belief, contains no materials previously published or written by another person, except where due reference has been made in the text. I give consent to this copy of my thesis, when deposited in the University Library, being made available for loan and photocopying subject to the provisions of the Copyright Act 1968.

Signed:

Date: 25th/02/2020

2 ACKNOWLEDGEMENTS

I wish to express deep appreciation to my supervisors, Associate Professor Tony Drew (principal supervisor) and Dr Sidsel Grimstad (co-supervisor) for their unwavering guidance throughout this PhD thesis journey. Because of your constant encouragement, this project stayed on course until its conclusion. In the safe hands of these two academics, I was able to sharpen my analytical and critical thinking in various ways. I thank both of you for your constructive comments that strengthened the quality of the thesis. My sincere thanks go to Associate Professor Suzanne Ryan who first introduced me to the fundamentals of research methods. I am equally grateful to the varied mentorship I received from other academics, and peer support from my colleagues. Special thanks go to the Faculty of Business and Law at the University Of Newcastle Australia, which empowered and availed me with an enabling environment to accomplish my academic pursuits. Similarly, I thank my employer, Makerere University Business School (MUBS, Kampala Uganda), for supporting my career development. I also wish to thank all the Expatriate Business People whose participation in the study and provision of information were invaluable for this thesis. In addition, I am grateful to Mr Lutaya Kivumbi, Mr William Musime, Mr Paul Nyanzi and Mr Silvano Kibuka whose assistance was instrumental in the success of the data collection phase of the thesis. The time and logistical support you accorded me were not in vain. I am forever very grateful to my dear mother Theresa Nakkazi (Owemmamba) who, against all social/economic odds, overcame the constraints of a peasant woman in an African rural setting to give a sound education to her children. And to my late father Joseph Kato who did not live long enough to see me through this long journey; Rest in Peace. Finally, I extend appreciation to my family who endured my prolonged absence from home. Your affection and understanding contributed enormously to this academic endeavour.

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TABLE OF CONTENTS

Page TITLE PAGE 1 STATEMENT OF ORIGINAL AUTHORSHIP 2 ACKNOWLEDGEMENTS 3 TABLE OF CONTENTS 4 APPENDICES 8 LIST OF FIGURES 9 LIST OF TABLES 10 ABSTRACT 11

CHAPTER 1 – INTRODUCTION 1.0 Introduction 12

1.1 Background 12

1.2 Research problem 14

1.3 Research objectives 15

1.4 Justification for the research 15

1.5 A conceptual framework 17

1.6 Methodology 17

1.7 Definition of terms 20

1.8 Delimitations 24

1.9 Conclusions 24

1.10 Thesis outline 25

CHAPTER 2 – LITERATURE REVIEW 2.1 Introduction 27 2.2 Expatriates’ experience with host country cultures 28 2.3 Expatriates’ experience with host country institutions 30

2.3.1 Relationships between informal economies and institutions 31 2.3.2 Implications of informal economies and institutions 32 2.4 How informal institutions can influence corrupt business practices 33 2.4.1 Meaning of corruption 34 2.4.2 Perceptions and dimensions of corruption 37 2.5 The study context: Expatriates in Africa and Uganda 39 2.5.1 European expatriates in Africa 41 2.5.2 Indian expatriates in Africa 41 2.5.3 Chinese expatriates in Africa 42 2.5.4 The social and political/economy of Uganda 45 2.6 Examples of informal institutions specific to different cultures 49 2.7 Magendo 56 2.7.1 Social, cultural and economic dimensions of magendo 57 2.7.2 Trends of magendo in Uganda 58 2.7.3 New forms of magendo 59 2.8 Synthesis of informal institutions 61 2.9 Theoretical approaches to studying informal institutions 63 2.9.1 Comparative theories on informal institutions 63 2.9.2 Adopting institutional theory 64

2.9.3 Response to contradictions, paradoxes and tensions 65

2.9.4 Developing a conceptual framework 66

CHAPTER 3 – METHODOLOGY 3.0 Introduction 72 3.1 Selection of a research paradigm 72 3.2 Selection of research methods 74 3.2.1 Justification for adopting qualitative methods 76 3.3 Selection of a research design and data collection methods 77 3.3.1 Selection of qualitative data collection method 78 3.4 Research procedures 79 3.4.1 Sample selection 79 3.4.2 Sample size and selection criteria 80 3.4.3 Accessing expatriate interviewees 81

3.4.4 Face-to-face interviewing 81 3.4.5 Interview questions 82 3.4.6 Questioning techniques 83 3.4.7 Interview process 84 3.5 Data analysis 84 3.6 Data Validity 86 3.6.1 Reliability 87 3.7 Generalisability 88 3.8 Ethical considerations 88 3.9 Conclusion 89

CHAPTER 4 – DATA ANALYSIS AND FINDINGS 4.1 Introduction 90 4.2 Data collection 92 4.3 Interviews 93 4.4 Data analysis 93 4.4.1 Description of qualitative data collected 93 4.4.2 The process of generating concepts 97 4.4.3 Concept analysis 100 4.5 Findings 136 4.5.1 Findings on business environment 137 4.5.2 Findings on regulative institutions 141 4.5.3 Findings on normative institutions 144 4.5.4 Findings on cultural-cognitive institution 148 4.6 Conclusions 151

CHAPTER 5 – DISCUSSIONS AND CONCLUSIONS 5.1 Introduction 153 5.2 Understanding the magendo institution 153 5.2.1 Expatriates’ understanding of the magendo institution 153 5.2.2 Linking magendo to institutional contradictions 155 5.3 Application of the conceptual framework 161 5.4 Response to institutional contradictions 162

5.4.1 Responses to context contradictions 163 5.4.2 Responses to regulatory contradictions 163 5.4.3 Responses to normative contradictions 164 5.4.4 Responses to cultural-cognitive contradictions 165 5.5 Theories 166 5.5.1 Contribution to theory 166 5.6 Significance of the study 167 5.7 Implication for institutional theory 168 5.8 Implication for policy and management practices 169 5.9 Implication for expatriate business practitioners 170 5.10 Limitations of the research 170 5.11 Future research 171 5.12 Conclusions 172

LIST OF REFERENCES 173

APPENDICES Page

Appendix A: Information Statement 189 Appendix B: Interview guide 192 Appendix C: Consent form 194 Appendix D: HREC approval certificate 195

LIST OF FIGURES Page

Figure 2.1 Map of Africa 40

Figure 2.2 Map of Uganda 46

Figure 2.3 IAD framework 65

Figure 3.1 Conceptual framework 67

Figure 4.1 Revised conceptual framework 135

Figure 4.2 Phrases, concepts, categories and theory 136

LIST OF TABLES Page

Table 2.1 Destination countries of Chinese business people in Africa 43 Table 2.2 Chinese investments in Africa 44 Table 2.3 Perception of blat 53 Table 2.4 Media reports on magendo 60 Table 2.5 Characteristics of selected informal institutions 62 Table 4.1 Attributes of interview respondents 94 Table 4.2 Summary attributes of participants 95 Table 4.3 Distribution of discussion on concepts 100 Table 4.4 Analysis of concept business environment 105 Table 4.5 Analysis of concept social issues 108 Table 4.6 Analysis of concept economic issues 110 Table 4.7 Analysis of concept regulatory issues 112 Table 4.8 Analysis of concept policy issues 114 Table 4.9 Analysis of concept company codes 115 Table 4.10 Analysis of concept standards 117 Table 4.11 Analysis of concept ethics 119 Table 4.12 Analysis of concept relationships 120 Table 4.13 Analysis of concept networks 121 Table 4.14 Analysis of concept power 122 Table 4.15 Analysis of concept trust 123 Table 4.16 Analysis of concept bribery 124 Table 4.17 Analysis of concept fraud 126 Table 4.18 Analysis of concept culture 126 Table 4.19 Analysis of concept corruption 128 Table 4.20 Analysis of concept integrity 130 Table 4.21 Analysis of concept magendo 131 Table 4.22 Level of knowledge of magendo 132 Table 4.23 Thematic coverage of context category 140 Table 4.24 Thematic coverage of regulatory category 144 Table 4.25 Thematic coverage of normative category 147 Table 4.26 Thematic coverage of culture cognitive category 150

ABSTRACT

The internationalisation of business brings expatriates from one institutional background to operate in countries with different institutional frameworks that guide business environments and practices. This may result in contradictions and tensions for expatriates if home country institutions differ from those in the host country. Expatriate business people working in developing countries often contend with corrupt business practices that are rooted in local informal institutions. In many emerging economies where formal institutions are not well established or implemented, informal institutions play a prominent part in guiding the behaviour of citizens and business managers. This study draws on institutional theory to provide a deeper understanding of different contexts and societal attributes. Institutional theory provides a productive lens through which to examine the experiences of expatriate business people in the environment that is being investigated. Magendo is described as an informal institution that influences the conduct of business in Uganda. Whereas local Ugandans may take magendo as a way of life and live with it, it is not known how expatriate business people contend with it. This study builds a framework to analyse how business expatriates respond to business contradictions and tensions between the institutional contexts they know from their own countries and the ones they are faced with under the influence of magendo. The framework enables the examination of potential relational contradictions, tensions and paradoxes that may result due to institutional differences between Uganda and the home countries of expatriates. The purpose of the framework is to enable analysis as to how business expatriates respond to experienced business contradictions and tensions in a host emerging economy. The study is based on qualitative research methods, in order to enable the development of theory to explain the influence of magendo on expatriate business people working in Uganda. Such an approach suits the exploration of expatriates’ perceptions because of its appreciation for, and attention to data. The analysis adopts a constructivist approach whereby ideas and concepts are drawn from the data, rather than superimposed by the researcher. This research contributes to institutional theory by using it to examine magendo through the perceptions of expatriates. It also contributes to policy and business practices by identifying how expatriates manage magendo. Last, it provides insights for Ugandan policy makers on how magendo impacts expatriate business behaviour. This forms basis for better policy formulation and improvement of the business environment in Uganda to attract more investors into the country.

CHAPTER 1

INTRODUCTION

1.0 Introduction This research examines expatriates’ perceptions of corrupt business practices in Uganda. In a business context, an expatriate is an individual working in a country other than his/her country of citizenship, temporarily or for an extended period (Pine, 2000). International business operators for a number of reasons use expatriates as agents of socialization – to transfer value beliefs; as network builders – to foster interpersonal linkages; as boundary spanners – to gather host country information; as language nodes – to bridge language barriers; and to transfer competence and knowledge-skills to local staff (Horak & Yang, 2016). This chapter begins with discussing the background of the study, and then it discusses the research problem, research objectives, justification for the research, a conceptual framework, methodology, thesis outline, definition of terms and delimitations. The overarching research question that guides this study is: How do expatriate business people perceive and deal with corrupt business practices in Uganda?

1.1 Background

Internationalisation is increasingly leading business people to move and work in business environments other than their home countries. Since expatriates originate from countries with different social, political, legal, economic and cultural backgrounds, they will often find that a host country has a different business environment and practices guided by different formal and informal institutions to those found in their home countries (Zhang, 2013; Xu et al., 2004). To understand and analyse institutions, this research adopts Hodgson’s (2006, 16) definition of institutions as ‘durable systems of established and embedded social rules that structure social interaction’ (Hodgson, 2006, p. 16). Research on institutions, culture and business is largely limited to America, Europe, The Middle East and Asia (Arrindell, 2003; Hofstede & Hofstede, 2001; Vance & McNulty, 2014; Welsh & Raven, 2006). In addition, research into cross-cultural experiences of expatriates largely focuses on the same regions (Batonda & Perry, 2003; Delios & Bjorkman, 2000; Harzing, Pudelko, & Sebastian Reiche, 2016; Lehmann, 2014; Vijayakumar & Cunningham, 2016). Compared to other regions, very little literature explains the African experience,

although some literature does address the political or economic issues of the Continent (Hufbauer, Rutschmann, Serrate, Vermeil de Conchard & Facon, 2013; Okpara, 2016). Esangbedo and Che (2016) observe that Africa has experienced a remarkable economic transformation in the last 30 years and like North America, Middle Eastern, European and Asian countries, African countries are following their own unique path to development, as influenced by their past colonial experiences, civil wars, poor governance and systemic drawbacks (George, 2015). George (2015) also notes that, in African countries, an individual is generally far more subsumed into one’s own group. Therefore, in this environment, individual accountability counts for far less than family or tribal loyalties. In addition, the state structures of many African countries remain fragile, which gives rise to informal institutions and practices that negatively affect business operations (Herbst, 2014; MacLean, 2010). These factors notwithstanding, Africa’s role in the global economy is rapidly changing, warranting the need to study and generate theory to guide and understand business operations in Africa with its variety of undocumented informal institutions and business practices (George, 2015). Uganda, the focus of this study, attracts a wide range of expatriates such as the British, Indians and more than 10,000 Chinese (Wissenbach, 2017), who engage in a variety of business operations. In Uganda, an informal institution, magendo, impacts business conduct and is associated with corruption (Lynch, 2011; Ruzindana, 1997; Sedigh & Ruzindana, 1999). Magendo embeds illegal dealings at both the government and private levels, whereby, in order to have something done, one must influence the process or give an extra incentive to expedite or conclude a transaction (Ruzindana, Langseth, & Gakwandi, 1998). Magendo evolved as a concept in the early 1970s due to the decline of Uganda’s formal economy (Southall, 1980), and this period was characterised by shortages of goods and poor services. Today, magendo is associated with broader corrupt practices, including bribe giving/taking, dishonest dealings, nepotism and lack of integrity. Its proponents, however, argue that it is supportive of Uganda’s upcoming middle class, some of whom engage in international trade (Titeca, 2012). This research seeks to examine how magendo affects expatriate business people in Uganda, and collects empirical data on the phenomenon of magendo as experienced and perceived by these expatriate business people. The aim is to generate knowledge on how magendo affects expatriates and their businesses in Uganda; contribute to theory for studying informal institutions in an African context; and, ultimately, contribute to literature on the African business environment. A qualitative research methodology is adopted to contribute to the development of theory and, in turn, address George’s (2015) challenge to researchers to improve understanding of the

cultural and social context of businesspeople and their actions in an African environment. Institutional theory is adopted as a mechanism to enable a deeper understanding of the context, societal attributes and regulatory environment of Uganda (Drew & Kriz, 2012; Ostrom, 2011) and, as such, is used as the theoretical base for the research. The study also develops a framework to examine potential relational contradictions, tensions and paradoxes that result due to institutional differences between Uganda and the home countries of expatriates who are doing business in this country. The purpose of the framework is to study how expatriate business people respond to business contradictions and tensions between the institutional contexts they know from their own countries and the ones they are faced with under the influence of magendo. It is anticipated that analysing the impacts of magendo will lead to a better understanding of how this institution influences business behaviour through social capital (networks and informal relationships) and trust. By focusing on Uganda, the study provides an opportunity to understand this phenomenon through the business lenses of expatriates who are working in this developing country. This will provide a basis from which to appreciate business practices in Uganda. In addition, it will alert researchers and business people alike about the ways and manner in which informal institutions such as magendo affect business experiences and practices.

1.2 Research problem The undertaking of business as an expatriate in a developing country is complex, not least of all because of informal institutions and potential corrupt business practices. In developing countries with fragile formal institutions, local informal institutions that do not conform to generally accepted, standard business practices (Herdman, Fox-Rushby, & Badia, 1998) influence business behaviour. Meagher (2007), on the other hand, argues that the rapid expansion of informal economic and political institutions in contemporary Africa is a result of economic liberalization and state failure. He contends that in countries where formal institutions are not well established or implemented, as is the case in Uganda, informal institutions play a prominent part in guiding the behaviour of citizens and business people. Magendo is described as an informal institution that influences the conduct of business in Uganda. Whereas local Ugandans may accept magendo as a way of life and live with it, it is however, not known how expatriate business people contend with and respond to it.

1.3 Research Objectives The objective of this study is to examine how expatriate business people experience and respond to the business tensions and contradictions caused by institutional differences between their home countries and Uganda, where the magendo institution impacts the conduct of business. By so doing, the study aims to generate theory to understand and guide better business operations in an African environment with an informal institution. This may also increase our understanding of the challenges of conducting business under the influence of magendo. This study anticipates that examining magendo through the perceptions of expatriates will: contribute to broadening of institutional theory; inform how expatriates might best manage magendo and; provide insights for Ugandan policy makers and expatriate business people into how magendo impacts business behaviour.

1.4 Justification for the research The justification for this study is based on the following five points that Miles and Huberman (1994) refer to as theoretical and methodological gaps. These are: i) Limited business literature on Africa Research on institutions, culture and business is generally limited to American, European, Middle Eastern and Asian countries (Arrindell, 2003; Hofstede, 2001; Lee, 1992). Compared to other regions, very little literature explains the African experience, although some literature addresses the political and economic issues of the continent (Hufbauer et al., 2013). George (2015), therefore, observes rightly, and highlights, the need to generate theory to guide and understand business operations in Africa (George, 2015). ii) Lack of knowledge on informal institutions in Africa The cross-cultural experiences of expatriates have been documented for American, European, Middle Eastern and Asian countries (Delios & Bjorkman, 2000; Lehmann, 2014; Vijayakumar & Cunningham, 2016); but little or no empirical research has been documented on the African experience (George, 2015). Research on informal institutions has been undertaken on guanxi in China (Bian, 2018; Cadsby & Bi, 2007; Hofstede, 2007); blat in Russia (Galeotti, 2017; Hutchings & Weir, 2006b; Ledeneva, 2000); jajmani in India (Caldwell, 2014; Gold & Guthrie, 2002; Orenstein, 2015); and; wasta in the Middle East (Abalkhail & Allan, 2016; Berger, Silbiger, Herstein, & Barnes, 2015; Hutchings & Weir, 2006a). Little however is known about the experiences of expatriates in the African context.

15 iii) The need to appreciate Africa as an important business destination Africa is steadily becoming an important business destination, and expatriate business people’s focus on Africa is reflected in the rising trade balance between the continent and other parts of the world (Warmerdam & van Dijk, 2013). Many expatriates today, notably those originating from China, have increased exports of entrepreneurial talent to Africa, thus stimulating the African economies (Ayodele & Sotola, 2014; Friedman, 2009; Gu, Zhang, Vaz, & Mukwereza, 2016). iv) The need to understand the attraction of Uganda to expatriates Uganda, the focus of this study, is a former British colony and since independence in 1962 (Versteeg, 2014), it has experienced varied social, cultural, political and economic changes and transformation. Today, this country is attracting a wide range of expatriates engaged in business. The country’s economy has been growing at an average of 6% per annum. It is strategically located at the heart of Sub-Saharan Africa, enjoys a liberalised business environment and has a growing young population. Uganda is a favoured business destination, and ranks among the ten leading countries in attracting the highest FDI projects in Africa (UNCTAD, 2016). The discovery of large quantities of oil and gas will further enhance Uganda’s attraction to foreign investment and business (Hickey & Izama, 2016; Kjær, 2013). v) Need to understand magendo This study presents and discusses magendo as an informal institution that influences the conduct of business in Uganda. Literally translated, magendo means ‘transacting business illegally, unlawfully or without a license’ (Mertz, Njogu, & Gooding, 1998; Wekesa, 2010), and it means ‘corruption’ in one of the East African languages, Swahili. Broadly, magendo is an informal institution that is associated with corruption (Lynch, 2011). This informal institution embeds illegal dealings at both government and private levels (Ruzindana et al., 1998). There is however, a lack of empirical research into what magendo is, and even less on its influence on foreign business activities in this region, where some simply associate it with the black market, petty corruption, bureaucratic corruption, political corruption, grand corruption and/or bribery. This research, therefore, examines magendo through the lived experiences of expatriates in order to better appreciate its impacts on their businesses and the possible choices they make when they face it.

vi) Need for a conceptual framework A conceptual framework is developed in order to study and better understand how expatriates overcome business contradictions and tensions between the contexts they know from their own counties and the ones they are faced with under the influence of magendo. The framework developed for this research enables the identification of potential relational contradictions and tensions that result due to the institutional differences that may exist between Ugandans and expatriates (Drew & Kriz, 2012; Ostrom, 2011).

1.5 A conceptual framework A conceptual framework is a researcher’s map of the territory that is to be investigated. A framework plays a bounding function, pointing out key factors or variables to be studied and the presumed relationship between them (Miles & Huberman, 1994; Seuring & Müller, 2008). In response to the paucity of research into the experience of expatriates engaging in business in African countries (George, 2015), this research develops a conceptual framework to study institutional contradictions faced by expatriate business people doing business in Uganda. This framework is based on a review of institutional theory literature in Chapter 2 of this dissertation. It portrays potential institutional contradictions and tensions that result due to the institutional differences that exist between Ugandans and expatriate business people (Ostrom, 2011). The framework proposes two equally opposing contexts represented by the host country Uganda and the home country of the expatriate businessperson. The host country of Uganda is the specific context, as is the country of origin of the expatriate. Uganda has a formal regulatory system that covers business conduct. What makes Uganda unique, however, is that its normative institutions are reflected by relationships, power play and/or trust. Another variable that makes Uganda unique is its cultural-cognitive institutions, some of which may instil unique business behaviour and practices among business people. In contrast to the Ugandan context is the context of the expatriate who moved into Uganda to engage in business. The expatriates come from different countries, and therefore experience, or are used to, different regulatory institutions; and their behaviours and practices are rooted in, and guided by, different normative and cultural variables.

1.6 Methodology The paradigms or philosophical assumptions discussed in business literature include positivism, transformative pragmatism and constructivism (Lewis, 2015). These paradigms are the basic beliefs that guide action; and deal with principles and worldviews (Denzin & Lincoln,

2000). This study adopts a constructivist paradigm that looks at a social phenomenon that evolves over time. Neuman (2020) points out that this paradigm best addresses a study, such as that of the magendo phenomenon and the experience of expatriate business people, where there is a paucity of empirical research and analysis. A constructivist philosophy allows a researcher to focus on a specific context (such as Uganda), and enables the exploration of the processes of interaction among expatriate business people and local officials in a given country context. The aim is to source information from the participants (Neuman, 2020).

Research methods and design To conduct this research, qualitative research methods are adopted as they offer the opportunity to address research questions that require both explanation and understanding of respondents’ perceptions and behaviour. As suggested by Marshall (2014), qualitative research is suited for the exploration of a study area where research is lacking. As this study is exploratory and lacks prior empirical research, a qualitative methodology is therefore deemed the most appropriate tool of inquiry. In addition, the focus of qualitative approaches facilitates the generation of data through conducting in-depth face-to-face interviews with expatriate business people working in an environment influenced by magendo. Research design refers to the plan for a piece of empirical research, and includes the research strategy, who or what is to be studied, tools and procedures to be used for collecting and analysing empirical materials data (Punch, 2000). The following summarised the research design that is adopted for this study.

Sample and sampling Expatriate business people operating in Uganda are the target population for this research. The research uses purposeful sampling procedures to ensure the inclusion of relevant constituencies and diversity within the boundaries of the defined population. The literature suggests that, where data are likely to represent plurality, the number of participants considered sufficient for a qualitative research project is between 15 and 60 (Saunders & Townsend, 2016). Based on this observation and in order to ensure the inclusion and diversity of the expatriate businesspeople in Uganda, 30 participants were invited to be interviewed for this study. Of the 30, 25 agreed to participate. Purposive sampling is used in this research because it offers a degree of control and allows for a comparison of the views and experiences of participants (Barbour, 2001). The focus on a diverse range of expatriates is required in order to generate

data and build theory and knowledge to inform and guide expatriate business people operating in a magendo environment (Lingard, Albert, & Levinson, 2008). The prospective respondents were sourced from up-to-date publicly available information from the Uganda Investment Authority (UIA) website. The prospective respondents were selected on the premise that, as expatriate business people, they had gained some experience of the unique ways of conducting business in Uganda. It was also assumed that they had the ability to discuss an outsider’s in-depth and interpreted perceptions of the Ugandan business environment. Selected participants who were willing to participate in the project were individually sent a copy of the Information Statement requesting that they contact the researcher by mail or phone if they wished to be involved in the research project. This enabled the discussion of the details of a convenient time and place for subsequent interviews.

Data collection strategy The data collection strategy answers questions on how data is to be collected for the study. The general aim of qualitative research is to provide an in-depth and interpreted understanding of the social world experienced by individuals through learning about their social and material circumstances, their experiences, perspectives and histories. The literature suggests that one- on-one semi-structured in-depth qualitative interviews are suitable for use in collecting data when seeking insights into the perceptions of respondents, (Charmaz, 2014; Gioia et al., 2013) as they give extraordinary voice to informants and allow the researcher to probe for deeper meaning. The interviews with the expatriate business people are the source of data for the research. It is believed that conducting one-on-one interviews with expatriates offers insights, generate theory (Charmaz, 2014) and provide solutions to local business challenges and expatriates’ experiences in living and working in Uganda (Lingard et al., 2008). The purpose of the questions is to obtain retrospective and real-time accounts of expatriates working under a different institutional framework than the one they are used to (Gioia et al., 2013). The interview questions and prompts examine the respondents’ perceptions of institutional contradictions between Uganda’s business environment and that of their home countries. The interview questions for this study are open-ended, to allow the participants to respond subjectively (Ng & Hase, 2008). Ultimately, the responses indicate what these contradictions are and how they deal with them in the Ugandan business environment.

Data analysis Qualitative analysis requires constant data analysis and comparison of data to look for similarities and differences within the data collected (Ng & Hase, 2008). Therefore, this research adopts a constant data analysis and comparison of data approach to identify emerging themes from the responses of participants. As similarities and differences among data emerge, they are be reduced to terms and themes (Gioia et al., 2013) to describe and explain the magendo phenomenon. Subsequent themes and aggregate dimensions enable the building of data structures, and provide graphic representation of how progress is made from raw data to terms and themes that ensure rigor for the study (Gioia et al., 2013). Data is subjected to constant comparison in order to identify any core issues underlying the business contradictions and tensions in this environment. The core categories capture the main concerns of expatriates and account for the patterns of their behaviour. This is the basis for identifying emerging constructs (Glaser, 1978). The core issues are identified through coding, theoretical sampling and theoretical sorting. In line with Goulding’s (2002) coding approach, data is broken down into distinctive units of meaning for analysis, and thereafter the researcher systematically re-evaluates them for their interrelationship, thus enabling the movement of data to a higher level of abstraction. This involves examining and comparing the transcripts of each interview for similarities or differences (Strauss, 1990). To support the process of analysis, the researcher uses the computer software product NVivo11 to organise the large volume of data from the interviews, thus improving efficiency. This eases navigation through the data, thus saving on the time that may have been spent on a manual analysis exercise (Ritchie, Lewis, Nicholls, & Ormston, 2013). NVivo11 also allows the quick retrieval and ordering of data and information (Bazeley & Jackson, 2013; Edwards-Jones, 2014). Emerging themes form the basis of the researcher’s conclusions and recommendations; and provide answers to the overarching research question.

1.7 Definition of terms Tischler, Biberman and McKeage (2002) underline the need to explain words and terms that may carry two or more definitions. In order to minimise misunderstanding of, and to allay confusion about the concepts and unusual terminologies used in this study, this section defines the unusual concepts, acronyms and terminologies used in, and for this study.

Blat Blat is an informal institution in contemporary Russia and the former Soviet Union. It is a practice that operates by gift giving and offering favours of access (Ledeneva, 2000). Its characteristics are discussed in comparison to the magendo informal institution.

Corrupt business practices Corrupt business practices are illegitimate community behaviour norms (Spicer, 2009). The study will refer to all illegitimate business behaviour norms as corrupt business practices; and corruption is one of them.

Corruption Corruption is the misuse of public office for private gain (Treisman, 2000). There are also abstract definitions of corruption categorised as good, bad, ambiguous, white, black and grey corruption (Heidenheimer, 2002). Corruption is a behaviour associated with informal institutions, and is a key focus for discussing the magendo institution in Uganda.

Culture Culture explains peoples’ individuality and group-think, and has been defined as the programming of the mind that distinguishes members of one group of people from another (Hofstede, 2001). Culture is also defined as a means by which people communicate, perpetuate and develop a shared knowledge about attitudes towards life, and as the fabric of meaning through which groups of human beings interpret their experiences and guide their actions (Geertz, 1973). The expatriate business people who were interviewed for this study came from varied cultural backgrounds. This was important for the study as they offered a variety of opinions based on cultural diversity.

Developed and developing countries Several indices differentiate developed and developing countries, for example, most developing countries have lower per capita income than developed countries. Madison (2013) observes that in rich countries, resources are mobile, technical and managerial skills abound, and there is a well-articulated institutional structure. On the other hand, in most developing countries, skills are poor, resources are not so flexible, economies are more unstable, and there is a stronger reliance on informal institutions (Maddison, 2013). Uganda, the setting of the study, is a developing country; whereas some of the countries of origin of some of the

21 expatriates who are part of this study are categorised as developed countries. The differences in contexts set the stage for possible contradictions.

Expatriate An expatriate is an individual living in a country other than his/her country of citizenship, temporarily or for an extended period (Hofstede, 2001). Expatriates are the main actors of and for this study; and it is through their lenses that this study learns about their experiences within an informal institution, magendo.

Guanxi Guanxi is an informal institution associated with China and people of Chinese ethnic origins. It means social relations or connections (Gold & Guthrie, 2002). It also means unending dependence on networks to transact business (Bian, 2018). In this research, it is discussed in comparison to magendo.

Institution Institutions are ‘durable systems of established and embedded social rules that structure social interaction’ (Hodgson, 2006, 16). They are social structures that have attained a high degree of resilience and are composed of cultural, cognitive, normative and regulative elements that, together with associated activities and resources, provide stability and meaning to social life (Scott, 2010). They consist of both informal constraints, sanctions, taboos, customs, traditions and codes of conduct, and formal rules, constitutions, laws and property rights (North, 1991). For this study, magendo is presented and discussed as an informal institution that impacts the conduct of business in Uganda. Other informal institutions such as guanxi are discussed in comparison with magendo.

Jajmani Jajmani is an informal institution of Hindus in India. It is a practice that operates using economic particularism (Caldwell, 2014; Gould, 1986). It is presented as one of the informal institutions that are compared to magendo.

Magendo Magendo is an informal institution, and is the focus of this research. Due to a lack of empirical research on this institution and, as it is an evolving phenomenon, its definition is not concrete.

Whereas some define magendo to mean ‘transacting business illegally, unlawfully or without a licence’ (Mertz et al., 1998), others refer to magendo as ‘black market, corruption and bribery’ (Sedigh & Ruzindana, 1999). The recent characteristics of magendo include land grabbing, extortion, creating ghost workers in the public service and vote buying (Goodfellow & Titeca, 2012). One of the aims of this study is to better define magendo.

Mzungu In several local languages of Uganda and most of East Africa, Mzungu is a non-derogatory word that literally means a European (white) person.

NRM The National Resistance Movement (NRM) is the name for the political party in government in Uganda at the time of conducting this study. The NRM has ruled Uganda from 1986 up to the period of undertaking this study.

Perception The online Cambridge Advanced Learners Dictionary defines ‘perception’ as a belief or opinion, often held by people and based on how things seem (Walter, 2008). Perceptions are in essence subjective. This thesis examines how expatriate business people perceive corrupt business practices in an environment characterised by the informal institution, magendo. Research on expatriates’ perceptions of corrupt business practices under a magendo environment will provide a knowledge base by which to understand the impacts of this institution, and to appreciate the business behaviour and practices in this country.

Phenomenon The online Cambridge Advanced Learners Dictionary defines ‘phenomenon’ as something interesting or special because it is completely different or extremely unusual (Walter, 2008). The magendo institution is a phenomenon in that it is an informal institution that is rarely acknowledged formally, but one that is nonetheless important to study and understand as it impacts business behaviour and practices in Uganda. It does so in a manner that does not adhere to standard or legitimate business traditions.

U.I.A The Uganda Investment Authority (U.I.A) is an investment and facilitation organisation in Uganda. It promotes, facilitates and supervises investment in that country (Obwona, 2001). The researcher accessed publicly available information from the U.I.A website and purposively selected participants for this study from this source.

Wasta Wasta is an informal institution associated with Arabic culture. It is based on strong family connections secured through strong wasta networking (Abalkhail & Allan, 2016; Hutchings & Weir, 2006b). It enables social networking based on strong family connections (Hofstede, 2001).

1.8 Delimitations This study adopts a constructivist paradigm to build a better understanding of magendo and its impacts on expatriate business people working and living in Uganda. It is also context–specific, focusing on magendo, as is experienced in Uganda. In addition, the research seeks to get an outsider’s perspective of a local informal institution, and therefore uses an institutional theory to study expatriates’ experiences and perceptions. Lastly, the study adopts qualitative methods to address research questions that require understanding of a complex underlying social phenomenon, magendo.

1.9 Conclusions This chapter presents the basis and motivation for research into the experiences of expatriate business people living and doing business in Uganda. It presents a research problem that examines institutional contradictions faced by expatriate business people working in an environment characterised by the informal institution, magendo. It justifies why the research is relevant and important, based on the observations and arguments of scholars such as George (2015) who have called for more business research about Africa, in Africa. It also discusses the research methodology. In addition, the chapter highlights definitions for un-usual terminologies and concepts. By examining the impact on expatriate business people of the relatively novel Ugandan phenomenon of magendo, the study opens the door for future debate on other informal institutions that might impact the conduct of business in other African countries.

1.10 Thesis outline Chapter 1 presents a general introduction about the intent of the study and underlines the impact of informal institutions on businesses. Chapter 1 underscores the need to study the conduct of business in an African context, hence the focus on magendo, an informal institution which is compared with other informal institutions such as guanxi in China and blat in Russia. Chapter 2 reviews the extant literature on informal institutions and the experience of expatriate business people working in such environments. Expatriates are often affected in a number of ways when operating in developing countries with informal institutions. This may be attributed to their ignorance of the social, economic or institutional novelties they face in the host environment (Bello & Gilliland, 1997; Noe, Hollenbeck, Gerhart, & Wright, 2017). To succeed in an informal economy characterised by paradoxes and contradicting institutions expatriates are nevertheless advised to be adaptable (Skarmeas, Katsikeas, & Schlegelmilch, 2002). Chapter 2 further discusses literature regarding corruption, which is closely linked to certain informal institutions, and highlights why expatriates bracket these practices as being corrupt. In addition, the chapter examines the context of Uganda located in East Africa. The last section of the chapter presents several theoretical approaches on informal institutions, and provides a justification for selecting institutional theory as the best to guide this study. It then presents framework conceptual framework to map the territory being studied and graphically explain the main dimensions to be studied. Chapter 3 addresses the methodology for studying the business experience of expatriates operating under the influence of the informal institution, magendo. The chapter opens with a discussion of alternative research paradigms and the justification for selecting this one for this study. The chapter then discusses alternative research inquiries and presents the research methods and rationale for the choice of qualitative methods. The chapter highlights the research procedures for the empirical inquiry and its implementation. It concludes by examining issues of validity, reliability and ethics. Chapter 4 covers the analysis of the findings – explication. It opens by discussing the manner in which the data for the study was collected. In addition, it highlights the interview strategies for the study. This chapter details how data for the study was analysed. It also presents a revised conceptual framework to highlight its various links to the study findings. The chapter concludes by presenting a number of study findings. Chapter 5 presents a discussion of the findings and the conclusions of the research. It opens by discussing the magendo phenomenon, underlining how it is perceived by the expatriate business people working in Uganda and its impacts on their businesses. The chapter further

highlights the links between the magendo institution and various contradictions covered by the study. In addition, Chapter 5 discusses the application of the conceptual framework and the responses of the various contradictions faced by the expatriates. The last sections of the chapter discuss the significance of the study and its limitations, and suggest possible areas for future research.

CHAPTER 2

LITERATURE REVIEW

2.1 Introduction Internationalisation is increasingly leading business people to move and work in business environments other than their home countries. Since expatriates originate from countries with different social, political, legal, economic and cultural backgrounds, they will often find that a host country has a different business environment and practices guided by different formal and informal institutions to those found in their home countries. Research and literature on institutions, culture and business generally focuses on Europe, America, the Middle East and Asia (Arrindell, 2003; Hofstede & Hofstede, 2001; Vance & McNulty et al., 2017; Welsh & Raven, 2006). In addition, research into the cross-cultural experiences of expatriates focuses on Europe, America, the Middle East and Asia (Batonda & Perry, 2003; Delios & Bjorkman, 2000; Harzing et al., 2016; Vijayakumar & Cunningham, 2016). There is very little literature to explain the African experience (Hufbauer et al., 2013; Okpara, 2016). With the global economic focus changing to Africa, there is, therefore, a need to generate theory to guide and understand business operations in this region, with its variety of undocumented informal institutions and business practices (George, 2015). That is the motivation for this study. This chapter examines the internationalisation of business and the role of expatriates in international business. It discusses how informal institutions may lead to corrupt business practices and the detrimental impacts of this. The chapter reviews studies from other countries that explain how informal institutions impact upon corrupt business practices. Institutional theory examined as a theoretical basis for research, and literature on institutional theory is discussed to enable a deeper understanding of the context, societal attributes and regulatory environment of a society (Drew & Kriz, 2012; Ostrom, 2011). The chapter first discusses the experience of expatriates with host country cultures. Following from this, it discusses the literature on the experience of expatriates with host country institutions. Understanding institutions is the key to appreciating their role in providing an enabling environment for doing business. This section discusses the relationship between informal economies and institutions and, lastly, it discusses the implications of informal economies and institutions. Section Four discusses how informal institutions may influence

corrupt business practices. This section discusses avenues of corruption and how corruption is perceived and experienced by different cultures. Section Five discusses the study context, Uganda, its social/economic status, and how expatriate business people feature in this part of the world. Section Six discusses cases of informal institutions in other societies as a precursor to examining magendo. The next section discusses the magendo institution, its genesis, dimensions and trends. A synthesis of informal institutions is discussed before the last section that presents theoretical approaches to studying informal institutions. This chapter discusses literature on institutional theory, and advances arguments as to why it is the most suitable theory by which to examine the research question for the study. A conceptual framework is developed based on the expatriates’ experience of tensions and contradictions between their country institutions (regulatory, normative and cultural-cognitive) versus the host country institutions and using the institutional theory to explain their responses.

