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1
FACULTY OF PURE SCIENCES
CULTURE AND BUSINESS ENTREPRENUERSHIP A CASE STUDY
OF MAURITIUS A study submitted in partial fulfilment of the requirements for the degree Master of Science in Information Systems
AT
THE UNIVERSITY OF SHEFFIELD BY
ANGELINAH C BONIFACe
SEPTERMBER 2008
i
TABLE OF CONTENTS
Contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipi Dedicationhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipiv Acknowledgementshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipv List of Abbreviationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipvii List of Illustrationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipviii Abstracthellipix 10 INTRODUCTION 1
11 Background to the study4
12 An Overview of Mauritian Economy8
13 Mauritius SME Background10
14 Purpose of Statement12
15 Aims and Objectives12
16 Research Questionshellip13
161 Sub-Questions13
17 The Significance of the Study13
17 Definitions of Termhelliphelliphellip14
20 LITERATURE REVIEWhelliphellip16 21Embracing Cultural Challenge in an Era of Globalisation16 22The Dynamics of Culture as a Multi-level Multi-layer Construct20 23International Business and Culture23 24Putz Model for Immigrant Business and Culture25 25 The Role of Information Communication Technologies30 26Cross Culture and International Business33
ii
27Investing in Mauritius35 30 METHODOLOGY37 31Research Setting39 32Methods40 33Research Participants and Sampling42 34Data collection Instrumentshelliphellip43 35Ethical Considerationshelliphellip44 36Procedure45 37Data Analysis46 38 Planned Programme of Dissemination47 39Time Scale48 310 Limitations and Delimitations48 40 RESEARCH FINDINGS AND DISCUSSION50 41Respondents Rate According to Sectors51 42Demographic Profile Participants52 43Characteristics of Responding Firms55 44Language57 45Religion 59 46Social life61 47 Market Accessibility63 48The Role of ICT to SME Business in Mauritius 66 49Governance and the Role of Women in SME sector in Mauritius68 410 Challenges Faced by the Country and Hence SME investors70 50 CONCLUSION AND RECOMMENDATIONS72 60 REFLELECTIONS FROM THE STUDY77
iii
70 FURTHER RESEARCH78 80 APPENDICES80 81 Apendix 180 82 Apendix 281 83 Apendix 382 84 Apendix 483 85 Apendix 586 90 REFERENCES87
iv
DEDICATIONS
To my father Shadreck Boniface who passed on before I could give back all
the good things you did in my life you will always be remembered by me for
the gap you left in my life no one can replace may his soul rest in peace To
my mother in recognition of your worth for all the support you gave A feeling
bears on itself the scars of its birth it recollects as a subjective emotion its
struggle for existence it retains the impress of what might have been but is
not and hope if the fool would persist in his folly he would become wise To
my daughter and to all my family and friends this is for you
THE BOTSWANA FLAG
The Botswana flag was officially adopted on September 30 1966
The colours on the flag correspond to those on the national coat of arms The
blue represents water the white-black-white bands depict the racial harmony
of the people as well as the pluralist nature of the society They are inspired
by the coat of the zebra the national animal
v
This report is dedicated to all those who spend their daily lives trying to cope
with the challenges of HIVAIDS and all those who are affected by this
disease and to the new AIDS free generation
ACKNOWLEDGEMENTS
My sincere gratitude to all whose knowledge skills experience and support
went into this work First are the authors of various literatures whose work
guided this dissertation Overly important too are all those participants who
offered their resources and business experiences which has influenced the
outcome of this paper
To the University of Sheffield thanks for the opportunity to pursue this course
at your institution and the experts you provided to teach various aspects of the
course A lot of thanks to the course leader and my supervisor Dr Kendra
Albright for all the guidance and motivation she provided during the entire
programme Moreover for the opportunity she gave me to pursue this
research Thanks too to the rest of the tutors especially Dr Barry Eaglestone
who refined my research knowledge and skills Special thanks go to my
sponsor The Commonwealth Scholarship for providing funds for me to purse
my programme To my Administrator Dr Fiona Groccut and Sarah Ferdecio
thank you for the fast response you would give whenever I needed your help
A special thank you to Richard Campos the Managing Director for
RCBusiness Support Ltd for the support you throughout this project
I could not do without the invaluable family support from my sister Juliet
Shadreck and my mom Monica Boniface thank you mum Particular thanks
to Theo my daughter who I left at a tender age to come and pursue this
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
i
TABLE OF CONTENTS
Contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipi Dedicationhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipiv Acknowledgementshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipv List of Abbreviationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipvii List of Illustrationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellipviii Abstracthellipix 10 INTRODUCTION 1
11 Background to the study4
12 An Overview of Mauritian Economy8
13 Mauritius SME Background10
14 Purpose of Statement12
15 Aims and Objectives12
16 Research Questionshellip13
161 Sub-Questions13
17 The Significance of the Study13
17 Definitions of Termhelliphelliphellip14
20 LITERATURE REVIEWhelliphellip16 21Embracing Cultural Challenge in an Era of Globalisation16 22The Dynamics of Culture as a Multi-level Multi-layer Construct20 23International Business and Culture23 24Putz Model for Immigrant Business and Culture25 25 The Role of Information Communication Technologies30 26Cross Culture and International Business33
ii
27Investing in Mauritius35 30 METHODOLOGY37 31Research Setting39 32Methods40 33Research Participants and Sampling42 34Data collection Instrumentshelliphellip43 35Ethical Considerationshelliphellip44 36Procedure45 37Data Analysis46 38 Planned Programme of Dissemination47 39Time Scale48 310 Limitations and Delimitations48 40 RESEARCH FINDINGS AND DISCUSSION50 41Respondents Rate According to Sectors51 42Demographic Profile Participants52 43Characteristics of Responding Firms55 44Language57 45Religion 59 46Social life61 47 Market Accessibility63 48The Role of ICT to SME Business in Mauritius 66 49Governance and the Role of Women in SME sector in Mauritius68 410 Challenges Faced by the Country and Hence SME investors70 50 CONCLUSION AND RECOMMENDATIONS72 60 REFLELECTIONS FROM THE STUDY77
iii
70 FURTHER RESEARCH78 80 APPENDICES80 81 Apendix 180 82 Apendix 281 83 Apendix 382 84 Apendix 483 85 Apendix 586 90 REFERENCES87
iv
DEDICATIONS
To my father Shadreck Boniface who passed on before I could give back all
the good things you did in my life you will always be remembered by me for
the gap you left in my life no one can replace may his soul rest in peace To
my mother in recognition of your worth for all the support you gave A feeling
bears on itself the scars of its birth it recollects as a subjective emotion its
struggle for existence it retains the impress of what might have been but is
not and hope if the fool would persist in his folly he would become wise To
my daughter and to all my family and friends this is for you
THE BOTSWANA FLAG
The Botswana flag was officially adopted on September 30 1966
The colours on the flag correspond to those on the national coat of arms The
blue represents water the white-black-white bands depict the racial harmony
of the people as well as the pluralist nature of the society They are inspired
by the coat of the zebra the national animal
v
This report is dedicated to all those who spend their daily lives trying to cope
with the challenges of HIVAIDS and all those who are affected by this
disease and to the new AIDS free generation
ACKNOWLEDGEMENTS
My sincere gratitude to all whose knowledge skills experience and support