2.2 Expatriates’ experiences with host country cultures An expatriate is any person living in a different country from where he or she is a citizen - ex (out of) patria (fatherland) (Pine, 2000). In a business context, an expatriate is an individual working in a country other than his/her country of citizenship, temporarily or for an extended period. To preclude other forms of international experience, McNulty et al., (2017) defines a business expatriate as legally working individuals who reside temporarily in a country of which they are not a citizen in order to accomplish a career-related goal, being relocated abroad either by an organisation, by self-initiation or directly employed within the host country. For a number of reasons, international business operators use expatriates: as agents of socialisation – to transfer value beliefs; as network builders – to foster interpersonal linkages; as boundary spanners – to gather host country information; as language nodes – to bridge language barriers; and to transfer competence and knowledge-skills development to local staff (Dowling et al., 2008; Horak & Yang, 2016). In this regard, intercultural awareness becomes a key component of preparing expatriates before moving into other countries, especially those with dissimilar institutions, to help them cope with unexpected behaviour and the practices of another environment. Such knowledge and preparation fosters an appreciation of the host country’s institutions so that expatriates can behave accordingly, or at least develop appropriate behaviour patterns to help them to cope with the national realities of the host countries (Dowling et al., 2008). Due to cultural shock and issues of cross-cultural communication (Chen & Shaffer, 2018), some studies suggest that expatriates face adjustment challenges associated with lack of

28 cultural intelligence (Earley & Ang, 2003). Intercultural awareness is therefore suggested as a key element of preparing expatriates who are moving into other countries, to help them deal with unexpected events in a new environment (Dowling et al., 2008). Cultural and psychic distances have been used to measure how far one’s own culture is from another one; where cultural distance measures the extent to which cultures are similar or different based on the five orientations: power distance, uncertainty avoidance, masculinity/femininity, time orientation and individualism/feminism (Shenkar, 2012). Psychic distance on the other hand underlines perceived differences held by individuals between the home country and a foreign country. It has been used to study the mental distance existing between people of different cultures such as expatriates in foreign countries (Ambos & Håkanson, 2014). Batonda (2003) examines, for example, how culture affects the development of international business networks between overseas Chinese and Australians in Australia, and between overseas Australians in China. He notes that overseas Australians learn to do what Chinese people expect them to do. In turn, the Chinese, in overseas Australian networks, show ability to improve their understanding of their partners’ culture. Therefore, both the Chinese people and Australians working as expatriates emphasise the importance of gaining knowledge and improving their understanding of their partners’ culture, especially practices which may be unique to each other (Batonda & Perry, 2003). Similarly, Hofstede (2001) examines how expatriates adopt and cope with actual challenges when in foreign lands. Shi and Franklin (2014) explore the relationship between cross-cultural adoption and the performance of business expatriates working in China. He argues that expatriates accompanied by members of their family display better cross-cultural adaptation (acculturation) and job performance. Kang, Shen and Benson (2017) identify two categories of expatriates whereby those who stay longer in host countries need family accompaniment; but those who stay briefly may not need the company of a family. He argues that expatriates who stay longer in host countries are the traditional expatriates while those who stay less than six months are described as non-traditional expatriates, and this category need not adjust to local norms and values. Overall, the high failure rate of expatriates in foreign countries is attributed to ignorance of host country norms and practices. On this point, Selmer (2002) identified the need for cultural knowledge when he studies expatriates’ experiences working in China. He notes that China presents a demanding cultural environment for expatriates whereby they have to cope with stressful and often difficult situations. As a coping tool, Varma, Pichler, Budhwar and Kupferer (2012) suggest that host country nationals can play a critical role in the successful adjustment of expatriates by providing them with social support. Expatriates, however, must be open

minded and adaptable to deal with the unknown (Skarmeas et al., 2002), and need to adopt different coping mechanisms for different environments (Hofstede, 2001).

2.3 Expatriates’ experience with host country institutions Institutions have been defined in different ways (Hindriks & Guala, 2015; Scott, 2013). Hodgson (2006, 16) defines institutions as ‘durable systems of established and embedded social rules that structure social interaction’. Scott (2013) on the other hand, suggests that institutions are social structures that have attained a high degree of resilience and are composed of cultural, cognitive, normative and regulative elements that, together with associated activities and resources, provide stability and meaning to social life. Hodgson (2006) explains further that not all social structures are institutions, and that social structures include sets of relations that may not be codified such as rules as norms of behaviour, and social conventions as opposed to legal rules, that can be codified. He further argues that members of a given community share tacit or explicit knowledge of such rules. In a similar manner, North (1991) suggests that institutions are the humanly devised constraints that structure political, economic and social interaction. They consist of both informal constraints (i.e. sanctions, taboos, customs and traditions or codes of conduct) and formal rules (i.e. constitutions, laws and property rights). Institutional differences exist between countries and these differences may lead to varied responses and behaviours for people working in these countries. The differences oftentimes lead to contradictions and tensions between people from different backgrounds. Discussing institutional differences that exist between countries, Grimstad (2011) notes that the institutions that are present in Anglo-Saxon cultures are very different to those in Northern Europe and Nordic cultures, reflecting in part informal institutions (i.e. trust regimes, degree of consensus and traditions), and in part formal institutions (i.e. constitutions, educational system, government involvement, unions and property rights). Grimstad (2011) further contends that, when faced with serious environmental issues, it is expected that the way/mode and means by which a business cluster or society responds to the environmental challenge differs according to the host country’s formal and informal institutions. Since expatriates originate from countries with different social, political, legal, economic and cultural backgrounds, they will often discover that the host country has a different business environment and practices guided by different formal and informal institutions to those from their home country. Expatriate businesspeople in developing countries with weak formal institutions are, for example, often guided by informal business practices that may contend with informality and corrupt business practices (Garcia-Bolivar, 2006).

2.3.1 Relationship between informal economies and institutions Informal economies have been linked to the creation of informal institutions (Tonoyan, Strohmeyer, Habib, & Perlitz, 2010). An informal economy refers to commercial activities that are unregulated or insufficiently regulated by the state and may have a number of negative implications and practices (Garcia-Bolivar, 2006). Whereas predictable legislation, governance and a sense of control defines a formal economy (Guha-Khasnobis & Ostrom, 2006), in an informal economy the sale of goods and services are often unregistered or hidden from the state for tax purposes (Chen, 2012). Within informal business environments, people may circumvent bureaucratic decision-making procedures and influence the allocation of state contracts and public procurement. They may also use influential government contacts for beneficial business opportunities, or to find valuable market information and business transactions (Ledeneva, 2008). Informality, in a number of developing countries may occur because the order under which business activities take place is not recognised by formal regulatory institutions (Godfrey, 2011). Informal business practices often thrive within informal economies, with business activities occurring outside the legal framework (Garcia-Bolivar, 2006). Such informal practices may be illegal but not criminal; yet people conduct them without following the formalities established by the official legal framework of the country. Informal business practices have been linked to a high cost of doing business in these environments (Garcia-Bolivar, 2006). In such environments, when the cost of doing business in the formal economy exceeds the benefits, it is commonplace for people to operate businesses outside the formal order. Garcia (2006) contends that in some countries informality is not attributed to a high cost of doing business, but because the order under which those activities take place is not recognised by the formal system of law. Such arguments may explain why, in some countries, business people prefer to operate under informal arrangements. It is also argued that high taxes, complicated regulations, bureaucratic hurdles and corruption are responsible for driving business activities underground, or to informal operations (Garcia-Bolivar, 2006). North, Wallis and Weingast (2009) argue that most countries in the world operate on informal business practices, guided by informal institution. They content that formal institutions are only relatively new devices and found in a very limited number of countries. North, et al. (2009) discuss two types of social orders to explain why some countries are more politically and economically developed than others. They observe that societies begin as natural states, which they term limited access orders; and are characterised by manipulation of the economy by coalitions of elites for their own benefit. They further argue that in the natural

31 states, personal relationships form the basis for social organisation and are the basis for individual interaction. In contrast to the limited access orders are open access societies that are both politically and economically more developed. North et al., (2009) highlight that only 25 countries (including USA, Britain and France) have transitioned from limited access orders to open access societies. These countries underwent an evolution from natural state to modern states due to their respective progressive development in creating formal institutions. According to North et.al, (2009), in open access societies, formal institutions provide all citizens with the opportunity to form economic and political organisations, supported by legal apparatus, to permit the citizenry to engage in competitive actions that had once been the domain of elite individuals and groups. Interestingly, Sened (1997), notes that adoption of formal institutions at the societal level is a slow process and only occurs when a sufficient proportion of the population perceive greater benefit from such adoption.

2.3.2 Implications of informal economies and institutions Informality within an economy has been linked to a number of implications for economies and it is argued that informality is an unwelcome experience for governments that face this problem. The negative side of informality includes, but is not limited to, governments’ failure to collect taxes from informal businesses, hence the failure to finance public services (Garcia- Bolivar, 2006). In some cases, the government may have directly or indirectly created fertile grounds for informal business practices by their own failure to provide good public services and or, dispensing genuine rule of law and order. Based on these arguments, Garcia (2006) accuses such governments of contributing to a slide into, or the formation of, informal institutions and illegal business practices. Explaining this issue, Garcia (2006) notes that, in the cases of some governments, informal businesses are subcontracted by the formal economy and are required to document only specific transactions that are partially considered formal. He further observes that such governments advocate for the formal conduct of businesses, emphasising: accruing benefits, such as access to larger markets; receiving business information; limiting business liability; risk and; most importantly, ensuring security on contracting and enforcing rights. These benefits notwithstanding, those engaging in informal business practices are unlikely to change their business practices if they do not see or perceive this to accrue a benefit. In these countries therefore, the perception of formality versus informality lies between legality/illegality for governments, and survival/pragmatism for the business people (Garcia-Bolivar, 2006).

Informal institutions influence and inform various corrupt practices (Dias & Alves, 2008). Informal institutions are also depicted as negative phenomena that promote corruption (Ross, 2002), but there is also growing recognition that informal institutions may influence business behaviour in a positive way when there are economic or political circumstances that make corrupt behaviour part of a survival strategy (Browne, 2004). Expatriates are often affected in a number of ways when they face informal institutions; and to succeed they need to undergo a cross-cultural adjustment (Harvey & Kiessling, 2004). Through a process of socialisation and adaptation, expatriates who stay in foreign countries for a long time need to learn about local issues including cultures and other local institutions (Kang et al., 2017).

2.4 How informal institutions can influence corrupt business practices Corrupt business practices are illegitimate business behavioural norms that include corruption (Spicer, 2009). According to institutional theory, the problem of corruption is related to an absence of strong formal institutions, a gap that is filled by informal institutions that often provide incentives and disincentives for people to behave in certain ways (Kimemia, 2018). Kimemia (2018) emphasises that when institutions are effective they provide structure and economic and political incentives leading to proper public governance. He also contends that strong institutions deter corrupt practices and punish those caught engaging in corruption. Scholars concur that corruption is most prevalent where there are forms of institutional weaknesses, such as political instability, bureaucratic red tape, and weak legislative and judicial systems (Dias & Alves, 2008; Yeboah‐Assiamah, Asamoah, Bawole, & Musah‐Surugu, 2016). Kimemia (2018) however emphasises that corruption is a global phenomenon facing both developing and developed economies. Institutions in many developing countries, however, lack the power of effective enforcement and regulation. In this regard, Kimemia (2018) observes that, under weak institutions, firms or business people have little or no fear of either being caught or punished for engaging in corrupt practices. They also know that, if they are caught, the chances of escaping prosecution are high, as they can bribe the police or buy the judicial system. When discussing corruption in Africa, Kimemia (2018) highlights that, due to weak political/economic institutions, African countries experience high levels of corrupt business practices. Some literature gives corruption a socio-cultural spin whereby corruption in most of Africa is discussed not as being purely selfish but as being shaped by larger socio-cultural assumptions about power, privilege and responsibility (Yeboah‐Assiamah et al., 2016). Their argument is that one has to balance cultural expectations (including care for kin or gift giving) with

professionalism and back up their argument with Hofstede’s conceptualisation of culture as the mental software of the mind. This suggests that the mind that has already been developed through acculturation, with societal values and traditional cultural underpinnings, in turn influences the rationality of managing public and private organisations (Hofstede, 2011). In discussing different categories of culture, Hofstede (2011) identifies six dimensions: Power Distance (small vs. large power distance); Uncertainty Avoidance (weak vs. strong); Individualism vs. Collectivism; Masculine vs. Feminine; v-Long term vs. Short-term Orientation; and Indulgence vs. Restraint. While discussing some of these dimensions, Hofstede (2011) suggests that one characteristic that defines large power distance societies is corruption and the covering up of scandals. Based on this observation, Rarick et al. (2013) note that many African countries experience large power distance, which may partly explain why some of them have high levels of corruption, as suggested by Hofstede. On the other hand, Hofstede (2011) highlights further that in a number of collectivist societies, such as those of Africa, people are born into extended families or clans that protect them in exchange for loyalty. He contends that the we consciousness is quite significant in such communities and, in terms of identity, people are classified as in-group or out-group, a factor which can be a basis for nepotism and associated behaviours. Bach and Gazibo (2013) observed that in a number of developing African countries, local leaders who took on Western-type jobs could no longer earn enough to support the extended family system or community and hence resorted to bribery or corruption to supplement inadequate personal incomes. In addition, Tangri and Mwenda (2013) suggest that in a number of African countries, corruption increases as a result of informal institutions prevailing over formal ones. Liedong (2017) disagrees with the argument of attributing corruption to socio-cultural factors and explanations. He does however acknowledge that in some communities, notably those in Africa, people tend to have a sense of comradeship and collectivity with a strong attachment to the extended family system and ethnic ties. However, he notes that this should not lead to the formation of informal networks that decontrol organisational regulatory circuits and systems. He concludes by finding no basis to believe that corruption is directly related or linked to local cultural issues in these environments (Liedong, 2017).

2.4.1 Meaning of corruption Corruption refers to the misuse of a position of authority for private gain (Treisman, 2000). Corruption can be categorised as good, bad, ambiguous, white, black or grey (Heidenheimer,

2002). Nonetheless, corruption, in all its forms, dissuades the formalisation of economies and business activities (Garcia-Bolivar, 2006). Dharmapala (2006) argues, however, that, whereas corruption is often discussed in relation to government officials seeking illicit payments in the course of their work (common to developing poor countries like Uganda), this overlooks the contrasting versions in which corruption can be defined. He argues that the definition should include, for example, cases of tax havens and money laundering – which would implicate more Western countries (Dharmapala & Hines Jr, 2006). Business related corruption however, is nevertheless more prevalent in relationship-based cultures where formal regulative institutions are not strong enough to influence business practices. In contrast, Albrecht, Albrecht and Hooker (2009) observe that rule based systems are known to be relatively less corrupt because, in these countries, rules have inherent authority, and these rules are largely enforced by fear of punishment.

Avenues of corruption There are various avenues for corruption, for example social networks with family, friends and national bureaucrats (Garcia-Bolivar, 2006). In order to appreciate the nature of the corruption associated with developing economies, it is therefore, necessary, to understand its avenues. The extant literature enumerates various avenues of corruption in societies such that some of these avenues are universal while others are context specific. Garcia (2006), for example, points out excessive and discretionary regulations as notable avenues for corruption. He cites closed social networks with family, friends and national bureaucrats as bleeding grounds for corruption (Garcia-Bolivar, 2006). Goel and Nelson (2010) observe that trade restrictions, government subsidies, price controls, multiple exchange rates, foreign exchange allocations, low wages in the civil service, natural resources, endowments and sociological factors are important avenues of corruption. Bjornskov (2011) is of the view, however, that low levels of trust in a society may engender and nurture corruption since people fail to develop cooperative ethos. He explains further, that if one meets a corrupt official or bureaucrat, one’s level of trustworthiness decreases, which affects future business dealings. The narrative also includes bureaucratic red tape as a notable avenue of corruption whereby excessive time spent on interpreting regulations for business increases an entrepreneur’s likelihood of becoming involved in corruption. Similarly, Soko and Lehmann (2011) argue that bureaucratic red tape increases uncertainty as well as operational and transactional costs, which leads to business people to try to find alternate ways of circumnavigating them through bribe giving. Closely linked to this argument, Lipset and Lenz (2000) cite closed networks as major avenues of

corruption whereby in corrupt-prone countries, who you know determines the success of a business transaction. This may then prompt business people to form ties with critical institutions or individuals as a way of overcoming barriers to entry, growing their businesses and enabling individuals to gain favours. On the other hand, Belitski, Chowdhury and Desai (2016) note that less business-friendly financial institutions are a notable avenue of corruption. They explain that unhelpful financial institutions increase an entrepreneur’s likelihood of becoming involved in corruption. Consequently, business people, most especially those not financially well off, may resort to informal credit markets or bribe bureaucrats in financial institutions to secure access to capital. Belitski et al. (2016) further argue that inefficient court systems and law enforcement in some countries motivate business people to engage in corruption. They compare the above situation with a stable legal framework and well-protected property rights in some developed countries such as Denmark, which they associate with good planning, resource acquisition and the prevention of the ad hoc expropriation of the fruits of entrepreneurship. Their conclusion is that those countries with strong and effective property rights laws, contracts and taxes, and countries where those laws are implemented are the ones with the best score on corruption indices (Belitski et al., 2016).

Consequences of corruption Banerjee (2016) discusses the consequences of corruption for economic activities through three channels: (a) public/private investment and expenditures, (b) human capital, and (c) governance. When corruption characterises any or all of these channels, it affects economic growth and normal economic activities. Bryant and Javalgi (2016) corroborate Banerjee’s assertion that corruption lowers private investment and reduces economic growth. While summarising the economic impact of corruption on countries, Rohwer (2009) also observes that corruption, according to Transparent International, constitutes a major obstacle to development, democracy and the rule of law. He notes that corruption leads to the depletion of national wealth, hinders the development of fair market structures and distorts competition, thereby deterring investment. For business operators, corruption increases transaction costs, such that businesses cannot determine in advance the cost of corruption (Garcia-Bolivar, 2006). Corruption in all its forms hurts business activities (Garcia-Bolivar, 2006). Corruption lowers private investment, reduces economic growth, and is strongly negatively correlated with the investment rate (Bryant & Javalgi, 2016). For governments, corruption leads to the failure to collect taxes from informal businesses, hence less revenues flow to finance public services (Garcia-Bolivar, 2006). It also affects growth by depleting national wealth, hindering the

development of fair market structures, distorting competition and deterring local and foreign investment (Banerjee, 2016; Rohwer, 2009). For business people in developing countries, it increases transaction costs (Garcia-Bolivar, 2006). Bryant and Javalgi (2016) variously note that countries such as Denmark are less susceptible to corruption, and their success is attributed to the development of the rule of law whereby business innovators can work in an environment in which the cost of business is reliably calculated and legally maintained. In their studies on human capital investment and economic growth (GDP), they argue that the level of corruption in a country moderates the relationship between human capital investment and global economic integration. These findings, therefore, have serious implications for developing countries that are in great need of foreign investment, which they solicit through foreign direct investment.

2.4.2 Perceptions and dimensions of corruption This sub-section looks at different country/regional perceptions of corruption with a view to understanding different people’s attitudes towards the behaviour. The review of literature on corruption notes that it is more prevalent in relationship-based cultures, because building a relationship requires time and effort, and the temptation is to take a short cut through giving a bribe. Rule based systems, on the other hand, are known to be relatively less corrupt, because in these countries rules have inherent authority, rather than deriving authority from the person who lays them down. In addition, these rules are largely enforced by guilt association and fear of punishment if caught, rather than constant supervision. To highlight different perceptions of corruption, several studies have examined the experience of selected countries and regions including Asia; North America, Africa and the Middle East (Albrecht et al., 2009; Asongu, 2014; Henning, 2001; Kimemia, 2018). In Asia, Albrecht et al. (2009) focused on the experience of Taiwan, China, South Korea and India. In Taiwan, which espouses a free market economy, and in China, which contains a mix of a centrally planned economy and a free market economy, locals offer bribes (kickbacks) rather than demand bribes. In both of the relationship countries that subscribe to Confucian thinking and share a common historical identity, favours are not taken as quid pro quo and are not looked upon as bribes for, if they were, business relationships would evaporate as soon as one party failed to reciprocate. They further note that both parties look at bribes as an investment in a relationship of mutual trust and highlight that in the Confucian settings of both countries, the family is historically viewed as the primary unit of economic survival whereby parents and grandparents come first, then children, and then social connections. When it comes

37 to business and employment, the segments of members take precedence over any other consideration, a practice that may border on nepotism and corruption, in the eyes of outsiders. Albrecht et al. (2009) also observe that another fast growing Asian country, India, whose economy is mixed, facilitates greasing-payment as a normal practice, and Indians consider grease payments to be a functional part of their relationship-based system. Albrecht et al. (2009) highlight that Indians will only resist it when it constitutes high-level influence peddling, and when they see it to be undermining the country’s economic system. In addition, they observe that in South Korea, a capitalistic Asian nation, side payments are made in business relationships, and are considered to play a functional role in building a relationship, including business relationships. These side payments can be gifts, which signal a willingness to do what the official wants in exchange for cooperation and favours from government or from the Authority. They conclude by noting that the Middle East is a relationship environment where the inherent authority (e.g. a sheik) of certain personalities is regarded as proper and natural. Therefore, one must buy one’s way to have the support of such influential people in order to do business. Examining the American experience regarding corruption, Flanary and Watt (1999) discuss the North American case (USA, Canada) as a sophisticated bill-and-hold transaction whereby companies give an impression that their organisations are doing well, when they are not. Under this income smoothing arrangement, customers may, for example, order products in the current quarter but not take delivery until the next quarter, which makes it a complex form of corruption. For Africa, the gravity of corruption on that continent is underlined in a report by the African Union that indicated 25% of the Gross Domestic Product (GDP) of the African states, amounting to US$ 148 billion, is lost to corruption every year (Kimemia, 2018). He further notes that corruption is the second most inhibiting factor to doing business in African countries, after access to finance. He also observes that this vice has an impact on foreign investment by causing a reduction in overall investment or a decrease in the probability of new investments. In his article on multinational corporations as the instigators of corruption, Kimemia (2018) notes that, many of the Multinational Corporations (MNCs) in Africa are not victims of corruption, but are active collaborators who participate in corruption. This argument is based on the findings that some MNCs and individual businesspeople are likely to invest in countries with weak institutions, despite the risks and uncertainties involved, because there is a likelihood of higher returns due to minimal local regulation (Kimemia, 2018). In a bid to minimise

corruption by MNCs operating in other countries, many western countries have legislated against their citizens committing bribery (Henning, 2001). Kimemia (2018) further observes that corruption in Africa is both demand and supply driven, and is motivated by the pressure to abuse power, the opportunity to abuse power and the ability to rationalise corrupt behaviour. The pressure to abuse power is characterised by four internal forces that he lists as: (a) financial need, (b) low wages, (c) higher returns, and (d) human greed. Corruption in many African countries takes different forms including bribery, fraud, pocketing donated funds, money laundering, cronyism, irregular cash payments, nepotism, irregular tendering, contracting processes and the avoidance of independent checks on contracting processes (Kimemia, 2018). While a number of developed countries have instituted anti-corruption laws that prohibit companies or individual business people operating overseas from engaging in corrupt practices, there is evidence that companies and individuals from various countries offer bribes or facilitation payments in a number of African countries to acquire financial favours, such as tenders and work permits (Henning, 2001). Henning (2001) contends that business operators in certain countries go against headquarter guidelines and accept corruption as a transactional necessity leading to supply-side corruption becoming a culture in a number of countries. Nonetheless, he does not agree that it is difficult to do business without engaging in corruption. He describes this line of thinking as a smokescreen to justify questionable business practices, such as offering extravagant gifts and hiring the relatives of senior government officials (Henning, 2001). Therefore, he is of the view that refusing to pay bribes may cost companies revenue and profits in the short term, yet giving in to demands for corrupt payments is no guarantee of success. In agreement with Garcia-Bolivar (2006) and Henning (2001), Asongu (2014) notes that corruption damages the host country as well as the reputation of the country of origin of expatriate business people, and the company if they embrace it. In his discussion of the damage done by corruption to African countries, Kimemia (2018) recommends the strengthening of institutions and legal frameworks in these countries to deter both the suppliers and the receivers of corruption.

2.5 The study context: Expatriates in Africa and Uganda There are limited cross-cultural empirical business studies about Africa in general and Uganda in particular; although some literature addresses the political and economic challenges of the continent (Hufbauer et. al., 2013). In recognition of this gap, George (2015) challenges

39 researchers to improve the understanding of the importance of the cultural and social context of business people and their actions in an African environment. Under the influence of economic globalisation, many countries and organisations have been seeking markets in developing countries, and business expatriates have been sent to work in African countries. Expatriates who have entered Africa have come from different backgrounds, at different historical times and for different purposes. This study limits the review of literature about expatriates in Africa to expatriates originating from Europe, India and China as they currently represent the largest expatriate groups in Africa. Historically, most of Africa was colonised by Europeans and, while political independence was attained, the cultural and economic legacy of European influence is apparent and significant in the countries they previously ruled. As colonialism ended, different migrants freely entered African countries for purposes of commerce, and among these were Indians who represent the subsequent category of expatriation into Africa (Park, 2009). Understanding this background facilitates an appreciation of the overall setting for this study that examines the experience of expatriate business people living and working in Uganda. The recent influx of business expatriates into Africa include Brazilians, Turkish and Iranians; but Zeng (2015) notes that the most significant of this category are the Chinese whose growing power and influence on this continent is notable . Today, China represents the current wave of expatriates in a number of countries in Africa.

Fig. 2.1 Map of Africa

Source: https://www.google.com.map+of+uganda+africa (Google, 2019a)

2.5.1 European expatriates in Africa The social, political and economic evolution of present Africa is strongly intertwined with colonial legacies that divided the Continent into the 54 countries that exist today in Africa. In a discussion around the legacy of Europe on Africa, Rodney (2018) argues that colonialism was not merely a system of exploitation, but one whose essential purpose was to repatriate the profits to the mother country. He points out that this amounted to developing Europe as part of a dialectic process in which Africa was underdeveloped. This observation defines the initial relationship of Europeans and Africa, and it is one characterised by political/social controversies. It dates back to the 15th century, through the slave trade era to the 18th century scramble for Africa that resulted in the formation of 53(4) unviable nation states (Rodney, 2018). Mamdani (2018) observes that the effect of colonialism on Africa has been enormous. Supporting this argument, Mudimbe (1988) discusses the European legacy in Africa at three levels: forceful domination of the physical space; the reformation of locals/natives; and the integration of local economic histories into Western perspectives. It is also observed that when the British, French, Spanish, and Portuguese colonised most of Africa they introduced various social, economic and political systems, much of which were incompatible with local people’s values (Fallers, 1961). In several ways, the colonial legacy explains today’s business focus and the concentration of Europeans in various African countries. Because of this domination by Europeans, and the integration of African economies into European ones, the economies of Eastern Africa, for example, which was colonised by the British, were integrated with Britain for a long time. Most West African countries were colonised by the French, whose social, economic and legislative influence characterise these countries today (Park, 2009). Nowadays, European expatriates coming into Africa are motivated by economic opportunities, and not ideological orientation or historical considerations.

2.5.2 Indian expatriates in Africa Over four million Indians are estimated to live and work in Africa, out of whom 350,000 live in East Africa and about 15,000 live and work in Uganda (Alva, 2013). Recounting the entry of the first Indian entrepreneurs into East Africa, Trovao and Batoreu (2013) note that Ismaili manufactures and traders, such as Alidina Visram who originated from Kutch – Gujarti India, entered British East Africa between 1840 and 1893. Many Indians have since settled in and set up businesses in almost every country in Africa. Their relationships with the local communities, have, however not always been smooth. In trade, some were accused of exploitation and

41 unfairness leading to one case which Gupta (1974) discusses as The Uganda Crisis of 1972 when close to 40,000 Asians, the majority of whom were Indians, were expelled from Uganda under the Idi Amin regime. This mass expulsion disrupted Uganda’s economy resulting in a scarcity of essential commodities. Currently, the presence of Indians in Africa is generally facilitated by the Export-Import Bank of India and the Confederation of Indian Industries (Taylor, 2012). Taylor (2012) notes that Indo-African ties are motivated by both political and economic considerations. He states that the relationship is reflected in the importance and trends of India’s trade with Africa, which has grown in the recent past from US $3 billion in 2000 to US $53 billion in 2011, and was projected to reach US$75 billion in 2018.

2.5.3 Chinese expatriates in Africa In an article on Chinese’ migration in Africa, Park (2009) observes that Chinese migration to Africa dates back to the 1870s when they entered the continent with the Dutch East India Company. She notes that, at that time, as many as 63,000 worked as contract miners in South Africa’s mines of Transvaal from 1904-1910. Subsequent Chinese migrations to Africa have roots in China’s international policy that started in the 1950s when it was purely political to foster anti-colonial solidarity with newly independent African states. Current Chinese migrations are, however, linked to the economic changes that took place in China in the late 1970s and that led to the liberalisation of immigration legislation in 1985 (Park, 2009). She notes, however, that Chinese aid packages and programs in Africa in the last 30 years are still linked to the temporary migration of Chinese workers. For example, China has sent 15,000 - 20,000 medical personnel to Africa to assist in the development of hospitals and clinics. Over 10,000 agro technicians have also worked on some 200 agriculture projects involving the establishment of farms and agriculture stations, as well as training. In addition, Chinese workers have come to Africa on contracts to work on large construction projects, such as railways, roads, telecommunication systems, hospitals, schools and power dams. She observes that today, much of China’s activities in Africa are profit-centred rather than ideologically based (Park, 2009). To underline the growing importance of Africa in China, UNCTAD (2016) reports that China’s share of African imports rose from 1.8% in 1992 to 14% in 2009; and the share of Africa’s exports to China increased from 1.7% in 1992 to 12.9 in 2009. The level of China’s FDI stock in Africa, which was at US$56 million in 1996, increased to US$4.46 billion in 2007, and has increased even further since then (Warmerdam & van Dijk, 2013). Today, China’s

42 investment in Africa is estimated to be over US$ 200 billion (Du & Zhang, 2018). Terence (2018) observes that more than one million Chinese people, mostly labourers and semi-skilled workers, have moved into Africa in the past decade. He also notes that Chinese MNCs are becoming a major player on the African continent (Jackson & Horwitz, 2018). Chinese business interests are heterogeneous in their scale, including business nature, corporate competence, market opportunity and level of institutional support. They range from large state owned firms that are global with a political task to fulfil, to small private firms driven by opportunistic rent-seeking and the short-term behaviour of their owners (Cooke, 2012). Distribution of Chinese in Africa When reviewing the countrywide distribution of Chinese people in African nations, Park (2009) estimates that between 580,000 - 800,000 live and work in Africa, with the largest number residing in South Africa followed by Nigeria. Each of these countries, Sudan, Angola, Algeria and Mauritius, host more than 10,000 Chinese people. These numbers underline the increasing migration of Chinese people coming to Africa to do business. Table 2.1 illustrates the destination countries and the numbers of Chinese expatriates in 12 select African countries, in North, East, West and Southern Africa, from 2001–2008, and the projected numbers by the end of 2018.

Table 2.1 Destination countries for Chinese in Africa

Country 2001 2008 2018 (Est.) North Africa Algeria 2,000 20,000 40,000

Egypt 110 10,000 10,000 Tunisia 0 2,000 -- West Africa Ivory Cost 200 10,000 -- Nigeria 2,000 100,000 40,000 Ghana 500 6,000 20,000 East Africa Kenya 190 7,000 -- Uganda 100 7,000 10,000 Tanzania 600 20,000 30,000 South Africa Namibia 0 5,000 40,000 Zambia 150 6,000 40,000 S. Africa 30,000 400,000 >400,000 Sources: Compiled based on information from Johns Hopkins (2018) and Mohan et al. (2009).

Table 2.2 highlights the focus of Chines’ investment in Africa that is infrastructure development. These are large-scale investments that either are undertaken by the Government of China or by state supported corporations that underpin China’s foreign policy into Africa, which is based on relationship through business plus investment.

Table 2.2 Examples of Chinese SOEs (State Owned Enterprises) investments in five select African countries.

Country Resource extraction Infrastructure project Uganda Namboole Sports Stadium (Completed 1997) Isimba Hydro power dam (Completed 2019) Karuma Hydro power dam (Ongoing) Entebbe express highway (Ongoing) Kenya Standard Gauge Railway(SGR) (2017) Ethiopia Construction of motor ways Oil exploration Production and distribution Electricity generation Sudan Oil Hydro Electro power plants Oil Pipeline Zimbabwe Coal Roads construction Ferrochrome Mobile telephone networks exploration Electricity production/distribution Sources: Wissenbach (2017); Park (2009); htpp- Chinese investments

Barriers/Challenges to investment Most Chinese enterprises in Africa are facing various competition and challenges in African countries. Among the challenges are the need to understand local cultures and languages, plus the uncertainty of the local economies. For example, a number of Chinese business expatriates lack sufficient preparation for their integration into Arabic or African cultures even though social relations with the host country people and the businesses are of paramount importance if they are to succeed in these unfamiliar environments (Ai, Cui, & Wang, 2019). Chinese expatriates in Africa have also been variously described as representing a new form of ‘neo- colonialism’ whereby Chinese MNCs in Africa (e.g. South Africa and Zambia) are reported to employ both expatriate Chinese semiskilled and unskilled workers in spite of the availability of local labour (Jackson & Horwitz, 2018). Explaining this practice of the Chinese, Park (2009) observes that the growth of overseas Chinese enterprises in Africa creates a demand for labour (not in the host country), and thus encourages further labour migration from China. There are

44 also notable anti-Chinese sentiments in a number of African countries due to: a) these expatriates living in isolation from local people, and b) Chinese retail businesses offering substantial competition to local manufacturers as Chinese shops saturate the market with cheap goods sourced directly from Chinese manufacturers who extend profitable terms of trade to them (Park, 2009). In her research on the coping strategies of the Chinese expatriates when faced with local barriers to conduct of business in Africa, Park (2009) observes that, due to perceived benefits and business profits, some Chinese expatriates have adapted to local circumstances. Some have also learned local languages and embraced local customs. These examples plus a culture of hard work has enabled most Chinese expatriates to succeed and to overcome local economic and social barriers (Park, 2009). Some Chinese business expatriates have thus constructed a new identity in their host countries (Ai et al., 2019). Compared to other expatriate business people, the Chinese people generally enjoy goodwill from most African governments and ordinary local people. This is because Chinese expatriates are regarded as more responsive to Africa’s needs than other foreigners on the continent (Jackson & Horwitz, 2018). In this regard, Chinese expatiates have become a force of change in Africa in addition to exporting entrepreneurial talent to the continent. Through various projects, they have stimulated a number of African economies (Friedman, 2009). Indians’ involvement, as well as Chinese involvement in Africa, has important implications representing the diversification of Africa’s linkage from the traditional colonially linked North- South trade built on former colonial powers (Taylor, 2012). It is also increasingly acknowledged that current Indian and Chinese trade engagement in Africa is not a zero-sum competition but complementary, as the Chinese are seen to supply hard infrastructure quickly and efficiently, while the Indians offer skilled technical services and assistance at a cost lower than that provided by other sources (Taylor, 2012).

2.5.4 The social and political/economy of Uganda An overview of Uganda Uganda is one of 54 countries that comprises the continent of Africa. It borders South Sudan in the north, Kenya in the east, Tanzania and Rwanda in the south and the Democratic Republic of Congo (DRC) to the west. Uganda encompasses 241,038 square kilometres, which is almost the size of her former colonial master Britain. According to the Uganda Bureau of Statistics (UBOS, 2018), Uganda is a developing country with a GDP of about US$27.15 billion. Uganda

45 has a population that is close to 40 million people, who are composed of four main ethnic groups subdivided into 56 sub-groups or tribes (UBOS, 2016).

Fig 2.2 Map of Uganda

Source: https://www.google.com/search?q=map+of+uganda+africa (Google, 2019b)

Recounting the political/economic trends of Uganda, Versteeg (2014) variously notes that, before attaining nation statehood on 9th October, 1962, Uganda was a British Protectorate. He makes further observations that the British governed Uganda in an indirect arrangement through the Imperial British East Africa Company (IBEAC). Before and after independence Uganda experienced various social, political and economic upheavals that define its statehood and explain the present social/political structures and its level of economic development. In 1995, Uganda promulgated a new constitution, and the country has since been governed under a pseudo-multiparty democracy. The government of Uganda (GOU) is comprised of three arms: the executive, the legislature (Parliament) and the judiciary. Each one of these is, in principle, supposed to reinforce and check the excesses of the others. This system of governance is meant to ensure a separation of powers and the rule of law, and guarantee individual freedoms, including economic freedoms that enable private participation in the social/economic development of the country (Versteeg, 2014). This background information is important for this study given the fact that Uganda’s social/economic trajectory since independence has been closely linked to its political stability or instability.

The Economy of Uganda Data from UBOS (Uganda Bureau of Statistics), which is corroborated by Diem (2014), indicate that Uganda is endowed with fertile soils, regular rainfall and varied natural resources that include mineral deposits of copper, cobalt and oil. The agricultural sector that is mainly controlled by small farmers is the most important sector supporting the country’s economy, employing 80% of the workforce. Under pressure from the World Bank and the International Monitory Fund (IMF), Uganda embarked on broad economic reforms in the early 1990s, but the ventures yielded mixed results. Uganda’s economy, however, became more monetised, as evidenced by the fact that the share of the non-monetary sector declined from 76% in 1990 to 36% by 2001. This implied a return to market transactions. Uganda’s GDP (factor cost) was 4.5% during the fiscal year 2002/3. This rose to 5.4% during the fiscal year 2003/4, and real GDP continued growing to 6.4% in the fiscal year 2004/5 (Diem, Hartter, Ryan, & Palace, 2014). At the time oil was officially discovered in 2006, the Ugandan GDP was steadily averaging 8% per annum up to the period of the 2008/9 fiscal year (UBOS, 2016). According to a report in ‘Independent Magazine’ (June 6, 2019), Uganda’s Gross Domestic Product (GDP) per capita is equivalent to US$ 800 whereas that of 2017 was US$ 666.61. This is a steady rise from a record low of US$ 272.20 in 1986 when only 80 factories existed in Uganda compared to 4900 that are in operation today. The country’s economy is projected to continue growing at about 7% per annum during 2019/20 (Independenteditorial, 2019). Uganda’s strong performance on the global market is attributed to export diversification and an increase in export earnings, the bulk of which is primary commodities such as coffee, fish, tea, gold, flowers and horticultural products. Whereas manufacturing contributes less than 10% of the GDP, the other major contributors are trading and the service sector. These account for 8.5% of real GDP, 5% of advertised employment and over 20% of export earnings. The discovery of large quantities of commercial oil and gas (in 2006) further enhanced Uganda’s attraction to foreign investment and business (Kjær, 2013). Uganda’s strategic location in the heart of Sub-Saharan Africa, with a liberalised business environment and a growing young and educated population, has led to a situation whereby Uganda ranks among the top ten countries attracting the highest FDI projects in Africa (UNCTAD, 2016).

Corruption in Uganda Understanding the level of corruption in Uganda provides useful clues on this vice, and offers background information as a basis for appreciating the nature of informality in this environment. This knowledge is important in order to examine the forms of corruption that

expatriate business people experience in the course of doing business, and to ascertain why there is lack of or poor services from a number of government offices. Nystrand (2014) argues that corruption represents a significant setback to Uganda’s development and economic success. In his research, he highlights that, in 2006, more than half of the government’s annual budget was lost to various forms of corruption. Corruption pervades a number of Ugandan public offices, but it is also noticeable in privately owned and privately run enterprises. He notes further that Uganda has the second highest incidence of bribery among East African countries, behind Burundi, and is ranked 140th out of 177 in Transparency International’s corruption perception index for 2013 (Nystrand, 2014). Today, however, there is little sign of improvement in levels of corruption because the 2018 Transparency International corruption perception ranked Uganda 149 out of 180 countries (Transparencyinternational, 2018). Notably, Nystrand (2014) observed that petty corruption in Uganda involves routine extra payments for services to low and medium level officials. He also describes grand corruption that involves central decision makers and politicians which has far-reaching implications for the government of Uganda in terms of lost revenue and chronic annual budget gaps/deficits. The government of Uganda has often acknowledged corruption as a disincentive of the country’s development. The president of this country is quoted by the Daily Monitor Newspaper of 6th June, 2019, to have stated that ‘The tempo of Uganda’s development is, however, interfered with by corrupt public servants and political actors. That is why corruption is now public enemy number 1’ (Kyeyune, 2019). When explaining the nature and levels of corruption in Uganda, Bukuluki (2013) adopts a socio-cultural outlook whereby he argues that, in collectivist cultures like Uganda, the acceptance or rejection of corruption depends upon the contextual interpretation of the act, the perception and meaning attached to it. He also notes that the conceptualisation of corruption in Uganda occurs only when the individual does not share his/her loot (stolen money or valuables) with others but enjoys the benefits alone, thus negating the context of collectivism in a collectivist environment (Bukuluki, 2013).

Business Expatriates in Uganda Expatriation into Uganda dates back to the 18th century when the British, together with Indian manufactures and traders such as Alidina Visram, entered the then British East Africa (Trovão & Batoréu, 2013). Since then, various nationalities from different countries have lived and conducted business in Uganda. Expatriates’ business activities in this country were, as

previously noted (section 1.1), disrupted by the expulsion of 40,000 Asians from Uganda in 1972 (Gupta, 1974). This resulted in major social, political and economic disruptions. As with the other African countries, the most significant recent cohort of business expatriates to enter Uganda are the Chinese. The initial entry of the Chinese into Uganda can be attributed to past ideological solidarity. However, this turned into commercial activities after the 1990s due to the need to access the local market, plus intense domestic competition in China (Allawi, 2015; Mohamed, Ibrahim, Eltayeb, & Abker, 2019). Mohamed et al. (2019) further suggest that other reasons were to transfer abroad excessive domestic production capability, a desire to enter new foreign markets via exports from Uganda and to benefit from African Regional and International Trade Agreements. They also note that most of the privately owned Chinese firms in Uganda fall into four main sectors: (a) wholesalers - 26%, (b) construction - 21%, (c) importing - 21%, and (d) manufacturing - 17%. Other sectors comprise less than 10%. According to Uganda’s biggest daily newspaper ‘The New Vision’ (March 7, 2012) China was the major investor in business in Uganda by 2010, a point collaborated by the country’s president Museveni (Newvisioneditorial, 2012). The investment trends of the Chinese in Uganda are also frequently reported in China’s media, ‘People’s Daily’, which mentioned that 32 China-invested projects were projected to create 5,500 jobs in Uganda by 2009 (Zafar, 2007). Today, over 7,000 Chinese are estimated to live and work in Uganda (Brautigam & Hwang, 2016). When discussing the experience of Chinese business expatriates in Uganda, Warmerdam & van Dijk (2013) note that most Chinese State Owned Enterprises (SOEs) operating in Uganda complain most about bureaucracy and inefficiency among the local work force. They also note that Chinese Privately Owned Enterprises (POEs) generally complain about corrupt officials and informal cultures. In a country that is geographically, culturally and institutionary different from their home countries, Chinese expatriates generally face challenges relating to: (a) corrupt local officials, (b) bureaucracy and inefficient officials, (c) currency fluctuations, (d) an unreliable workforce, (f) obtaining visas for expatriate workers and (g) the language problem (Dupasquier & Osakwe, 2006).

2.6 Examples of informal institutions specific to different cultures A number of studies have explored how relationship based informal institutions in different countries influence business behaviour, such as: guanxi in China; blat in Russia; jajmani in India; and wasta in Arab countries (Drew & Kriz, 2012). By examining such informal institutions, this study intends to build a better understanding of how they influence business

behaviour through social capital (networks and informal relationships) and trust. This section examines literature on these informal institutions before examining a similar construct from Uganda, magendo.

Guanxi China has been described as a paragon of highly collectivist societies where business operates using an informal business practice called guanxi (Hofstede, 2007). Hofstede (2007) observes that China is one of the few ancient nation states in the world that has never been totally dissolved or occupied by outside powers or influences. The culture of China is therefore relatively continual, homogeneous and strong in comparison with most other cultures in the world. As Selmer and Worm (1998) observes, there has also been little change in their written language and the works of the Chinese that are 2,000 years old or more. This can be interpreted today as making the passing on of old values more fundamental in China than in the West or elsewhere. Wong (1998) defines guanxi as a friendship with implications of a continual exchange of favours involving social connections or social networks. He contends that this institution is considered important in almost every realm of life in China, including politics, business, officialdom and street life. Guanxi is associated with both positive and negative connotations. Some view it as an institution that fuels China’s rampant corruption, and as an obstacle to the country becoming modern, based on the rule of law; while others consider it a humane practice that supports the cold transactions that characterise China (Wong, 1998). In essence, guanxi is discussed as social interaction within a network whose members engage in an infinitely repeated favour exchanges with people they know. This repeated favour-exchange ensures trust among the members of a guanxi network, which may minimise the risk of uncertainty. On the other hand, those who look at guanxi negatively view it as simply an emotional desire for the pursuit of personal interests or as under-the-table corrupt behaviour (Gold & Guthrie, 2002). Whichever definition and perception, guanxi is a social reality that needs to be appreciated by international business operators working in China or working with the Chinese. Two important elements of guanxi, highlighted in the literature, are trust and reciprocity, which are argued to be the glue for social exchanges and the boundaries of trust in the Chinese social set up. Whereas trust is important in economic interactions all over the world, in China trust towards the members of one’s in-group and distrust towards others is one of the strongest characteristics of interpersonal relations. Building this trust, as Cadsby and Bi (2007) observe about guanxi, implies creating social connections built implicitly without the need for explicit

50 discussions or arrangements that are based on mutual interest and benefits. Guanxi, therefore, functions as a substitute for legal protection providing contextual confidence for building trust. Whereas some argue that extended boundaries of trust in China create benefits for individuals and organisations, others note that what needs to be strengthened is the level of trust between Chinese and foreigners or collaborators abroad (Björkman & Schapp, 1994). Expatriates however, experience considerable problems in developing guanxi in China, most especially the linkage between interpersonal relationships and the attainment of desirable resources and services (Cadsby & Bi, 2007). They further note that this entails a social obligation to do and reciprocate favours for others (e.g. by providing some kind of scarce resource). Notably, Western business people have been known to be insufficiently sensitive to guanxi, and it has been suggested, that this may damage work and business relationships. Because many expatriates lack socio-cultural training before deployment they do not understand how to observe social protocols when they get to China. Consequently, outsiders, most especially Westerners, may violate local behavioural norms, which in turn results in business failure (Björkman & Schapp, 1994). A comparison of the Chinese and Western cultures in resource allocation also underlines the differences between the two peoples. Whereby Westerners employ the equity rule, which encourages individuals to allocate resources in proportion to their contribution (Wong, 1998), the Chinese employ the need rule, which dictates that dividends, profits or other benefits should be distributed to satisfy the recipient’s legitimate needs, regardless of their relative contribution (Huang & Andrulis, 1994). While comparing the two cultures, Wong (1998) contends that the equity rule works for mind oriented, or rule-rational adherent Westerners; whereas, the heart oriented focus works for guanxi adherents who often take a long term perspective regarding the building of group loyalty and perceptual group values. He further argues that this diversity underlies the contradictions and appreciation, or lack of appreciation, of this institution by outsiders who work in China, or those who do business with the Chinese.

Blat – Russia Russia is a global political power and ranks among the BRICs or the next generation of economic powers. It is large, with a relatively sizeable population (about 145 million in 2017), and its influence in world social/political affairs is significant. Geographically speaking, it is the largest country in the world spanning 11 time zones with a diverse array of cultures. It is one country that has experimented with a number of political/economic systems. At one time, it experimented with central planning or socialism (1917-1994) which ultimately collapsed in

1994. Since then, it has embraced pseudo free market economic models. The economic experience of Russia (part of the former USSR) before, during and after the fall of communism, therefore, offers a suitable study for a country with informal institutions (Ledeneva, 2000). Ledeneva (2000) defines the blat institution as the use of personal networks to obtain goods and services in short supply, and for circumnavigating formal procedures. It is a Russian institution based on gift giving whereby networking and trust become fundamental parts of economic transactions. During the Soviet era, blat was a channel of sociability at the level of offering favours of access and has been described as an institution that is linked to corruption (Ledeneva, 2000). This institution, like some other informal institutions, evolved during periods of challenges in providing and distributing the necessities of life such as food, jobs and living space in the former USSR. Following the fall of the Soviet Union, perceptions of blat have changed. Ledeneva (2009) notes that blat is today associated with criminality (blatanoi) and is also linked to the exchange of favours (Ledeneva, 2009). It is an institution that enables one to circumvent formal rules and procedures. Whereas, in the Soviet era, blat was generally non-monetised and was meant to beat the system, today blat is business-related involving state budget transactions, tax evasion and creative accounting. Blat has thrived because of Russia’s weak civil society and low levels of trust in public institutions (Shlapentokh, 2006). Some blame it for the creation of informal networks to compensate for the failure of formal organisations, which leads to high levels of interpersonal trust as a substitute for the low levels of impersonal trust in public institutions. Ledeneva (2008) further explains that Russia is a state that operates via unwritten codes where members are recruited (blat appointments) based on loyalty and compromise. Under this system, the allocation of rewards and punishments is based on extra-legal criteria, and can be summarised thus: for friends, we have everything, for enemies, we have the law (Ledeneva, 2008). Ledeneva (2008) illustrates how deep and widespread blat is in Russia today using the following examples, the initiation of a legal case against competition is around US$100,000, while purchasing a court decision or the confiscation of assets is around US$50,000. Table 2.3 illustrates Russian perceptions of blat in 2007, how relevant it was and what the weight of its ranking was in relation to services. This table demonstrates that, although a scarcity of consumer goods is no longer the most important issue in Russia (it ranks at the bottom of Table 2.3) as was the case in the early 1990s, services that involve blat still exist today (Ledeneva, 2009). Those services with the highest percentages are perceived to be more significant for blat.

Table 2.3 Perceptions of blat in Russia

Service Percentage Medical services: local surgery, hospital or bed and operation 24 Solving problems with the traffic police, registration of a vehicle 18 Finding a job 12 Education: places in primary-secondary and higher education 12 Legal services 05 Army conscription 04 Getting better prices 04 Repairs of housing 03 Tickets for events 02 Hobbies 01 Consumer goods 01 Foodstuffs 01

Source: Compiled based on literature and information from Ledeneva (2009)

For expatriates living and working in Russia, blat has been noted to variously affect their business transactions. Kelly (2000) describes Russia’s situation as a modernisation trap of informality, meaning that one cannot use the potential of informal networks without the backdrop they entail.

Jajmani Like China, India is an ancient nation with old cultures and traditions, but, unlike China, outsiders occupied it for extended periods, and the British ruled it for over 200 years before departing in 1947 and leaving behind a trail of social, political and economic influence. India is the second most populous nation in the world (about 1.2 billion, 2017) and, like China; this large population has an impact on the world’s social, economic and political affairs. For centuries, Indians have been moving to different parts of the world influencing and being influenced by the cultures where they move to, and whenever they go back home they take with them these influences. Unlike China, however, India is a class-based nation with varying degrees of social strata (Gould, 1986). Jajmani is discussed as an informal institution associated with the Hindu practice of economic particularism (Gold & Guthrie, 2002; Gould, 1986) in India. Gold (2002) has described this instituion as a pattern of economic and ritual relationships, which characterise rural India. He notes that it is a system of hereditary dyadic service relationships between households of different castes in the same locality, where land holding forms the bases of such

53 relationships (Gold & Guthrie, 2002). Benson (1976) notes that the jajmani system uses the exchange of grain and other benefits for economic or ritual services (e.g. grave digging etc.). He highlights the point that this system depends on payment in kind, which implies delayed reciprocity, thus building a permanent relationship between the parties involved. He also observes that this system runs on a form of patronage between the landlords called kamin and the specialist service providers, or artisan castes as they are called locally, who are involved in this jajmani relationship within a traditional village set up (Benson, 1976). Gould (1986) explains that jajmani operates at an economic level whereby one specialist, for example a gravedigger or carpenter, provides a service and is paid in kind with a known amount of grain or its equivalent in money. He observes that jajmani runs on kinship, which is the framework within which peasants carry on relationships, and this forms the highest measure of trustworthiness, durability and meaningfulness. In this regard, it is believed, among Hindu Indians, that the most stable relationships in one’s life are those based on Jajmani-purjan. This evolves into economic and professional relationships that need to be appreciated by expatriates doing business in India, or with Indians outside of India (Gould, 1986). It is observed, however, that this system can be corruptly manipulated for political and economic benefits by the more powerful watandar – the big boss property owner, holding the work rights (Gould, 1986). As is the case with other informal institutions, jajmani has evolved over time whereby today the service providers, called paniwallu, are paid in cash, and many of them have graduated into higher government services. Indians of Hindu leaning, however, jealously guard these family specialities to the extent that one may not easily penetrate the professional system in this environment without encountering internal resistance or rejection. In practical terms, one gets a job in India according to one’s family speciality or background, or one joins a profession based on one’s known family specialisation. In essence, this system ascribes professionalism to individuals as opposed to an individual’s capabilities (Benson, 1976). At the macro level, these orientations spill over into the modern Indian business landscape, which has implications for foreigners who may not be familiar with the caste system that runs on jajmani traditions.

Wasta Because of its oil wealth and fast development, the business world considers the Middle East to be an important global economic player, and for years, it has been a desired destination for expatriates. Thus, it is important to understand this region and appreciate its social structures, institutions and business practices. In addition, the Middle East lies between three major

cultural entities, Africa, Europe and Asia, with the possibility of influencing or being influenced by their external forces. In this region, an informal institution wasta characterises relationships. It is based on strong family connections and is secured through strong wasta networking (Hutchings & Weir, 2006b). Families in Arab collectivist societies are regarded as being centrally important, the main unit and backbone of society. In these countries, wasta is very important in that it facilitates social networks based on strong family connections (Hofstede, 2001). Throughout the Arab world, social networks are a significant force in all aspects of decision- making, and play a very important role in family, business and career decisions. Cunningham and Sarayah (1993) explain that historically wasta was used to manage relations between families and tribes through the use of intermediaries, who would be called upon to be the intercession or the wasta between conflicting parties. They note that, today, the network part of wasta is widely discussed as a set of activities that people perform to obtain interpersonal connections with those who are in positions of power within the private and public social, political and economic spheres. In the workplace, wasta is referred to as a key determinant of the recruitment of individuals and thus of career success. In this regard, it becomes a process of using help that might not be available to other competitors. Thus, wasta fosters the progress of people who reach their positions through befriending influential people. As is the case with a number of other informal practices, wasta is, variably viewed and perceived. On the positive side, those who benefit from it argue that it strengthens social ties and networks and that it deepens social cohesion, reinforces social relations and strengthens ties within kinships groups. It is argued that it is a system supporting members in being recruited and promoted, or having access to vital business information (Cunningham & Sarayrah, 1993). On the other hand, critics argue that wasta is an obstacle for those who come from the lower social strata who may not be well connected in society where connections rather than one’s capabilities matter most. Critics contend, it is an unfair system that leads to recruiting unqualified or less qualified personnel in preference to better ones (Hutchings & Weir, 2006a). Wasta, like other informal institutions, has implications for expatriates who work in the Middle East or with Arabs. Outsiders, notably expatriate business people, should therefore appreciate this institution, know how it works and how it affects businesses with Arabs, or those that operate in an Arab environment.

2.7 Magendo This section introduces and discusses a relatively unexplored informal institution, Magendo, to explain its meaning, trends and uniqueness. Magendo means corruption in an East African language, Swahili. Doing magendo means transacting business illegally, unlawfully or without a license (Mertz et al., 1998). Magendo also denotes business practices that operate and survive using illegal practices. This institution is associated with informal business dealings at the governmental and private levels whereby, in order for one to have something done, one must influence the process or give an extra incentive in order to expedite or conclude a transaction (Ruzindana et al., 1998). When Wekesa (2010) discusses the genesis of magendo, he states that the proliferation of informal activities has been due to Kenya-Uganda cross border interactions. He contends that, historically, although magendo activities manifested in different forms and were known by different names, their main characterisation was that they were not recorded in countries’ national accounts. He highlights that magendo operated outside the official national networks. He notes also that the existence of magendo economic activities, and its categorisation, reflected the ordinary people’s struggle to survive outside the formal state defined networks. This occurred when scarcity and shortage of essential goods resulted in higher demand and profits thus making it hard to control magendo (Wekesa, 2010). In the 1970s, when there were shortages of goods and poor services in Uganda because of the government expulsion of Asians who had been dominant in the commercial sector, magendo was considered to be a subculture. However, it persisted beyond that period and, despite social/economic changes, it remains a dominant force affecting local and foreign business operations. Like other informal institutions, magendo is dynamic, and it has since metamorphosed into various forms of illegalities. Today, business practices under magendo are associated with illegalities such as: bribe giving/taking; dishonest dealings; nepotism; lack of integrity; acquiring unscrupulous wealth; buying well-paid jobs; buying legal justice; and buying good school placements (Bukuluki, 2013). The recent characteristics of magendo include land grabbing, extortion, vote buying and many other illegal practices (Goodfellow & Titeca, 2012). This informal institution’s survival is rooted in informal practices that exist in the place of formal institutions and procedures (Annis, Heidenheimer, Johnston, & Le Vine, 1990; Sedigh & Ruzindana, 1999). Proponents of magendo argue, however, that it supports Uganda’s upcoming middle class (Steare, 1984). As it has been often observed in emerging and developing countries, business practices in these environments generally rely on relational ties

guided by informal institutions rather than formalised systems and institutions (Herdman et al., 1998). Magendo, like blat, may have lost the original connotation of survival, characterised by shortages, but it still explains the increasing forms of illegality characterising the conduct of business in Uganda. Today, a new shortage has emerged in the setting characterised by magendo: this is a shortage of honesty (business morals) to which this institution is fast adjusting. Attaining a well-paid job or legal justice, property or good school placements are some of the new power bases and most notable manifestations of magendo in its current form (Bukuluki, 2013). Whereas magendo has been largely linked to corrupt business practices that affect business activities within Eastern Africa (Kenya, Tanzania, Uganda, Rwanda, Burundi, Somalia, Southern Sudan and parts of DR Congo), there is, however, a lack of empirical research into what magendo is. There is also no knowledge of its influence on foreign business activities in this region such that some simply associate it with the black market, corruption and bribery (Lynch, 2011; Ruzindana, 1997; Sedigh & Ruzindana, 1999). Nonetheless, it is noted that magendo grew because of the decline of Uganda’s formal economy in the early 1970s, a period characterised by shortages of goods and poor services following the government’s expulsion of Indians who dominated Uganda’s commercial sector (Southall, 1980). Though illegal, it is acknowledged that magendo originally assisted ordinary people to survive and access scarce goods and services.

2.7.1 Social, cultural and economic dimensions of magendo An appreciation of Uganda’s social, cultural and economic context facilitates an understanding of the varied dimensions of magendo. The study contends that, given its characteristics, corruption is only one element of magendo. It therefore posits that the conventional definition of corruption as the abuse of public office for public gain (Annis, 1990) may only provide a starting point for studying magendo and understanding its implications through examining the experience of expatriate business operators (Annis et al., 1990). Magendo may be a recent phenomenon in Uganda’s social, political, economic experience (Uganda’s independence occurred in 1962), but its attributes may be traced back to the social structures of Uganda’s social/cultural traditions. To emphasise this argument, Tumwesigye (1995) observed that the head of a family had the duty of feeding and protecting the family, and paying due allegiance gifts or fees to the village chief or king. Until the onset of colonialism in Africa, a family head and leaders in various positions had the duty of sustaining their entities

through hard work, such as engaging in trade or agriculture. He further notes that when there was war and a call to arms, one had to fight hard to bring home booty to boost the family wealth and to tithe something to the military commander, area chief or king. This social order, as Tumwesigye (1995) highlights, was abruptly disrupted by colonialists in most parts of Africa, and replaced with a foreign social, political, economic order based on individualism and capitalistic thinking, which emphasised oneself and one’s immediate family, and was derived from direct paid employment (Tumwesigye, 1995). Disrupting people’s ways of life thus changed their thinking and orientation, and created new ways of survival. With this disruption went the rational manner of sustaining oneself and earning a living to support the family and communal attachments, thereby giving rise to informality. Tumwesigye (1995) argues that, whereas African societies are intrinsically communal and egalitarian, this new order implied that an individual was no longer accountable to society or community but to the employer or the deploying authority. Today in Uganda, as is the case in most of Africa, corruption and informal institutions such as magendo, were noted to have attained ideological proportions at the onset of colonial eras, whereby the unscrupulous culture of success in politics, religion, academic life, public administration or business became praiseworthy by society. Honesty and integrity which had been enshrined in the traditional values of yesteryear, and whereby success through honest hard work was communally shared and celebrated, has since ceased to be a hallmark of distinction (Tumwesigye, 1995).

2.7.2 Trends of magendo in Uganda The colonisation of Africa has largely been accused of causing social disruptions that, in turn, birthed informal institutions such as magendo (Zoogah, Peng, & Woldu, 2015). Zoogah et al. (2015) observe, however, that the post-independent leaders who took over from the colonialists sustained these social/economic disruptions. A number of post independent leaders enhanced these practices across the continent through economic mismanagement on one hand and ill- informed experimentalism on the other hand. This occurred via Ujamaa (socialism) in Tanzania; Humanism in Zambia; nationalisation, Africanisation, liberalisation and de- regulation in Uganda and; African Marxism in Ethiopia – all of which retarded these countries’ economies. It was around this period that magendo gained momentum; Southall (1980) observes that Uganda experienced price inflation and scarcity of essential items like sugar, fuel, medicines and other essentials, leading to a culture of hoarding and the smuggling of scarce items from neighbouring countries, that is, engaging in magendo or doing magendo (Southall, 1980). He notes further that all available essentials went to the military, which had to keep the

regime in power. However, soldiers in turn sold essential goods on the black market at five times the buying price so that the chain reaction continued in scope, complexity and form. The few goods and services that were available could only be procured through bribery, nepotism, favouritism and clientele (Southall, 1980). Southhall (1980) highlights that scarce goods came from either well-placed soldiers or the so-called black Asians who had taken over the smuggling rackets, thus fuelling magendo. During this period, personal ties took precedence over bureaucratic role performance in an economy that had failed and where ingrained habits of coping and survival had taken centre stage (Southall, 1980). Magendo has nevertheless persisted today, although the forces that exerted power at that time no longer exist (Flanary & Watt, 1999). Magendo, as noted by Decker (2010), has irreversibly became a way of life (culture) in Uganda, and by 1980 – shortly after Amin’s overthrow from power and government magendo was reported to account for 51% of Uganda’s Gross Domestic Product (Decker, 2010). It is observed, however, that the magendo that occurred during Amin’s era was limited to the smuggling of scarce goods in order to survive – as was the case for blat in Russia. Today, magendo is an institution that, in many ways, characterises Uganda’s social, political and economic landscapes, albeit with an evolving nature and novel forms, as is discussed in the next sub-section. 2.7.3 New forms of magendo The new forms of magendo that affect business operators today have wider meanings beyond the scarcity of goods and services (Southall, 1980). The new forms of magendo include social, economic and political illegalities, such as buying/influencing votes, inflating/deflating of tax dues and buying/influencing tenders. Magendo today is also explained in terms of illegalities such as buying examination results for students, buying/influencing promotions within security services or at any place of work, organising fake export schemes, land grabbing, extortion, creating ghost workers in public service buying, injustice and the stealing of public money by unscrupulous public officials (Goodfellow & Titeca, 2012). At a micro level, new forms of magendo run inverted rent systems whereby a supervisor or authority may, for example, impose on a subordinate the requirement to constantly send him/her money (gifts) in return for patronage. Under this arrangement, one is deployed on the condition that one constantly sends money to the deploying authority, and any failure to co- operate may lead to redeployment to ‘dry’ posts, stations, departments, or even to facing summary dismissal from work, under any excuse. These practices have not spared quality and standards, whereby expired products are found on the market. In addition, substandard goods/services are reported daily in the media and in public procurement. It is common for

59 contracts not to go to the highest bidder, but to the one who has paid a bribe (Flanary & Watt, 1999). Today, the illegalities associated with magendo pervade almost all sectors of Uganda’s society. At the government level, as Sedigh (1999) notes, a public official may exploit his/her office or trade to gain advantage using money, wealth or position (Sedigh & Ruzindana, 1999). Despite the evolution of more formal institutions in Uganda in recent years, magendo is still firmly entrenched. Table 2.4 illustrates examples of reported media cases recounting magendoism or ways and manner in which magendo manifests in Uganda today. Table 2.4 Media reports of new forms of Magendo

S/N Title Summary report On-line newspaper Date 1 Chief Justice The Chief Justice warns that failure by the public to The Monitor 9/12/2016 criticises corruption report corrupt officials has fuelled the rampant corrupt tendencies. 2 Editorial Fighting corruption is a failure; the reason given is The Monitor 9/12/2016 failure by government to grant powers to either recover or confiscate property belonging to corrupt officials. 3 Corruption in bidding Corruption today takes form of bid rigging or The Monitor 3/1/2017 collusion whereby competitors agree to suppress rivalry that relies on inter-firm communication. 4 Judge under probe The judiciary is investigating a high court judge over The Monitor 19/1/2017 disappearance of a case file after allegedly demanding a bribe. 5 Church infighting The laity rejected the Anglican bishop elect because The Monitor 22/1/2017 when he worked under his father, a former bishop, he defrauded Christians of their savings in the defunct Christ for Development Trust (ACID) organisation. 6 Oil money Legislators are reported to probe alleged swindling of The Red Pepper 5/1/2017 taxpayers’ money by big shots in government. 7 Directorate of Public Non-empowerment of the office of DPP means that The New Vision 8/8/2016 prosecution(DPP) grand corruption is thriving and petty corruption is reducing productivity. 8 Corruption among The Vice President warns workers against corruption The New Vision 11/9/2016 health workers that compromises services at health centres. 9 Uganda’s war on There is increasing arrest of the corrupt, but The Independent 7/1/2017 corruption corruption has grown as the prosecution; because the returns on corruption are very high, therefore thieves do not mind spending 5 years in jail, come out and enjoy their loot-stolen money/items. 10 Corruption can only There is lamentation that when grand corruption is The New Vision 12/6/2018 be defeated through unearthed, perpetrators escape justice. The corrupt concerted, not officials use their connections with big people to disjointed effort defeat justice 11 Corruption Several American investors are discouraged from The New Vision 6/7/2018 frustrating American investing in Uganda due to irrepressible levels of investors in Uganda corruption 12 Why corruption With flourishing corruption, traffic officers will The Monitor 12/5/2019 might not be bad endure ‘working’ under heavy downpours on the after all Mabira forest stretch. 13 Bishops decry Bishops blame crippling service delivery on The Monitor 23/4/2019 unending corruption corruption Source: Generated for this study, based on online media reports from: The Monitor, https://www.monitor.co.ug/News/National; The New Vision, https://www.newvision.co.ug/ The Independent, https://www.independent.co.ug/; The Red Pepper, htts:www.redpepper.co.ug

As the study has severally observed, magendo is wider than ordinary corruption involving bribe giving and taking. Media reports emphasise this when they highlight various forms of social/economic illegalities. Corrupt practices reported in Uganda’s local media are not limited to bribe giving, but are far wider in scope. A broad spectrum of players such as judges, health workers and religious people are also presented to highlight the spread of this phenomenon. The perception and gravity of magendo is illustrated in the following excerpt from Nystrand (2014):

At the lowest level, to get an office person to give a paper to the boss, might take 10,000- 30,000shs. When the boss is supposed to move it to the next level, he is asking for 100,000-200,000shs. For payment from government, about 10 signatures are needed. Each signatory might ask for 100,000shs. Supervision from the engineer might cost 500,000shs. Chief administrative officer might ask 500,000shs. At the end, you might pay 2-3 million shs (roughly US$ 1000) for a process to go through.

2.8 Synthesis of informal institutions Whereas guanxi, wasta and jajmani are deeply engrained in the old cultural practices of their countries, blat and magendo are not. Guanxi, wasta and jajmani have similarities in their practice such as reciprocity, and they are relatively structured and defined. Blat does not share these attributes, and neither does magendo. Table 2.5 is a summary of the key characteristics of the informal institutions discussed in the Section 2.7. It illustrates their differences, exchange relations, type of relationship, and the perception of the people who experience them. Based on the review of literature on informal institutions, the study notes that these institutions are grounded in local social traditions: they are dynamic, evolving, and are affected by modernity and political changes around them. They have common characteristics such as corruption, while others are unique, such as the caste system in India.

Table 2.5 Key characteristics of selected informal institutions

Institution Exchange relation Reaction Perceptions Value judgement GUANXI -implicit/explicit -immediate /long -supportive, -good for some, bad for others reciprocity term -necessary -important for business -corrupt conduct WASTA -implicit/explicit -immediate/long term -supportive, -good for some, bad for others reciprocity -complex, -unpredictable -corrupt BLAT -vague -immediate -unnecessary -good for some -no reciprocity -continuous -corrupt -burdensome, -unpredictable JAJMAN -implicit -long-term -unnecessary -retrogressive for development -reciprocity -corrupt MAGENDO -vague -short term,(one off) -corrupt -unpredictable -no reciprocity Source: Generated for the study, based on reviewed literature on informal cultures

Studying informal institutions like guanxi, blat, wasta, jajmani and magendo enable an understanding of peoples’ social capital entrepreneurship, trust, shortages, survival strategies, shadow economies, political environments and remittance economies grounded in informal practices. Therefore, a review of these informal institutions underscores the importance of understanding informal business practices as being a key to success within countries associated with informal institutions. Historically, informal institutions such as guanxi, wasta and jajmani were associated with managing family relations and conflicts. Changing times have however affected them, and extant literature portrays them to have turned into networking business tools (Hutchings & Weir, 2006b). It is also noted that wasta and guanxi are reciprocal institutions that specifically seek to form networks, not only for immediate needs or push but also as a proactive measure that may prove useful in future. It is an invaluable social, political and economic form of investment. In comparison to these institutions, networking practiced in other cultures, as is the case with Western cultures, may not have reciprocal obligations. Among Europeans, for example, individuals are generally employed based on their qualifications and skills, and not for possible reciprocity now or in future. This study, on the other hand, observes that magendo and blat institutions are conditioned by prevailing social, economic and political disorders in those countries (Uganda and Russia). The study recognises, however, that all culture-based informal institutions such as guanxi, wasta or jajmani are permanent features in their countries, given their salience, strength and

entrenchment within their national cultures. On the other hand, in a number of African countries such as Uganda, it may be lack of political-will to tackle informality that sustains an informal institution such as magendo (Southall, 1980).

2.9 Theoretical approaches to studying informal institutions There are several theoretical approaches to studying and researching informal institutions. Prior research on informal institutions largely focuses on diverse issues about informality and corrupt practices (Cunningham & Sarayrah, 1993; Gold & Guthrie, 2002; Gould, 1986; Ledeneva, 2008).

2.9.1 Comparative theories on informal institutions Studies on the Chinese informal institution guanxi have been undertaken on employer /employee relations (Chen, 2013). While the basis of this research is a willingness to repeat exchanges between participants, trust is nevertheless underlined as an important element to support relationship. Chen et al. (2013) use a social exchange theory to provide a framework to understand this continued exchange process. Among other findings, guanxi is underlined to be an effective informal institution among businesspeople that are members of a given society. For expatriates, this is less evident. Therefore social exchange theory may not be suitable to understand how expatriates perceive and respond to contradictions embedded in informal institutions in a host country. The study of blat, a Russian informal institution, on the other hand, underlines distributive unfairness (Bempechat, Ronfard, Li, Mirny, & Holloway, 2013), whereby decisions are taken not on the basis of an institutionalised rule, but on the basis of personal relationship and traditional forms of authority in Russia. Bemperchat’s (2013) study of blat used a theory of personal constructs, which sought to find deeper meanings for respondents in their daily lives. For an expatriate, their personal constructs would derive from the expatriate’s own culture, and, therefore, a theory of personal constructs in examining how expatriates respond to an informal institution in a foreign environment setting. Social desirability and face saving are highlighted as key constructs in the study of wasta among Middle Eastern Arabs (Whiteoak, Crawford, & Mapstone, 2006). However, the utility of wasta depends more on individual attitudes towards taking advantage of hierarchical relationships for self-promotion to which others do not have access. The study of wasta uses cultural theory to understand deep social issues in an Arab context. This enables an understanding of both current and traditional rules in Arab social structures. Expatriates are

63 considered alien to a local culture, and therefore cultural theory may not be suitable for examining how informal business institutions affect expatriates conducting business in another country. Prior studies on the Indian informal institution, jajmani, focused on professional groups and the influence of particular trades in India (Schütte & Kreutzmann, 2015). In this case, the role of governments was underlined in the structures of daily life at the local level in India, and institutional theory was used to analyse jajmani in India. It provided a mechanism to appreciate that, whereas private and cooperative sectors were subject to formal regulations, formal institutions did not play a significant role between agents in that community. In this case institutional theory was able to explain influences on business behaviour and or whether the influences came from formal or informal institutions. Expatriates are challenged not only by the tension created by differences between home and host country informal cultures (cultural distance), but also by a lack of knowledge of the formal institutions present in the host country (psychic distance) (Bello & Gilliland, 1997). Cultural theory does not adequately cover expatriates’ knowledge or responses to a host country’s formal and informal institutions, and seems less suitable to understand expatriates’ perceptions and responses to corrupt business behaviour. Cultural theory may also legitimise corruption as a way of life, or a cultural phenomenon, rather than a result of weak formal institutions or a survival mechanism in a country with weak systems in which a large part of the population have a low socio-economic stance. Using institutional theory and an institutional framework to understand expatriates’ dilemmas and responses to informal and corrupt business practices is therefore deemed a more appropriate basis from which to examine expatriates’ perceptions and responses to business corruption in countries with large informal economies.

2.9.2 Adopting institutional theory Institutional theory may be used to examine the diverse institutional spheres that make up society; to examine the ways in which individuals are empowered and constrained by shared normative systems, and; to explore the ways in which symbolic systems-cultural rules and schemas shape and support social life (Scott, 2010). Institutional theory thus provides a productive lens through which to examine aspects of contemporary life in society, as well as organisations (Scott, 2013). For example, the Institutional Analysis and Development Framework (IAD) is used to explain and understand how a country’s informal institutions may shape its economic and regulatory institutions (Ostrom, 2011), (see figure 2.3) and how this

may influence the conduct of business in that country (Holmes Jr, Miller, Hitt, & Salmador, 2013).

Figure 2.3 IAD framework

Source: Ostrom (2009, p. 829).

The IAD framework, with its three spheres - exogenous variables, action arena and outcomes, is a multitier conceptual map that facilitates institutional analysis at several levels (Ostrom, 2011). Discussing the IAD framework, Drew and Kriz (2012) observe that the exogenous variables impact on actors engaging in situations or experiences in the action arena, and that the interplay of these factors results in outcomes which, in turn, provide feedback to the actors, the exogenous variables and others in the system. Feedback that is of value to the actors is likely to lead to the institutionalisation of behaviour (in the action arena), whereas feedback of low value to the actors is likely to result in actors engaging in institutional change through a modification of the situation, actors and/or the exogenous variables (Drew & Kriz, 2012).

2.9.3 Response to contradictions, paradoxes and tensions In the course of business transactions, individuals or organisations may face contradicting institutions that may result in tensions (Smith & Lewis, 2011), however there is minimal conceptual clarity to describe this concept. ‘Paradox’ and ‘dilemma’ are two words used to describe these contradictory tensions (Smith & Lewis, 2011). As expatriates move from their home countries into other business environments, they encounter contradicting elements, which constitute or result in tensions. These can be paradoxes with respect to culture (Johnston & Selsky, 2006) or institutions (Wijen & Ansari, 2007). A paradox may be real or may simply

represent a puzzling phenomenon (Clegg, 2002). Paradoxes have, however, been recognised as important analytical tools for cross-cultural studies (Johnston & Selsky, 2006). This research incorporates the above arguments and aims to examine expatriates’ responses to institutional paradoxes, and the nature of expatriates’ reactions. In response to the paucity of research into both informal institutions, and the experience of expatriates engaging in business in African countries (George, 2015), this research develops a conceptual framework based on the review of the institutional literature, to study the institutional contradictions faced by expatriate business people doing business in Uganda. The overarching research question that guides this inquiry is: How do expatriate businesspeople perceive and deal with corrupt business practices in Uganda?

2.9.4 Developing a conceptual framework Ravitch and Riggan (2016) note that a conceptual framework broadly includes relevant theoretical literature and the empirical findings of prior research. They argue that existing formulated theories are a major source from which a conceptual framework can be developed and may provide the basis for ideas and structure. Bazeley and Jackson (2013) note that a conceptual framework comprises commitments that inform and guide the study. They also note that a framework plays a bounding function, pointing out key factors or variables to be studied. It underpins the critical sources of information for the study, and it lays down premises for what will be done with this information once it has been collected. The conceptual framework generated for this study and illustrated in Figure 2.4, is the visual catalogue of actors to be studied: expatriate business people, the host country Uganda and expatriates’ countries of origin.

Figure 2.4. Conceptual framework of institutional contradictions of expatriates and Uganda

The environments to be examined in the study have different institutional realities at the formal and informal levels and the framework in the form of the following variables captures these: context, regulative institutions, normative institutions and cultural-cognitive institutions. How does the conceptual framework relate to the research question: How do expatriate business people perceive and deal with corrupt business practices? This study focuses on how expatriates overcome business contradictions and tensions between the institutional context they know from their own countries and the one they are faced with under the influence of magendo. As illustrated in Figure 2.4, the two opposing horizontal arrows portray the contradictions faced by expatriates, while the vertical arrow indicates the choices and outcomes expatriates devise managing the institutional contradictions between their own countries and Uganda.