went into this work First are the authors of various literatures whose work
guided this dissertation Overly important too are all those participants who
offered their resources and business experiences which has influenced the
outcome of this paper
To the University of Sheffield thanks for the opportunity to pursue this course
at your institution and the experts you provided to teach various aspects of the
course A lot of thanks to the course leader and my supervisor Dr Kendra
Albright for all the guidance and motivation she provided during the entire
programme Moreover for the opportunity she gave me to pursue this
research Thanks too to the rest of the tutors especially Dr Barry Eaglestone
who refined my research knowledge and skills Special thanks go to my
sponsor The Commonwealth Scholarship for providing funds for me to purse
my programme To my Administrator Dr Fiona Groccut and Sarah Ferdecio
thank you for the fast response you would give whenever I needed your help
A special thank you to Richard Campos the Managing Director for
RCBusiness Support Ltd for the support you throughout this project
I could not do without the invaluable family support from my sister Juliet
Shadreck and my mom Monica Boniface thank you mum Particular thanks
to Theo my daughter who I left at a tender age to come and pursue this
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
ii
27Investing in Mauritius35 30 METHODOLOGY37 31Research Setting39 32Methods40 33Research Participants and Sampling42 34Data collection Instrumentshelliphellip43 35Ethical Considerationshelliphellip44 36Procedure45 37Data Analysis46 38 Planned Programme of Dissemination47 39Time Scale48 310 Limitations and Delimitations48 40 RESEARCH FINDINGS AND DISCUSSION50 41Respondents Rate According to Sectors51 42Demographic Profile Participants52 43Characteristics of Responding Firms55 44Language57 45Religion 59 46Social life61 47 Market Accessibility63 48The Role of ICT to SME Business in Mauritius 66 49Governance and the Role of Women in SME sector in Mauritius68 410 Challenges Faced by the Country and Hence SME investors70 50 CONCLUSION AND RECOMMENDATIONS72 60 REFLELECTIONS FROM THE STUDY77
iii
70 FURTHER RESEARCH78 80 APPENDICES80 81 Apendix 180 82 Apendix 281 83 Apendix 382 84 Apendix 483 85 Apendix 586 90 REFERENCES87
iv
DEDICATIONS
To my father Shadreck Boniface who passed on before I could give back all
the good things you did in my life you will always be remembered by me for
the gap you left in my life no one can replace may his soul rest in peace To
my mother in recognition of your worth for all the support you gave A feeling
bears on itself the scars of its birth it recollects as a subjective emotion its
struggle for existence it retains the impress of what might have been but is
not and hope if the fool would persist in his folly he would become wise To
my daughter and to all my family and friends this is for you
THE BOTSWANA FLAG
The Botswana flag was officially adopted on September 30 1966
The colours on the flag correspond to those on the national coat of arms The
blue represents water the white-black-white bands depict the racial harmony
of the people as well as the pluralist nature of the society They are inspired
by the coat of the zebra the national animal
v
This report is dedicated to all those who spend their daily lives trying to cope
with the challenges of HIVAIDS and all those who are affected by this
disease and to the new AIDS free generation
ACKNOWLEDGEMENTS
My sincere gratitude to all whose knowledge skills experience and support
went into this work First are the authors of various literatures whose work
guided this dissertation Overly important too are all those participants who
offered their resources and business experiences which has influenced the
outcome of this paper
To the University of Sheffield thanks for the opportunity to pursue this course
at your institution and the experts you provided to teach various aspects of the
course A lot of thanks to the course leader and my supervisor Dr Kendra
Albright for all the guidance and motivation she provided during the entire
programme Moreover for the opportunity she gave me to pursue this
research Thanks too to the rest of the tutors especially Dr Barry Eaglestone
who refined my research knowledge and skills Special thanks go to my
sponsor The Commonwealth Scholarship for providing funds for me to purse
my programme To my Administrator Dr Fiona Groccut and Sarah Ferdecio
thank you for the fast response you would give whenever I needed your help
A special thank you to Richard Campos the Managing Director for
RCBusiness Support Ltd for the support you throughout this project
I could not do without the invaluable family support from my sister Juliet
Shadreck and my mom Monica Boniface thank you mum Particular thanks
to Theo my daughter who I left at a tender age to come and pursue this
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
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Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
iii
70 FURTHER RESEARCH78 80 APPENDICES80 81 Apendix 180 82 Apendix 281 83 Apendix 382 84 Apendix 483 85 Apendix 586 90 REFERENCES87
iv
DEDICATIONS
To my father Shadreck Boniface who passed on before I could give back all
the good things you did in my life you will always be remembered by me for
the gap you left in my life no one can replace may his soul rest in peace To
my mother in recognition of your worth for all the support you gave A feeling
bears on itself the scars of its birth it recollects as a subjective emotion its
struggle for existence it retains the impress of what might have been but is
not and hope if the fool would persist in his folly he would become wise To
my daughter and to all my family and friends this is for you
THE BOTSWANA FLAG
The Botswana flag was officially adopted on September 30 1966
The colours on the flag correspond to those on the national coat of arms The
blue represents water the white-black-white bands depict the racial harmony
of the people as well as the pluralist nature of the society They are inspired
by the coat of the zebra the national animal
v
This report is dedicated to all those who spend their daily lives trying to cope
with the challenges of HIVAIDS and all those who are affected by this
disease and to the new AIDS free generation
ACKNOWLEDGEMENTS
My sincere gratitude to all whose knowledge skills experience and support
went into this work First are the authors of various literatures whose work
guided this dissertation Overly important too are all those participants who
offered their resources and business experiences which has influenced the
outcome of this paper
To the University of Sheffield thanks for the opportunity to pursue this course
at your institution and the experts you provided to teach various aspects of the
course A lot of thanks to the course leader and my supervisor Dr Kendra
Albright for all the guidance and motivation she provided during the entire
programme Moreover for the opportunity she gave me to pursue this
research Thanks too to the rest of the tutors especially Dr Barry Eaglestone
who refined my research knowledge and skills Special thanks go to my
sponsor The Commonwealth Scholarship for providing funds for me to purse
my programme To my Administrator Dr Fiona Groccut and Sarah Ferdecio
thank you for the fast response you would give whenever I needed your help
A special thank you to Richard Campos the Managing Director for
RCBusiness Support Ltd for the support you throughout this project
I could not do without the invaluable family support from my sister Juliet
Shadreck and my mom Monica Boniface thank you mum Particular thanks
to Theo my daughter who I left at a tender age to come and pursue this
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
iv
DEDICATIONS
To my father Shadreck Boniface who passed on before I could give back all
the good things you did in my life you will always be remembered by me for
the gap you left in my life no one can replace may his soul rest in peace To
my mother in recognition of your worth for all the support you gave A feeling
bears on itself the scars of its birth it recollects as a subjective emotion its
struggle for existence it retains the impress of what might have been but is
not and hope if the fool would persist in his folly he would become wise To
my daughter and to all my family and friends this is for you
THE BOTSWANA FLAG
The Botswana flag was officially adopted on September 30 1966
The colours on the flag correspond to those on the national coat of arms The
blue represents water the white-black-white bands depict the racial harmony
of the people as well as the pluralist nature of the society They are inspired
by the coat of the zebra the national animal
v
This report is dedicated to all those who spend their daily lives trying to cope
with the challenges of HIVAIDS and all those who are affected by this
disease and to the new AIDS free generation
ACKNOWLEDGEMENTS
My sincere gratitude to all whose knowledge skills experience and support
went into this work First are the authors of various literatures whose work
guided this dissertation Overly important too are all those participants who
offered their resources and business experiences which has influenced the
outcome of this paper
To the University of Sheffield thanks for the opportunity to pursue this course
at your institution and the experts you provided to teach various aspects of the
course A lot of thanks to the course leader and my supervisor Dr Kendra
Albright for all the guidance and motivation she provided during the entire
programme Moreover for the opportunity she gave me to pursue this
research Thanks too to the rest of the tutors especially Dr Barry Eaglestone
who refined my research knowledge and skills Special thanks go to my
sponsor The Commonwealth Scholarship for providing funds for me to purse
my programme To my Administrator Dr Fiona Groccut and Sarah Ferdecio
thank you for the fast response you would give whenever I needed your help
A special thank you to Richard Campos the Managing Director for
RCBusiness Support Ltd for the support you throughout this project
I could not do without the invaluable family support from my sister Juliet
Shadreck and my mom Monica Boniface thank you mum Particular thanks
to Theo my daughter who I left at a tender age to come and pursue this
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
v
This report is dedicated to all those who spend their daily lives trying to cope
with the challenges of HIVAIDS and all those who are affected by this
disease and to the new AIDS free generation
ACKNOWLEDGEMENTS
My sincere gratitude to all whose knowledge skills experience and support
went into this work First are the authors of various literatures whose work
guided this dissertation Overly important too are all those participants who
offered their resources and business experiences which has influenced the
outcome of this paper
To the University of Sheffield thanks for the opportunity to pursue this course
at your institution and the experts you provided to teach various aspects of the
course A lot of thanks to the course leader and my supervisor Dr Kendra
Albright for all the guidance and motivation she provided during the entire
programme Moreover for the opportunity she gave me to pursue this
research Thanks too to the rest of the tutors especially Dr Barry Eaglestone
who refined my research knowledge and skills Special thanks go to my
sponsor The Commonwealth Scholarship for providing funds for me to purse
my programme To my Administrator Dr Fiona Groccut and Sarah Ferdecio
thank you for the fast response you would give whenever I needed your help
A special thank you to Richard Campos the Managing Director for
RCBusiness Support Ltd for the support you throughout this project
I could not do without the invaluable family support from my sister Juliet
Shadreck and my mom Monica Boniface thank you mum Particular thanks
to Theo my daughter who I left at a tender age to come and pursue this
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
vi
course To Gobonaone Keaosenya thanks for your moral and emotional
support you gave during my studies To my family Lebo Kay Goitse Kgosi
Monica Jullie Douglas and all other friends not mentioned thanks for your
moral support Thanks to my family for their prayers and support
Thanks too to all my MSc in Information Systems classmates for sharing their
extensive and diverse knowledge skills and experiences during the course I
acknowledge friends and colleagues in Botswana who encouraged me to
pursue this programme particularly Dr Jorosi for the inspirational advice
Special thank to my sincere friend Patience Chakandinakira for her moral
supportTo Dr Phil Lyoka thank you for the editing and grammar corrections
and all the support you gave throughout this project
Due to technical limitations I am not able to list everyone but I OWE ALL OF
YOU who provided moral academic technical economic support or
otherwise a very BIG THANK YOU including whoever reads this work
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
vii
LIST OF ABBREVIATIONS
BIDPA Botswana Institute for Development Policy and Analysis BOI Board of Investment ESRC Economic And Social Research Council EPZ Export Processing Zones FDI Foreign Direct Investment GDP Gross Domestic Product GSP General System of Preferences IB International Business ICT Information Communication Technologies ILO International Labour Organisation IT Information Technology ISO International Organization for Standardization IVTB Industrial and Vocational Training Board MEDIA Mauritius Enterprise Development Investment Authority MNC Multinational Companies NAFTA North American Free Trade Agreement NHPA National Handicraft Promotion Agency OECD Organisation for Economic Co-operation and Development SADC Southern African Development Community SEHDA Small Enterprises amp Handicraft Development Authority SME Small and Medium Enterprise SMME Small medium and micro-enterprises SMIDO Small amp Medium industries Development Organisation UK United Kingdom UN United Nations USA United States of America WTO World Trade Organization
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
viii
LIST OF ILLUSTRATIONS TABLES Table 1 THE STUDY TIME SCALE
2 RESPONDENTS RATE ACCORDING TO SECTORS
3 AGE GROUP AS PER PARTICPANT
4 GENDER PROFILE
5 EDUCATION PROFILE 6 YEARS EMPLOYED AS CEO 7 COMPANY AGE PROFILE 8 NUMBER OF EMPLOYEES 9 ANNUAL SALES 10 OWNERSHIP
FIGURES 1 MAP OF MAURITIUS SHOWING ALL PROVINCES
2 MAURITIUS MAP SHOWING POLITCAL DIVISIONS
3 THE DYNAMIC OF TOP-DOWN-BOTTOM-UP PROCESS ACROSS LEVELS OF CULTURE
4 PUTZ MODEL FOR IMMIGRANT BUSINESS AND CULTURE
5 THE BASIC MECHANISM OF INTERNATIONALISATION-STATE AND CHANGE ASPECT
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
ix
ABSTRACT
In this new millennium few executives can afford to turn a blind eye to global
business opportunities The globalizing wind has broadened the mindsets of
executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories One such new
trajectory is the concern with national culture Whereas traditional IB research
has been concerned with economic legal issues and organizational forms and
structures the importance of national culture has become increasingly
important in the last two decades largely as a result of the classic work of
Hofstede (1980) National culture has been shown to impact on major
business activities from capital structure (Chui et al 2002) to group
performance (Gibson 1999)
The purpose of this study was to understand the concept on how to penetrate
a new international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
Data was collected through telephone interview web survey literature review
and face to face interview involving business managers legal stakeholders
and government officials and former government ministers About 17
telephone interviews were done with only government officials 4 face to face
interviews and 140 web survey interviews questions All the respondents were
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
x
randomly selected and respondents would suggest further participants Data