Discussion of the conceptual framework In response to the paucity of research into both informal institutions and the experience of expatriates engaging in business in African countries (George, 2015), the researcher developed a conceptual framework to study institutional contradictions faced by expatriate business people doing business in Uganda. The framework is based on a review of institutional theory literature. It portrays potential relational contradictions and tensions that may result due to the institutional differences that may exist between Uganda and the expatriate business people working and living in Uganda (Drew & Kriz, 2012; Ostrom, 2011; Scott, 2010). The framework is intended to enable a study of how expatriates overcome business contradictions and tensions between contexts they know from their own countries and ones they are faced with under the influence of the informal institution magendo. The framework proposes two equally opposing contexts represented by the host country Uganda, and the countries of origin of the expatriates. The host country is therefore a specific context, and so is the country of origin of the expatriate. Among other things, the framework portrays Uganda’s formal regulatory system that covers its business conduct. In addition, its normative institutions, reflected by relationships, power play and or trust, enlist Uganda’s uniqueness. Another variable making Uganda unique is her cultural cognitive institutions, some of which may instil unconventional business behaviour and practices. In contrast to the Ugandan context, is that of the expatriate who moves into this country to do business. The expatriates originate from different countries, have experienced different regulatory institutions, and their behaviour and practices are rooted in and guided by different normative and cultural variables in their countries of origin. Pressured and sandwiched between two diametrically opposing contexts, the expatriate within the action arena, which is Uganda’s social/business space, can react in various ways as he/she interacts in business transactions. The basic proposition of the study is that the expatriate may opt to embrace or reject the unconventional local business practices. The choices made, however, may have implications for the expatriate as an individual, his/her business, the host country and his/her home country. Therefore, the framework is important for this study because it lays down approaches to the decisions taken by the expatriates.

Practical and theoretical debates on the framework This framework brings to the fore a number of fundamental practical and theoretical debates and insights for the study. These are based on the exogenous variables of the framework that are examined below in broader detail.

Context A context is a situation within which something exists and, from an ecological perspective, business people undertaking new ventures in other environments, face institutional novelties, which they must navigate (Aldrich & Fiol, 1994). Those undertaking the new ventures must not only carve out novel practices, but they must cope with difficulties stemming from their nascent status (Aldrich & Fiol, 1994). The host country, Uganda, into which expatriates have moved, may have a number of ecological realities that are politically, economically and socially different from those of their home countries. Contradictions related to context may also have ramifications for expatriate business people who are working in this country.

Regulative institutions Regulative institutions are legally sanctioned behaviours, such as formal rules, laws and constitutions of countries (Kshetri & Dholakia, 2011) and are characterised by boundaries of what can and cannot be done. The regulative pillars of countries are mapped with formal institutions and constraints in the form of macro-level rules (North, 1990). For this study, the host country Uganda has rules and regulations that may be different from those of the home countries of the expatriates, thus leading to possible paradoxes and contradictions that the study explores and analyses. Expatriates can either respect or disrespect the regulative institutions of Uganda based on whether they perceive them to be contradictory.

Normative institutions Normative institutions are forms of informal pillars directed at evaluating phenomena (Scott, 2013), and these are argued to contribute to the improvement of public governance and administration (Ruiter, 1997). While institutional theory explains behaviour as influenced by social norms, in many instances people act not because of normative conformity (Knoke & Wright-Isak, 1982), but because they perceive the act to be the right thing to do (Wendt, 2001). The normative variables of the framework offer a useful description of Uganda’s business environment vis-à-vis those of the expatriates. The normative institutions of the host country may, however, be different from those of the home countries of the expatriates, thus resulting in the tensions and contradictions that this study examines.

Cultural-cognitive institutions Cultural cognitive pillars are related to informal institutions and evidence suggests that, across cultural groups, there are significant differences in cognition and behaviour (Kshetri &

Dholakia, 2011). This implies that people can no longer be thought to experience the world in exactly the same way (Endsley, 2015). Alesina et al. (2015) discusses culture as those customary beliefs and values that ethnic, religious and social groups transmit fairly unchanged from generation to generation, and are the basis from which to interpret their experiences Some cultural cognitive institutions in Uganda may be different from those of the expatriates’ home countries, thereby raising contradictions for the latter. For example, in the process of doing business, expatriates may interact with local people whose commitment to local norms are so strong that they overrides all considerations of legality (Steare, 1984). Norms are grounded in deep-rooted cultural values and are largely implicit and this may present challenges to foreigners in this environment (Lang & Hofstede, 1993). While local informal institutions such as magendo may mystify some expatriates, others are likely to adapt to enable them cope with the local business dynamics. In this regard, the framework highlights how cognitive elements, imposed by national cultures, inform expatriates’ cognition (Wendt, 2001).

Action arena The action arena of the framework, sandwiched between the two opposing contexts, portrays Uganda’s social space whereby expatriates interact with Ugandans in the process of doing business. Expatriate business people are the main actors in this business space, however, government officials and the Ugandan citizenry constitute the other actors. The interplay between the exogenous variables and the expatriates in the action arena results in the varied outcomes. For this framework, the action arena captures the duality faced by the expatriate, and the resulting choices expatriates make. The conceptual framework thus portrays the decision options open to expatriates - which can be the acceptance or the rejection of corrupt business practices. It is suggested that when expatriates operate in an environment that is influenced by informal institutions they make choices based on their backgrounds and the reality of the context in which they live and work. The resultant contradictions manifest due to changed contexts (i.e. home country vis-à-vis Uganda). This study, therefore, developed the framework to explore what choices expatriates make in this business environment, and why some expatriates may be more likely to embrace certain business illegalities in comparison to others. At the formal level, it is, for example, noted that it is possible to extract bribes that stem from existing formal institutions (i.e. nature of regulations, licensing, permissions, tax exemptions and discretionary power in implementing and enforcing them). These control rights, as Svensson (2003) contends, determine the threat level whereby if an Official retained control rights, an expatriate or anybody else dealing with

70 such a person may be coerced into business illegalities. That far, some expatriates may find it hard to refuse; and therefore are likely to pay bribes or engage in other acts of illegality. On the other hand, expatriates with less need for government permission (formal requirements/procedures) and services will have greater refusal power as they have no need to indulge in business illegalities such as bribery and can therefore resist illegalities without significant impact on their businesses (Svensson, 2003). This is the first time institutional theory has been used to study the perceptions of expatriates on conduct of business in Uganda. It is therefore anticipated that this study will contribute to institutional theory by using it to explain the perceptions of expatriates in a host country and more specifically, an African country.

CHAPTER 3

RESEARCH METHODOLOGY AND DESIGN

3.0 Introduction This chapter describes and justifies the research methodology and design selected for the study in order to answer the research question: “How do expatriate business people perceive and deal with corrupt business practices in Uganda?” The chapter opens with a discussion of the background to the methodology. It discusses the research paradigm and its justification. The chapter examines the research methods, its justification plus the research procedures and, in addition, it presents data analysis for the study. Lastly, the chapter examines the issues of validity, reliability, generalisability and ethics. The study aims to contribute to understanding the international business environment in Uganda by examining how expatriate business people respond to informal business practices that may contradict business practices they are used to from their home countries. The study aims to contribute to institutional theory to explain expatriate experiences and their responses.

3.1 Selection of a research paradigm A research paradigm is a basic set of beliefs that guide action, dealing with principles, ultimates or the researcher’s worldviews (Denzin & Lincoln, 2000). Paradigms are philosophies and values that underpin and influence people’s actions, behaviour and strategies for maintaining or improving practices (Zuber-Skerritt, O, 2001). Patton (1975) discusses a paradigm as a scientific method that leads to scientific knowledge. He contends that paradigms are normative, that they inform the practitioner what to do without the necessity of long existential or epistemological consideration. Four common paradigms that are widely discussed in business research are positivism, transformative, pragmatism and constructivism (Lewis, 2015). These are similarly presented by Creswell (2013) as positivism, advocacy/participatory, pragmatism and constructivism. Creswell (2013) discusses positivism as a deterministic paradigm that causes or determines effects or outcomes. The problems studied by positivists reflect a need to identify and assess causes that influence outcomes. Positivism is reductionist in the sense that the intent is to reduce the ideas into small, discrete sets of data that can test variables and confirm or negate hypotheses and research questions (Creswell, 2013). This research is exploratory in nature as it aims to develop an understanding of a phenomenon through subjective perceptions by

expatriates; and is not seeking to test theories or hypothesis. A positivist approach is not suitable for this study, as it does not seek to test theory but rather build theory. A transformative paradigm, which is also referred to as participatory (advocacy) research enlists writings on Marxist, feminists, racial/ethnic minorities and persons with disabilities (Neuman, 2002). This philosophy propounds an action agenda and a transformative philosophy that holds that research inquiry should be intertwined with an objective to contribute to social and political change to confront oppression (Mertens, 2010). The issues of focus include empowerment, inequality, oppression, domination, suppression and alienation. Transformative research thus provides a voice for participants and advances an agenda for change in order to improve participants’ lives, with the researcher often actively involved in solution development. While research into expatriates’ perceptions of corrupt business practices in a magendo context may reveal sensitive areas demanding change; the purpose of this study was to obtain as much information about the expatriates’ experience around corrupt business practices which demanded that the researcher remained neutral to create trust in order to access this sensitive information. Adopting a transformative paradigm would not be suitable for this sensitive study. Researchers who opt to use all research approaches and methods available to understand the research problem, adopt a pragmatic paradigm. This is a philosophy underpinning the use of mixed research methods (Patton, 1999). Patton (1999) argues that pragmatism is not committed to any one system of philosophy and reality. In addition, researchers are free to choose the methods, techniques and procedures of research that best suit their needs and purposes. Lastly, he notes that researchers look at what or how to conduct research, based on the intended consequences (or problems to be solved) and where they want to go with it. Mixed methods researchers therefore first need to establish and justify why they need both quantitative and qualitative data to answer their research questions (Patton, 1999). This pragmatist research paradigm is not suited for this study because the purpose of this study is not to collect quantitative data in order to quantify what magendo is but, rather, the purpose is to gain a deeper understanding of how expatriates respond to informal business practices in the host country. A constructivist paradigm seeks to understand the world in which people live and work (Neuman, 2020). Neuman (2020) argues that individuals develop subjective meanings of their experiences and that such meanings are directed towards certain objects or things. The goal of constructivist research is to rely, as much as possible, on the participant’s views of the situation being studied. The research question in this study is intentionally broad and general so that the

participants may construct the meaning of the Ugandan business environment, based on their personal experiences. Further the constructivist paradigm allows for the examination of processes; i.e. the responses and interactions that expatriates exhibit with regards to the host country informal business practices. Similarly, the historical and cultural contexts each participant comes from may be better appreciated by adopting a constructivist philosophy. Rather than starting with a theory (as is the case with the positivists), this research aims to inductively develop insights into the research question through sourcing knowledge (information) through interviews with the participants (Neuman, 2020). The magendo phenomenon, as Newman (2020) points out, lacks empirical research and its impact on business has received little attention in terms of research and analysis. Therefore, a constructivist paradigm is adopted for this study.

3.2 Selection of research methods Richie et al. (2013) discuss three research methods that are generally used to conduct research; quantitative, qualitative, and a mix of the two. They highlight that quantitative research investigates the social world with emphases on hypothesis testing, causal explanation, generalisation and prediction. They note that quantitative research is deductive whereby the study reaches a proposition or hypotheses theoretically through a logically derived process that uses evidence in support of a conclusion. Qualitative research, on the other hand, focuses on developing a deeper understanding, it relies on rich description and through this, is able to establish emergent concepts and develop theories. Qualitative research is inductive, involving the use of evidence as the basis for a conclusion. Qualitative research also focuses on patterns and associations derived from observing the world (Ritchie et al., 2013). Previous literature highlights circumstances where quantitative and qualitative approaches can be combined in social research, that is, if there is justified value in bringing the two together, to form a mixed approach. Opponents of this combination, such as Brannen (2017), argue that the two approaches are so different in their philosophical and methodological origins that they cannot be effectively blended (Brannen, 2017). On the other hand, its protagonists argue that while they recognise the different ontological (meaning or what is known about the world) and epistemological (way of knowing about the social world) bases of the two methods, they suggest that there can be value in bringing them together if the two approaches can yield different elements of intelligence about the study (DePoy & Gitlin, 2015). DePoy and Gitlin (2015) contend that the two approaches provide distinctive evidence, and argue that, when used together, they offer a powerful source of information and illuminate policy and practice (DePoy

& Gitlin, 2015). Muijs (2010) clarifies that the specificity of quantitative as opposed to qualitative research lies in collecting numerical data; and analysis is done using mathematically based methods. Qualitative data on the other hand are usually not numerical and are not analysed using statistics.

Quantitative methods Quantitative research is described by Denzin and Lincoln (2000) as positivism or the scientific method of doing research. The key idea in their discussion underlines the importance of objectivity and evidence in search for truth and underscores the primacy of statistical inquiry in social research. Denzin and Lincoln (2000) underscore a deductive approach in which hypotheses is derived from theory and then tested empirically. Muijs (2010) suggests that quantitative research assists in explaining phenomena by collecting numerical data that are analysed using mathematically based methods such as statistics. He explains that by developing reliable measurement instruments, a quantitative researcher can objectively understand a phenomenon. He contends therefore that positivism or the scientific thinking is used to test theories about suggested laws and either reject or accept them.

Qualitative methods Qualitative research is defined either theoretically or practically, or both (Denzin & Lincoln, 2000). Denzin and Lincoln (2000) define qualitative research as a situated activity that locates the observer in the real world. They observe that these practices turn into a series of representations that may include field notes, interviews, conversations, photographs, recordings and memos. Qualitative researchers study things in their own natural settings, attempting to make sense of or to interpret phenomena in terms of the meanings people bring to them (Denzin & Lincoln, 2000). Patton (1999) defines qualitative research by focusing on key aspects of methodology of qualitative research. Elsewhere, qualitative research has been defined basing on data collection methods, such as observational methods, in-depth interviewing and narratives (Ritchie et al., 2013). Qualitative research is theoretically driven and is as much about social practices as it is about experiences (Silverman, 2016). The purpose of this study is not to test theory in order to affirm or falsify it. Rather the study aims to generate theory to explain the experience of expatriates working in Uganda. Therefore, the study will adopt qualitative and not quantitative methods.

An assumption of qualitative research is that although the physical world exists apart from perception, reality itself is social, manifested in the subjective use of language by respondents; and therefore research is an investigation of the process by which reality is interpreted by individuals (Creswell, 2013). As qualitative research is inductive, data is collected for the purpose of interpretation. A qualitative researcher establishes new meanings emerging from the data through an inductive process based on the analysis of data by coding, pattern- recognition and interpretation, which in turn can be used for theory-development (Creswell, 2013).

3.2.1 Justification for adopting qualitative methods By adopting a qualitative approach for this study, the researcher is able to build a better understanding of magendo and its impacts. Specifically, qualitative methods allow proper examination of magendo based on the perceptions of the interviewees. The researcher will through a qualitative data-gathering approach be able to obtain the respondents’ subjective views and perceptions about magendo and the institutional environment of Uganda. Through improved understanding of the subjective experience of expatriates in Uganda, the study will be able to contribute important knowledge about how expatriate business people respond to business contradictions and tensions between the institutional contexts they know from their home countries and the host country Uganda. Qualitative research methods were considered best suited for this research as this aim to provide and in-depth and interpreted understanding of the social world, people’s perspectives and histories. Qualitative research focuses on depth rather than quantity and depends on a research design that allows for a naturalistic inquiry that involves in-depth interview of a small sample rather than an experimental or manipulated setting. The nature of data generation is flexible and sensitive to the social context in which data are produced (Ricthie et al., 2013). The choice of qualitative methods offers an opportunity to address the research question that requires explanation and understanding of a social phenomenon, magendo, and its context. Qualitative methods enable the generation of data and information through in-depth face-to- face interviews with expatriates working in an environment influenced by magendo. During interviews, the researcher obtains interview data that include expressions of the expatriates’ lived experiences in relation to informal business practices, how they make sense of these and how they respond to their experience. The researcher through analysis and pattern-recognition makes sense of data collected and develop an understanding of how informal business practices

influences the business environment as well as how they influence expatriates’ business activities.

3.3 Selection of a research design and data collection method A number of research designs are reviewed with the aim of selecting a suitable one for this study. The purpose of the review is to identify which design would be most suitable for this study. The designs explored were narrative, ethnographies, case studies, grounded theory and phenomenology (Creswell, 2013). A narrative design involves studying the lives of individuals through the stories they tell about their lives, in a chronological narrative (Creswell, 2013). As this research is not about individual’s chronological stories, but rather their experience and perceptions of a specific phenomenon, the narrative design was not considered suitable for this study. An ethnographic design of inquiry focuses on anthropology and sociology whereby a researcher studies the shared patterns of behaviours, language and actions of a cultural group in a natural setting over a prolonged period, and data collection involves observations and interviews (Ritchie et al., 2013). The expatriates interviewed for the study are of diverse backgrounds and are not homogeneous; hence, their behaviour may not be studied as a group behaviour. In addition, the short timeframe for this research may not allow such a design. A case study design of inquiry focuses on evaluation whereby the researcher performs an in-depth analysis of a case, a program, event, organisation, activity, process or of individuals (Caniato, 2012). Cases are bounded by time and activity, and the researcher collects a variety of data from different stakeholder in the case over a period of time (Caniato, Caridi, Crippa, & Moretto, 2012). This research is not studying a specific event or program and is not seeking data from a variety of sources about the same event; the case study is therefore not deemed suitable for this study. Grounded theory is a research method that seeks to develop theory in an iterative and continuous process as data is collected and analysed (Bryman, 2015 and Corbin, Strauss, & Strauss, 2014). Glaser (2017) argues that this approach aims at linking theory and data more thoroughly. The purpose is to undertake rigorous research that enables the systematic collection, coding and analysis of data. Corbin et al. (2014), on the other hand, contends that a theory emerging from and grounded in this kind of systematic discovery process is closely linked to the data and is destined to last, despite its modification and reformulation (Corbin et al., 2014). The purpose of this research is not to develop new theory from an iterative process of data collection, but rather to use a conceptual framework based in institutional theory to

examine a specific phenomenon. Through this, the study does not seek to develop new theory but rather contribute to existing institutional theory, grounded theory design was therefore deemed inappropriate for this research. A phenomenological research design is one in which the researcher describes the lived experiences of individuals in relation to a phenomenon as described by the participants (Denzin, 2000). This inquiry is an approach to social science research that involves interacting with participants in their own languages and on their own terms. It enables the researcher to understand deep human behaviour or human action based on the informant’s own frame of reference (Denzin & Lincoln, 2000). It also means that, through this research design, social forces and cultural components influencing behaviour can be identified and described (Groenewald, 2004). As the purpose of this research is to draw on the lived experiences of expatriate business people to develop an understanding of how they perceive and deal with corrupt business practices, a phenomenological research design is to be adopted.

3.3.1 Selection of a qualitative data collection method This sub-section justifies what type and how qualitative data will be collected. Tashakkori and Teddlie (2010) describes six data collection methods used in qualitative research; questionnaires, interviews, focus groups, tests, observation and secondary data (this is information from personal and official documents, physical data and archived research data). Each of these methods serves a particular purpose, for example, a qualitative questionnaire can be unstructured, exploratory or open ended (Tashakkori & Teddlie, 2010). Miles and Huberman (1994) argue that knowing what the researcher wants to find out leads to the question of how that information will be obtained. How much of instrumentation must be designed prior to going to the field and how much structure it should have depends on the type of inquiry (Miles & Huberman, 1994). For Glaser et al. (2017) the need to make data collection rigorous in qualitative research is more significant, as it is equally important for an interview to be conducted within a strong, but flexible plan (Sunstein & Chiseri-Strater, 2011). Based on the reviewed literature, the researcher will use personal in-depth interviews using open-ended questions for data collection for two reasons: (a) Interviews will allow the researcher to respond flexibly to expatriates’ discussions with follow-up questions, in the form of probes; (b) Interviews elicit narratives that illustrate emerging concepts and reveal tacit perceptions of the interviewees.

The interviews with expatriates will involve researching people, listening, asking for clarification and delving deeper into discussions or explanations. In-depth interviewing that is adopted for the study is described by Marshall (2014) as a procedure that embodies individual lived experience as the primary method for gathering data (Marshall, 2014). Face-to-face interaction with the respondents, will therefore bring the researcher into closer contact with those respondents and thus make him part of the artefacts of the study, along with the transcripts of the interviews (Sunstein & Chiseri-Strater, 2011).

3.4 Research procedures This section addresses describes data collection criteria and processes to be implemented for the study.

3.4.1 Sample selection Ritchie (2013) describes how probability sampling is generally used in quantitative research to conduct surveys, whereby the sample is determined by the need to produce a sample that is statistically representative of the sampled population. Non-probability sampling, on the other hand, refers to strategies used in qualitative research, and the intention here is not to produce a sample which is statistically representative, but rather enough samples in order to reveal a coherent pattern as grounding for theory development (theoretical sampling) or purposefully select samples that provide enough diversity to understand a phenomenon from different angles -purposive sampling (Ritchie, 2013). For this study, purposive sampling will ensure that all participants are expatriates; yet they will also be purposefully selected in order to ensure diversity with regards to their country of origin, their industry, size of business, gender, and time spent in host country. Through this, the study will emphasise heterogeneous samples (Robson & McCartan, 2016) yet study the same phenomena (Patton, 2003). The study will adopt purposive sampling that is criterion-based. Its key feature, according to Babour (2001), is that sample criteria are prescribed and, in addition, the sample units are selected on the basis of known characteristics that may be social or demographic factors such as experience or behaviour relevant to the research topic. The participants selected for this study will be expatriates who are assumed to have the information that is required for the research. This research, therefore, will adopt purposive sampling because, as Barbour (2001) notes, it gives a degree of control, and it allows a comparison between the views and

experiences of participants, which underscores the differences between, for example, expatriate business operators from different cultural backgrounds (Barbour, 2001).

3.4.2 Sample size and selection criteria Expatriate business people operating in Uganda are the target population for the research. As this will be a single study based on individual interviews, the number of participants recommended is 50 or less (Bannan-Ritland, 2003). The literature also suggests that, where data are likely to represent plurality, the number of participants that is considered to be sufficient for qualitative research is between 15 and 60 (Saunders & Townsend, 2016). Based on these observations and in order to ensure the inclusion and diversity of the expatriate business people working in Uganda, thirty participants will be selected for interviewing. The selection of participants will be guided by the following criteria: (a) Business ownership: Based on the literature review, foreign privately operated businesses are more likely to experience the undue effects of informal institutions such as magendo and associate illegalities such as corruption. Therefore, participants for this study will be selected from privately owned and run businesses, as opposed to government-based businesses.

(b) Home country: The country of origin of the expatriate will also be considered, based on the assumption that foreigners from different institutional backgrounds perceive informal institutions differently and may respond to them differently. The country-of- origin factor also allows for the inclusiveness and diversity of as many nationalities as possible.

(c) Business type: It is assumed that different types of businesses (i.e. service, export or production) may yield different trends, behaviour and patterns. Attention will therefore be paid to business type/diversity.

(d) Business size: The size of the business, by local Ugandan standards, will be another factor that will be considered. The argument is that a business that is relatively small in terms of scope may be more prone to the influence of a local informal institution. In comparison, a bigger organisation, with strong rules, guidelines, international outreach and capital is better shielded from the influences of local informal institutions.

(e) Length of stay in the country: How long an expatriate has stayed in the country will also be considered an important factor pertaining to appreciation or failure to appreciate

ways of doing things in a local manner. It is noted in the study that one’s approach to business conduct is partly a reflection of one’s length of stay in this environment.

3.4.3. Accessing expatriate interviewees In order to find expatriates that could be invited to take part in this study, names of expatriate business owners were extracted from publicly available information from the Ugandan Investment Authority (UIA) website –www.ugandainvest.com. From the list of registered expatriate business people working in Uganda, 30 were purposively selected for subsequent interviews. Each of the selected participants will be sent a copy of the Information Statement by the researcher (see Appendix A). The Information Statement provides a summary of the projects and its intended outcomes and invites prospective participants to contact the researcher by e-mail or telephone if they are willing to participate in the research. An arrangement will be made to meet those who will respond positively for a face-to-face interview, either at their workplace or in the office of the researcher.

3.4.4 Face-to-face interviewing The face-to-face interviews with expatriate business people aim to generate an understanding of how expatriate business people perceive and responded to contradictions under the influence of the informal institution, magendo. The aim of these interviews is, therefore, to reveal new knowledge (Charmaz, 2000). The interviews for this study will be conducted in a conversational style to create a comfortable environment for the expatriate business people who will be discussing their experiences. To ensure relaxed interaction, technical and highly academic language will be avoided, and the interviewer, as Sunstein and Chiseri-Strater (2011) suggest will allow and encourage respondents to frame responses in their own way. The intention is to encourage respondents to formulate their own concepts and responses through recounting their lived experiences. This approach should allow the researcher to source rich and deep data from questions that will be grounded and studied in this particular empirical setting. The aim is to reveal new knowledge about the institution of magendo (Charmaz & Belgrave, 2012). During the interviews, the researcher will adopt an interested but detached persona as Tashakkori and Teddlie (2010) advises that this mode of data collection require the interviewer to remain non- judgemental to the responses given, but that the researcher can probe the respondent for clarity or for more detailed information when needed.

3.4.5 Interview questions Semi-structured in-depth qualitative interview questions are used to collect data for the study. The purpose of the questions is to obtain retrospective and real-time accounts of expatriates working under a different institutional framework than the one from their countries of origin (Gioia et al., 2013). The interview questions and prompts will examine the respondents’ perceptions of institutional contradictions between Uganda’s business environment and that of their home countries. The interview questions for this study will be open ended, to allow the participants to respond subjectively. Bryman (2008) recommends this type of questions because it allows respondents to answer in their own terms and broad uncontemplated replies. He also notes that other advantages of in-depth interviewing include tapping levels of knowledge and understanding of respondents when they suggest certain answers or ideas. Lastly, such questions explore new areas or ones of which a researcher has limited knowledge (Bryman, 2008, 2015). It is believed, therefore, that open-ended questions will motivate respondents to explore their experiences and thoughts and to narrate their perspectives in a more revealing manner. A list of guiding questions (see appendix B) was developed to ensure that similar topics would be covered in each interview. The guiding questions also enable a depth of discussion on each topic through prompting follow-up questions. The introductory questions are general, focusing on: (i) respondent’s business experience in Uganda and (ii), comparing a respondent’s home country context to that of Uganda. Questions three to five compare the regulatory environments of the host country Uganda to the countries of origin of the expatriates. Questions six and seven underline normative issues in Uganda, while question eight addresses culture cognitive issues in general. Question nine focuses on a local institution, magendo, and seeks to understand the manner of coping employed by expatriates to navigate the contradictions they face in this business environment. The last guiding question is a general one, aimed at extracting additional information that may have been missed in the main narrative. All questions can be interjected with prompts to further the discussions, seeking clarity or widening the scope of the narrative. Being interpretive research, the progression of the interviews will be widened through prompts as the researcher follows informants’ leads in the investigation (Gioia et al., 2013).This should allow the interviewer to change the direction of the interview through probing by asking the respondent to expand an answer given or by asking follow-up questions (Bryman, 2015). These questions, plus prompts, will examine the respondents’ perceptions of

institutional contradictions between Uganda’s business environment and that of their home countries. The responses by the expatriates will underline the contradictions, and how they will be dealt with, in Uganda.

3.4.6 Questioning techniques An essential element of interviews is the verbal interaction between the interviewer and the interviewee (Berry, 1999). Asking questions will therefore be central to the interviews for this study, and the researcher will be guided by Berry’s (1999) questioning techniques for asking questions. These techniques include: (a) Asking single questions. By asking one thing at a time, a researcher eliminates an unnecessary burden of interpretation by the interviewee. (b) Asking clear questions. The questions should be easy to understand, short and devoid of jargon. (c) Asking truly open-ended questions. Such questions do not pre-determine answers and allow room for respondents to respond in their own terms. (d) Asking experience/behaviour questions before opinion/feeling questions. This establishes context for the respondents. (e) Sequencing questions. This should occur by way of funnelling – that is asking questions from general to specific, from broad to narrow. (f) Raising probing and follow-up questions. The purpose of probing is to deepen the response to a question in order to increase the richness of the data. (g) Raising interpreting questions. A researcher should clarify and extend the meanings of the interviewee’s statements, to avoid misinterpretation. (h) Avoiding sensitive questions. These may irritate respondents, resulting in possible interruptions of the interview. (i) Establishing a free reigning style, but still maintaining control of the interview. The researcher should allow a free flow of ideas from a respondent, but should have a checklist as a guide for the conversation. (j) Establishing rapport. Rapport is established by respecting respondent’s opinions, supporting their feelings or recognising their responses.

In addition to the above guidelines, attentive listening, showing interest and respect for what the respondent says will be very important (Berry, 1999). These suggestions regarding best practices for interviewing and the nature of questions will be practiced by the researcher. This

83 will allow the interviews to flow smoothly, resulting in rich data and information that will be collected for the research.

3.4.7 Interview process The process of interviewing will follow six procedures suggested by Robson (2016) which begin with arrival at the venue and ends with the post interview activities. Arrival entails getting to the participant’s address that is followed by introducing the research topic. To set the tone, the interview should begin with a neutral question. During the interview, the interviewer guides the participant through the key themes that are explored with a series of follow up questions and probes. A few minutes before the end of the interview, the researcher signals the approach to conclude the exercise. After the interview, it is important to thank the participant and gradually move him/her out of the interview by informing him/her how his/her contribution will help the research. When conducting the interviews, each of these stages will be approached systematically. For example, the researcher will arrive five minutes ahead of the start time at the agreed venues. At first, the researcher will present a consent form (Appendix C) to the respondent to sign, thereby accepting to participate in the interview. To kick-start the interview, the research area will be explained to interviewee before the interview begins. As the interview progresses, the researcher will observe the body language of the respondent to appreciate the seriousness and emphasis of an issue, among other things. In addition, the researcher will take note of how a respondent approaches and present his/her discussion. These observations will be noted in a notebook for future reference. Care will also be taken to end the interviews within the indicated period of one hour by using rejoinders/statements such as, …as we are about to end this interview;….now that we are coming to the end of….., that will signal the end of the interviewing exercise. At the end of each interview and after leaving the meeting, the researcher will always spend some time, when at a distance from the meeting, to record key observations and highlights on a digital voice recorder.

3.5 Data analysis There are various steps that can be followed in qualitative research, and a number of qualitative analysis techniques support these processes. For this study, computer software tools will be used to perform analytical support based on analytical issues defined by the researcher (Leech & Onwuegbuzie, 2007). This includes the use of the computer software package NVivo 11, which will assist in organising data (Tesch, 2013).

Data will be subjected to constant comparison in order to identify core issues underlying the business contradictions of expatriates and tensions in this environment. To support the process of analysis, the researcher will use a computer program NVIVO 11, to organise the large volumes of data from the interviews, to generate nodes and form patterns; thus improving efficiency. This will also ease navigation through data, thereby saving on the time that would have been spent on the analysis exercise (Ritchie et al., 2013).

Coding Coding will be undertaken as an important step of this qualitative research. It entails reviewing transcripts and/or field notes and giving labels to component parts that seem to be of potential theoretical significance or that appear to be particularly salient within the social worlds of those being studied (Bryman, 2015). He notes that coding is tentative, such that it is in a constant state of potential revision and fluidity. The data are treated as potential indicators of concepts, and the indicators are constantly compared and named as indicators of a class of events or behavioural actions (Bryman, 2015). Elsewhere, Charmaz (2012) observes that codes serve as shorthand devices to label, separate, compile and organise data. Coding is thus an important first step in in qualitative data analysis (Charmaz & Belgrave, 2012), and it can manifest as open coding, axial coding or selective coding (Corbin et al., 2014).

Open coding Bryman (2015) notes that open coding is a process of breaking down, examining, comparing and categorising data. This process of coding yields concepts that are later grouped into categories. Open coding uses indicators such as words, phrases and statements from the data, which form concepts. Indicators are therefore constantly compared with one another to identify new insights until saturation is reached (Bryman, 2015). For this study, the researcher will look for terms used by expatriates: terms that could be thoroughly or minutely analysed (Strauss, 1990). Data management for this study will begin during interviews that will be digitally recorded with an ICD-PX 470 Sony recorder. Interviewees will be transcribed verbatim, and the process of coding will begin with the use of NVivo 11 software that will be used to organise the large volumes of information. The software will ease navigation through the data. It will also enable quick retrieval, and the ordering of data into select concepts that will later be placed into selected categories. The concepts will be the frequently made statements about an issue, or words severally used by the respondents during the discussions.

Axial coding This is a set of procedures whereby data are put back together in new ways after open coding, by making connections between categories. This is done by linking codes to context, to consequences, to patterns of interaction and to causes (Bryman, 2015). Axial coding is therefore a dense conceptualisation that leads to the identification of core categories in the analysis (Strauss, 1990). Through axial coding, the research will generate nodes that will form concepts that will be grouped into categories. These categories will be organised and presented in thematic tables. These thematic tables highlight patterns that occur within the data through association and linkages between phenomena, and for this study, they will represent the higher level of abstraction for this study (Goulding, 2002).

3.6 Validity Validity is concerned with whether research is believable and true, and whether it is evaluating what it is supposed to be or purports to evaluate (Zohrabi, 2013). Validity is an essential criterion for evaluating the quality and acceptability of research. Zohrabi (2013) further states that, since researchers use different instruments to collect data, the quality of these instruments should be validated, because the conclusions drawn are based on the information that is obtained using these instruments (Zohrabi, 2013). The following methods have been suggested to boost the internal validity of research: member checks: triangulation, long-term observation, peer examination, collaborative modes of research and declaring the researcher’s bias (Csikszentmihalyi & Larson, 2014).

Researcher’s bias To ensure validity, the research bias is particularly underlined for this study. It is noted that the researcher is a Ugandan from the country where the study will be conducted. Notwithstanding the fact that the researcher is not an expatriate in his own country, he has inside knowledge of the research topic and he may have personal opinions that may be reflected in the research process and narrative. Nevertheless, presenting the role of the researcher highlights his/her own biases to enable the taking of steps to mitigate them. In this regard, Corbin et al. (2014) notes that while it is not possible to void one’s mind, the researcher should not add his experience to the data; his experience may, however, be used to raise other possibilities of meaning, or suggest something new to think about. To mitigate such bias as much as possible, the following three steps will be undertaken during the research process and interviews.

a) During interviews, the questioning techniques will involve asking open-ended questions that will not pre-determine answers. This will allow room for the respondent to respond in their own terms. b) Only the voiced opinion of the respondents will be considered for the study. They will be transcribed verbatim and will be presented as individual opinions of the respondents and not the researcher. c) During the analysis stage, data will be treated as indicators of concepts and the transcribed codes will serve as devices to label, compile and to organise data. For this study, the researcher will act as an instrument of the research. His role will be that of observing, listening, recording and interpreting what the expatriates will be voicing as their perceptions on the issues being discussed.

3.6.1 Reliability Zohrabi (2013) observes that reliability deals with consistency, dependability and replicability (Zohrabi, 2013). He further notes that, in qualitative approaches, achieving identical results are fairly demanding and difficult, as the data exists in narrative form and is subjective. Instead, he suggests thinking about the dependability and consistency of the data. For this study, therefore, reliability will be premised on representation, understanding and interpretation. The first element of reliability will be representation. Representation refers to the interviewees who will be purposively selected for the study. Thirty respondents will be selected from among expatriate business people working in Uganda. The purposeful sampling of expatriates will ensure the inclusion of relevant constituencies and diversity within the boundaries of the defined population. The demographic breakdown that will be generated will portray a wide array of what constitutes expatriate business people working in this environment, as this study will consider them representative of the study population. Among other things, the expatriates selected will also belong to different age groups. In addition, these expatriates will be from different backgrounds in terms of countries and continents. The sizes of their business shall also vary from small, medium to big by Uganda standards. Effort will also be made to ensure gender parity. The second element of reliability for this study will be vested in the belief that respondents, being expatriates and business people working in Uganda at the time of the investigation, will have a fairly good understanding of the subject matter pertaining to the area of inquiry. Their choice will therefore be based on a belief in their ability to share with the researcher an

outsider’s in-depth and interpreted understanding of the Ugandan business environment, their experiences and perceptions. The third element for reliability of the research will be interpretation. Interpretation underlines internal evidence for the various explanatory accounts for this study. To enhance reliability for the study, the researcher will observe and analyse patterns that can explain behaviour of certain categories of expatriates working in Uganda. Some of these patterns may be a result or variation in the number of years they may have stayed and worked in Uganda. In addition, the internal reliability for the study will depend on accurate recording, transcription and truthfulness of responses during interviews (Miller, 1997). With the use of the NVivo 11 software, all interviews will be transcribed and the information will be coded and organised in a manner that will allow expatriates to present verbatim individual or related statements. By presenting the expatriates’ statements verbatim, the researcher will aim at distancing himself from the emerging concepts and themes that will be the basis of further discussion. For this research, all claims will be supported by evidence by way of presenting direct quotations or by referencing.

3.7 Generalisability Generalisability refers to whether the findings from a study that are based on a sample can be said to be of relevance beyond the sample and context of the research itself (Ritchie et al., 2013). Schwandt (1997) notes that studies can be generalised or replicated in two ways, empirical generalisability, or analytical generalisability; the former means that findings can apply, and may be replicated in other situations, whereas the latter is situation specific (Schwandt, 1997). This being a qualitative study, as is posited by Yin (2003), generalisability cannot be empirical but rather can be analytical through the theory that is developed based on the analysis and patterns generated, based on participants’ perceptions of a phenomenon. Ensuring that participants are selected from various nations and cultural backgrounds, plus other variables that emerge during the course of conducting the study will underline issues of generalisability (Yin, 2015).

3.8 Ethical considerations Because the research will involve contact with humans, it will require approval from the University Of Newcastle Human Research Ethics Committee (HREC) to ensure that the research is ethically acceptable. In accordance with the ethics guidelines, informed written consent will be sought from all participants once they have read the Participation Information

Sheet covering what the research will be about and their right to participate or not. The ethical consideration of a qualitative research ultimately depends on voluntarism and privacy; that is free will and respect for confidentiality. In order to ensure privacy, pseudo names will be used for each participant to protect the identities of the respondents (Marshall, 1979). The pseudonyms of the respondents for this study prefixed with a capital letter “R” followed by a numeral.

3.9 Conclusion This chapter has discussed and justified the selection of the research paradigm and research inquiry. It has discussed the paradigm, methodology, research procedures and analysis of the data. It has also highlighted the issues of validity, reliability and ethical considerations for the research. As the study will involve contact with humans, it will be mandatory to fulfil ethical requirements, as is highlighted in this chapter. The next chapter presents the processes involved in the analysis of data and the formulation of the findings for the study.

CHAPTER 4

DATA ANALYSIS AND FINDINGS

Magendo is not limited to Africa. In terms of width, a foreigner may come face to face with it. Of course, you can’t do business without facing it (R2: i.e. Respondent 2).

In many ways, needless bureaucracy breeds corruption, it encourages it (R23).

Wherever I was aware that things were going too slow, I usually involved a lawyer. I did not ask him what means he used (R7).

For me I know where to go, which person to talk to, and when, if I need something done (R6).

4.1 Introduction This chapter focuses on the stages and processes involved in the analysis of data collected for this research project. The logic of analysis used for this research is in line with the suggestion by Ritchie et al. (2013) for rigorous analysis, that is the analytical ideas and concepts cited are rooted within the data, and not superimposed by the researcher. In addition, as part of the process, data were reduced from their raw form of verbatim texts (i.e. words/phrases) in order to make sense of the evidence. Data were therefore organised and sorted under subject matter (i.e. concepts) which were investigated for similarities and or differences (Ritchie et al., 2013). This qualitative study focuses on inquiring into the social world of the expatriate business people working in Uganda. This was done by interviewing expatriate business people in order to get firsthand information, plus their perspectives on how they navigated paradoxes created by the informal institution magendo in the Ugandan business environment. This approach enabled the researcher to explore the perceptions of expatriate business people working in this country (Berg, 2012). Through interviewing 25 expatriates, the researcher was able to learn about their social and material circumstances. For example, many were living and working successfully in Uganda, as exemplified by their long stay in the country. The researcher also learnt about their experiences, that is, over time they had socialised and learnt how to do things in certain ways that were tailored to the Ugandan situation. Many respondents willingly voiced their varied perspectives on pertinent issues – for example, some thought corruption was good while others thought it was bad. In addition, during interactions with them, a few shared their

histories with the researcher – for example, some intimated that they had worked in more than one country before going to Uganda. During the subsequent transcription exercise and process, the researcher looked for emerging concepts for possible theory building. In essence, the analytical approach of this study was premised on its primary aim and focus, theory building (Gosby, 2000; Strauss, 1990) and interpretation (Barbour & Schostak, 2005). As discussed previously in Chapter 3, a phenomenological approach was adopted for this study whereby five considerations informed the choice of this approach. The first consideration dwelt on the status of the collected data. For this study, data was treated as referring to and representing phenomena, in terms of the perceptions and experiences of respondents (Ritchie et al., 2013). The second consideration addressed how data was to be reduced. This meant that the researcher had to find a way of handling this data – data reduction. As the analytical approach involved the generation of analytical categories and identification of relationships between them, data reduction was based on categorisation (Ritchie et al., 2013). The third consideration belies the kind of concepts generated. Concepts provide starting points for building analysis and give the user a general sense of reference and guidance in approaching empirical instances (Bowen, 2006). Concepts may, therefore, provide prescriptions of what to see, or may suggest directions along which to look. The fourth consideration focused on the way concepts were applied to the data. This study adopted a cross-sectional code and retrieval method (Mason, 2002) which was applied via the computer software NVivo 11 to the 25 transcriptions, and was used as a means of searching for and retrieving chunks of labelled data. This enabled a systematic overview and analysis of the details in the totality of data. The fifth and last consideration was the way data were accessed and displayed (Miles & Huberman, 1994). This chapter organises and displays data in the diagrammatic Tables 4.5 – 4.22 in order to establish connections and interrelationships that may not be easy to see in ordinary text. Tables 4.1 and 4.2 present the attributes of the interviewed expatriate business people working in Uganda. This analysis chapter covers five sections. Section 4.1 is the general introduction to the chapter. Section 4.2 details the manner in which data for the study was collected. Section 4.3 explains briefly the interviewing methods for the study. Section 4.4 presents data analysis, culminating in a revised conceptual framework. Section 4.5 explains the findings of the study, and the chapter closes with conclusions from the chapter.

4.2 Data collection The data was collected through interviews with 25 respondents between 29th April 2018 and 29th June 2018. Their names have been coded with a capital letter “R” prefixing the sequential number of each interviewee (e.g. R1, R2, etc.) in order to protect their identities. Similarly, an effort has been made to disguise any possible leads or detailed particulars of any respondent, as this may compromise his/her identity. Originally, it was the intention of the researcher to interview only one respondent on any one day to optimise efficiency and effectively manage logistical necessities such as transport. This was the case for R1, R2, R3, R7, R8, R13, R14, R15, R16, R19, R22 and R25. On a few occasions, however, two or even three respondents were interviewed on a given day to accommodate the tight schedules of those respondents who had agreed to be interviewed on a particular day and time. All of the interviews, except four, were conducted in the quiet boardrooms or offices of the respondents. Two interviews, with R6 and R11, were conducted in open but acceptable environments, which did not interfere with the flow of the interview or the recording. Two interviews, with R17 and R25, were conducted in the researcher’s quiet office located in a secure part of Kampala city. The process of data collection covered six major stages: arrival, introducing the research area, beginning the interview, the body of the interview, ending the interview and after the interview (Ritchie et al., 2013). Each of these stages was approached systematically, for example, the researcher arrived five minutes ahead of time at the agreed venues. To kick-start the interview, the interviewee was taken through the research area and then moved on quickly to the main agenda of interviewing. The interviewer always took note of the body language of the respondents and how they approached and presented their discussions. These observations were noted in a notebook of the researcher for future reference. For example, some interviewees were noted to enjoy uninterrupted flowing conversations that led to exceeding the agreed time limit. Care was taken, however, to end the interviews within the indicated period of one hour by using rejoinders/statements such as …as we are about to end this interview,… now that we are coming to the end of…, which signalled winding up. At the end of each interview, and after leaving the meeting, the researcher always spent some time, when at a distance from the venue of the interview, to record key observations and highlights on the digital voice recorder. The use of good recording equipment (an ICD-PX 470 Sony recorder) produced an optimal digital recording of all interviews, except two (R6 and R12) who declined to be audio recorded, and whose responses were written in a notebook. The details relating to the data collection exercise are discussed in Chapter 3, Section 3.4.

4.3 Interviews As discussed in Chapter 3, Semi structured in-depth qualitative questions were used to collect data for this research and prompts to widen discussions were based on the responses of the interviewees. In an instance where the researcher may have had differing views, for example on whether Ugandans were generally conservative people, he listened to the value judgements, plus arguments raised by the respondent. Only the voiced opinion of the respondent were considered for the study. This approach enabled the sourcing of rich data grounded in the empirical reality of the interviewees, as they were able, through their own discussions, to reveal knowledge, which is important for theory building (Charmaz, 2000). Interviews with various expatriates at agreed venues were, therefore, the major source of data for this research.

4.4 Data analysis The data analysis sub-section opens with description of the collected data, thereby defining the particulars of the participants plus their attributes. The process through which concepts were identified is explained and, finally, the sub-section presents a detailed analysis of each identified concept.

4.4.1 Description of qualitative data collected As discussed in Chapter 3, the participants were purposively selected to ensure the inclusion and diversity of the expatriate business people working in Uganda. The criteria for inclusion were based on obtaining a diverse sample with regards to the cultural and institutional backgrounds of the participants, as well as the type and size of the business owned or operated. In addition, it was believed that any selected participant had the ability to share with the researcher an outsider’s in-depth and interpreted understanding of the Ugandan business environment and his/her experiences and perceptions. To recruit participants, the researcher accessed an updated publicly available information database from the Uganda Investment Authority (UIA) website. The website provides the names of businesses, the names of business people, their nationalities and the local contact details of each business owner. From this list of registered expatriate business people working in Uganda, the researcher selected 30 participants for subsequent one-hour interviews. Following an initial telephone contact, an Information Statement was sent to each of the 30 selected participants, and the researcher received a response from 25 business people who had agreed to be interviewed. Table 4.1 provides an overview of the attributes of the participants.

The origins of the respondents are presented as regions instead of countries based on realisation that some of the interviewee’s nationalities make their identities identifiable, which would not protect their anonymity.

Table 4.1. Attributes of interview respondents.

Code name Continent Gender Age Length of Area of business Size of business of origin range stay (Ugandan standards) in Uganda R1 Europe F 40s 13yrs Nutritionist Small R2 Africa M 40s 09yrs Insurance Big R3 Africa M 50s 01yr Aviation Medium R4 Middle M 40s 03yrs Food processing Medium East R5 Asia M 30s 10yrs Forex/Finance Small R6 Asia M 60s 36yrs Manufacturing Medium R7 Europe M 60s 20yrs IT Small R8 Europe M 60s 30yrs Media Medium R9 Asia M 40s 02yrs Petroleum products Medium R10 Asia M 40s 15yrs Forex/Finance Medium R11 Europe M 60s 30yrs Health Medium R12 Asia M 50s 05yrs Import trade Big R13 Africa M 50s 15yrs Private Security Big R14 Africa M 20s 07yrs Education Small R15 Asia M 40s 21yrs Fabrication Small R16 Asia M 30s 02yrs Manufacturing Medium R17 Asia F 50s 27yrs Hotel Small R18 Africa M 50s 08yrs Insurance Big R19 Africa M 40s 05yrs Private security Big R20 Asia M 50s 03yrs Banking/finance Big R21 Africa M 30s 09yrs Petroleum Big R22 Africa M 40s 05yrs Export/import Medium R23 Asia M 50s 40yrs Medical retail Medium R24 Africa M 50s 03yrs Banking/finance Big R25 Asia F 40s 03yrs Agro Big farming/export Source: Generated for this study.

Of the 25 respondents, 22 were male and three were females, seventeen of these expatriates (68%) fell into the age bracket of 40 - 50 years. The male skew reflects the gender segmentation of the expatriate business community working in Uganda, while expatriates in that age bracket indicated those who dominated the business environment in Uganda. There was also a wide range of responses to the question of how long each respondent had stayed and worked in Uganda, which was between 1- 40 years. Eleven of the expatriates (44%) had been in the country for more than ten years. The expatriate originated from eleven different regions/countries: India (8), Kenya (4), South Africa (3), UK (2), China (2), Scotland (1), Nigeria (1), Kashmir (1), Israel (1), Germany (1) and Egypt (1). In order to maintain the anonymity of the respondents the nationality of each respondent was not identified, rather the region to which they belonged.

The business domains of the respondents were also diverse. These included nutritionist, insurance, aviation, food processing, finance, manufacturing, IT, media, petroleum trades, health, import/export, private security, education, hotel, medical retail and farming. The wide diversity of the respondents’ countries of origin and industry fields ensured that a broad range of perceptions could be sourced for this research.

Table 4.2. Summary of attributes of participants Nationality Age range Size of Business Length of stay Gender Interviewed Egypt (1) 20s (1) Small (6) 1-40 years M (22) 25 Germany (1) 30s (3) Medium (10) F (3) Israel (1) 40s (9) Big (9) Kashmir (1) 50s (8) Nigeria (1) 60s (4) Scotland (1) China (2) S. Africa (2) U.K (2) Kenya (4) India (8) Source: Generated for this study

Mode and diversity of responses to identical questions The 25 participants voiced varied opinions on issues raised during the interviews. When, for example, the researcher inquired into their perceptions about the business environment in which they were operating compared to their home countries, their responses varied, as the following three examples highlight:

Uganda is worse than, I would say, Tanzania where I stayed previously, and that is a long time ago. The Tanzanians, if you bought something they are more customer oriented, whereas here in Uganda the customer does not matter (R1).

Okay. I mean it is fair to say that the environment is conducive for business and especially the government understands in terms of international companies who bring in expatriates (R13).

Definitely, the whole market of my country is big. Demand is also big. Here, I think the market is relatively smaller. Though, due to economic policies, it is easy to establish business and enter into business here, and then one can take it to another level (R15).

In essence, the three respondents approached the same subject matter differently in the sense that the first one talked about customer focus, the next about government understanding of big business while the last talked about the size of the market. In spite of this, all of them were underscoring the differences existing between the business environment of Uganda and their home countries. To begin, Respondent 1, a 45 year old European who had lived in Uganda for

13 years and worked as a nutritionist educator, did not only think that Uganda’s business environment was inferior to her home country, she also benchmarked it with that of neighbouring Tanzania: she thought that, in all estimates, Uganda was worse than Tanzania, which was also not so good, but was still better than Uganda. Her measure was based on customer care in the retail trade. On the other hand, Respondent 13, a 52 year old African, who had lived in Uganda for 15 years and worked with a security organisation, was all praise for the business environment in Uganda. In particular, praise was directed towards the Ugandan Government’s policy on expatriates, whereby the government of Uganda had developed a conducive investment environment for expatriates. His measure was focused on foreign investment. Lastly, Respondent 15, a 40 year old Asian who had lived in Uganda for 21 years, sounded more pragmatic about the Ugandan business environment. He acknowledged differences in the sizes of the economies of his country and Uganda but also underlined an attraction – good economic policies – that gave Uganda an edge over his home country. This could have been the reason to stay and work in Uganda, and not in his home country. His measure and consideration was the economic performance of countries. These diverse responses to the same question underlined both the cultural and professional diversity of the respondents. This was important for the study as it offered a broader spectrum of information and data to draw on in understanding diverse expatriates’ perceptions.

Obtaining thicker description through probing/prompting techniques For this interpretive research, depth and thickness of qualitative data was achieved from the interviews through prompts as the researcher followed a respondent’s leads in the discussions (Gioia et al., 2013). This allowed for any changing of direction of the interviews through probing by asking the respondents to expand a given answer, or by asking follow-up questions (Bryman, 2015). Respondent 4, a 45 year old European, who had lived and worked in Uganda for three years, was an example of an interviewee who widened the narrative based on unscheduled interviewing in the form of probes. Whereas, in this case, the original inquiry sought a comparison of policies between Uganda and the country of origin of the interviewee, the probing and subsequent narrative wound up underscoring frustrations caused to him by a local licensing body and an accusation of corruption against certain government officials in Uganda. This discussion went as follows:

Question: Tell me about any differences between government policies that regulate business behaviour in this country in comparison to your own country. Response: Uuuu! It is more difficult in Uganda. Probe: How? Why? Response: Because when I send my products to Europe and it is from here in Uganda or Africa, there is a lot of questions. So this is the challenge which I face. But, when I send them from ‘my country’, No question. Probe: Has it got to do with quality? Response: Eee...h! Not quality. For example, now for six months I have been pursuing clearing of my licence – up to now we have not got this certificate. Everything that is done in government offices takes long, especially when they come and see it’s a Mzungu (European), they just want to pull money, money. If you ask me, my second business cannot be in Uganda. Through prompting, the respondent revealed not only that the business environments are different and that it is more difficult in Uganda, but also spelled out exactly why it is more difficult in Uganda.

4.4.2 The process of generating concepts The frequency of words and/or phrases used by each respondent during interviews constituted important indicators of underlying concepts. These words/phrases reflected the respondents’ subjective views on the questions posed. The researcher therefore, in the examination and analysis of the qualitative data, made a deliberate effort to capture each line of thinking expressed as particular phrases. The subjective perceptions of respondents were the basis for generating 18 concepts comprising of particular phrases that describe or refer to a particular issue. The concepts identified fit the categories that comprise the analytical framework discussed in Chapter 2 and provide ample evidence for the inquiry. Statements by respondents illustrate that a concept has the power of providing and explaining evidence. While discussing the differences between their home countries and the host country, some respondents, for example, talked about the bad business environment of Uganda, and they used words or phrases such as: pay for everything (R1), not good (R7), takes long (R4), difficult procedures (R9). On the other hand, some expatriates used words or phrases in praise of the Ugandan business environment, for example: no problem (R8), good business (R5), very smooth (R14). Some respondents used words or phrases that equated the Ugandan business setting to that of other environments, such as: comply (R2), aligned policies (R18), same colonial master (R19). This last group implied that what was happening in Uganda was

97 no different from other parts of the world, and, for them, fitting into the Ugandan business environment was as good as they would fit in, elsewhere. These statements and thoughts constitute the concept of business environment as discussed by the expatriates. These phrases were grouped into concepts that are abstract, but still clear enough to be comparatively analysed (Strauss, 1987). While discussing concepts, Berg (2012) refers to them as symbolic or abstract elements representing objects, properties or features of objects, processes or phenomena. They are smaller components or basic building blocks of theory that may communicate ideas or introduce particular perspectives, or can be a means of explaining a broad generalisation (Berg, 2012). Concepts are, therefore, important in communicating thoughts, and, for this study, the salience of analytical concepts that evolved in the course of discussions with interviewees is recognised because they constitute the respondents’ own thoughts. As a unit of analysis, therefore, the use of these concepts is important as they illuminate the sources of paradoxes and tensions associated with the contradictory context faced by expatriate business people in the Ugandan business environment. Eighteen concepts were identified in the analysis and they are discussed below.

Organising of concepts through pattern recognition The first cluster of concepts is comprised of business environment, social issues and economic issues. These arose out of responses to questions that required discussing differences in the business experiences of expatriates between their host and home countries. The second cluster of concepts contains regulatory issues, policy issues, company codes, standards and ethics. These arose in response to an inquiry into the regulative aspects of the host country and their home countries. The third cluster of concepts is comprised of relationships, networks, power, trust, bribes and fraud. These concepts arose from inquiry into the normative institutions of the host country and how the interviewees navigated them. The fourth cluster of concepts is comprised of culture, corruption, integrity and magendo. These are based on the responses to an inquiry into cultural institutions, mainly how such institutions, including magendo, affected the actions of the interviewees.

Frequency of concept discussion For this study, the concept of business environment as a factor in context contradiction was significant, in that almost all the participants discussed it extensively, voicing differing

98 perspectives on how the Ugandan business environment is different from that of their own countries. The researcher noted that, whereas half the number of selected concepts (nine out of eighteen) attracted discussion from all participants; some concepts were discussed by less than ten participants. Three out of twenty-five participants, for example, discussed the concepts of relationships, power and trust. The number of respondents who discussed a particular point was, however, deemed to be of less importance compared to the enthusiasm and depth with which a chosen issue was discussed by those who chose to voice their thoughts about it. Therefore, this was the consideration accorded to all the concepts selected for this research. In one instance, the concept of personal relationships attracted three discussants, but one of them voiced compelling reasons in support of relying on such relationships. R22, a 40 year old African who had lived in Uganda for five years and worked for a logistics company, argued that, in the environment in which he was operating, one had to value personal relationships to do business – he subsequently raised important issues in support of this position. When the researcher tasked and probed him to explain how he dealt with informal business practices, he said: Socially, I do not consider myself as a foreigner. I am just like other Ugandan brothers. So when we are faced with a deal, we have to negotiate, we have to find our way out.

R22’s thoughts were revealing in that when he was faced with difficult decisions to make in order to navigate informal business practices, all options were open to him including illegal pathways in order for his business to survive. Choices would include, among others, embracing illegal business practices such as bribery, to move his business forward. Trust, another concept that was discussed by only three respondents also revealed important survival strategies that expatriates used while working in Uganda. Asked to discuss how he approached the issues of informal business practices, R21, a 33 year old African who had lived and worked in Uganda for nine years and worked in the petroleum industry, focussed the narrative on the reliance on personal connections and trusted people to get around a problem. He said: Okay, honestly, since you have that feeling that you are going to be disadvantaged, so you also have to act in a diplomatic way. You can either call someone, if you have connections, and see whether they can help you or you talk to the police and you ‘sort’ it out, yaah!

Table 4.3. Number of respondents who discussed particular concepts Concept Frequency Transcript references Business environment 23 R1, R2, R3, R4, R5, R6, R7, R8, R9, R10, R13, R14, R15, R16, R17, R18, R19, R20, R21, R22, R23, R24, R25 Policy issues 18 R1, R2, R3, R4, R5, R6, R7, R8, R14, R15, R16, R18, R19, R20, R22, R23, R24, R25 Standards 17 R1,R2, R3, R4, R7, R8, R13, R14, R15, R17, R19, R20, R21, R22, R23, R24, R25 Corruption 14 R1, R2, R4, R8, R10, R13, R17, R18, R19, R20, R21, R22, R24, R25 Ethics 14 R1, R3, R4, R7, R8, R10, R13, R17, R19, R21, R22, R23, R24, R25 Magendo 13 R2, R5, R6, R8, R10,R12, R14, R15, R18, R19,R21,R23, R24 Economic issues 13 R2, R4, R5, R6, R8, R9, R10, R13, R17, R18, R20, R24, R25 Bribery 10 R2, R4, R7, R8, R14, R17, R18, R20, R21, R23 Social issues 10 R1, R3, R4, R5, R6, R7, R15, R20, R22, R24 Regulatory issues 08 R2, R3, R8, R14, R18, R20, R22, R24 Integrity 08 R1, R3, R13, R17, R18, R19, R22, R24 Culture 06 R2, R7, R17, R22, R23, R25 Company codes 06 R18, R19, R20, R21, R22, R24 Fraud 05 R2, R14, R17, R19, R24 Networks 05 R1, R3, R6, R7, R22 Relationships 03 R7, R19, R22 Power 03 R8, R13, R23 Trust 03 R1, R17, R21 Source: Developed for this study

Table 4.3 illustrates the frequency of concept discussion, from most to least frequent. Being a qualitative study, frequency discussed in this section simply illustrates the internal composition of the sample and does not hold any statistical significance. It is, however, important in that it gives clarity about the perceptions of expatriates who gave particular evidence, and this is of value to this study.

4.4.3 Concept analysis A concept is an important unit of analysis for this study and, as such, each one is analysed in this sub-section. The 18 concepts have been categorised in the following order and under the following headings: context contradictions - business environment, social issues and economic issues; regulative contradictions - regulatory issues, policy issues, company codes, standards, ethics and company codes; normative contradictions - relationships, networks, power, trust, bribery and fraud; culture normative contradictions - culture, corruption, integrity and magendo. A table has been drawn for the analysis of each concept. The structure of the first

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three tables constitutes the first column that highlights a concept, and below it are the various discussion sub-themes that came up during the course of interviewing. The second column carries the indicators comprising words or phrases that were frequently voiced by respondents concerning what was discussed. The last column – the transcript reference – illustrates code- named individual expatriates who contributed to a particular debate.

Context category: analysis of “business environment” concept This research was designed to examine expatriates’ perceptions of corrupt business practices under a magendo environment, and the purpose was to establish how expatriates dealt with host country contradictions, tensions and paradoxes. The analysis of business environment as a concept underscores, therefore, the key issues of the research, that is, contradictions, tensions and paradoxes based on dissimilar institutional environments in countries where expatriates business people operate. This concept revealed a range of issues, including: what was perceived to be good or bad about the business environment of Uganda, how Uganda compared with the home countries of the expatriates, and similarities that might exist between countries. This was one concept that attracted discussion from almost all participants as they voiced opinions on what they perceived to be the differences that existed between the business environment they are operating in and the ones from where they originated. The statements of the respondents formed, therefore, a broad narrative underlining what constituted differences discussed under the following four sub-themes (concepts), that is, good, bad, home is better and similar to home.

Good Several respondents thought that the business environment of Uganda was ideal and perfect for one to succeed in business. To underscore this perspective, R5, an Asian in his thirties, who had lived in Uganda for ten years and worked for a financial institution, stated that: Business is good, we have business potential here and have enough chances to develop. R8 supported this view, as he had found no difficulty operating in this country since he arrived 30 years ago. Similarly, R13 thought it was not difficult to do business in this country and argued how conducive Uganda was for business ventures. Respondents such as R8, R13, R14, R19, R21, R22 and R25 shared this positive perception about the business environment of Uganda. For all these interviewees, Uganda offered a good environment in which expatriates could do business.

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Bad Some respondents however voiced negative sentiments about Uganda being a bad environment for doing business. What featured repeatedly in their discourses was a focus on the complex procedures one went through before operating in Uganda. R9, an Asian in his forties who had worked in Uganda for two years made this revealing statement: In Uganda, there is big challenge in procedures and that stuff in doing business. It is much easier in Dubai. You can establish a company in a day’s time in Dubai, a maximum of three days. The above sentiments were echoed by other respondents, for example, R3 who complained that it took weeks or even months to get anything done in Uganda. Equally, R4 stated that everything handled by government offices takes long. R10 blamed it on cumbersome processes and bureaucracy, an argument echoed by R23. The latter argued that business in Uganda was subject to double taxation and that the business environment of Uganda was characterised by unnecessary regulations.

Home is better Whilst a good number of respondents had a lot to say about how the Ugandan business environment was good or bad for business, easy or difficult to operate in, quite a few referred to their own countries to benchmark and compare with their host country. In this category was R1 who stated that it was much easier to do business back home compared to Uganda; the statement made was: Any type of business is, I think much easier in my country because it is more straightforward (R1). Respondents with similar thoughts or perspectives included R5 who thought it was better in the home country where loans and government subsidies were accessible. R6 also argued that life was better back home, while R7 hailed the more transparent policies of own country. In addition, some, R15, R18 and R24, talked of the advantages of bigger home markets.

Similar to home While some respondents made value judgements about the business environment of Uganda, a few recognised in their discourses that Uganda was not much different from their own countries or any other business environment they knew of. To underscore the similarity of the Ugandan business environment and that of the expatriates’ countries of origin, R1 stated that: In my country, we are kind of conservative like Ugandans. Nevertheless, we have quite strong professional ethics (R1).

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R1 thus painted a globalist view of the two contexts. It is, however, in the conclusion that this respondent made a distinction for the home country, either to differentiate or to elevate the home country above the host country. A few other respondents echoed these thoughts about the similarities of the two business contexts. When, for example, R2, a 50 year old African who had lived in Uganda for nine years and worked as an insurer, was asked about his business experience both in Uganda and in his country, he stated that: Due to continental reviews, regulators borrow from across other jurisdiction, and by 2014 the regulator here took the initiative to separate insurance under separate entities. You can see that, because of the experience we had in the previous market, it was easy for us to quickly comply with these new legal requirements. Based on our previous experience we knew how to restructure these entities. Another interviewee, R18, talked about aligned policies in reference to common trends and legal regimes pertaining in a regional economic body of East Africa to which Uganda belongs with Kenya, Tanzania, Rwanda, Burundi and South Sudan. Equally, R19 underlined similarities in business environments that exist because of similar colonial legacies that blended in a number of ways. For R19, the colonial legacy of Uganda and that of his country explained why the Ugandan business environment was not any different from that of his country. As perceptions are subjective, the responses voiced by interviewees on this particular issue varied according to their cultural background, experience in the country and industry among other things.

Variation of opinions on the business environment Noteworthy, were the contrasting thoughts of R24 and R25 about the roles of their governments in business. R24, a 50 year old African who had lived in Uganda for three years and worked for a financial institution, thought a government had no excuse to interfere in business, and he made the following statement about his government: Business there operates more effectively. The other key thing is politics – it plays less role in driving the market economy – the influence of politics is limited to regulation, or it is indirect. On the other hand, R25, a 41 year old Asian who had also lived in Uganda for three years and worked as a commercial farmer, thought that government intervention in the conduct of business was good, and to support this argument the following statement was made: But for my country government, if we have a contract with the local government, it is totally guaranteed: about infrastructure, yes everything. For my country government, there are good intervention policies to observe.

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Whereas R24 underlined a non-interventionist approach of governments in conducting business, less politics, R25 thought it was good for governments to intervene in the running of businesses, most especially in infrastructure development, and at least in the country where this interviewee came from. Both these respondents thought their home countries had better policies than those of their host country, Uganda, in this regard, although their home countries’ policies were dissimilar in application. In essence, the two positions of these respondents differed from what they had experienced in Uganda regarding the role of government in business. Business environment was a concept that was widely discussed by every respondent when asked about his/her opinion about the business environment of the host country Uganda vis-à- vis that of his/her own country of origin. The thoughts of the 25 respondents regarding the concept business environment are presented in Table 4.4a and 4.4b based on the inclination and focus of their responses and are grouped under four sub-clusters/subthemes: i) the good that characterises Uganda; ii) the bad that characterises Uganda; iii) the advantages of expatriates’ home countries as benchmarks to underscore differences between the contexts; and iv) the opinions of some respondents underscoring the similarities of the environments - thus not branding Uganda as a unique business context, but one that is similar to other business environments. It was, however, noted early on that respondents contributing to the fourth subtheme embraced local business dynamics with ease. For this group of expatriates, it was business as usual, as it would be the case in other environments, including their own countries.

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Table 4.4a. Analysis of the concept “Business environment”

BUSINESS ENVIRONMENT INDICATORS TRANSCRIPT REFERENCES (Words or phrases) Uganda is good -good times R5, R8, R9, R13, R14, R19, R21, R22, R25 -good business -Uganda developing -conducive -easier in Uganda -very smooth -soft landing -make money -fresh business -good market -doing well -good to stay -business uncertainty -easy to penetrate -Uganda stable -promising country -no problems -good people -not difficult -cordial environment -banking space -good investment -plenty of labour -market oriented -fresh business Uganda is bad -Uganda worse R1, R3, R4, R7, R9, R10, R17, R23 -need better skills -not good

-Ugandans not exposed -takes time -Ugandans lose -difficult in Uganda -takes long -very, very poor -difficult procedures -cumbersome process -bureaucracy -high competition -pay for everything -laws un-implemented -no level playing field -very bureaucratic -many regulations

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Table 4.4b. Analysis of the concept “Business environment”

BUSINESS ENVIRONMENT INDICATORS TRANSCRIPT REFERENCES (Words or phrases) Home is better -home business easier R1, R5, R6, R7, R15 -bisect insurance -takes just a week -voluminous business -many changes -get loans -subsidies -better life -easier in Dubai -bigger market -more modernised -more effectively -less politics -intervention Similar to home -also conservative R2, R18, R19 -bad or good -continental reviews -aligned politics -same colonial history

Tables 4.4a and 4.4.b illustrate the variations in perceptions on business environments underlined by the varied backgrounds of the respondents. Each of the respondents had a subjective idea on what constituted differences between the host business environment and their home countries. These were insightful sources of knowledge for understanding how an outsider, particularly an expatriate, survives in a different business environment.

Context category: analysis of “social issues” concept An expatriate businessperson coming from a different social background is likely to encounter contradictions and paradoxes when in another environment. These are related to characteristics of the new environment that are different from that of his/her own country. This study, therefore notes that Uganda, the host country, is a context characterised by unique social issues that possibly influence the business conduct of expatriates who participated in this study. A number of respondents voiced discontent with the conduct of Ugandan officials and/or workers, and they complained that such behaviour did not help to advance business operations. R1, a European, expressed, for example, a disdain for conducting business transactions through intermediaries. The same person spoke of a lack of professional ethics among officials in Uganda, which hampered the smooth running of business. This respondent thought that the system itself was such that those who broke rules and varied procedures were left to get away with it, which exacerbated the lack of professionalism in business dealings in this country. This respondent also criticised the behaviour of too much talk among Ugandans, which affected productivity. Another interviewee of European background, R4, echoed R1 complaint about in

106 regard to much talk and little work among Ugandans. He also thought that too much talking contributed to ineffectiveness at places of work, and contributed to the failure by many to provide the services required to those who needed them. R4 had, for example, frequented an office for several months to procure a trading licence, without success. R6, an Asian, shared similar sentiments about too much talking and little work among Ugandan public officials. Some respondents were, however, more realistic as they thought that, like in any other environment, people learn and change. R24, for example was of the view that people still learn, and eventually catch up with modern ways of conducting business or trade. There were also notable variations in the levels of opinions by respondents who shared similar backgrounds. In this regard, two diametrically opposing positions were underlined by respondents from the same Asian country, R15 and R20, regarding the productivity of Ugandans. R15, a 40 year old Asian who had lived and worked in Uganda for 21 years and worked in a fabricating industry, stated that: Still, people are still slow, doing a few things at a time. Compared to other countries including neighbouring Kenya, you find the workforce here is quite incompetent in terms of knowledge, and are insincere. In regard to the productivity and commitment of the Ugandan workforce, R20, who was also an Asian aged 51 years and had lived in Uganda for three years working with a big financial institution, gave a clean sheet of approval for Ugandan workers, and said: I would say people here are more committed than in my country. If there is work pending, they will first finish it and then go. In my country, it is a socialist country where people would work for only the time that is allocated/allotted to them. So people there work from 10 am to 5 pm strictly. Here, if there is work, they try to stay and try to complete it. R15 was a small-scale businessperson who had lived in Uganda for 21 years. R20, on the other hand, had stayed in Uganda for only three years, but was working for a big organisation. The variations in their perceptions might therefore be attributed to the type of businesses they engaged in. The former had to deal personally with a mixed category of people on a daily basis by talking to them, discussing with them and taking business decisions based on a case-by-case basis. The latter, however, worked for a big financial institution that ran on strict rules, regulations, and set guidelines for the recruitment and code of conduct of employees and clients. He, therefore, dealt with a select group of people and clientele who shared particular characteristics, and were guided by standard guidelines. Unlike the concept of business environment where most interviewees said something regarding the differences between Uganda and their own countries, only 12 respondents voiced

107 opinions on the contextual contradictions based on the social indices illustrated in Table 4.5. Whereas some were concerned about social issues in this country, others were not bothered about them.

Table 4.5. Analysis of the concept “social issues”

SOCIAL ISSUES INDICATORS TRANSCRIPT REFERENCES Concerned -intermediaries R1, R3, R4, R6, R7, R15, R22 -professional ethics -get away with it -much talk, little work -talking, talking and little work -people slow -insincere -need honest people

Unconcerned -next level R2, R5, R20, R22, R24 -enjoying my stay -not a foreigner -people still learning -not guest

It is evident from the table that different communities experience different social realities. For business people, notably expatriates, social issues are part of their foreign work environment, but such issues are often not considered to be a deterrent for running business. This may be why some interviewees are unconcerned about them, while those who have some concerns continue working in this environment.

Context category: analysis of the concept “economic issues” In several ways, most respondents acknowledged that Uganda was a different entity economically at the organisational level. They were also cognisant of variations in the levels of competence of the local officials responsible for the economic direction of this country. More than half of all the respondents interviewed thought that economic context differences between Uganda and their home countries were quite observable. Their arguments focused on implications of stiff competition in business. Some observed that the economy of Uganda was good and steadily improving, while some thought that Uganda’s economy was bad.

Stiff competition A number of respondents voiced concern for the stiff competition within the Ugandan economy as an issue that negatively impacted their businesses. This perspective underlined Uganda’s

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policies as too liberal and, accordingly, some respondents thought that this negatively affected business conduct. R13, an African working for a security organisation, lamented, for example, the numerous security companies that competed against one another within a relatively small Ugandan market. He thought that such competition led to poor pay for most employees, but also impacted negatively on standards. He thus suggested more protection for this industry in order to improve standards, saying: Yes, it is all about money and competition. If you look around, I think there are over 100 security organisations in Uganda. It is a small market but every day you find new players in the industry. R18, an African insurer, concurred with R13 regarding the challenges associated with stiff competition, and he stated that: In Uganda, the ratio of the business and the number of companies make competition intense and stiff. R24, who worked for a financial institution, however, had views that were dissimilar to those of R13 and R18 with regard to competition between businesses. R24 thought that competition was good for their industry and that it was helping to improve standards. He stated: But the environment is conducive to do business. There is plenty of opportunities. It is quite competitive in terms of banking space, it is very competitive, and in some cases, it’s quite aggressive. The two contrasting perspectives of the respondents might be attributed to differences in the nature of their industries whereby some industries, such as security organisations, require state protection in terms of policy formulation and intervention. Whilst a lack of strong regulations could be causing problems for security organisations, financial institutions such as banks are highly regulated and competition exists on a fairly even playing field and everybody plays by the same rules.

Good economy Several respondents judged the economy of Uganda as promising and offering numerous business opportunities. To underline this perspective R2 stated that: You can imagine coming in the country in 2009, when of course the total premium income going into our industry totalled 100 billion shillings. Now we are talking about 400 billion shillings. Of course with the discovery of oil, and the planned production of petroleum, within the country, we expect business to grow. I have seen continuous improvement in the field (R2).

Other respondents who thought the economy of Uganda was doing well were R2, R4, R5, R6, R8, R10, R13, R17, R18, R19, R20, R24 and R25.

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Bad economy A number of respondents, however, expressed concern about the economic status of Uganda. Among this group was R9 who complained that his business was hardly breaking even and, as a result, he no longer had money to spend; he stated that: The business is very bad, very slow and we are hardly breaking even. We are still losing money. And people are not ready to pay. The problem here is people do not appreciate quality. What they need is good price and price alone.

Similarly, R17, who first imported shoes into Uganda, but abandoned that sector for other business ventures, thought that the business woes for this business stemmed from failure by the local bureau of standards – UBS – to do their job, causing the Ugandan market to be flooded with poor quality substitutes which affected business for those who valued quality. About the performance of the local bureau of standards, R17, a 50 year old Asian who had lived in Uganda for 27 years, said that: Even today, UBS (Uganda Bureau of Standards) cannot handle the big volumes of imports. This has led to flooding of the market with poor quality substances. Other respondents who thought the economy of Uganda was not performing well were R13 and R18. The words and phrases underscoring the thoughts of the respondents on the economic status of Uganda are illustrated in Table 4.6.

Table 4.6. Analysis of the concept “economic issues” ECONOMIC ISSUES INDICATORS TRANSCRIPT REFERENCES Stiff competition -money and competition R13, R17 -because of competition -competition is high -intense competition -competitive environment Good economy -continuous improvement R2, R4, R5, R18, R19, R20, R24 -penetration growing R25 -potential business -economic growth -making money -break even -bigger middle class -bigger GDP per capita -plenty of labour -big profit

Bad economy -poor land use R9, R10, R13, R17 -fight -hardly breaking even -no money to spend -flooding market

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This table highlights the variations in perceptions of the economy by the respondents. This is indicative of subjective considerations, some of which are based on the nature of an individual’s industry. In the study environment, some industries were doing well while others were not. This defines Uganda as a developing economy with extremes and sometimes economic unpredictability in performance.

Regulative category: analysis of the concept “regulatory issues” The differences in the legal regimes of Uganda and the countries of origin of the respondents presented a number of paradoxes that were voiced by expatriates doing business in Uganda. By extension, company or business codes within Uganda presented a number of challenges, which the expatriates had to navigate. From the narratives of the respondents, the researcher understood that they wanted and tried to respect the host country’s rules and regulations, and that none of them wanted to court trouble by flouting local rules, as this would negatively impact their business. R2 emphasised that it was in order for an expatriate to comply with any local regulations and thus underlined this position. R20 concurred with the latter, that regulatory compliance was essential for smooth running of an organisation. Several respondents nevertheless had problems appreciating Uganda’s legal regime. R3, a 52 year old African who had lived in Uganda for one year and worked in the transport industry, found it frustrating to weave through numerous office bureaucracies as he sought to obtain a licence to run his school. The challenges caused by red tape within some offices often led to delays or even a loss of business: I cancelled that because the previous course was not finalised. About five or six of these students, it took them more than 6 months to get the licence. Now I have cancelled the next intake. This respondent was also embittered by the numerous rules he had to comply with in order to start and transact business in Uganda. In the course of interviewing other expatriates, the researcher was, however, surprised to learn that some of them were calling for more regulations for their industries. Unlike R3, who complained about too many rules and regulations, some respondents thought more rules would serve them better. One of these was R14, a 26 year old African who had lived in Uganda for seven years and worked in an education sector, like R3. He thought that the education sector would do better if it were more regulated to ensure better business, and he said thus: It could be wiser if more regulations were put in place, especially in this sector. Then we shall be able to have organisations that bring about this magendo thing to the end, bring good standards of education and better business conduct.

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Some respondents, such as R18, acknowledged that, despite being based in Uganda, they operated under more or less similar laws to those of their countries of origin. For R20, the challenges never resided with regulations, but with the regulators who had to champion and implement them. For performing below expectations, he accused public officials of inconsistencies and applying laws selectively, depending on their convenience and circumstances, whereby bending such laws would serve the personal interests of the officials. Despite the dissatisfaction or complaints voiced, all respondents who discussed regulatory issues as an element of regulative contradiction appreciated the high price of being caught on the wrong side of the local laws in Uganda. They understood that, if caught in any act of illegality while doing business, it would destroy their businesses in some sense, in addition to attracting unwanted legal consequences, fines and/or other forms of punishment. R18 summarised these thoughts thus: We know that when legal measures catch up with you, the punishment is bigger – you may be barred from operating for several years. Table 4.7 illustrates the perceptions of respondents with regard to regulative issues in Uganda. The responses that fall under the regulative concept indicate that expatriate business people are keen and feel obligated to observe the laws of the host country, not least of all because of regulative consequences if they transgress local laws or business regulations. Whereas some expressed misgivings about some local rules and regulations, to be on the safe side they are willing to observe them, and by so doing, continue doing business in this country.