was put in to categories and themes and analysed according to those themes
Putz (2000) model was used as guide to selection of themes
Findings revealed the following 1 Language and religion are not a barrier to
foreign investment in Mauritius 2 Mauritius is a peaceful and tolerant nation
and most of its social life revolves around family and friends 3 Market
opportunities exits in the manufacturing industry offshore financial services
cyber culture and the construction industry 4 The country‟s business
economy faces stiff competition from Botswana South Africa and Vietnam 5
The government plays an important role in ensuring security for foreign
investors
From the results it was concluded that culture plays an important role in the
daily lives of the Mauritian people but it does not have a direct impact to
investment in Mauritius
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
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Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
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Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
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Economic And Social Research Council (2005) ESRC research ethics
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Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
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2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
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6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
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Commonwealth Secretariat UK (2006) Looking Outward A study of small
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Reed DM (1998) Using the Business Excellence Model in Small Service
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Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
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Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
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Hofstede G (1980) Cultures Consequences International Differences in
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SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
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Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
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Cairncross F (2001) The Death of Distance Harvard Business School Press
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Commonwealth Secretariat UK (2005) Looking Outward A study of small
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Drucker PF (1995) Managing in a Time of Great Change Truman Talley
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Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
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Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
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Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
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Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
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Haire M et al(1966)Managerial Thinking An International Study Wiley
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Heuer M et al(1999) Cultural stability or change among managers in
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Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
1
CHAPTER ONE
INTRODUCTION
Globally Small and Medium Enterprises (SMEs) are increasingly regarded as
vital for diversifying economies through the creation of employment
(Machacha 2002 p 277) The OECD (2000) notes that small and medium-
sized enterprises account for 60-70 percent of jobs created in member
countries Southwood (2004) in discussing the status of the SME sector in
Africa observed that governments and large corporations dominated
economies of the countries yet the real engine of economic growth lay with
SMEs Muuka (2002 p 1) in discussing the SME sector in Africa noted that
the informal sector is huge due to the large numbers of employees it absorbed
as a consequence of inadequate jobs and opportunities in the formal sector
The author points out that in many African countries the informal sector is
estimated to employ from three to six times the number of employees in the
formal sector However very little has been documented through research
about this important sector
In Mauritius the Mauritian government believes that the real engine of
sustainable and equitable growth is in the SME sectors Not only is it of great
importance for the rate of job creation and income generation but also it
deserves particular attention since the sector has been largely neglected in
the past In this respect this study of Mauritius is important in addressing
some of issues of culture by using the International business as a framework
for this study to understand the business environment in Mauritius and the
potential for growth in a global perspective (Stone 1997)
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
2
In this new millennium few executives can afford to turn a blind eye to global
business opportunities Japanese auto-executives monitor carefully what their
European and Korean competitors are up to in getting a bigger slice of the
Chinese auto-market Executives of Hollywood movie studios need to weigh
the appeal of an expensive movie in Europe and Asia as much as in the US
before a firm commitment The globalizing wind has broadened the mindsets
of executives extended the geographical reach of firms and nudged
international business (IB) research into some new trajectories
However research shows that as markets competition and organisations
globalise the business people businesses themselves and consumers
involved in these institutions increasingly have to interact manage negotiate
and compromise with people from different cultures (Hofstede 1997
Hoecklin 1995) Global business managers report that when doing business
overseas challenges mount For example structural conditions physical
social and economic arrangements can affect business operations and
outcomes as can the varied norms and behaviours that come with different
national cultures
One such new trajectory is the concern with national culture Whereas
traditional IB research has been concerned with economiclegal issues and
organizational forms and structures the importance of national culture
broadly defined as values beliefs norms and behavioral patterns of a
national group (Hofstede1980) has become increasingly important in the last
two decades largely as a result of the classic work of Hofstede (1980)
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
creation Organisation for Economic Co-operation and Development
[Online]wwwoecdorgmediapublishpb00-11ahtm [Accessed 8 July 2008]
Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
Secretariat
Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
Littlefield Lanham MD
SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
San Francisco
Stone A ( 1997) SMEs and Technology why should we make special efforts
to help (World Bank 1997)
Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
3
National culture has been shown to impact on major business activities from
capital structure (Chui et al 2002) to group performance (Gibson 1999) For
reviews see Boyacigiller and Adler (1991) and Earley and Gibson (2002)
Weisinger and Trauth (2003) report that culture evolves and takes unique
forms in local offices of organizations This means that culture is both dynamic
and situated in its local context Thus external conditions both structural and
cultural can influence global business Yet small and medium enterprise
(SMEs) managers can have an impact on how their organizations‟ cultures
evolve Therefore strategic leaders need to introduce unique norms values
and processes that fit together coherently in successful organizations
Therefore the main purpose of this case study is to explore and understand
the Small Medium Enterprise (SMEs) business environment in Mauritius and
how SMEs can penetrate the business culture there