Table 4.7. Analysis of the concept “regulative issues”

INDICATORS TRANSCRIPT REFERENCES -same things R2, R3, R8, R14, R18, R20, R22, R24 -quickly comply -borrow across jurisdiction -separate insurance -implement -approval -signed -compelled -no regulation -how many rules to take? -it is illegal -monitored -breaking regulations -need more regulations -same regulations -under the same law -big punishment -regulatory compliance -sense of belonging -regulation challenges

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The table illustrates perceptions of respondents with regard to regulative issues in Uganda. Their responses that fall under regulative concept indicate that expatriate business people are keen and feel obligated to observe the laws of the host country, not least of all because of regulative consequences if they transgressed local laws or business regulations. Whereas some expressed misgivings about some local rules and regulations, to be on the safe side they are willing to observe them; and by so doing, continue doing business in this country.

Regulative category: analysis of the concept “policy issues” The majority of the respondents, 18 in total, discussed policy issues. Their thoughts varied from expressing total ignorance about policy matters in their working environment to those who had crafted ways and means of beating the local system whenever the need arose. Whereas many respondents thought that no policies existed in Uganda, or that existing policies were simply bad, some thought that those that existed were not adhered to, or that people were not informed about them. Discussing this matter, R1 stated for example that: No, I don’t think people conform to policy. I think a lot of people don’t know policy, not only in education. So the policy is not being given to people. So the people do not know what they should and should not do. Respondents who acknowledged that policies existed, but thought that they were simply bad included R3, who talked about wrong policies and manners of implementation. R4 argued that local policies were simply difficult, while the fact that unnecessary bureaucracy existed in Uganda perturbed R7. R14, on the other hand, contended that the policies were never adhered to, an argument shared by R19 who said that policies were badly followed. Giving another perspective on policies in Uganda, R16 called for enacting clearer policies, implying that those in place were not satisfactory in some ways. In a different vein, R25 starkly compared policies in Uganda and those of their home country and concluded that the home policies were far better than those of Uganda. The following statement reflects these thoughts: For my government, they have very good policies for foreign investment. In a way, this was an indictment on local polices in Uganda, but also, the varied perspectives on policy issues of the expatriates pointed to the paradoxes expatriates faced as they operated under unacceptable, unclear or even bad policies in this environment. The words and phrases highlighting the thoughts of respondents on policy issues as a concept for regulative contradictions are presented in Table 4.8. This table highlights the perceptions of expatriate businesspeople with regard to policy matters in the host environment. The thoughts that constitute the concept of policy indicate that expatriates may have no say in the policies that

113 are in place to guide their businesses. This implies that they may harbour contradictory opinions or misgivings about them, however to operate well in a foreign environment, they have to respect such policies.

Table 4.8. Analysis of the concept “policy issues”

INDICATORS TRANSCRIPT REFEENCES -don’t know policy R1, R2, R3, R4, R5, R6, R7, R8, R14, R15, R16, R18, R19, R20 -don’t conform to policy R22, R23, R24, R25 -policy gap -systemic problem -disconnect -difficult to sell -policy implementation -policy framework -wrong policy -wrong implementation -why pay? -procedures and policies -need that kind of thing -for me I know where to go -terrible bureaucracy -tiresome and frustrating -more transparent -policy not respected -fight board -not worth it -not adhered to -need open policies -similar policies -can’t compare countries -have clear policy -East African policy -comply with policy -government sets policy -hardly followed -company policy -Africa is like a book -policy interpretation -roadblock -limited policies -open government policy -takes time -adhere to values -follow local policy -China’s policy is good

Table 4.8 highlights perceptions of expatriate business people with regard to policy matters in the host environment. The thoughts that constitute the concept policy indicate that expatriates may have no say in the policies that are in place to guide their businesses. This implies that they may harbour comparative opinions or misgivings about such policies; however to operate in a foreign environment, they have to respect such policies

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Regulative category: analysis of the concept “company codes” Few respondents were willing to engage in deep discussion on how they run their businesses. This could be attributed to the protectionist practices of most business, especially under circumstances when pertinent business values are subjected to question or open discussion. In total, six respondents discussed company conduct and codes of their business and most of their thoughts were general in nature and abstract in essence. R18, for example, underlined the strictness with which they dealt with errant employees, when he stated that: But I said, our company is very strict. We are part of an international organisation that cannot be seen to be doing things that are illegal. We know that when legal measures catch up with you the punishment is bigger; you may be barred from operating for a number of years.

Similarly, R21, R22 and R24 all emphasised their companies’ non-compromising stances against any deviation from company codes. Similarly, R20 expressed satisfaction that, because of their good company codes of conduct, their business was doing exceptionally well and he stated that: Because we try as much as possible to be straightforward and to follow regulations of the country. We do not do that, because our management does not allow that.

The thoughts of R18, R19, R20, R21, R22 and R24 regarding company codes as a concept of regulative contradictions are illustrated in Table 4.9.

Table 4.9 Analysis of the concept “company codes”

INDICATORS TRANSCRIPT REFERENCES -very strict R18, R19, R20, R21, R22, R24 -can be traced -compare ourselves -business decision -company basis -management disallows -use legal ways -adhere to values -due process of law

Table 4.9 highlights the varied thoughts on the concept of company codes. According to the responses of the interviewees, businesses have internal codes that guide them and sometimes define the value of a particular business entity. These may not be attributed to a local environment, but they do assist a business in staying on course and relating well to local requirements.

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Regulative category: “standards” concept Most respondents voiced opinions on what constituted standards in the Uganda context. Comments on standards ranged from the non-existence of business standards to an ‘I don’t care’ attitude, so long as a business moved on. A number of respondents, R4, R7, R8, R13, R15, R19, R21, R22, R23 and R24, thought that standards in Uganda were bad, poorly administered and/or not adhered to. R1, R4 and R13 clearly thought that Ugandans never cared about business standards, as expressed by R1: There are standards and there should be people monitoring standards, to make sure standards are kept. But there is this belief by the majority of Ugandans that things can be smoothed over. Some respondents acknowledged, however, that standards do exist in Uganda, but were being flouted by bad players in Uganda’s business field. R2, for example, thought that standards had to be strictly adhered to in order for business to run properly. On the other hand, R17 argued that good standards, as they were in their own country, ensured orderliness in conduct of business, while R24 advocated for transparent business standards in Uganda. At the other extreme, however, were respondents who blamed poor business standards in Uganda on bad policies and practices. R4, for example, complained about discriminatory business policies that affected and compromised standards. He stated: Everything that is done by government officers takes long, especially when they realise it’s a Mzungu (European), they just want to pull money, money. This dissatisfaction existed in reference to a situation where expatriates such as R4 were compelled to part with bribes in order to be served. For R8, the complaint was, however, not against government officials, but the existing bad policies that compromised standards: But you hear a lot of things that are happening in government. That some companies get tax breaks, because they paid money to officers in the treasury. The thoughts of respondents on standards as a component of regulative contradiction are presented in Table 4.10. This table presents the thoughts of expatriate businesspeople on the concept of standards. Based on the responses of the interviewees, standards are both legal requirements which should be observed, but are also an important factor that defines a business entity. Expatriates indicate that where the law was weak in enforcing standards in certain circumstances, internal dynamics could be the guide as to how to uphold the brand or image of a business/company.

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Table 4.10. Analysis of the concept “standards”

INDICATORS TRANSCRIPT REFERENCES -standard monitoring R1, R2, R3, R4, R7, R8, R13, R14, R15, R17, R19, R20, R21, R22, -keep standards R23, R24, R25 -do not care -standard selling -delayed authorisation -lots of questions -Mzungu standards - feel bad -never get an answer -negligence -no skills -did not have to pay -take long time -it is our right -can’t happen in Europe -tax breaks -never existed -improvement in standards -negative impacts -leave it -according to standards -internal rules -quite incompetent -we have order -market flooding -internal vetting -more committed -not allowed -different standards -disrespect standards -no level playing field -unnecessary regulations -set standards -still learning -clear principles -do right thing -transparent -better with China

Based on the responses by the interviewees, standards are an important factor that define a business entity. According to table 4.10, the respondents were obligated to respect standards so as to uphold the image of their businesses.

Regulative category: analysis of the concept “ethics” Half the respondents discussed the concept of ethics in relation to their businesses in Uganda. Some of those who voiced opinions on ethics discussed it with regard to the behaviour of business players and government officials whereby some blamed declining ethics on a primitive love of money or because of changed times. Several respondents, as such, talked about the down side of declining ethics in Uganda. R1, for example, talked about how it was

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hard to fight bad practices in Uganda, while R4 accused local government officials of simply sitting in offices to pass time while doing no work. R8, on the other hand, lamented the practice of what he called picking holes done by government officials as pretexts for asking bribes from those who wanted services. R21 shared this lamentation. For R23, the get rich quick mentality underlined declining ethical behaviour in Uganda. He stated that: They would rather work to ensure making a lot of money at all cost, quickly. But as any businessperson knows, the ‘get rich quick schemes’ are all short term games. Some respondents focused the discourse on how to navigate unethical practices or bureaucracies. R3, for example, suggested that if things were getting to a tricky twist, it ‘was better to let go than embrace unethical behaviour. He said this in relation to the challenges he faced chasing a licence for months without end and strongly emphasised this in the following words: No, Matthias. As I said, if things seem difficult, just let go. Of interest, however, were the different lines of approach for two respondents (R8 and R7) in regard to sidelining or upholding ethical practices in order to move their businesses forward. R8 who had lived in Uganda for over three decades stated that: So they are just picking holes, so you can give them some money and the problem is fixed. I paid money from my own pocket, because it would be more expensive to meet what had been asked of me, within such a short time. Conversely, R7, a 65 year old European who had lived in Uganda for 20 years and worked in the communication industry, came up with a different but maybe better solution to navigate this ethical paradox. When R7 was asked a question regarding ethical behaviour for a businessperson in Uganda, he confided that: Aaah! Wherever am aware that things are going too slow, then I usually involved a lawyer. I did not ask him which means he used, but according to the fees, there must have been some bribes included. R25 also mentioned hiring a local lawyer to mitigate intricate ethical paradoxes. The thoughts of R7 and R25 were revealing in that, much as they were aware of the pertaining illegalities and the payment of money beyond what they thought to be normal, they at least protected their conscience by shielding behind local lawyers. The words and phrases reflecting the thoughts of the expatriates on the concept of ethics as a factor of regulative contradictions are presented in Table 4.11. According to the table, the interview responses indicate that the concept of ethics may border on illegality or immorality. Depending on circumstances, some expatriates, notably those in small businesses, may transgress beyond ethical behaviour in the process of doing business. For a number of

118 businesses, however, especially those belonging to big organisations, respondent stated they would always uphold an ethical approach to doing business. To uphold the image of their businesses, they avoid transgressing rules and regulations in the work environment. In addition, they benefit from the structures and strength of their businesses/organisations that safeguard them against being compromised.

Table 4.11. Analysis of the concept “ethics”

INDICATORS TRANSCRIPT REFERENCES -business ethics R1, R3, R4, R7, R8, R10, R13, R17, R19 -hard to fight R21, R22, R23, R24, R25 -just let go -pass time in offices -feel bad -fed up -gave up -very discouraging -just picking holes -trend -make a choice -nothing less -money problem -people changed -poor quality products -don’t want to pay -kitu kikubwa (a big bribe) -kitu kidogo (a small bribe) -face hard times -get rich quick -adhere to values -clear principles -local lawyer

Table 4.11 highlights that businesspeople, most especially those belonging to big organisations, they adhered to ethical conduct of their businesses to uphold the image of their businesses. They managed to do so based on the structures and strength of their organisations that safeguarded them against compromise. Expatriates managing smaller businesses sometimes transgressed ethical behaviour in the process of doing business.

Normative category: analysis of “relationships” concept Only three respondents thought that personal relationships played an important role in the conduct of business. Even when issues of relationships arose for discussion, respondents were not emphatic in their opinions and only distantly described what they had observed occurring among the locals, but not in relation to the conduct of their own businesses. It was in this regard that R19, a 41 year old African who had lived in Uganda for five years and worked for a security

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organisation, distinctly criticised nepotism that was occurring in some places of work that he knew of. He casually stated that: I know some companies which employ some because they speak the same language. The words and phrases expressing the thoughts of these respondents on relationships as a concept of normative contradictions are presented in Table 4.12. The table highlights the thoughts of the interviewees with regard to the concept of relationships. Respondents in this study were asked to discuss informal business practices that may involve personal relationships in the course of doing business. Some of those who contributed to the debate thought it was wrong, whereas others thought it was good, although it may not reflect the good governance of an institution.

Table 4.12. Analysis of the concept “relationships”

INDICATORS TRANSCRIPT REFERENCES -right choice R7, R19, R22 -no relatives -same language -not a foreigner -we negotiate -find way out

Few Respondents discusses relationship as an a major concept in conducting business, whereby some thought that it was good to emphasise them while others thought that it undermined smooth running of business.

Normative category: analysis of “networks” concept Somewhat related to the concept of relationships was the concept of networks, both of which involve working towards getting strategic contacts to assist one in conducting business. As it was with the concept of relationships, this concept also attracted minimal discussion among the respondents, and its discussion was offered by R1, R3, R6, R7 and R22. R1, for example, described the intricate and complex nature of networks that supported the illegalities in the business environment of Uganda. R1 discussed the manner of soliciting bribes in Uganda and noted that: They would not really come to me. They would go to somebody else, who would then come to me, who brings you together and does the negotiations. It’s always done behind my back. R6, on the other hand, presented a more telling business survival technique. He roundly discussed how he survives in this business environment by having in place good networks and

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contacts. This 60 year old Asian, who had lived in Uganda for 36 years and worked in the manufacturing industry, explained thus: But as I said, for me I know where to go, which person to talk to and when, if I need something done. No problem. i) R7 also thought that having many networks was a good idea, and R21 supported this thinking. What these respondents voiced were: One had to have good contacts in order to move things or to have things done for you. ii) One needed good and reliable contacts in case of trouble with the law. Without such contacts, one could only sort out the problem by bribing – which pathway could be costly and unsustainable.

All these arguments, however, point to a lack of, or a weakness of, formal institutions in Uganda, or even inoperative systems. The words and phrases reflecting the thoughts of the respondents on networks as a concept of normative contradictions are presented in Table 4.13.

Table 4.13. Analysis of the concept “networks”

INDICATORS TRANSCRIPT REFERENCES -wouldn’t come to me R1, R3, R6, R7, R22 -bring you together -behind my back -intermediary -do some networking -I know where to go -person to talk to -networks important -call someone -sort it out

This table presents the various phrases that were used while discussing the concept of networks. A number of the respondents were of the view that good networks improve the conduct of business. Other respondents discussed networks as things that did not contribute to the good conduct of business or good governance. They argued that these networks sometimes led to devising ways of defeating the local system. Respondents discussing the latter category underscored the characteristics that typify the weak systems of governance in developing countries such as Uganda.

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Normative category: analysis of the concept “power” One would have thought that any issues of power balance/imbalance would play a big role in the conduct of business of expatriates in a foreign country. Given their discussions, however, there was little indication of the significance of this concept in the respondents’ business activities in Uganda. In only one discussion was a local official portrayed as using/misusing his power and arbitrarily getting his way with the expatriate. In this case, the power balance tilted against the respondent and in favour of the official who financially disadvantaged the respondent by making him pay a second time for a licence/permission he had already paid for several years back. To explain this development R8 stated that: We showed a letter from a previous Authority – they said ‘you need to get it from this Authority’ – yet this Authority did not exist in the year in question. Oooh! They insisted that I still had to get it from the current Authority. The thoughts of the respondents on the concept of power are illustrated by phrases in Table 4.14. Most respondents interviewed did not think that power relations at any level impacted the conduct of their business in the study environment. This could have been the reason the concept power attracted minimal discussion from the interviewees.

Table 4.14. Analysis of the concept “power” INDICATORS TRANSCRIPT REFERENCES -make excuses R8, R13, R23 -ask why? -more expensive -insist -only the qualified -bureaucratic

Table 4.14 indicate that most respondents did not think that power relations impacted the conduct of their business in the study environment.

Normative category: analysis of the concept “trust” Just like the previous concept of power, that of trust attracted minimal discussion among the respondents who were interviewed for this study. Only R1, R17 and R21 among the 25 respondents discussed issues relating to trust or a lack of it. R1, for example, focussed the discussion on trade transaction issues that defined local marketing practices, their advantages plus disadvantages, and stated that: In supermarkets, prices are pre-set, rather than the open market, where you do bargaining all the time.

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The words and phrases highlighting the thoughts of respondents on the concept of trust as an element of normative contradictions are presented in Table 4.15. Whereas trust is an important factor in the conduct of business between parties, this concept did not feature prominently as one of those that impacted the business environment of Uganda.

Table 4.15. Analysis of the concept “trust”

INDICATORS TRANSCRIPT REFERENCES -pre-set prices R1, R17, R21 -bargaining -willing to assist -call someone -disadvantaged

Whereas trust is an important factor in the conduct of business between different parties, this concept did not feature prominently as one of those that significantly impacted the business environment of Uganda.

Normative category: analysis of the concept “bribery” Ten respondents discussed what they thought about bribe-giving or bribery. Many made value judgements about bribes and bribery. Some respondents discussed the negative side of bribe giving. R4, for example, angrily asked why he had to pay bribes all the time, a problem equally lamented by R17. R17 referred to failure of a file to move when one did not pay a bribe. R13, wondered how many officials one had to pay (a bribe) in order to get a service. Condemning bribery, R4, a 45 year old respondent from the Middle East who had lived in Uganda for three years, said: …and after auditing, they take me out and tell me, you know, with some money everything will be okay. Why? Why do I need to pay money while I am not supposed to pay it? Did I commit any crime here? Surely, it’s not okay. Not so unexpectedly, some respondents embraced bribery in order to operate and advance their businesses. R21, for example, talked about sorting out things, while R14 talked about giving kitu kidogo (literally translated, something small or a bribe), in order to move things. Another respondent, however, argued that bribe giving could never address the real problem of poor service delivery, and that he would embrace none of it in any form. R23, a 55 year old Asian who had lived and worked in Uganda for 40 years, stated thus: To be honest with you, I would not follow that guy who wants bribing in order to get my goal. Simple reason, how many people will you buy? So it does not stop and actually, it encourages it and even makes it worse.

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The words and phrases on the thoughts of the respondents regarding bribery as a concept of normative contradictions are presented in Table 4.16.

Table 4.16. Analysis of the concept “bribery”

INDICATORS TRANSCRIPT REFERENCES -take me out R2, R4, R7, R8, R14, R17, R18, R20, R21, R23 -everything will be ok -why? why? -involve lawyer -clever means used -kitu kidogo -a lot of money -have to pay -file not moved -cannot be seen -you pay money -easily adopt -pay for service -a soda -follow regulations -disadvantaged -sort it out -how many to buy? -not addressing problem -encourage continuity -soft target

This table highlights the various phrases the respondents used as they discussed the concept of bribery. While responding to the inquiry on the informal business practices they faced, the respondents raised bribery as one of the challenges characterising the study environment. In their discussions, bribery was linked to the informality that prevails in the study environment. Some respondents discussed how they managed such situations, either through using a lawyer or by giving bribes to officials to move their business forward. These are two of responding to the paradoxes and contradictions experienced in this environment.

Normative category: analysis of the concept “fraud” The discussion of the concept of fraud generally focussed on the conduct of local officials and, for unknown reasons, it did not attract wide discussion as the researcher had originally anticipated. Probably, respondents preferred to play it safe by not talking about what could attract trouble for their businesses. The few who discussed the concept fraud did so in general or detached terms, for example, R2, a 50 year old African who had lived and worked in Uganda in an insurance industry for nine years, when discussing fraud stated that: It manifest in a number of ways. In claims, people claim more than they generally deserve. They go and forge additional documents indicating more damage that incurred

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at the time of the accident, just to be able to claim more. And you know our industry is centrally built on faith. A few other respondents discussed fraud in terms of how it manifested or how it was practiced. Other respondents chose a moralising approach to discussing fraud, for example, R24 argued that fraud degrades integrity. The words and phrases capturing the thoughts of the respondents on fraud as a concept of normative contradictions are presented in Table 4.17. The concept of fraud was also a source of paradoxes for expatriates operating in the study environment. The table highlights how various respondents discussed it, whereby some gave the view that it was an illegality that characterised the environment in which they were working. Those who were in industries such as insurance had to always be on the lookout for forms of fraud, especially in claims made by clients. This enabled the companies to devise ways of managing paradoxes related to fraud.

Table 4.17. Analysis of the concept “fraud”

INDICATORS TRANSCRIPT REFERENCES -insurance fraud R2, R14, R17, R19, R24 -across borders -claim more than -companies do the same -manufacture grades -connive with thieves -conspire with thieves -lower rates -issue of integrity

Respondents in particular industries such as Insurance, were more concerned about fraud, especially during claims by clients. It is this category of respondents who devised ways and means of managing paradoxes related to fraud.

Cultural-cognitive category: analysis of the concept “culture” The respondents discussed the concept of culture in comparative terms or to criticise what they deemed as wrong practices or culture in the business context in Uganda. Those who approached the issue of culture in a comparative manner, comparing the Ugandan culture with theirs or identifying differences and/or similarities were R2, R7, R8, R17, R22, R24 and R25. R2 thought, for example, that the people of his culture were different from Ugandans in that they were more expressive during social exchanges, and he said that: In terms of culture, my countrymen are more expressive: we tell you if you please me. I will tell you if it is good. But when I came here, people would not tell you, they would not really tell you their mind because they don’t know who sits next to you maybe from

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security. But all of us have a history, but that should not define you as an individual- we should grow beyond that. Other respondents gave value judgments of their cultures and that of Uganda and thought the latter was worse than theirs. These included R8, R17, R20, R22, R23 and R25. Talking about time management, for example, R25 voiced a poor rating, and had a bad opinion of the Ugandans he had interacted with, stating: The most prominent is about time management. For example, if we have a target of finishing work in a day, the locals will take 3 days. If we have an appointment with someone and we agree for 9.00 o’clock, they turn up at 2.00 pm in the afternoon. So when I tell them to turn up at 10.00 o’clock, I know that they will come at 12.00 noon, so this is a big difference in our cultures – as far as time management is concerned. The indicators for the thoughts of the respondents on culture as a concept of culture cognitive contradictions are presented in Table 4.18. The discussions and the varied perspectives of what constituted culture indicate a deep appreciation of this concept by the respondents. This was an affirmation of diversity of cultures, but it was also indicative of need for expatriates to pursue adjustment measures to narrow any cultural distance that may have affected the conduct of business in a setting with different characteristics.

Table 4.18. Analysis of the concept “culture”

INDICATORS TRANSCRIPT REFERENCES -more expressive R2, R7, R17, R22, R23, R23, R25 -don’t tell their mind -find hindrances -really frustrating -going too slow -monthly check -cultures change -slippery slope -easy to make friends -willing to assist -need honest people -lower people have value -like a book -disrespecting regulations -get rich quick -not work hard -short term gains -still learning -different culture -time management -financial management -non-saving culture -lose transaction time

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Table 4.18 illustrates varied perceptions of culture by different people and how it manifested in different environments. For the expatriates, this was indicative of need to adjust to cultural realities of a different cultural environment.

Cultural-cognitive category: analysis of the concept “corruption” The concept of corruption attracted discussion from a majority of respondents – 15 in all. Discussions of this concept by some, focused on a condemnation of corruption. Other respondents, however, only described corruption or simply explained the channels of corruption. R4 and R8 for example, dwelt on the negative side of corruption. Specifically, R8 stated that: In the past, you could run a business with no bribes or corruption. And now it has become quite frequent. Other respondents, including R1, R8 and R21, discussed the nature of corruption. Some respondents also suggested ways or means of curbing corruption: by tackling it through tight regulations (R10); by use of the media to expose and shame the corrupt (R8); by applying rules without discrimination (R13); by putting in place clear principles (R24); or through the hiring of local lawyers (R25). One respondent (R17), however, argued that corruption had not existed in Uganda in the past and R10 expressed a deep worry that, rather than declining, corruption in the Uganda business terrain was on the increase: It has been gradual, but we have noted that corruption has been on increase for a very long time now. The words and phrases capturing the thoughts of the respondents on the concept of corruption (an element of cultural cognitive contradictions) in Uganda are presented in Table 4.19.

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Table 4.19. Analysis of the concept “corruption”

INDICATORS TRANSCIBED REFERENCES -Ugandan way R1, R2, R4, R8, R10, R13, R17, R18, R19, R20, R21, R22, R24, R25 -something for a price -manifest everywhere -several instances -it’s not okay

-culture of corruption -quite frequent -it’s illegal -picking holes -money fix problem -small scale corruption -every day, every week -tax breaks -has to pay -corruption is alcoholism -networks are broken -media role -politics and corruption -no consequences -it’s a trend -been gradual -performing economy -tight regulations -urgency breeds corruptions -no favouritism -social values -onset of corruption -no accountability -something small -high value taxes -lots of bureaucracy -money at all cost -defeating the system -clear principles -local lawyer

The interviewees using the words and phrases illustrated in the above table variously discussed the concept of corruption. During discussions, some respondents gave corruption a cultural spin and discussed it as an inherent practice attributed to the ways of life of the people in the host country Uganda. Other respondents however, differed from this, and attributed the vice to institutional gaps or weaknesses in some countries including Uganda, where they were working. All of them, however, agreed that corruption was not good for business and that it had to be discouraged and resisted.

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Cultural-cognitive category: analysis of the concept “integrity” Some respondents who discussed the concept of integrity approached it by condemning the misbehaviour of local officials they knew of, who transgressed professional practices. A few respondents discussed integrity focussing on how they themselves upheld it, as company policy required them to. R13, R17 and R24 were critical of what they termed a lack of integrity that compromised service delivery among some local Ugandan officials. R17 was, for example, very critical of the Ugandan police force and said: People have also changed. Today people never have enough money. If you go to police, you have to give money. You have to pay in order for them to work on your file/case: if you don’t, the file is not moved. Some respondents, however, did not limit discussing integrity to local officials or Ugandans in general. They thought that they themselves had to project integrity while doing business. These included R1, who called for moral stature in business. R18 stated that he never compromised on upholding the image of his company under any pretext, while R19 starkly said that he never bent business rules, for anything. Other respondents, like R22, contended that illegal practices were simply not allowed in their company. In such a case, R24 indicated that, in his company, they did not stop at simply upholding good practices but whoever transgressed the codes of conduct of the organisation was severely dealt with, in order to uphold integrity among members. He thus said: If it is an issue of integrity, or accepting a bribe or fraud, we will go through the due process and, if found guilty, they will be expelled from the organisation, and if it is a criminal offence we try our level best to make sure the case is prosecuted to the full extent of the law. The indicators projecting the thoughts of the respondents on the concept of integrity as a component of culture-cognitive contradictions are presented in Table 4.20. The interviewees had varied perceptions of what constituted integrity, and the phrases they used while discussing this concept are illustrated in this table. Upholding integrity was underlined as a key element of business practice and traditions. Based on the responses reflected by the phrases used about this concept, some respondents expressed discomfort with the degeneration of integrity in some offices they had visited. They were equally uncomfortable with some members of the business community who never upheld integrity in the course of doing business. Most of these respondents underlined the strong need to uphold integrity by everybody as a core value in the conduct of business in Uganda, or elsewhere.

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Table 4.20. Analysis of the concept “integrity”

INDICATORS TRANSCRIPT REFERENCES -moral standing R1, R3, R13, R17, R18, R19, R22, R24 -tell obvious -just let go -lack of integrity -money spoils -you have to pay -money by other means -poor quality -flood market -cannot be seen -won’t bend rules -not allowed -expelled and prosecuted -conduct self -transparent -play by rules

Table 4.20 illustrates varied perceptions of what constituted integrity. Upholding integrity was underlined as a key element of business practice. A number of respondents were uncomfortable with some members of the business community who never upheld integrity in the course of doing business in Uganda or elsewhere.

Cultural-cognitive category: analysis of the concept “magendo” Almost all of the respondents interviewed contributed to the discussion of the concept magendo. Their discussions ranged from expressing total ignorance about the concept while indicating desire and curiosity to know what it was. Others had a fairly good knowledge about the concept. Some of the respondents thought magendo was akin to corruption. Those who thought that magendo was similar to corruption in nature and practice were R5, R14, R17, R18, R19, and R21. R21 pointedly stated that: Magendo, magendo, magendo is something to do with… it is like corruption. Whereas some respondents had little knowledge about magendo, they were curious to know and learn what it was, and how it related to the conduct of business. Among these were R1, R3, R4, R7, R9, R11, R16, R17, R20, R22, and R25. R1, for example, stated: I have never heard about the word magendo, I did look it up but do not remember what it was. Seven respondents had a good conceptualisation of what magendo was. These were R8, R10, R12, R18, R19, R21 and R23. R18, for example, discussed clearly what he thought magendo was, its genesis and trends, stating that:

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I think magendo has always been there, at least since I lived. People are changing; it is bolder now than twenty or so many years ago. Earlier on, people were a little bit more afraid, it is more institutionalised today, it is more or less a culture. It is more complex in the sense that the areas it permeates have widened. The words and phrases projecting the thoughts of the respondents on magendo as a component of culture-cognitive contradictions are presented in Table 4.21.

Table 4.21. Analysis of the concept “magendo”

INDICATORS TRANSCRIBED REFERENCES -cases everywhere R1, R2, R5, R6, R8, R10, R12, R14, R15, R17, R18, R19, R20, R21, R22, R23, R24, R25 -not limited to Africa -corruption -pay to have things done -gain prominence -black market -informal market -smarter -changed business -challenging -exploit loopholes -even playing field -stiff competition -good standards -unusual way of acting -under the table -inducements -favours -lower premium -bolder people -more institutionalised -a culture -avenue for corruption -bigger budgets-bigger corruption -not limited to money -getting worse by day -a soda -shortage system -free market -cut a deal -of different forms -new avenues -different players -informal business

Level of knowledge on magendo As the informal institution of magendo institution was the major focus of this research, the inquiry paid special attention to its discussion. Despite being a novel concept, magendo attracted substantive discussion among respondents. A number of respondents were ignorant about the concept, but were curious to learn about it and how it impacted business conduct –

131 these included R1, R3, R4, R7, R9, R13, R16, R17, R20, R22 and R25. Perceptions of some respondents regarding magendo varied from the institution being akin to corruption, to describing it as a product of institutional failures (R2, R5, R15, and R24). Some respondents had heard a little bit about magendo, but could not conceptualise it properly (e.g. R6 & R21). Seven of the 25 respondents, that is, R8, R10, R12, R18, R19, R21 and R23, nevertheless gave comprehensive statements on magendo. Table 4.22 illustrates, a number of respondents – most especially East Africans but also non- Africans - had substantive knowledge of magendo. Among these was R8, a European who had lived and worked in Uganda for 30 years; R10 – an Asian who had lived and worked in Uganda for 15 years; R12, an Asian who had lived and worked in Uganda for five years; R18, an African who had lived and worked in Uganda for eight years; R19, an African who had lived and worked in Uganda for five years; R21, another African who had lived and worked in Uganda for nine years; plus R23, an Asian who had lived and worked in Uganda for 40 years.

Table 4.22. Level of knowledge of magendo by the interviewees RESPONDENT KNOWLEDGE ORIGIN YEARS INDUSTRY R1 None Europe 13 Nutritionist – Small R3 None Africa 1 Aviation – Medium R4 None M/East 3 Food processor –Medium R7 None Europe 20 IT – Small R9 None Asia 2 Petroleum – Medium R13 None Africa 15 Fabrication – Small R16 None Asia 2 Manufacturing – Medium R17 None Asia 27 Hotel – Small R20 None Asia 3 Banking – Big R22 None Africa 5 Import/export – Medium R25 None Asia 3 Agro farming – Big R11 None European 30 Medical R2 Moderate Africa 9 Insurance - Big R5 Moderate Asia 10 Finance- Small R6 Moderate Asia 36 Manufacturing- Medium R15 Moderate Asia 21 Fabrication – Small R14 Moderate Africa 7 Education-Medium R24 Moderate Africa 3 Finance – Big R8 High Europe 30 Media- Medium R10 High Asia 15 Finance – Medium R12 High Asia 5 Import – Big R18 High Africa 8 Insurance – Big R19 High Africa 5 Private security – Big R21 High Africa 9 Petroleum – Big R23 High Asia 40 Medical – Medium Source: Generated for this study

Since Uganda is an East African country, together with four other countries, Burundi, Kenya, Rwanda and South Sudan, responses indicating knowledge about magendo from East

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Africans were not unexpected. For example, R18, a 56 year old African who had lived and worked in Uganda as an insurer had this to say about magendo: I think magendo has always been there, at least since I lived. People are changing, it is bolder now than twenty or so years ago. Earlier on, people were a little bit more afraid, it is more institutionalised today, it is more or less a culture. It is more complex in the sense that the areas it permeates have widened. What was common to the Non-East Africans who properly conceptualised and discussed magendo, was their long stay in this part of the world. This may have offered them an opportunity to appreciate and understand the cultural cognitive contradictions that were specific to this region, including the concept of magendo. R10, a 39 year old Asian who had lived and worked in Uganda for 15 years and worked in a financial institution, had this to say about magendo: I think there has been a revolution as compared to what used to be before. What has happened is, people have become smarter, as times have changed. There are new ways of doing business as business has changed. Earlier on, everything used to be manual, now you have to use computers. You have globalisation and the digital world. So even magendo itself has changed compared to before, it has evolved. R8, a 66 year old European who had lived and worked in Uganda for 30 years in various industries, also made the following statement about magendo: Magendo is not a new word. Magendo refers to a period between 1982 – 1986. That was the time the word magendo started gaining currency. So it is better to check when the word first gained prominence which can tell for example when corruption gained momentum in Uganda. R23, a 55 year old Asian, was another non-African who had lived and worked in the sector of health for over 40 years and had broad appreciation of the concept. He presented an elaborate narrative of the chronology and trends of the magendo institution, and brought to the fore interesting insights that are taken up in the broader pursuit of the analysis of the findings for this study. His thinking and ideas are provided in the following statement: Magendo in Amin’s time is when the true word magendo started. And that is when connected people were hoarding goods and services that people did not have access to like salt, sugar and soap. They would actively create a shortage system deliberately, while you are hoarding you would drive the price up. That was the real magendo of that time. You needed a licence and because everyone was trying to make money along the supply chain, magendo came in because it was not a free market. I think the concept of magendo today would be probably in a different perspective. Maybe not in goods and services, because the free market has allowed goods and services to proliferate. Maybe magendo today has got to do with how to cut a deal and then make money in supplying for that deal. For example, if it is the road works, and you are to supply lubricants, you can hoard and escalate the price up and then share that difference with the guy who gives the licence to bring in that commodity. Magendo is taking place in different forms, in new avenues, new forms with different players and is more complex.

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R23’s perspectives underscore two aspects surrounding the magendo phenomenon: the earlier conception of magendo, which epitomised a shortage system of the 1970s; and the current magendo conception whose avenues and characteristics include cutting big deals, having different players and is of a nature that is more complex. The last bit of this statement – complexity – underlines, therefore, the gist of this study: to explore how expatriates working in Uganda overcome or manage complexities in form of business contradictions and paradoxes. The varied discussions by respondents on the magendo phenomenon is testimony (i): to the existence of the magendo institution in Uganda; and (ii) that magendo, as an informal institution, has been around for some time, as stated by R8: magendo is not a new word. While its genesis may not be accurately known, all those who discussed it were emphatic about its negative impact on the conduct of business, with some also underlining its changing characteristics.

A revised conceptual framework Figure 4.1 illustrates how the 18 concepts are grouped in relation to a particular institutional category, and how responses to these contradictions became the basis for theory building. The revised framework highlights the nature of relational contradictions and tensions that result due to institutional differences that exist between the host country, Uganda, and the home countries of the expatriate business people. The identified concepts indicate particular sources of tensions that characterise each of the four institutional categories. The expatriate responses to these paradoxes and contradictions ultimately lead to the theory formulation that is discussed in Chapter 5.

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Figure 4.1. A revised conceptual model of institutional contradictions resulting in theory formulation

Relationship between words, concepts, categories and theory This sub-section has presented and discussed phrases and words that were frequently used by the interviewees. These have been organised into 18 analytical concepts that were later grouped into four categories. These four categories were based on the analytical framework discussed in Chapter 2 and revised as Figure 4.1. These constitute the basic building blocks for theory formulation that is discussed in Chapter 5, Sub-section 5.5.1. This process of abstraction that starts with the identification of key words, concept generation, category development and theory formulation is illustrated in Figure 4.2.

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Figure 4.2. Relationships between words/phrases, concepts, categories and theory

Words/ Concepts Categories Theory phrases

Source: Generated for this study Figure 4.2 illustrates the inductive path of the analysis whereby the forward arrows illustrate the process of movement from the small details of words, thence to concepts, followed by categories and finishing with a specific outcome, which is the generation of theory. The feedback arrows in the middle equally illustrate a pattern of interaction whereby, in reverse order, theory is linked to or is a product of categories, as categories are linked to concepts and concepts are linked to words. In addition, the lower feedback arrows illustrate that theory is the composite outcome of categories, concepts and words put together in a reverse pattern. Words/phrases that describe or refer to a particular issue constitute a particular concept and the concepts are grouped into categories. The relationship between words, concepts, categories and theory for this study is based on the ability of the generated theory to offer an explanation based on these constituents (Berg, 2001). Fig.4.2 is the graphic representation of how progress is made from raw data to theory. This sub-section has discussed various issues that became evident during the interview process. The study respected the subjective opinions voiced by the respondents in order to uphold the respondents’ views and opinions in the manner and form that the respondents presented them. This is a prerequisite for the study’s research approach.