The purpose of this paper is therefore to explore and understand how national
culture influences international business decisions and how to culture affects
international business investment using Mauritius as a case study
In this chapter the author outlines the background of the study specifies the
study objectives describes the significance of the study gives methodological
overview and finishes off by outlining definitions of key terminologies
4
11 Background to the Study
Strategically located in the Indian Ocean at the crossroads of Africa and Asia
Mauritius is reputed for its beautiful countryside and its 150 kilometres of white
sandy beaches and transparent lagoon A British colony that gained
independence in 1968 officially known as Republic of Mauritius the country is
positioned to the east of the Madagascar Islands The geographical
coordinates of the nation are 20ordm17 South latitude and 57ordm33 East longitude
The total area covered by the island nation is 2040 square kilometres
Mauritius enjoys a maritime sub-tropical climate and is therefore an all-year-
round holiday destination From a monocrop economy depending mainly on
sugar it has diversified its economic activities into textile and apparel
industry tourism and financial service Mauritius has witnessed a massive
development in the last decades (SMIDO 2006)
5
Figure 1 Map of Mauritius showing all Provinces
Source Encarta World atlas online
6
Figure 2 Mauritius map showing political divisions of the country
Source Maps of the world online
The research area was around the capital city Port Louis marked in red For
anonymity the site was just called A or B Administratively Mauritius is divided
into nine Provinces (figure 2)
The country is remarkable in its ethnic diversity It forms a unique mosaic of
immigrants from the Indian sub-continent Africa Europe and China The
cultural diversity and harmony of the island make Mauritius a unique place in
the world The various religions found on Mauritius tend to play a major part in
7
the islands cultural events and churches temples and mosques are to be
found everywhere Hindus make up approximately half of religiously affiliated
Mauritians followed by Muslims and Christianity as the minority It is also
known for its social peace political stability and racial harmony Its steady
economic growth over the years coupled with its nation‟s social cohesion and
prosperity ensure continuing development (Country Profile 2005)
The country is equipped with a highly skilled labour force to suit virtually all
business in two international languages English and French and a very good
infrastructure thereby attracting Foreign Direct Investment The average
economic growth was 56 over the last 3 years The income per Capita has
reached 4000 US Dollars As a result the standard of living has gone up The
country has now a life expectancy rate of 714yrs an adult literacy rate of 83
(Country Profile 2005)
To face globalisation and a new economic environment the Government has
taken several steps High value-added capital intensive and knowledge-
based activities are on the priority list The Information Technology sector is
undergoing rapid changes so as to be fit for the next millennium The aim is to
make Mauritius a centre for high-tech and software services which can be
exported (Commonwealth Secretariat 2006)
8
12 An Overview of Mauritian Economy
The economy of Mauritius has experienced major structural transformation
over the last two decades The country has moved away from a mono-crop
economy with fast population growth high unemployment and low per capita
income to one that is more dynamic and diversified The sources of
diversification have been agriculture export manufacturing (mainly textile)
tourism and more recently international services with Offshore and Freeport
activities (Country profile 2005)
To respond to the global competition in these sectors Mauritius has made
extensive use of modern technology to improve its productivity and efficiency
The real growth rates have been around 54 over the past four years and
Mauritius is now classified as a middle-income country and is one of the
healthiest economies in the whole African region (Country profile 2005) The
sugar sector provided the start-up capital for the Export Processing Zones
(EPZ) The rapid rate of growth of investment in the manufacturing sector
(investment grew by over 30 each year from 1983 until the late 1990s in this
sector) that led to the success of the EPZ and the Mauritian economy as a
whole This was made possible by the confidence of entrepreneurs and
foreign investors prevailing in the country at that particular time The private
sector accounts for approximately 70 of total capital formation in Mauritius
Investment rate stood around 27 in the four years ending 1996 peaking to
30 in 1994 (SMIDO 1996)
9
When the government recommended the diversification of the economy with
the creation of Export Processing Zones in the early 1980‟s the EPZ sector
benefits from duty-free and quota free access into European Union markets
granted under the Lomeacute Convention as well as tariff preferences granted
under the General System of Preferences (GSP) by countries such as North
America and Japan The mid 1980s witnessed a textile boom raising per
capita incomes and living standards However the conclusion of the Uruguay
Round (General Agreement on Trade amp Tariffs) implies the loss of guaranteed
markets and preferential access which will result in strong competition in
these respective markets (Country profile 2005)
The new strategy of the industrial sector aims at targeting high quality and
high value added products with a view to restoring the competitiveness of the
goods by applying latest technology to the manufacturing industry and hence
improving the quality of the finished products Limited data is available
regarding the SME sector in Mauritius The current research has observed
that there is little research in the field in SME sector in Mauritius
In view of the importance of foreign investment as a source of sustenance to
economic growth the government of Mauritius has taken a series of policy
measures to encourage its flows into manufacturing offshore banking and
financial services information technology communication and tourism As far
as foreign investors are concerned Mauritius offers itself as an attractive
destination because several positive features such as political stability
10
availability of skilled labour and investment-friendly rules and institutions
(Stone 1997)
With such a promising economy there is virtually no evidence on how to
penetrate the business culture in Mauritius and how culture can affect SMEs
and business opportunities therefore this study will explore and understand
the business environment in Mauritius and the challenges of doing business
there as a foreign investor Currently there is very little research done on
SMEs and culture in Mauritius
13 Mauritius SME Background
Experience shows that attitudes towards small business vary from decade to
the next from country to country Before the industrial revolution all business
was small business but with industrial and commercial expansion of
developed nations small has become medium and medium has become big
business
Business owners and managers have often seen growth as an end in itself
and at time the cry get big or get out has been heard in most nations
(Meredith 2004) For more than two decades SMEs have experienced
favourable growth SME has long been prominent in the countrys economy
and make up a large portion of national economy in terms of output
employment and effective utilisation of regional resources Small and medium
enterprises in Europe make up 998 of all European enterprises provide
66 of its jobs and account for 65 of its business turnover (Meredith 2004)
11
In developing countries SMEs account more than 90 of all enterprises
Over the last five years they have been responsible for more than 80 of job
created (Stone 1997) On the issue of job creation Stone (1997) found that
SMEs create more employment than large enterprises and with a lower
investment per job created SMEs are not usually associated with international
activity but they do in fact play a significant international role and their
importance appears to be increasing Available data on SMEs international
activity are very limited (Stone 1997)
In general terms and depending on the country SMEs contribute between
15 and 50 of exports and between 20 and 80 of SMEs are active
exporters Overall it is estimated that SMEs now contribute between 25 and
35 of world-manufactured exports (UN 2005) Increased exports not only
boost the level of sales and employment but also extend the life cycle of
goods and services
In Mauritius SMEs represent 19 according to a report issued by the
Commonwealth Secretariat entitled a Study of Small Firm export Policies
and Institutions in Mauritius Subsequently these SMEs have developed
gradually and move from their tradition orientated operations to export-led
firms probably due to improvement of technology in the field of communication
and the new economic dimension which prevailed
At this juncture it is important to report that few studies on culture and small
and medium entrepreneurship have been conducted on Sub-Saharan Africa
12
There is a paucity of information and even those scarce studies they do not
cover broad perspectives of the situation of SMEs in Sub-Saharan Africa
Therefore this study builds upon the existing limited body of research
regarding how business cultures contribute to the success or failure of small
and medium entrepreneurs In particular it explores the business culture in
Mauritius and its barriers to penetration for new and foreign small and
medium entrepreneurs
14 Purpose Statement
The purpose of this study was to understand the concept on how to penetrate
an international business culture and the challenges that comes it using a
grounded theory research design The case study explored and understood
how cultural differences affect small and medium enterprises in Mauritius
business opportunities and how to penetrate the business culture in Mauritius
15 Aims and Objectives
To investigate the challenges of national cultural differences in
business in Mauritius
To investigate how to penetrate the business environment for a new
and or foreign business culture especially in Mauritius
To investigate business opportunities for SMEs in Mauritius and how
these can benefit the locals
13
16 Research Question
How can Small and Medium Enterprises penetrate the business culture in
Mauritius
These sub-questions all pertain to SMEs business
o 161 SUB-QUESTIONS
What kind of businesses are operating in Mauritius now
What are their business strategies (marketing brands) etc
What are the necessary mechanisms for establishing business in
Mauritius
What are the business needs of established and starting businesses
What are the mechanisms for potential growth of local business
What are the challenges for doing business in Mauritius
How much of business behaviour is influenced by the national culture
17 The Significance of the Study
The findings of the current study will increase the understanding of cultural
barriers to market penetration for SMEs in Mauritius The study adds
knowledge to the body of literature in this area focusing at further
improvement of understudying of culture and business issues The
study becomes part of the universitys education development in line with its
obligations to the communities and the country This research problem arose
from an information need of a particular client This research therefore will try
to explore the client‟s information need and probably contribute to the wealth
of knowledge
14
18 Definitions
CULTURE Hofstede (1997) defines culture as ldquothe collective programming of
the mind which distinguishes the members of one group or category of people
from anotherrdquo It is the norms beliefs and values common to a society
Culture is about the way people understand their world and make sense of it
It only when this is taken for granted assumptions are challenged that people
realise that they even exist (Hofstede 1997)
ENTERPRISE An enterprise is considered to be any entity engaged in an
economic activity irrespective of its legal form This includes in particular
self-employed persons and family businesses engaged in craft or other
activities and partnerships or associations regularly engaged in an economic
activity (European Commission 2003)
INTERNATIONAL BUSINESS International business consists of transactions
that are devised and carried out across national borders to satisfy the
objectives of individuals and organizations The Primary Types of International
Business Activities Are Importing and Exporting Direct Foreign Investment
(Govindarajan and Gupta 2001)
GLOBALISATION refers to a bdquogrowing economic interdependence among
countries as reflected in the increased cross-boarder flow of three types of
entities goods and services capital and knowhow‟ (Govindarajan and Gupta
2001 4)
15
SMALL AND MEDIUM INTERPRISES (SME) is made up of enterprises
which employ fewer than 250 persons and which have an annual turnover not
exceeding EUR 50 million andor an annual balance sheet total not
exceeding EUR 43 million (European Commission 2003)
In Mauritius an SME has been redefined taking into account the volume of
investment in equipment which was previously one million up to 10 millions
Mauritian Rupees presently to be classified as a small enterprises and with
less than 50 and 200 employees for small and medium scale respectively
(Stone 1997)
16
CHAPTER TWO
LITERATURE REVIEW
The aim of this chapter is to introduce conceptual themes that are important in
order to understand the role of culture in international business The chapter
discusses the context of relationship between culture and international
business practices in small and medium enterprises (SMEs) and the major
challenges they face in the area of globalisation A model adopted from Putz
(2000) forms a framework for articulating the conceptual role that culture has
in international business using Mauritius as a case study
21 Embracing Cultural change in an era of globalization
A significant theoretical issue for international business is the role of culture in
the whole aspect of information transformation Since the landmark study by
Haire et al (1966) and the publication of Industrialism and Industrial Man by
Kerr et al (1960) researchers have continued to search for similarities in
culturally specific beliefs and attitudes in various aspects of work related
attitudes as well as consumption patterns and other behaviours If cultures of
the various communities of the world are indeed converging (Heuer et al
1999) International Business (IB) related practices would likely become
increasingly similar For example standard culture-free business practices
would emerge and inefficiencies and complexities associated with divergent
beliefs and practices in the past era may disappear (Heuer et al 1999)
17
Studies elsewhere suggest that culture gets affected by globalization practices
in the current 21st century Globalization has seen flows of information
technology money and people and is conducted via international
government organizations such as the African Union the North American
Free Trade Agreement (NAFTA) and the European Community global
organizations such as the International Organization for Standardization
(ISO) multinational companies (MNCs) Also includes cross-boarder alliances
in the form of joint ventures international mergers and acquisitions These
interrelationships have enhanced participation in the world economy and
have become a key to domestic economic growth and prosperity (Drucker
1995 153)
Literature suggests that because globalization tends to redistribute economic
rewards in a non-uniform pattern a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) Strong opposition to
globalization usually originates from developing countries that have been
affected by the destabilizing effects of globalisation However in recent years
there have been heated debates in Western economies triggered by
significant loss of professional jobs as a result of offshoring to low wage