4.5 Findings Defining categories is an important process of data analysis as it enables one to compare, contrast and build theory from the findings from the data. Categorisation also enables the researcher to maintain a connection between indicators, concepts and categories. The following is the process undertaken in categorising the findings into the 18 identified concepts and, descriptions of how they fit into the totality of the study. The four basic categories for this study are the four exogenous variables of the analytical framework as presented and discussed in Chapter 2. These were defined as context contradiction, regulative contradiction, normative

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contradiction and cultural-cognitive contradiction. These four categories constitute the basic building blocks for theory formulation (Babbie, 2015). Each category identifies and underpins how various dimensions are characterised. Each category comprises one big idea that constitutes conceptual clusters grouped together to form an explanatory pattern. For each category, a thematic table is generated to highlight any patterns that occur within the data, through association and linkages between phenomena (Babbie, 2015). After discussing each category, a thematic table is drawn. Thematic tables are the visual evidence that underline why three or more sets of phenomena, – concepts - are attached to the particular category of the table. The thematic table for each category illustrates therefore, how synthesised data are grouped, and related the discussion highlights links with the analytical framework. Each thematic table comprises the first column under which all the concepts under that category are listed. The second column carries the themes discussed, and is divided into sub-themes discussed by the various respondents (for example R2 or R3). As an example, Table 4.23 illustrates the thematic coverage of the category of context that is discussed under three concepts: business environment, social issues and economic issues. The discussions by the respondents on the business environment surfaced four broad areas or sub-themes that the researcher summarised for the table: Uganda offers a good working environment – Uganda good; Uganda business environment is bad – Uganda bad; Uganda business environment is similar to the expatriate’s home country – similar to home; home country is better than the business environment of Uganda – home better.

4.5.1 Findings on contradictions experienced on business environment Context can be defined as the situation within which something exists and in the case of this research, the economic, social and environmental elements. A business context would influence businesspeople undertaking ventures in other environments and facing institutional novelties; and as Aldrich and Fiol (1994) suggests, they must navigate such situations. Those undertaking such ventures must not only curve out novel practices, they must also cope with difficulties stemming from their nascent status (Aldrich & Fiol, 1994). The host country, Uganda, into which expatriate business people moved, may have a number of elements that are politically, economically and socially different from those of their home countries. These contextual factors may have several ramifications for the expatriate business people operating in this country. These are explored through answering related research questions and understanding how expatriates navigate these contradictions.

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The guiding questions on context contradiction are: i) Tell me about your business experiences since coming to Uganda? ii) What is it like to do business in Uganda compared to your home country? These questions were general, focusing on respondents’ business experiences in a new context in comparison to that from where they originated. The responses to these questions generated three general sub-themes: business environment, social issues and economic issues. Some interviewees, such as R1, discussed context differences based on bad business practices in Uganda when she suggested that, one has to pay for everything, even what you are not supposed to pay for. For this respondent, this practice was not only disturbing, but also strange compared to what she was used to in her home country. The thoughts of other respondents such as R4, R9 and R 13 dwelt on business behaviour that was different. A number of respondents had different views on whether the business environment of Uganda was any different from their own countries. R5 was of the view that Uganda was an ideal and near perfect environment for business, and that was the reason he had stayed in Uganda for ten years. These positive perceptions were echoed by R2, R8, R13, R14, R19 and R21, most of who had lived and worked in Uganda for a number of years. For R24, what underlined the difference between his country and Uganda is what he described as the influence of politics in business in Uganda. He thought that this was improper. This line of thinking, however, differed from that of R25 who thought that the government of Uganda should have been playing a bigger role in supporting business ventures. Compared to Uganda, R25 thought that the intervention policies of her country were better than what the government of Uganda was doing. The respondents also discussed social and economic issues as a basis for context contradiction. R1 and R4, for example, expressed discontent with what they termed too much talk and little work among Ugandans. They thought this behaviour affected productivity in a number of ways and that this social behaviour was different from what a number of these respondents were used to in their own countries. Other respondents thought the differences between the Ugandan business environment and their home countries were economic, citing economic parameters and the performance of Uganda vis-à-vis their home countries. R13 and R18 thought that Uganda’s business environment was badly regulated; leading to what R13 described as numerous companies that compete against one another in a relatively small Uganda market. These two respondents indicated that they did not enjoy the stiff competition they faced in this country. The views of these two were, however, contradicted by other respondents who enjoyed competition in

138 business dealings. R24, for example, thought that unhindered competition was good for the financial industry in which he worked, as it led to better business prospects.

Context contradictions thematic table The respondents who discussed business environment focused on four broad issues: i) Uganda is a good business environment; ii) Uganda is a bad business environment; iii) Uganda is similar to their home countries; and iv) their home country was a better environment than Uganda. All those who thought Uganda was a good business environment, except R8, were Africans and Asians who had stayed in Uganda for a varied number of years and worked in different industries (R2, R5, R6, R13, R14, R15, R16, R17, R21, R22, R24 and R25). The majority of those, however, who thought Uganda was a bad business environment were of European and Asian backgrounds (R1, R4, R7, R9, R10 and R23). They worked for different industries of different sizes, and they had lived in the country for varied number of years. Those who thought that Uganda was in many ways similar to their own countries were African (R2, R18 and R19). This pattern/composition can give credence to an argument for similarity of businesses behaviours within the same geographical environments, that is, the proximity argument, or for countries within similar regional or economic blocks. Those who thought of their countries as being better than Uganda were a mixture of Africans and Asians, who had been operating in Uganda for a relatively few years. Social issues were discussed according to whether respondents experienced bad social behaviour among Ugandans or not. Expatriate businesspeople who harboured social concerns against Uganda’s social infrastructure were generally Asian expatriates, while African expatriates thought social issues were immaterial, in that they never affected the conduct of their businesses. Some Europeans, such as R6, thought that the social issues back home were more straightforward than those in Uganda. Economic issues were also discussed, and these focused on whether Uganda’s economy was good or bad, and the stiffness of competition in the conduct of business. Those who thought it was good were generally Africans and Asians, while those who thought it was bad were a mixture of Europeans and Asians, the majority of whom ran small or medium sized businesses. Those who did not like the stiff competition in business were generally Africans and Asians.

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Table 4.23. Thematic coverage of the context contradiction CONCEPT THEME FOR DISCUSSIONS Business Uganda good Uganda bad Similar to home Home better environment

R5, R8, R13, R14, R19, R1, R3, R4, R7, R10, R2, R18, R19 R1, R5, R9, R21 ,R22, R25 R17,R23 R25

e.g. R5: Business is good; e.g. R4: The service is e.g. R18: Practices are e.g. R9: It is have enough chance to very poor. the same. much easier in develop. Dubai. Social issues Concerned Unconcerned R1, R3, R4 ,R6, R7 R2, R5, R20, R22, R15, R22 R24

e.g. R6: A lot of talking but e.g. R5: I have little work. enjoyed my last ten years. Economic Good economy Bad economy Stiff competition issues R2, R4, R5, R19 R6, R8, R9, R9, R10 R13, R17, R18 R20, R24, R25 R13, R17 e.g.R24: Environment is e.g. R9: Hardly e.g. R18:In Uganda, conducive for business. breaking even. competition is intense Source: Generated for this study.

Table 4.23 is a thematic summary of the category of context contradiction. It illustrates a higher level of abstraction for the thoughts of the respondents about this category based on three concepts: business environment, social issues and economic issues. The three concepts illuminate the sources of paradoxes and tensions associated with context contradictions faced by expatriates who do business in this environment. Based on this thematic table, there seem to be no uniform opinion, rather expatriates have different opinions as to whether the Ugandan business context is good (8), bad (7), the same as home (3) or home is better (4). Similarly, some expatriates were concerned about the bad social issues characterising Uganda (7); on the other hand, others were unconcerned about it (5). Equally, there was variation in perception about the economic status of Uganda, whereby some expatriates thought it was good (7), others thought it was bad (7), while a few simply resented the stiff competition (3). This is evidence that different expatriates experience the Ugandan business context differently. As discussed above, the context category reflects typical perceptions of a wide array of businesspeople working in a business environment that is different from that of their home country. Although their thoughts focus and address a particular context of Uganda, what they discussed may have been true for any other context, notably those in the developing world. These thoughts indicate that, to a foreigner, Uganda is a context characterised by a number of

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contradictions, some of which are unique to the Ugandan business environment, but some of which may be of a universal nature.

4.5.2 Findings on contradictions experienced regarding regulative institutions Regulative institutions are legally sanctioned behaviours, such as the formal rules, laws and the constitutions of countries (Kshetri & Dholakia, 2011), and are characterised by boundaries of what can and cannot be done. The regulative pillars of countries are mapped with formal institutions and constraints in the form of macro-level rules (North, 1990). The country in which the study was conducted has rules and regulations that may be different from those of the home countries of the expatriates, thus leading to possible contradictions that this research explores and analyses. The guiding questions on regulative contradictions addressed both government and company issues. These were: iii) How is the conduct of business in Uganda different from that in your country? iv) Tell me about any differences between government policies that regulate business behaviour in this country in comparison to your own country? v) Tell me about any differences in company codes of conduct here compared to your own country. The questions for this category sought to underline contradictions/paradoxes based on the regulative differences between Uganda and the home countries of the expatriates. The questions focused on four sub-themes that have been discussed as concepts: legislative issues, policy issues, issues of standards and ethics/ethical behaviour in business. Regulations that guide business conduct in Uganda and the way various legal regimes affected business in this country, highlight contradictions that were discussed by various respondents. R2, for example, was at pains to implement what he did not know how to implement. He complained against a requirement to implement certain policies for his business, which lacked any proper legal back up. When he was asked to comment on government policies that regulate business behaviour in Uganda, R2 voiced concern captured in the following transcription: ...there was a new law, a new Insurance Act 2017; the Insurance Act was changed to a new legal framework for insurance. The regulation to implement that Insurance Act was not fully developed. On 30th March 2018, the regulator told me the law was operational, yet I did not know the framework, the statutory instrument, the regulations under which I will implement the law. It puts you in a difficult position because this is

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a new law that has no framework for implementing it. So I have to implement something I don’t know how to. Some respondents talked about policy issues in their discussions, while a few of them voiced mixed opinions on company codes and ethics. Some respondents also examined the issue of standards as a factor, indicating regulative contradiction in differing perspectives. Discussing the unsatisfactory nature of business policies in Uganda, R3 sounded philosophical but evasive when he suggested that there might be something wrong with either the policies or the people implementing policies. For R2, the challenge lay with adherence to existing policies and, in part, he blamed businesspeople themselves when he stated that policies are there, documents are there in Uganda but are hardly followed to the letter. The few respondents who were willing to discuss codes of conduct in their business dealings upheld the primacy and importance of safeguarding the image of their businesses despite temptations to do otherwise. R21, a 33-year-old African who had lived and worked in Uganda for nine years, stated for example that, We try as much as possible to be straightforward and to follow the regulations of the country. We do not do so because our management does not allow that. For taxes, we prefer paying the correct taxes because it’s a risk for us if you compare yourself with Ugandans. R13 blamed low wages for the low standards in Uganda and stated that, normally, if you have low paying industry, you don’t have high standards. Ethics or the lack of them in the business environment of Uganda equally yielded varied discussions from the respondents. Some thought there was a lack of ethics in this environment, while others were restrained in their opinions or cared less about ethics and were willing to do anything to move their businesses forward, minus ethics. R8, for example, stated that of course, I may be breaking the law, but this morning I gave some money to someone to take to the licensing office. This respondent was not only knowingly breaking the law by giving a bribe but, due to constraints or any other excuses, he put ethics aside to move his business forward and get the licence he needed.

Regulative contradictions thematic table Respondents who discussed legislative issues dwelt on compliance or defiance of regulatory codes while others were judgemental as to whether the local legal regime was good or bad. All those who thought it was in order to comply with local rules were expatriate Africans and Asians who worked for either insurance or financial institutions – none were running a private

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business. The majority of those who talked about sidelining local rules were expatriate Africans who operated small or medium sized businesses. Respondents who discussed policy issues focused on the bad side of policies in Uganda and demonstrated either respect or disrespect for policies. The majority of those who expressed negativity against policies in Uganda were expatriate Europeans who ran small or medium sized businesses. Those who thought it was ideal to respect policies at any rate were expatriate Africans and Asians, while some respondents thought that policies in Uganda were simply being disrespected. Respondents who discussed ethics dwelt on the negativity of it, while others discussed the unethical behaviour that they experienced. All expatriate Europeans, plus female respondents, spoke negatively against the ethical behaviour in the Ugandan business environment. Those who discussed unethical behaviour ran medium and big businesses, and most of them had stayed in Uganda for more than ten years. All those who discussed company codes did so in terms of the strictness with which they observed company rules and regulations for their business, and all worked for large organisations. Table 4.24 is a thematic summary of the category of regulative contradictions. It illustrates a higher level of abstraction in the thoughts of respondents about this category based on five concepts: regulatory issues, policy issues, standards, ethics and company codes. These concepts highlight causes of paradoxes and tensions associated with regulative contradictions faced by expatriates working in Uganda. As was the case with context contradiction in the previous section, there were varied opinions regarding regulative contradictions. Table 4.24 illustrates that five expatriates chose to comply with the local regulatory requirements while four opted not to. Seven expatriates had negative opinions about policy issues in Uganda; three respected them, while another three disrespected local policies. While seven respondents thought standards in Uganda were bad, four opined that there were simply no standards in Uganda. Ethics attracted two schools of thought whereby a sic had negative opinions against ethics, while another six highlighted the nature of unethical practices. There was only one, a single opinion espoused regarding company codes, with five respondents arguing for upholding them at any cost.

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Table 4.24. Thematic coverage of the regulative contradictions CONCEPT FOCUS OF DISCUSSIONS Regulatory Comply with Defy issues R2, R3, R18, R20, R24 R8, R13, R14, R22 e.g. R2: We comply with legal e.g. R8: Off course, I may be requirements. breaking the law. Policy issues Negativity Respect for Disrespect R1, R2, R3, R4, R6, R15, R18 R14, R19 R7, R8, R16 e.g. R6: People have to follow e.g. R14: Policies are not e.g. R7: The process of registering them. really adhered to. business was difficult. Standards Bad standards in Uganda No standards R1, R8 ,R13, R14, R15, R17, R23 R4, R7, R22, R25 e.g. R1: Nobody cares about a e.g. R4: But here people do not customer. care. Ethics Negativity against Unethical behaviour R1, R7, R8, R17, R22, R25 R4, R10, R13, R17, R19, R23 e.g.R7: It is always very e.g. R19: They do not want to discouraging. pay. Company Respect codes R18, R19, R21, R22, R24 e.g.R18: As I said, our company is very strict. Source: Generated for this study.

The perceptions expressed by the expatriates and illustrated in Table 4.24 reveals that developing economies such as Uganda often have poor or weak regulatory institutions. Some expatriates underscored the weakness of the local institutions in Uganda, and their discussions brought to the fore several gaps in policies, standards and ethics, all of which impacted their businesses. Their arguments did not point to a lack of regulatory institutions, but rather an absence of will to enforce or implement some of these regulative requirements.

4.5.3 Findings on contradictions experienced on normative institutions Normative institutions are informal pillars directed at evaluating phenomena in order to contribute to the improvement of public governance and administration (Scott, 2013). While institutional theory explains behaviour that is influenced by social norms, in many instances people act not because of normative conformity (Aldewereld, 2009), but because they perceive the act to be the right thing to do (Wendt, 2001). The normative variables of the framework for this study, therefore, offer a useful description of Uganda’s business environment vis-à-vis that of the expatriates. The normative institutions of the host country may, however, be different from those of the home countries of the expatriates, resulting in tensions and contradictions, the focal point of this research. The guiding questions on normative contradictions were open and broad and, by being so, they attracted varied discussions. The questions were:

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vi) Have you experienced any informal business practices in this country, and can you give some examples? vii) Could you please explain how you deal with these informal business practices? The respondents discussed a wide array of issues, yielding various concepts in relation to these questions, and these included relationships, networks, power, trust, bribery and fraud. Whereas some respondents discussed relationships as being advantageous in business dealings, others thought otherwise. While some respondents valued networks, in that they play an important role in business conduct, others said that they preferred working under strong and firm systems. Some respondents gave opinions on the role of power in business, while others discussed why it was right to be trustworthy in business and the reasons why one should always avoid bribery and fraud. Discussing relationships as an element of normative contradiction, R29 was, for example, critical of the practice of ascribing achievement as opposed to merit. Talking about preferential treatment in some organisations, R19 said he knew of some companies which employ people because they speak the same language. He criticised it as a bad business practice as it retards business by recruiting incompetent people while denying properly qualified ones the chance to join such organisations. Some respondents, however, thought that having networks was the key to success and perseverance in Uganda. R7 thought that the right choice of a person to deal with was the one he knew. Another interviewee, R6, had a well laid-down method of doing his business that he explained thus: for me I know where to go if I need anything. Few respondents, however, voiced opinions on the role power or power balance played in the business environment in Uganda. R8, for example, discussed power in terms of the power imbalance between him and the local authorities whereby, in one instance, he was unfairly forced to pay for a licence he had already paid for, thus losing money through double payment for the same licence. Trust, as an element of normative contradiction, was also rarely discussed by the respondents, although it had originally been thought by the researcher to constitute a vital element in business dealings, most especially when one is operating in a foreign country. Some respondents, not unexpectedly voiced opinions on bribery in relation to Uganda’s business context. R2 argued that bribery was a universal phenomenon that was not limited to Africa. He pointed out that there were several cases of bribery in UK that he clearly knew of, and one of them involved a government official. R17 discussed bribery in terms of inconveniences associated with it, but R20 looked at the positive side of bribery when he stated that you pay money, you get everything you want. Most

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respondents, however, voiced misgivings against the vice and advised avoiding it, as R23 argued; you encourage others to continue using you as a target, as you become a soft target whom they can visit any time. Equally, the few respondents who discussed fraud described it as a bad practice and frowned upon it, some arguing that it was not business-specific and that it cut across boundaries. One interviewee, R2, stated categorically that fraud is not limited to any business but permeates all business entities. Concerning his own industry, R2 he stated that we also have the challenge of insurance fraud, it is also here in so many ways.

Normative category thematic table Some respondents discussed relationships by way of focusing on whether they were good or bad for business. The respondents who discussed networks dwelt on what was good/bad with networks. Those who talked about the benefits of networks ran either small or medium business and were of varied backgrounds. The one who talked negatively about networks in business was a European. The respondents who discussed power focused on power balance in business relationships. All of them had lived and worked in Uganda for more than 30 years. Trust was discussed as an attribute in business transactions, most especially in situations where one has to deal with people unknown to him/her. On the other hand, the discussion of bribery focused on whether it was good or bad. Those who talked negatively against bribery were Africans and Asians. R20, who had lived and worked in Uganda for three years, however, voiced support for bribery. Fraud, on the other hand, was discussed in terms of its manifestations in the Ugandan business environment. Table 4.25 is a thematic summary of the category of normative contradictions. It illustrates a higher level of abstraction for the thoughts of the respondents about this category, based on six concepts: relationships, networks, power, trust, bribery and fraud. The six concepts discussed underlie the paradoxes and tensions associated with the normative contradictions faced by expatriates living and working in Uganda.

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Table 4.25. Thematic coverage of the normative contradictions CONCEPT FOCUS OF DISCUSSION Relationships Good Bad R7, R22 R19 e.g. R: I go for one I know about. e.g. R19: Speak same language. Networks The good The bad R3, R6, R7, R21 R1 e.g. R3:Want to meet e.g. R1: Go to somebody else. people and network Power Power balance R8, R13, R23 e.g. R8: Would be more expensive. Trust Why trust? R1, R17, R21 e.g. R21: Call someone with connections. Bribery Against For R7, R14, R17, R18, R21, R23 R20 e.g. R23:How many people will you buy? e.g. R20: Pay, get everything. Fraud Manifestations R2, R14, R17, R19 e.g. R2: They forge additional documents. Source: Generated for this study.

Opinions on normative institutions were as varied as with other institutions in the study, although only a few discussed them in comparison to other institutions. Based on the thematic table 4.25, two respondents thought relationships were good, while another one thought relationships were bad. Four respondents thought networks were good, while one thought they were bad. Three voiced a single opinion on power, and this discourse was limited to power balance. Similarly, trust attracted one line of argument from three respondents. One, on the other hand, supported bribery, while six were against it. Four respondents who focused mainly on its manifestations also discussed fraud. These findings suggest that normative values may be a factor related to several things, including the culture of certain groups of people, or that of a particular organisation. The findings also suggest that with wide cultural/psychic distances between people, contradictions and paradoxes, such as those discussed by the interviewees, are likely to ensue. The study highlights, nonetheless, that perceptions about normative contradictions are as varied as the contexts that are being discussed. In this regard, Uganda is no exception; from an outsider’s point of view as the findings indicate expatriates of different backgrounds had different perceptions of what pertained in the host country Uganda.

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4.5.4 Findings on contradictions around cultural-cognitive institution Cultural cognitive pillars are related to informal institutions (Kshetri & Dholakia, 2011), and evidence suggests that, across cultural groups, there are significant differences in cognition and behaviour, and that people can no longer be thought to experience the world in exactly the same way (Endsley, 2015). Cultural institutions affect the actions of people and are a basis from which to interpret people’s experiences and guide their actions (Geertz, 1973). The guiding questions on the culture cognitive category were: viii) To what extent is the business culture in Uganda different from that of your own country? ix) What is your understanding of magendo, and in what ways does it influence your business operations? These semi-structured questions generated discussions on culture, corruption, integrity and magendo. Based on the analytical framework discussed in Chapter 2, the host country’s cultural cognitive institutions may contradict those of expatriates. In the process of doing business, therefore, expatriates interact with local Ugandans who are very committed to their norms at the expense of considerations of legality (Falk, 2019). These norms are grounded in the deep- rooted values of the local people and are largely implicit, which may present challenges to foreigners entering such an environment (Lang & Hofstede, 1993). On the concept of cultural issues, some respondents voiced opinions on what they thought were cultural peculiarities in the environment they were working in. R2, for example, discussed what he thought were the differences that characterised Ugandans in comparison to people from his home country. While he thought his people were more expressive, he was of the view that Ugandans were generally discrete in the way and manner that they dealt with other people. This difference, for him, constituted several contradictions that he was struggling to appreciate, understand and navigate in order to continue working in this environment. The concept of corruption generated various perspectives from the respondents. A good number of them discussed corruption as a bad practice that negatively affected business practice. Those who discussed it thought it was injurious to business in Uganda and that it was widespread, as R10 argued it is becoming a trend now in Uganda. R8 thought corruption was not only bad, but also suggested ways of managing it and, in his words; this was by way of organising periodic changes in leadership, to break the chains of patronage. He thus thought that corruption was fuelled within political circles, hence suggesting regular changes in government or management hierarchies. Varied opinions were thus voiced on corruption, its

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causes, vehicles, modes and ways of fighting it or managing it, with R10 suggesting that once the economy is performing well, corruption levels reduce. The issue of integrity as a source of normative contradiction did not attract much discussion among respondents. Eighteen respondents, however, voiced varied opinions about the magendo phenomenon. Some expressed ideas regarding what they thought magendo to be, but others expressed ignorance, although they were anxious to learn about it. Question 9 specifically focused on magendo, a local informal institution that is thought by some people to influence conduct of business in Uganda. In order to generate discussions on this institution, the narrative was broadened to include magendo and its associated manifestations such as corruption and the erosion of integrity within the environment of the research. This was done according to the argument that magendo is an abstract institution that instils an obligation to act corruptly and that, by so doing, integrity is eroded. Those who voiced opinions on magendo generally noted that it was not a good as it eroded good business conduct , and this line of thinking was represented by R15 who stated that magendo is not the usual way of running business, and that in many ways, it bordered on, and promoted corruption practices.

Cultural cognitive thematic table The respondents who discussed culture focused on the bad experiences encountered in Uganda, plus what they deemed to be differences between their cultures and that of the host country. Those who thought that the local culture was not good came from different backgrounds and worked for businesses of varied sizes, but the majority had stayed in Uganda for relatively a short time of between 3 - 5 years. The majority of those who thought that culture in Uganda was simply different from their own were from different backgrounds and the majority of these worked for big organisations. Interestingly, Respondents who had accumulated ten or more years of living and working in Uganda voiced no opinion on corruption, perhaps implying that they had socialised or were appreciating the situation, as it were - a case of acculturation. The respondents who discussed integrity focused on lack of it or why it had to be upheld during conduct of business. Those who thought it was missing in Uganda were all of European background. The majority of those who spoke about need to uphold integrity in business worked for financial institutions.

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Linking magendo to corruption Table 4.26 illustrates that those respondents who had good knowledge of magendo were Africans from the East African region. Those with a fair knowledge about this concept were generally Asians; however, there was the exception of a European who had a good understanding of this concept. This could be attributed to his long stay and working in various industries of Uganda. All respondents’ discussion on magendo, nevertheless, underlined an institution associated with corrupt practices. The commonly used words/phrases included the following: • corruption • pay to have things done • black market • informal market • exploit loopholes • unusual way of acting • under the table • inducements • favours, • avenues for corruption • getting worse by day • cut a deal

Table 4.26. Thematic coverage of the Culture normative category

CONCEPT FOCUS OF DISCUSSION Culture Negativity Differences R7, R20, R22, R23, R25 R2, R8, R24 e.g. R23: ‘The get rich e.g. R2: ‘We are more mentality.’ expressive.’ Corruption Against Type/s of R4, R8, R10, R13, R15, R17, R1, R8, R18, R21, R24, R25, R20, R22, R23 e.g. R21: ‘Kitu kidogo e.g. R8: ‘It is illegal.’ (something small) Integrity Lack of Upholding of R1, R13, R17 R3, R18, R19, R22, R24, e.g. R17: ‘Money has spoilt e.g. R3: ‘I just let go.’ people.’ Magendo No knowledge Low knowledge High knowledge R1, R3, R4, R7, R9, R13, R2, R5, R6, R15, R21, R24 R8, R10, R12, R18, R16, R17, R20, R22, R25 e.g. R15: I have heard about it, R19, R21, R23 e.g. R7: Not heard about it. in relation with taxation. e.g. R8: Magendo not a new word. Source: Generated for this study

Table 4.26 is a thematic summary of the category of culture cognitive contradiction. It illustrates a higher level of abstraction for the thoughts of the respondents about this category,

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based on four concepts: culture, corruption, integrity and magendo. The four concepts are the sources of paradoxes and tensions associated with culture cognitive contradiction that expatriates face as they do business in Uganda. The thematic table highlights the differing opinions on this institution. While five respondents focused on the negativity of the culture in Uganda, four dwelt on what constituted cultural differences between the contexts. Nine respondents were opposed to corruption while six others highlighted the types of corruption in the study environment. With regard to integrity, three respondents highlighted how it is lacking in this environment, whilst five argued that integrity had to be upheld at any cost. While eleven (11) respondents had not heard of the concept magendo, the study found that six (6) had moderate knowledge of what magendo. Seven (7) respondents however, fully understood and elaborately conceptualised what the magendo concept was. What makes Uganda, or any other country, unique are the cultural cognitive pillars and, in the case of this study environment, an informal institution that is not fully appreciated and understood by expatriates, yet it impacts their businesses in a number of ways. Appreciating and understanding the cultural-cognitive values (abstract values) of another country is, therefore, an important issue for expatriates operating in a country other than their own. This study highlights that informal institutions, such as magendo, need to be understood by expatriates as they may directly or indirectly impact conduct of business.

4.6 Conclusions This chapter has presented the perceptions voiced by expatriate businesspeople who worked in various industries and stayed in Uganda for a varied number of years. Since they were perceptions, the thoughts of the respondents were subjective and were presented in these expatriates’ own words in order to stay as close as possible to what they said, and not what the researcher may have imposed on them. In this chapter, four major themes (categories) and eighteen sub-themes (concepts) reflecting the perceptions of the respondents have been identified and analysed. In summary, regarding context differences, the study finds a wide variety in the perceptions of the different expatriates, with some finding the Ugandan business environment hard to work in while others thought it was ideal. Regarding regulatory institutions, one common opinion was that there is not so much a lack of regulatory institutions, rather a lack of will, power, skills or people to implement them. Regarding normative institutions, the study finds that a psychic distance exists between the countries of origin of the expatriates and the host country. This

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implies that expatriates from countries separated by shorter psychic distance were less constrained by Uganda’s normative institutions compared to those from countries separated by a wider psychic distance. There were also variations in perceptions around cultural-cognitive institutions. Whereas the majority of the expatriates in the study had NOT heard of magendo and did not know the concept or what it implied, quite a few (seven out of 25) understood it. Those who knew the concept were from countries neighbouring Uganda and those who had stayed quite a long time in the country. The next chapter discusses the findings from this chapter, the contribution of this research to theory and the implications for research, policy and business practice.

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CHAPTER 5

DISCUSSION AND CONCLUSIONS

5.1 Introduction This study has examined the perceptions of expatriates operating within the Ugandan business context, a context influenced by an informal institution, magendo. The purpose of the research was to explore how expatriates experienced contradictions, tensions and paradoxes between their home countries’ institutions and Ugandan institutions, and to thereby contribute to institutional theory. This inquiry involved 25 in-depth interviews with expatriate businesspeople from Asia, Africa, Europe and the Middle East working in this country. The study adopted a phenomenological research design using in-depth, open-ended interviews and the subsequent analysis of the data gathered. This chapter begins with a discussion of the findings from the analysis of expatriates’ perceptions around the magendo phenomenon as an informal institution. The next section highlights how the analytical framework was applied to this study. This section is followed by a discussion of how the expatriates responded to the various contradictions raised by magendo. The subsequent sub-section presents the theoretical contribution that the study produced. The next sub-section discusses the significance of the study and thereafter highlights the study implications for policy and management practices; and implications for expatriate business practitioners. The chapter then presents the limitations of the study and suggests areas for future research.

5. 2 Understanding the magendo institution One of the aims of this study was to better define and explain the magendo institution. Whereas there may be varied appreciations and definitions of magendo, this empirical study presents explanations of how it may be understood from an outsider’s perspective. In the process, the study has examined ways that this informal institution links to the contradictions experienced by expatriate businesspeople working in Uganda.

5.2.1 Expatriates’ understanding of the magendo institution The focus of the study was the informal institution magendo, and this research finds that respondents of different backgrounds have varied perspectives on this informal institution. As well as facing tensions created by differences between their homes and the host country

153 cultures and informal institutions, this study finds that culture and psychic distances may reduce over time as a result of conducting business in another country as identified in section 4.4.3, analysis of the concept culture. This may also be due to the process of acculturation. In Chapter 4 Section 4.4.3 (analysis of the magendo concept), R18 observed that the magendo institution that is linked to corrupt practices had become institutionalised in Uganda and was more or less a culture. This observation affirms what Decker (2010) states in 2.7.2 that ‘magendo has irreversibly become a way of life (culture in Uganda)’. R6 noted, however, that expatriates working in this environment eventually adopt and carry on with their businesses and stated that for me I know where to go, which person to talk to and when, if I need something. As Skarmeas et al., (2002) suggest in 2.1 ‘expatriates must be open minded and adaptable so as to deal with the unknown’. There is also evidence that expatriates of African and Asian background, plus those who had stayed longer in Uganda, learnt and understood the dynamics of local institutions, and eventually adopted the survival techniques discussed in Chapter 4. The study also notes that, unlike other informal institutions discussed in Chapter 2, such as guanxi in China, wasta in the Middle East, or jajmani in India, magendo is not rooted in the cultural values of Ugandans. Based on the literature reviewed and supported by a number of interviewees, this informal institution has been driven more by non-cultural factors. Similar to blat in Russia, magendo was originally characterised by shortages of essentials in its country. In the first place, the onset of magendo is traced back to the early 1970s and was due to the decline of Uganda’s formal economy (Southall, 1980). Discussing the role magendo may have played at that time; Wiegratz (2010) states that, though illegal, magendo originally assisted ordinary people to survive and access scarce goods and services. R8 and R23 supported the observations about the origin and evolution of magendo. R8 stated, magendo is not a new word, while R23 noted that magendo is taking place in different forms, new avenues and with different players. They also noted that it has since metamorphosed into supporting different informal business practices. To that end, R23 posited that, today, magendo involves cutting deals between suppliers and officials. What is evident from the respondents is that magendo thrives in Uganda today due to weak administrative institutions, and, to some extent, it continues to be an informal institution of survival with changed characteristics. This suggests that, with stronger formal institutions, an improving economy and stronger tools of governance, magendo may recede. R18 agrees with this observation and made the following statement regarding some characteristics of magendo:

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There is real effort to tackle it, but this has to be an effort by everybody, it is not just for a few people, like sending armed police – this may not end it. When government sets down a policy, it has to be implemented by everybody, regardless.

Similarly, R10 stated, once the economy is performing well, corruption levels reduce. Some respondents had comparative perspectives on magendo and discussed the business situation they faced in Uganda in comparison to other parts of the world they were familiar with. R2 for example stated that ‘I can say that phenomenon magendo is not limited to Africa, off course you can’t do business without facing it. By making this observation, he underlines the fact that characteristics of magendo manifest widely in other parts of the world where business takes place. Similarly, R3, R14 and R15 concur when they describe magendo as corruption, which is found in almost every country, and manifest in various forms. R6 affirms this observation that characteristics of magendo such as corruption manifest in all societies when he stated that ‘It is all over the place’. R18 on the other hand observed that informal institutions such as magendo are difficult to eradicate and he points out the case of Tanzania; a neighbouring country to Uganda. He states that ‘More or less like Magufuli (current president of Tanzania) has done; but I do not think he has defeated it. He may have just pushed it underground. Overall, this study finds that responses to contradictions faced by expatriates working in a magendo environment reflect the background of the expatriates, their length of stay in the country and nature of business that is undertaken. The following section discusses these contradictions and the responses to these contradictions in detail.

5.2.2 Linking magendo to institutional contradictions Magendo has been discussed as an informal institution that embeds corrupt business practices. It is dynamic and, since its onset, it has metamorphosed into various forms of illegalities permeating business operations and implementations in Uganda. Godfellow et al., (2012) earlier on highlights in 2.7, the current characteristics of magendo that include corruption and other vices in conducting business. Expatriate businesspeople working in the Ugandan business environment are as a result, faced with a number of contradictions between what they are used to from their home countries and what is informal and standard business practice in the host country.

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Expatriates’ perceptions on business context contradiction In a developing country such as Uganda, informal constraints – sanctions, taboos, customs, traditions and codes of conduct - predominate rather than formal rules – constitutions, laws and formal property rights (North, 1991). In terms of contextual contradictions, respondents discussed whether Uganda was generally different from their home countries, and in what manner these differences manifested. Most of them focused on whether the host country was a good or bad business environment, whether Uganda was similar to their home countries and whether the home countries were better than Uganda. The understanding/misunderstanding of magendo is what Lynch (2011) and Sedigh & Ruzindana (1999) discussed in 2.7 as lack of knowledge about magendo. The majority of those who thought that the host country was good were Africans and Asians, and that may be attributed to geographical proximity. It may also be due to the fact that cultural and psychic distances between Africans and Asians from the developing countries of Africa and Asia are narrower when compared to that of Europeans from developed countries. For this category of expatriates, contradictions in the business environment of Uganda were minimal, and the data tells us that their periods of stay and work in Uganda were lengthy, as is illustrated in Table 4.1. R23, for example, had lived and worked in this country for over 40 years. Not every respondent, however, thought Uganda was a good business environment. Respondents of European backgrounds did not find it easy to live and do business in Uganda. In essence, most Europeans came from countries with capitalist philosophies featuring strong formal social, political and economic institutions. The formal institutions of these countries are quite different to those in developing countries such as Uganda. In a developing country, such as Uganda, formal policies and systems may be in place, but they may not be adhered to. In addition, inadequate resources and the motivation of public servants in a developing country may not support practices and behaviours that are underpinned by formal institutions, preferring instead to rely on informal institutions such as magendo. This informal institution is, therefore, associated with practices about which a number of expatriates from European background complained. Despite variations in individual perceptions on context differences, the data analysis identified that most of the respondents had stayed and worked in Uganda for very long periods – some up to 40 years (Table 4.1). This implies that contextual differences did not prevent sustained business transactions in this environment. It also suggests that a number of expatriates acculturated over time.

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Expatriates’ perceptions on regulatory contradictions Magendo has been discussed as an informal institution that encourages business practices based on illegal behaviours. This is most evident in situations where rules, policies or ethics are compromised, and often standards or company codes are disregarded in pursuit of business interests. Regarding regulatory issues, respondents voiced perceptions on regulatory contradictions, highlighting the manner in which they differed from their home countries. Their discussions generated five concepts: regulative issues, policy issues, issues of standards, ethics and company codes. For this study, these sub-themes captured key issues pertaining to business conduct in Uganda. The perceptions on these issues were as varied as expatriates’ backgrounds, industries and length of stay in Uganda. It was also noted that, while some expatriates complied with local regulative requirements, others defied them. Whereas some respondents (such as R2) strongly believed in abiding by the local laws to operate smoothly, others (such as R8) chose to sideline them. What is important to note is that most of the respondents who abided by Ugandan formal legislation worked for big organisations such as banks or insurance companies that operate according to strict global guidelines. Conversely, those who talked about defying rules in pursuit of business interests generally operated small private businesses. Based on this, it seems that it is easier to manipulate a small business than a global or large firm. In addition, it may seem that for a small business it may be a necessity to manipulate to survive in a competitive environment with cutthroat margins and a lack of capital and human resources. Paradoxes associated with ethics, policy issues and standards attracted comments that also reflected the backgrounds of the respondents. Generally, those from European backgrounds found policies, business ethics and standards wanting in Uganda. Conversely, African and Asian expatriates were either indifferent or disregarded them in order to stay in business. To that effect, R6, a 60 year old Asian male who is involved in a mid-sized manufacturing organisation and has 36 years of experience in Uganda, noted that, if need be, he only had to activate his networks to get what he wanted. This worked for him more effectively than a dependency on existing systems, in which he had no confidence. For big organisations, however, all their expatriate employees affirmed strict adherence to company rules and codes of conduct. In their case, it could be assumed that those working for big organisations did not have to grapple with numerous paradoxes so long as they adhered to the guidelines laid down by their organisations. This apparently shielded such expatriate

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businesspeople against possible local paradoxes related, for example, to a lack of implementation. What was apparent though, during discussion of regulatory contradictions by expatriates, was the weakness in the local Ugandan systems that allowed defiance, non-compliance or the lack of enforcement of existing rules. This implies that, without strong systems, business conduct could be more complicated, as the creation of space for illegal behaviour by unscrupulous players was always a possibility, especially in small to medium sized enterprises.

Expatriates’ perceptions on normative contradictions Magendo has been discussed as an institution of survival, and the survival strategies of expatriates are underscored by the purposes and attitudes they voiced in the study. This is in agreement with the literature review that notes, in 2.7.2 that the magendo that occurred during Amin’s era was limited to the smuggling of scarce goods in order to survive. The normative institutions, which Scott (2013) describes as informal pillars, were discussed under six concepts: relationships, networks, power, trust, bribery and fraud. While some respondents underscored the advantage of having personal relationships in business, not everybody agreed with this idea. For example, R19 abhorred ascribing jobs based on ethnic relationships instead of competence. Ironically, in this study, it was a European, R22, who supported personal relationships in conducting business, while an African, R19, abhorred the idea. Given the cultural orientations of these two, the researcher had expected the opposite of what turned out to be their positions on this issue. This is based on the understanding that Europeans are categorised under individualism as compared to Africans who are more collectivist. According to Hofstede’s categorisation of cultures, status among most Europeans is achieved and not ascribed compared to most Africans (Hofstede, 2001). In another instance, R1 of a European background, argued that networks were bad for business. Nevertheless, for the good of broadening contacts in transacting business, a number of respondents thought networks were necessary for business. Power balance did not attract significant discussion and neither did trust, implying that these variables may not have been significant sources of contradictions for expatriates in this business environment. Whereas the power balance between expatriates and the host country was obviously in favour of the hosts, trust was not a critical factor in the success of their business. The concept of bribery, however, attracted significant discussion by respondents, and most of them voiced the opinion that it was illegal and unsustainable for business. Not all, though, thought bribery was bad. For example, R20 suggested that pay and get what you want and

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move the business forward. The thoughts of R20 are linked to the key focus of this study, magendo, which began as an institution of survival. The statement of R20 underscores the survival strategies of some expatriates in this environment whereby some of them thought that if they were left with no choice, they would have to buy their way out of trouble through bribery. This point also underlines the discussion in Chapter 2, that bribery, and similar malpractices, are more evident in developing countries such as Uganda that have weak formal institutions. The statement also underscores a weakness in Ugandan government systems whereby, with money, one could get away with many things in the course of transacting business.