countries (Schaeffer 2003)
Workers in manufacturing and farming in advanced economies are becoming
increasingly wary of globalization as their income continues to decline
18
significantly In parallel to the angry protests against globalization the flow of
goods services and investments across national boarders has continued to
fall after the rapid gains of the 1990s The creation of regional trade blocs
such as NAFTA the European Union and the Association of Southeast Asian
Nations have stimulated discussions about creating other trade zones
involving countries in South Asia Africa and other parts of the world
Although it is often assumed that countries belonging to the World Trade
Organization (WTO) have embraced globalization the fact is that the world is
only partially globalized at best (Schaeffer 2003)
Many parts of Central Asia and Eastern Europe including the former
republics of the Soviet Union parts of Latin America Africa and parts of
South Asia have raised heightened scepticism about globalization (Greider
1997) In fact less than 10 of the world‟s population are fully globalized (ie
being active participants in the consumption of global products and services)
(Schaeffer 2003)
According to Guile`n (2001) these trends might indicate that globalization is
being impeded by tendencies towards country-specific modes of economic
development making the convergence of IB-related values and practices
difficult to achieve Hofstede (1980)‟s favourite definition of f ldquoculturerdquo is
precisely that its essence is ldquocollective mental programmingrdquo it is that part of
peoples conditioning that they share with other members of their nation
region or group but not with members of other nations regions or groups
Hofstede (2001) asserts that these mental programs of people around the
19
world do not change rapidly but remain rather consistent over time His
findings tend to suggest that cultural shifts are relative as opposed to
absolute Although clusters of some countries in given geographical locales
(eg Argentina Brazil Chile) might indicate significant culture shifts towards
embracing Anglo values the changes do not diminish the absolute differences
between such countries and those of the Anglo countries (ie US Canada
UK)
According to Hofstede (1980) Examples of differences in mental
programming between members of different nations can be observed all
around us One source of difference is of course language and all that
comes with it but there is much more In Europe British people will form a
neat queue whenever they have to wait not so the French Dutch people will
as a rule greet strangers when they enter a small closed space like a railway
compartment doctor‟s waiting room or lift not so the Belgians Austrians will
wait at a red pedestrian traffic light even when there is no traffic not so with
the Dutch Swiss tend to become very angry when somebody-say a foreigner
makes a mistake in traffic not so with the Swedes All these are part of an
invisible set of mental programs which belongs to these countries‟ national
cultures Such cultural programs are difficult to change unless detaches the
individual from his or her culture Within a nation or a part of it culture
changes only slowly (Hofstede 1980)
20
This is the more so because what is in the minds of the people has also
become crystallized in the institutions namely government legal systems
educational systems industrial relations systems family structures religious
organizations sports clubs settlement patterns literature architecture and
even in scientific theories All these reflect traditions and common ways of
thinking which are rooted in the common culture but may be different for other
cultures (Hofstede 1980)
22 The dynamics of Culture as a Multi-level Multi- layer construct
Multi-level approaches of viewing culture as a multi-level construct that
consists of various levels nested within each other from the most macro level
of a global culture through national cultures organisational cultures group
cultures and cultural values represented the self aspect of the individual See
figure 3
21
Figure 3 The dynamic of top-down-bottom up process across levels of
culture (Source Schein 1992)
The model proposes that culture as multi-layer construct exist at all levels
from global to the individual Changes that take place at the external layer of
behaviour are most likely shared by individuals who belong to the same
cultural background level hence characterising the aggregated unit (Schein
1992)
Top-
Down
Individual
Behaviour
Values
Assumptions
Global Culture
National Culture
Organizational Culture
Group Culture
Bottom
Up
22
Below the global level are nested organizational layers or networks at the
national level with their local cultures varying from one nation or network to
another Further down are local organizations and although all of them share
some common values of their national culture they vary in their local
organizational cultures which are also shaped by the type of industry that
they represent the type of ownership the values of the founders etc Within
each organization are sub-units and groups that share common national and
organizational cultures but differ from each other in their unit culture based on
differences in functions of their leaders‟ values and the professional and
educational level of their members At the bottom of this structure are
individuals who through the process of socialization acquire the cultural values
transmitted to them from higher levels of culture Individuals who belong to the
same group share the same values that differentiate them from other groups
and create a group-level culture through a bottom-up process of aggregation
of shared values (Schein 1992)
Both top-down and bottom-up processes reflect the dynamic nature of culture
and explain how culture at different levels is being shaped and reshaped by
changes that occur at other levels either above it through top-down
processes or below it through bottom-up processes(Schein 1992) Similarly
changes at each level affect lower levels through a top-down process and
upper levels through a bottom-up process of aggregation The changes in
national cultures observed by Inglehart and Baker (2000) could serve as an
23
example for top-down effects of economic growth enhanced by globalization
on a cultural shift from traditional values to modernization
In view of the complexity of the organizational structures specific
organizational structures that have global character need to be established so
as to adopt common rules and procedures in order to have a common
bdquolanguage‟ for communicating across cultural borders (Kostova 1999 Kostova
and Roth 2003 Gupta and Govindarajan 2000)
Given the dominance of Western Multi National Companies (MNCs) the
values that dominate the global context are often based on a free market
economy democracy acceptance and tolerance of diversity respect of
freedom of choice individual rights and openness to change (Gupta and
Govindarajan 2000) The multi-level structure explains how a lower-level
culture is being transformed by top-down effects and that the cultural layer
that changes first is the most external layer of behaviour In the long run
bottom-up processes of shared behaviours and norms would affect the local
organizational culture as well (Schein 1992)
23 International Business and Culture
Knowledge of cultural differences is one of the key components in
international business practices and success Improving levels of cultural
awareness can help companies build international competencies and enable
individuals to become more globally sensitive (Hofstede 2003) Indeed
cultural differences contribute towards different ways people behave in
24
business Research in the field of international management underscores that
the attributes of cultural knowledge used by a firm play an important role in the
firms expansion For example Martin and Salomon (2003) found that cultural
orientation in entrepreneurial action is a central theme and can serve as a
starting point for immigrant business