Expatriates’ perceptions on cultural-cognitive contradictions Cultural cognitive contradictions attracted significant discussion by expatriates as evidenced by the depth of discourse on culture, corruption, integrity and magendo concepts. Discussion of the main concept of cultural cognitive contradiction focussed on the level of knowledge or lack of knowledge about the magendo institution. As Geertz (1973) observed as early as 1973, that local informal institutions (such as magendo) affect the actions of people and are the bases from which they interpret their experiences and actions. In this study, a number of respondents had no idea what the magendo institution was and how it impacted business conduct, yet they expressed curiosity to learn about it. This was an expression of willingness to gain knowledge on this informal institution and maybe to reflect on whether they had unknowingly already faced it in the course of their business dealings. However, contrary to the earlier thought of the researcher, namely, that magendo was little known, a number of respondents discussed it with thoroughness, and some of them touched on important aspects of its complexity in terms of origin, evolution, effect and social grounding. Revelations about the sound knowledge some respondents had about magendo were summarised by R8 who stated that magendo was not a new word. This was confirmation of what Goodfellow and Titeca (2012) noted, that magendo is an informal institution that has affected business conduct in Uganda since the early 1970s and that, today, it permeates social, economic and political boundaries. Despite its social/economic significance, however, prior to this study, magendo had not been scientifically studied or analysed. With regard to culture, Kshetri and Dholakia (2011) posit that, across cultural groups, there are significant differences in cognition and behaviour. Supporting this argument, Endsley (2015) explains that people can no longer be thought to experience the world in exactly the same way. These observations help to explain cultural cognitive contradictions and underscore

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reasons why it was not unexpected for the respondents to experience numerous paradoxes related to differences in culture. Whilst respondents were not asked to define what culture was during these interviews, they voiced what they perceived to be bad about some behaviours embedded in the Ugandan culture. In one such instance, R23 did not approve of the get rich quick mentality among the Ugandan youth. Other respondents, such as R2 and R7 appreciated, however, that culture in Uganda is simply different from theirs, reflecting the comments of Endsley (2015), that have been noted. As discussed in Chapter 2, Hofstede (2011) identifies six dimensions of culture: power distance; uncertainty avoidance: individualism vs. collectivism; masculine vs. feminine; long- term vs. short-term orientation; and, indulgence vs. restraint. Focusing on these six dimensions and based on several norms and values such as the hierarchical nature of local communities, Uganda can be described as a high-power distance country. This is similar to that of neighbouring Kenya and Tanzania (Hofstede, 2019). According to Hofstede (2011), cultures with large power distance are prone to corruption and the cover up of scandals. The opposite is true of societies with small power distance whereby corruption is rare, and scandals end political careers (Hofstede, 2011). Regarding corruption, the data indicated that those expatriates who had spent the least amount of time in Uganda were the ones who voiced the most criticism against the vice, despite their countries of origin. The majority of the critics of corruption (Table 4.26) had stayed in Uganda for less than ten years, and there is a possibility that they were not fully socialised to appreciate its dynamics. Their counterparts, who had accumulated more than ten years of living and working in Uganda, either kept silent about the issue of corruption or simply expressed a sound knowledge of what it is. The latter group, however, did not voice judicious statements against corruption, nor did they indicate how or whether they had confronted it in the course of doing business in this country. While Hofstede (2019) did not include Uganda in his studies, and he has no data on this country’s scores, its scores on other orientations such as collectivism maybe as high as that of neighbouring Kenya and Tanzania which stand at above 75%, and the score on time orientation maybe equally high, above 66% (Hofstede, 2019). Rarick et al. (2013) investigated Uganda’s cultural values and implication for managerial behaviour and found that Uganda’s score on masculinity stood at about 50%, while that for individualism was as low as 25%. They found the uncertainty avoidance of Uganda to stand at around 55%, while Uganda’s score on long-term orientation was at or below 20%. Ugandan culture can, therefore, be characterised as masculine, collectivist and high in uncertainty avoidance, and short term in orientation towards time.

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The cultural orientations of Ugandans could, therefore, be the opposite of some expatriates who do business in this country, particularly those of European origin. Understanding the value orientations of countries also gives insights into potential social, economic and political differences between them, and leads to an appreciation of possible sources of contradictions when different systems meet in the form of individuals from one system entering and working in another system.

5.3 Application of the conceptual framework Expatriate businesspeople working in Uganda explained that they experienced tensions and paradoxes about which they had to make decisions on a daily basis in order to sustain their businesses. An analysis of these decisions and responses was based on the conceptual framework that was developed for this study. The conceptual framework has been used in this study to explain the contradictions that result from institutional differences between two or more differing contexts. It also maps out various responses to paradoxes faced by expatriates working in an environment characterised by an informal institution. Responses to contradictions were initially thought to lie between embracing and rejecting illegal business practices imposed on them by magendo, a local informal institution. When he embraced an illegality, R8 revealed that he had to pay a bribe to have his papers processed. By paying a bribe this respondent was refuting Henning (2001) assertion against corruption. In 2.4, Henning (2001) argues that refusing to pay bribes may cost companies revenues and profit in the short term, yet giving in to demands for corrupt payments is no guarantee of success. This study notes, however, that expatriates who opted to embrace bribery, did not eradicate the contradiction or problem, they simply minimised its cognitive effect. This pathway mostly attracted expatriates who did not wish to confront resultant tensions head on, those who could not afford to wait for long or those who were disadvantaged in one way or another and could not avoid what they perceived to be illegitimate. These were expatriates who opted to live with, and to accommodate, paradoxes as an unsolvable phenomenon and, in their thinking, they assumed that nothing could be done to rectify the situation (Clegg, 2002). On the other hand, R3 and R23 rejected an illegality, and R3 stated that if things seemed difficult, just let go. Some expatriates resisted business illegalities through a number of responses, (discussed in more detail in section 5.6), and they did so knowing that illegalities never added value to their businesses, implying that resisting them did not constitute breaking company codes or the host country rules. When he argued against bribery, R23 stated that it is not addressing the problem. If you pay, you simply encourage others to continue using you as

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a target they can visit frequently. The contention of this expatriate was that if one were to pay a bribe to a local official so as to access a service, this would not be a one off deal, rather it might mark the beginning of a sustained long term practice of paying bribes. This position was predominantly held by expatriates who worked for well-established large businesses that had strict organisational guidelines and codes of conduct. The choices by some expatriates affirm what Kimemia (2018) states in 2.4 that strong institutions deter corrupt practices and punish those caught engaging in corruption. The act of embracing or rejecting business illegalities is described as creative consideration, whereby one opts to embrace a good practice or reject a bad one (Lüscher & Lewis, 2008). This study, however, has established that another mode of response by expatriates was to devise coping and survival measures as a response to the various contradictions they faced in this business environment. R7, for example, pursued a pragmatic path and steered clear of directly paying bribes by hiring a local lawyer, although he acknowledged that the final cost of the transaction was higher than expected. Similarly, R6 appreciated the importance of personal attachments. He justified this approach by stating that for me I know where to go, which person to talk to and when. The findings reveal, though, that the majority of expatriates pursued the third pragmatic pathway where they would use intermediaries to undertake magendo, to avoid dealing directly with it, and avoid potentially mishandling the situation due to not being familiar with the processes/codes of informal business practices. This study posits therefore that, for most expatriates (notably those who never worked for big organisations), it is pragmatism, more than anything else that has enabled their businesses to survive in this environment. This pathway is exemplified by R7 who hired a lawyer in the face of business contradictions, and R6 who made friends with important big people in the country in order to gain patronage and/or information on business. Whereas expatriate businesspeople have varied perceptions on business practices in Uganda, how they responded to what was considered contradictory has been a strong finding of this research. Based on their discussions, expatriate businesspeople suggested several pathways to navigate institutional paradoxes in Uganda’s business environment, characterised by the informal institution, magendo. The following are the specific responses to institutional contradictions discussed by the respondents.

5.4 Response to institutional contradictions The first objective of this study was to examine how expatriate businesspeople experienced and responded to business tensions and contradictions caused by institutional differences

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between their home countries and the host country, Uganda. This section highlights various responses to such contradictions. The contextual difference between Uganda and the countries of origin of the expatriates was never in question. Similarly, the expatriate businesspeople acknowledged varied social, economic and political differences between the two environments. However, what was unknown, and hence was the motivation for the study, was how the expatriates reacted and responded to these institutional contradictions.

5.4.1 Responses to context contradictions Faced with contextual contradictions, expatriates adopted various measures in order to survive in the magendo influenced business environment of Uganda. Socialisation is one measure adopted, as attested to by R22 who stated that, despite being a foreigner in Uganda, he had come to identify himself with Ugandans, and he called Ugandans his brothers. With a perceived relational mindset, this respondent, as was discussed in Chapter 4, appreciated the importance of personal attachment with the local people, as was captured in the statement: we have to negotiate, like brothers; we have to find our way out.

5.4.2 Responses to regulatory contradictions Faced with regulatory contradictions, expatriates discussed a number of ways to navigate challenging situations in Uganda. Strict adherence to laid-down rules was suggested as a good pathway to respond to regulative paradoxes. In situations of uncertainty, or in the face of weak business standards, respondents suggested strict adherence to the rules in place, as R2 stated: there might be bad standards or weak ones, however these had to be strictly adhered to, to ensure orderliness in the conduct of business. This respondent worked for one of the big organisations that had a global outlook. Such an organisation operates via strict rules and guidelines. Ethics was another regulatory contradiction discussed by respondents. This social value attracted three levels of responses from the respondents. In the first instance, unethical business behaviour was discussed as a concern for a number of respondents. Many argued however that they would never cross the red line to get involved in unethical dealings of any sort. For example, R3 articulated that if things seemed difficult, just let go. This point is emphasised by Kimemia (2018) who states in 2.4 that strong institutions punish those who engage in corruption. Not every respondent, however, embraced this ethical position. R8’s discussion attests to a different response to a regulative contradiction. He stated that, in order to get his papers processed within a required timeframe, he had to pay a bribe to some officials. This was

163 possibly an inducement to disregard some stringent administrative requirements. On the other hand, R7 suggested a different response to ethical paradoxes, he suggested hiring a lawyer. In his discussions, R7 suspected that bribes were paid at some point during the transaction; but he steered clear of it by shielding behind a local lawyer, although he acknowledged that the final costs were higher than normal.

5.4.3 Responses to normative contradictions A number of pathways were suggested in response to the normative contradictions faced by expatriate businesspeople working in Uganda. Personal connections were suggested by R21 as the best ways to navigate normative paradoxes. Discussing trust in the face of problems, R21 thought that personal connections with trusted important people ensured him of overcoming a problem because, in the event of problems, big people intervened to rescue him. As with personal connections, networks were cited as effective tools by which to navigate intricate business-related normative paradoxes in Uganda. An Asian, R6, clearly underlined the importance of having networks while doing business in Uganda. He had lived and worked in Uganda for at least 40 years and, during this long stay, had accumulated knowledge about this business environment. His approach to navigating business paradoxes was through creating contacts with important people. He stated that, when in need, he knew where to go, which person to talk to and when. He therefore felt at home living and working in Uganda and this was partly attributable to contacts with the important people. He backed this argument by citing past and future engagements with big people in Uganda when he stated that …soon I will meet the President (of Uganda) about an investment. In March, I travelled with the Vice President of Uganda for a business trip to my country…. For this expatriate, good connections with big people provided a safety net for success. This statement extends earlier research by Soko (2011) who states that ‘bureaucratic red tape increases uncertainty which leads to the business people to try to find alternative ways of circumnavigating them.’ In addition, strategy of R6 concurs with the observation of Ledeneva (2008), who notes that people circumvent bureaucratic decision-making procedures and influence government contacts for beneficial business opportunities to find valuable market information and business transactions. Whilst R6 may have found a working formula for his businesses, not everyone else however could, and for the majority the paradox persisted. Some respondents suggested no bribery payment as the best way of navigating the bribery- related normative contradictions. Several respondents complained about bribery in Uganda, and R14 revealed being asked to part with kitu kidogo (something small – a bribe) to get the

164 appropriate service. Most respondents however, such as R23, refused outright to pay bribes, and his argument was how many people would you bribe? On matters of business consideration, he saw this as an unsustainable solution to the paradoxes and, as such, he argued, bribe giving does not stop it, it worsens it.

5.4.4 Responses to cultural-cognitive contradictions Faced with cultural cognitive contradictions, respondents suggested several responses that enabled them to carry on living and working in Uganda. Some respondents discussed coping with local cultural paradoxes. One aspect of cultural cognitive contradictions arose from time management by sections of the local people working with the expatriates. R25, for example, lamented the many man hours lost while dealing with some Ugandans. She complained that if we have an appointment with someone at 9.00 o’clock, they turn up at 2 pm. When I tell them to report at 10.00 am, I know they will come at 12.00 noon. From this experience, this respondent avoided disappointment by setting back time for appointments to accommodate lapses in time management by employees. In this case, it would appear that R25 has accepted the short-term orientation of Ugandans (Rarick et al., 2013) and changed her strategy for organising meetings. A number of respondents lamented corruption in the business environment in Uganda. Apart from lamenting that it compromised their business, some respondents suggested intervention measures to curb it. R10, for example, observed that with tight regulations, corruption could be tamed, implying that he did not trust the stringency of existing regulations against corruption in Uganda. Exposing and shaming were also suggested as tools with which to respond to the concept of corruption. R8, for example, suggested involving the media to expose and shame the corrupt. For R23, the response lay in applying rules without discrimination, having observed inequity and weakness in the enforcement of rules or policies in this country. Upholding integrity was discussed as being the key to navigating cultural cognitive contradictions while doing business in Uganda. The issue of integrity or lack of it touched both local officials and foreigners who did business in Uganda. As R17 pointed out, you have to pay in order for them to work on your case; else, the file is not moved! All respondents, however, argued for upholding integrity in their business dealings and, to this end, R18 stated that he ...never compromised the image of his company. Similarly, R19 emphatically stated that in business, for nothing would I bend rules for anything. R24 went further when he stated that compromising integrity in their company would not be limited to chastising the offender, but legal measures would be activated against an offender, in case of criminal offences. The

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choices of these respondents reflect what Asongu (2014) observed that corruption damages the host country as well as the reputation of the country of origin of expatriate business people; if they embrace it. For this paradox, responses ranged between rejecting of illegalities and, in most cases, devising survival measures to continue working in this environment. What has been presented and discussed in Section 5.4 are some of the concrete responses to paradoxes that were voiced by the interviewees as pathways to overcome the contradictions they faced. Whereas some respondents embraced some illegalities, most of them rejected or resisted them and, instead, creatively devising survival techniques such as hiring lawyers or getting connections to big people. These varied responses to the paradoxes provide the basis for the contribution this research makes to institutional theory, as discussed in the following section.

5.5 Theories The second objective of this study was to contribute to institutional theory by examining business operations in an African environment subject to the informal institution, magendo. Theories are explanations and, as Berge (2000) notes, emergent theories often generate new questions and propositions. Qualitative research studies such as this one, contribute to social theories, whereby they have something to tell about the underlying social processes and structures that form part of an explanation for individual behaviour, group behaviour or beliefs (Ritchie et al., 2013).

5.5.1 Contribution to theory Whetten (1989, p. 490) suggests that theory must contain ‘four essential elements’ what, how, why and the conditional limitations of, who, where and when. The contribution to institutional theory made by this study is the identification and explanation of why expatriates (who) engage these three pathways to manage paradoxes (how), when in a foreign environmental context (where) underpinned by an informal institution such as magendo (what). This study illustrates that expatriates’ responses to paradoxes vary and this research indicates that the following factors are important: home country institutional framework, cultural background, nature of industry or business, size of business and length of stay in an environment. Based on the broader discussion on the expatriates responses to institutional contradictions in Section 5.4, the responses to paradoxes and tensions underscored strategies that include socialisation, strict adherence to rules, refusal/acceptance to pay bribes, hiring lawyers, relying on personal connections and networks, and upholding integrity.

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The contribution to theory by this study accounts for the responses and behaviour of expatriates who are faced with an unfamiliar informal institution, such as magendo. This contribution provides a mechanism by which to understand how expatriate businesspeople perceive and respond to contradictions embedded in an informal institution in a foreign environmental context. This research has in essence, enabled the examination of expatriates’ responses to institutional paradoxes encountered, and the following responses that may occur embracing a paradox, rejecting a paradox or devising survival strategies. The study notes that those who embraced the paradox worked in small businesses, had stayed briefly in the host country and the majority originated from either Africa or Asian countries. On the other hand, the majority of expatriates who rejected paradoxes were of European background, came from strong economies and worked for big organisations. Those who were likely to devise survival strategies were Africans and Asians who had accumulated many years working in Uganda (over ten years) whereby they had learnt and internalised local business dynamics. At a more fine-grained level, respondents from countries with similar levels of institutional development to Uganda, were more able to embrace the paradoxes. Conversely, respondents from highly regulated economies and multinationals were most likely to reject the paradoxes. Respondents with longest stay in Uganda were more likely to devise survival strategies in this business environment. This study posits, however, that some responses may only minimise tensions in the short term. In circumstances where an expatriate was, for example, to embrace a paradox and pay a bribe to a local official in order to access a service, this may not be a one-off undertaking. Such payment may simply mark the beginning of sustained long-term payments of bribes, as the briber will keep going back to the victim. Such a response, therefore, confines the expatriate to perpetually endure a paradox. The second line of response is where expatriates reject an illegality. This pathway is informed by a number of factors including the personal strength of an individual expatriate businessperson, the strength of the business and whether he/she works for a big organisation that cannot be easily compromised by host country informal institutions. The third pathway is devising pragmatic survival techniques, such as the hiring of a local lawyers or building connections with important local people.

5.6 Significance of the study First of all, this is the first empirical study into the impact of magendo on business behaviour in Uganda and its impact on expatriates. Prior to this study there was lack of empirical research into what magendo is, and even less on its influence on foreign business activities and this

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country and region. Whereas prior to this study it was believed that local Ugandans took magendo as a way of life and lived with it, we did not know how expatriate businesspeople contended with it, and responded to it. This study has therefore shed light on how expatriate businesspeople respond to contradictions and tensions between institutional contexts they know from their own countries and the ones they are faced with in a different environment. Secondly, there has been paucity of institutional literature on business in an African country whereby this study is contributing literature in order to explain the African experience, generate theory to guide and understand business operations in Africa. As a result of this study, there are clear research contributions and institutional theory was examined in a new context Uganda and Africa where informal institutions such as magendo had previously not been scientifically studied or analysed. Thirdly, this study has developed a conceptual framework to study and better understand how expatriates can overcome business contradictions and tensions between the contexts they know from own countries and they may be faced with under the influence of and informal institution such as magendo. With the support of a conceptual framework, the study has therefore provided a conceptual explanation of an informal institution, magendo. Like other informal institutions, magendo develops and evolves as business contexts and the economy change. This changes the modes and impacts of this institution from survival for everyday consumer/ small business to the systematic manipulation involving officials and big illegal deals. Magendo may have begun as an informal institution of survival, rooted in informal practices that exist in place of formal procedures; it has metamorphosed into an institution of high-level unscrupulousness that affects local and foreign business in Uganda.

5.7 Implication for institutional theory Examining magendo through the perceptions of expatriate businesspeople has contributed to institutional theory in various ways. At the conceptual level, this study has contributed to the theoretical and business literature on informal business practices and institutions in an African context. Specifically, it has contributed to institutional theory by building an institutional theoretical understanding of the informal institution magendo through the lived experiences of expatriates living and working in Uganda. The study finds that expatriates who were most likely to embrace contradictions originated from either Africa or Asia, and that the majority of them operated small businesses and had stayed in the country for a relatively short time. On the other hand, the majority of expatriates who rejected the contradictions were of European background whose economies were run on strong regulations that could not easily be

168 compromised. Those who were likely to devise survival strategies, such as creating connections with big people were Africans/Asians who had spent a long time (over ten years) working in Uganda. It was observed in Chapter 2 of this thesis that there is a paucity of research into both informal institutions and the experience of expatriates engaging in business in African countries. Consequently, this research has contributed to institutional theory to guide and enable understanding of business operations in Uganda and Africa where informal institutions such as magendo had previously not been scientifically studied or analysed. With the support of an analytical framework, the study has, provided a conceptual explanation of the informal institution, magendo. Like other informal institutions, magendo develops and evolves as business contexts and the economy changes. This changes the modes and impacts of this institution from survival for everyday consumer/small business to the systematic manipulation involving officials and big illegal deals. Magendo may have begun as an informal institution of survival, rooted in informal practices that exist in place of formal procedures; however, it has metamorphosed into an institution of high-level unscrupulousness that affects local and foreign business. Concepts identified in the study offer significant features that arise because of expatriates living and working in a country that is different from their own. The contribution to institutional theory underlines the experience of expatriates from different institutional backgrounds who, in order to do business, must devise means and ways of responding to novel institutional contradictions in another country.

5.8 Implication for policy and management practices This study has provided insights for Uganda policy makers into how magendo impacts business behaviour. By exploring and highlighting how informal institutions in general and magendo in particular influence business behaviour through social capital- networks and informal relationships, the study enables the enacting policies that are relevant to guiding better conduct of business in this country and any other country where international business is taking place. By focusing on a developing country such as Uganda, the study has provided an opportunity to understand this phenomenon through the business lenses of outsiders. This will help to make better sense of business practices from an outsider’s perspective and it will in turn alert local policy makers on the ways and manner in which this informal institution may affect business experience of expatriates in this country. This forms basis for better policy formulation and

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improvement of the business environment in Uganda and in other environments that are characterised by informal institutions.

5.9 Implication for expatriate business practitioners This study has presented and discussed magendo as an informal institution that influences conduct of business in Uganda. Broadly, it has been noted that magendo is an informal institution that embeds illegal dealings at both government and private levels. As there was lack of empirical research into what magendo and its influence on foreign business activities, the study has laid foundation to examine its meaning and trends. Based on this study, expatriate business practitioners may be able to better appreciate its impacts on their businesses, their perceptions of its practices and the possible choices they can make when they face it. As expatriates in Uganda face an informal institution magendo, they should therefore be prepared to undergo a process of acculturation, so as to cope properly with its impacts on business. Cultivating appropriated response strategies against corruption that associated with magendo, is part of this process. For some, magendo may signify a negative contextual difference but it does not prevent success business transaction in this country. In addition, the pragmatic path of hiring a local lawyer is key to navigating contradictions and paradoxes associated with working in this business environment. For all expatriate business people, most especially those in the small to medium categories, it is ideal to broaden their business networks to include local people with influence. Such contacts may provide valuable protection when one’s business faces contradictions such as bribery, which are associated with magendo.

5.10 Limitations of the research The researcher acknowledges practical limitations related to this research. While the research focused on an area that was academically interesting, the study recognised the fact that it was one that was socially, economically and politically sensitive. Corrupt business practices in general, and magendo in particular, are anti-social practices and, therefore, engaging people to discuss these issues was inviting some of them to discuss taboos. In their discussions, some were not willing to reveal much about their particular businesses. In addition, some were guarded and unwilling to discuss some issues such as the informal business practices that they may have experienced in the course of doing business. Some of them were calculating in what they discussed, responding to interview questions with single word/sentence answers and thereby impeding the flow of the discussions.

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In addition, the multicultural background of the interviewees sometimes created communication challenges. How each one of them conceptualised and discussed issues was subjective, leaving the researcher to decipher with some difficulty, the meaning of certain statements that were made by some respondents. The study adopted qualitative methods to address a research question that required an understanding of a complex underlying social phenomenon, magendo. Alternative methods such as statistical or quantitative inquiries, if adopted, could have shed more light on the gravity, extent and actual cost associated with informal institutions in general and magendo in Uganda in particular. Similarly, the study selected expatriate businesspeople as its sample. If however, different samples such as local policy makers, local businesspeople or gender-based sample were used, evidence that is different from this one may have been generated. Finally, interviewing CEOs and managers who run tight schedules had its challenges. Some of them discussed issues in haste to beat time, thereby limiting the rich information that may have been sourced from them. In such cases, it was difficult to ask too many probing questions. These constituted limitations on the quality and quantity of the data and information collected for the study.

5.11 Future research First of all, magendo like other informal institutions is broad, transcending social, economic, political, business and academic boundaries/scopes. This study adopted a phenomenological methodology to build a better understanding of magendo and its impacts upon expatriate businesspeople working and living in Uganda. Whereas the study dwelt on the expatriate business perspective, future research could focus on political or gender perspectives, as well as what magendo is, how it impacts local and foreign business and how it may change over time. Secondly, whereas this study adopted a phenomenological approach, other types of inquiries may be undertaken to study magendo, for example, ethnographic inquiries to focus on anthropological and sociological aspects of magendo and quantitative research to measure the impact of magendo in the Ugandan economy. Thirdly, this study was context–specific, focusing on Uganda and to some extent the surrounding region of East Africa. This, therefore, opens opportunities for future inquiries into other contexts that are different from this one. By focusing on other regions such as South America, Asia or West Africa, future research might generate broader knowledge about local informal institutions, how different players contend with them, and draw comparison with informal institutions from other regions.

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5.12 Conclusions The findings of the study reflect the perceptions of respondents that the informal institution magendo, embeds corrupt practices that have an influence on business behaviour. The thesis notes that, whereas at its onset, magendo was an institution of survival due to shortage of goods and poor services, it has since metamorphosed into broader corrupt practices which respondents variously discussed as contradictions in this study. The study notes that, whereas this institution has not hindered the conduct of business, expatriates who are key actors in the study environment have pursued different pathways to navigate the context contradictions they experience. This is indicative that there is no a single mechanism for navigating contradictions in an environment characterised by an informal institution such as magendo. Individual or organisational responses to managing business under magendo are, however, the basis for generating the contribution to institutional theory made by the study. This contribution to theory provides a mechanism to understand how expatriate businesspeople perceive and respond to contradictions embedded in an informal institution, in an African environment. One of the aims of the study was to better define magendo, and the research examined various contradictions faced by expatriate businesspeople working in Uganda. These contradictions reflect the subjective perceptions of the participants. Based on the varied perceptions of the participants, the empirical research conducted underlines the argument that magendo is not what has been ordinarily labelled as black market, petty corruption, bureaucratic corruption or political corruption. Rather, this examination of magendo posits that it is an informal institution that is widespread. It embeds an array of illegalities and malpractices that transcend industries, professions and social economic boundaries, thereby affecting the conduct of business in Uganda. Nevertheless, unlike other informal institutions that are permanent features, given their entrenchment within their national cultures, magendo is an institution of survival. With good and strong formal institutions in place, an informal institution such as magendo can diminish substantively and stop hurting businesses. According to this study, this can make African countries in general and Uganda in particular, more attractive business destinations for expatriate businesspeople.

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APPENDICES

Appendix A Information Statement for the Research Project

Dr Tony Drew, Dr Sidsel Grimstad, Mr Matthias Mulumba, Manager, International Relations, Lecturer, PhD candidate, Newcastle Business School, Newcastle Business School, Newcastle Business School, Faculty of Business and Law, Faculty of Business and Law, Faculty of Business and Law, University of Newcastle, University of Newcastle, University of Newcastle, 409 Hunter Street, Newcastle, 409 Hunter Street, Newcastle, 409 Hunter Street, Newcastle 2300 Australia. 2300 Australia. 2300 Australia. Tel: +61 2 4921 2099 Tel: +61 2 49216271 Tel: +256 772509943 [email protected] [email protected] [email protected]

Information Statement for the Research Project: Expatriates’ Perceptions of Corrupt Business Practices: the Magendo Phenomenon in Uganda

Document version: no 2; dated 19th/02/2018

You are invited to participate in the research project identified above which is being conducted by Mulumba Matthias Sebuttemba, under the supervision of Dr Antony Drew and Dr Sidsel Grimstad from Newcastle Business School at the University of Newcastle. The research is part of Mulumba Matthias Sebuttemba’s Doctor of Philosophy studies at the University of Newcastle. Why is the research being done? The purpose of the research is to examine expatriates’ perceptions of corrupt business practices, under a magendo environment; and how expatriates deal with host country contradictions, tensions and paradoxes. We believe that as an expatriate businessperson in Uganda, you have gained experience of the unique ways of conducting business in Uganda, and your reflections on these would be valuable for future policy making in order to improve the business environment in Uganda.

Who can participate in the research? The study is focusing on Expatriate business people in Uganda. Your business was purposefully selected from a list of expatriate business people operating in Uganda (http://www.monitordirectory.co.ug/listing/www.ugandainvest.com). The choice is based on belief in your ability to share with us an outsider’s in-depth and interpreted understanding of the Uganda business environment, your experiences and perception, which will give valuable insights for future policymaking. What choice do you have? Participation in this research is entirely your choice. Only those people who give their informed consent will be included in the project. Whether or not you decide to participate, your decision will not disadvantage you. If you do decide to participate, you may withdraw from the project at any time without giving a reason and have the option of withdrawing any data that has been provided by you.

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What would you be asked to do? We ask you to read this Participant Information Statement and the attached Consent Form. If you agree to participate in this research, we request you to contact Mr Mulumba by phone or email (his contact details are at the end of this Information Statement). When you meet Mr Mulumba, he will again explain the purpose of the face-to-face interview and ask you to sign the Consent Form, prior to the interview commencing. The interview will be scheduled at a time of your convenience and will take place at your business premises; or in the office of the researcher located in a quite section of Kampala City. You will be asked to discuss your business experience since coming to Uganda. You will be asked general questions about your business experience in Uganda and how it compares with your home country. You will be asked questions about your perception on business, culture and ethics, in an African context and you will be asked some general demographic questions. The content of the interview will be audio-recorded for later transcription and analysis. How much time will it take? The interview will last about one hour. What are the risks and benefits of participating? While there are no direct benefits for you from the research, it is anticipated that by participating in this research you will be provided an opportunity to discuss and reflect on the business practices and environment that you have encountered in Uganda, and be given an opportunity to assess and suggest solutions. By providing an outsider’s perspective on the Ugandan business environment, this research will provide significant benefits in that it will: i-Enable you (and the business world) to better understand the institutional contradictions and how best to overcome them. ii- Provide insights into the challenges of conducting business in the Ugandan business environment influenced by unfamiliar local institutions and how best to manage them and iii- Offer an opportunity for you to discuss business challenges and experiences. These may later inform policy makers in this Country. The research findings will provide valuable inputs for future policy making on improving the Uganda business environment. This being an academic research it is unlikely to pose any risk to you or your business. How will your privacy be protected? In accordance with the University of Newcastle Human Ethics Procedures (policy ID 000417), your identity will remain anonymous. Interview recordings and transcripts will be held in soft copy on password-protected computers accessible only to researchers named in this document. Any transcribed information and hard copy paper work is to be stored in a lockable file system in the Chief Investigator’s University Office. All the data will be kept for five years after completion of the thesis. Also, note that you are free, to review and amend submission in the interview transcript or recording.

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How will the information collected be used? The data will be presented in scientific journals and in a thesis to be submitted for Mr. Mulumba Matthias Sebuttemba’s doctoral degree. A copy of the final thesis will be deposited in the University of Newcastle publically available on line library. Interview participants may request a copy of the summary of the findings at the end of 2019. Local Contact Any issues related to this research project may be referred to The Head of Department Marketing and International Business Makerere University Business School, Plot M118 PortBell Road, P.O.Box 4337, Kampala Uganda. Tel. +256 414220846. Email [email protected]. What do you need to do to participate? Please read this Information Statement and be sure you understand its concerns before you consent to participate. Once this Information Statement has been read and understood, should you wish to participate in this research, you are requested to contact the student researcher by phone or email. Further information For further information, please contact Mulumba Matthias Sebuttemba – Faculty of Business and Law, University of Newcastle 409 Hunter Street, Newcastle, NSW 2308, Australia- Tel: +61 470235223/+256 772509943 ; Email: [email protected]. Thank you for considering this invitation.

Dr Tony Drew Dr Sidsel Grimstad Mulumba Matthias Principle Supervisor Co- Supervisor PhD Candidate Researcher

Complaints about this research This project has been approved by the University’s Human Research Ethics Committee, Approval No. H-2017-0352. Should you have concerns about your rights as a participant in this research, or you have a complaint about the manner in which the research is conducted, it may be given to the researcher, or, if an independent person is preferred, to the Research and Innovation Services, Research Integrity Unit, The University of Newcastle, Callaghan, NSW 2308, Australia, Telephone +61 2 49217894; email: [email protected] OR the Head of Department, Marketing and International Business, Makerere University Business School, Plot M 118 PortBell Road, P.O.Box 1337, Kampala; email: [email protected]; Telephone+ 256 414 220846

191 Appendix B Interview protocol for semi-structured interviews

Part A: Demographic information

Name: ……………………………… (To be de-identified prior to coding data) Age: …………. Gender: ………… Country of origin…………… Location of work ……………….……… Length of stay in Uganda: …………………………… Knowledge of local language……………………………………. Type of business………………………………………. Size of business (By Uganda standards)………………………

Part B: Grounded theory method questions

The first two are the most important questions, and subsequent ones are additional prompting questions:

1. Tell me about your business experiences since coming to Uganda.

2. What is it like to do business in Uganda compared to your home country?

3. How in your opinion is conduct and practice of business in Uganda conforming with policy?

4. Tell me about any differences between government policies that regulate business behaviour in this country in comparison to your home country?

5. Tell me about any differences in company codes of conduct here, compared to your home country?

6. Have you experienced any informal business practices in this country, and can you give some examples?

7. Could you please explain how you deal with these informal business practices

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8. To what extent is the business culture of Uganda different from that of your own country?

9. What is your understanding of magendo, and in what ways does it influence your business operations?

10. Anything else you would like to say?

These questions examine the respondents’ perceptions of institutional contradictions between Uganda’s business environment and that of their home countries. Ultimately, the responses should indicate what these contradictions are and how they are dealt with in the Ugandan business environment.

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Appendix C Consent Form for the Research Project

Dr Tony Drew, Dr Sidsel Grimstad, Mr Matthias Mulumba, Newcastle Business School, Newcastle Business School, Newcastle Business School, Faculty of Business and Law, Faculty of Business and Law, Faculty of Business and Law, University of Newcastle, University of Newcastle, University of Newcastle, 409 Hunter Street, Newcastle, 409 Hunter Street, Newcastle, 409 Hunter Street, Newcastle, 2300 Australia. 2300 Australia. 2300 Australia. Tel: +61 2 4921 2099 Tel: +61 2 49216271 Tel: +256 772509943 [email protected] [email protected] [email protected]

Consent Form for the Research Project Expatriates’ Perceptions of Corrupt Business Practices: the Magendo Phenomenon in Uganda Researcher: Mulumba Matthias Sebuttemba

Document Version: 2; dated 19th/02/2018 I agree to participate in the above research project and give my consent freely. I understand that the project will be conducted as described in the Participant Information Statement, a copy of which I have retained. I understand I can withdraw from the project at any time and do not have to give any reason for withdrawing. During the interview, I can ask for the tape to be stopped and edited or erased. I may also review the transcription of the interview and edit my contribution. If I decide to withdraw, all data related to me will be withdrawn and destroyed. I consent to: 1. Participating in an interview of up to one hour. 2. The interview being digitally recorded for later transcription. I understand my personal information will remain confidential to the researchers. I have had the opportunity to have questions answered to my satisfaction. I may request for a copy of the summary of the findings when the research is completed, at the end of 2019.

Print Name: ______Signature: ______Date: ____/____/_____ Contact telephone number: ______

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Appendix D

HUMAN RESEARCH ETHICS COMMITTEE

Notification of Expedited Approval

To Chief Investigator or Project Supervisor: Doctor Tony Drew

Cc Co-investigators / Research Students: Mr Matthias Mulumba Doctor Sidsel Grimstad

Re Protocol: Expatriates' perceptions of corrupt business practices: The Magendo phenomenon in Uganda

Date: 08-Mar-2018

Reference No: H-2017-0352

Date of Initial Approval: 07-Mar-2018

Thank you for your Response to Conditional Approval submission to the Human Research Ethics Committee (HREC) seeking approval in relation to the above protocol.

Your submission was considered under Expedited review by the Chair/Deputy Chair.

I am pleased to advise that the decision on your submission is Approved effective 07-Mar-2018.

In approving this protocol, the Human Research Ethics Committee (HREC) is of the opinion that the project complies with the provisions contained in the National Statement on Ethical Conduct in Human Research, 2007, and the requirements within this University relating to human research.

Approval will remain valid subject to the submission, and satisfactory assessment, of annual progress reports. If the approval of an External HREC has been "noted" the approval period is as determined by that HREC.

The full Committee will be asked to ratify this decision at its next scheduled meeting. A formal Certificate of Approval will be available upon request. Your approval number is H-2017-0352.

If the research requires the use of an Information Statement, ensure this number is inserted at the relevant point in the Complaints paragraph prior to distribution to potential participants. You may then proceed with the research.

For Noting: Please amend and email the revised Participant Information Statement with the following;

1. Under the section 'Who can participate?' please indicate the list of expatriate people publicly accessible via the website.

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Conditions of Approval

This approval has been granted subject to you complying with the requirements for Monitoring of Progress, Reporting of Adverse Events, and Variations to the Approved Protocol as detailed below.

PLEASE NOTE: In the case where the HREC has "noted" the approval of an External HREC, progress reports and reports of adverse events are to be submitted to the External HREC only. In the case of Variations to the approved protocol, or a Renewal of approval, you will apply to the External HREC for approval in the first instance and then Register that approval with the University's HREC.

Monitoring of Progress

Other than above, the University is obliged to monitor the progress of research projects involving human participants to Linkage of ethics approval to a new Grant

HREC approvals cannot be assigned to a new grant or award (i.e. those that were not identified on the application for ethics approval) without confirmation of the approval from the Human Research Ethics Officer on behalf of the HREC.

Best wishes for a successful project.

Associate Professor Helen Warren-Forward Chair, Human Research Ethics Committee

For communications and enquiries: Human Research Ethics Administration

Research & Innovation Services Research Integrity Unit The University of Newcastle Callaghan NSW 2308 T +61 2 492 17894 [email protected]

RIMS website - https://RIMS.newcastle.edu.au/login.asp Linked University of Newcastle administered funding: Funding body Funding project title First named investigator Grant Ref

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