ldquoUnderstanding the culture and the conceptualisation of culture in conjunction with entrepreneurial action is a critical issue when doing business in an international environment Contributions of economic geography inspired by the cultural turn which shows alternative ways of thinking about the connection between culture and economy by using a new understanding of culture are also critical (pg 198)rdquo
The statement underscores the important of understanding the culture of a
society before attempting to do business there otherwise the company runs a
risk of going out of business The ways in which different groups of people
interpret their environment and organise their activities is based the on the
specific cultural values and assumptions Certain values often thought to be
universal really do differ from culture to culture What constitutes an ethical
business practice is not the same everywhere This can be an enormously
difficult area in managing business across cultures (Straub et al 2002)
Although one may claim cultural differences to be going away they are
actually being absorbed in the business practices This makes it more critical
than ever to try to understand different cultures and their influence on the
ways people do business and view the world The costs of not understanding
are getting greater than ever The essence of culture is not what is visible on
the surface It is the shared views about what people understand and interpret
25
the world These cultural differences are crucial influences on interactions
between people working and managing across culture (Gertler 1997)
The social behaviour of a society is embedded in a particular context and is
connected to other deeply held values and beliefs (Weisinger and Trauth
2003) This means that the stakes are high for mismanaging cultural
differences Ignoring or mishandling differences can result in an inability to
retain and motivate employees a misreading of the potential of cross-border
alliances marketing and advertising blunders and failure to build sustainable
sources for competitive advantage Mismanaging cultural differences can
render otherwise successful managers and organisations ineffective and
frustrated when working across cultures (Weisinger and Trauth 2003)
24 Putz Model For Immigrant Business and Culture
Literature in the field of Immigrant Business differentiates mainly between two
basic approaches each with a different emphasis which are combined to
explain entrepreneurial action of immigrants (Putz 2000) The first approach
emphasis the bdquoopportunities‟ offered by the host country including access to
the market and job market conditions The second approach focuses on the
bdquoresources‟ of migrant groups from whom the concept of culture becomes
essential (see Figure 1 below)The Putz (2000) cultural model below is a
summary of explanatory approaches following the assumption that self
employment of certain groups is the result of their specific cultural
predisposition which favours business activity
According to Putz‟s (2000) view of cultural model the bdquoopportunities‟
approach which refers to market possibilities as an explanation for self
26
employment of immigrants assume that there are certain market segments
with favourable development perspectives especially for immigrant groups
Here two factors receive special attention which are niche markets and legal
and institutional frameworks Niche markets make the establishing of business
by immigrants easier because their needs for consumer goods create specific
demand Legal and institutional frameworks gain awareness in international
comparative studies through restrictions specified by a country regarding
business permits and regulations these frameworks influence both the extend
and the sectored structure of the bdquoimmigrant business‟ (Putz 2000)
According to Putz (2000) the observation that most immigrant groups show a
higher level of self employment rate than others often forms the background
explanation which focus on opportunities created by the host society
Resource models stress the shared characteristics of migrants of same origin
Resources models explain that certain groups have specific cultural
resources which make it easier for members of that group to become self
employed therefore one can distinguish between the cultural traditions and
socialethnic networks ( Putz 2000)
27
Figure 4 Dominating models concept of bdquoImmigrant Business‟ (Source Putz
2000)
OPPORTUNITIES
Market Access
Possibilities
Market Conditions
Niche Markets
lsquoOpenrsquo Markets
Job Market
Conditions
Access
Vertical Mobility
Legal and Institutional
Frameworks
lsquoEthnicrsquo
Business
RESOURCES
lsquoClass Resourcesrsquo lsquoCultural Resourcesrsquo
Cultural
Traditions
Social lsquoEthnicrsquo
Resources
28
When successfully managed differences in culture can lead to innovative
business practices faster and better learning within the organisation and
sustainable sources of competitive advantage (Sondergaard and Hofstede‟s
1994) In relation to that the current study argues that managers need to
study and understand the culture and the niche market before investing This
assumption has been raised as a result of the previously reported experiences
and research findings already reported so far It is therefore critically important
to understand that every society has got its own way of behaving which needs
to be understood if the business is to succeed Operating companies need to
understand what their business means to the people of the given community
and their culture
Several studies of international business have indicated that
internationalization of the firms is a process in which the firms gradually
increase their international involvement(Johanson amp Wiedersheiml 1995
Gibson 1999 Chui et al 2002 ) It seems reasonable to assume that
within the frame of economic and business factors the characteristics of this
process influence the pattern and pace of internationalization of firms Figure
5 below shows a model of the internationalization process of the firm that
focuses on the development of the individual firm and particularly on its
gradual acquisition integration and use of knowledge about foreign markets
and operations and on its successively increasing commitment to foreign
markets The basic assumptions of the model are that lack of such knowledge
is an important obstacle to the development of international operations and
that the necessary knowledge can be acquired mainly through operations
abroad (Johanson and Wiedersheiml1995)
29
FIGURE 5 The Basic Mechanism of Internalisation- State and Change Aspects
Figure 5 Basic Mechanism of Internalisation (Source Johanson amp
Wiedersheiml 1995)
Market knowledge and market commitment are assumed to affect both
commitment decisions and the way current activities are performed These in
turn change knowledge and commitment ( Aharoni 1966) In the model it is
assumed that the firm strives to increase its long-term profit which is
assumed to be equivalent to growth (Williamson 1966) The firm is also
striving to keep risk-taking at a low level These strivings are assumed to
characterize decision-making on all levels of the firm Given these premises
and the state of the economic and business factors which constitute the frame
in which a decision is taken the model assumes that the state of
internationalization affects perceived opportunities and risks which in turn
influence commitment decisions and current activities (Johanson amp
Wiedersheiml 1995)
Market
Knowledge
Market
Commitment
Commitment
Decisions
Current
Activities
30
2 5 The Role Of Information Communication Technologies
Hofstede (2001) observed that not only will cultural diversity among countries
persist but also new technologies might even intensify the cultural differences
between and within countries Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
Information communication technologies (ICTs) enable users to access varied
amounts of information globally however it does not necessarily increase
their capacity to absorb the information at the same rate as the information is
disseminated or diffused (Bhagat et al 2002) In addition information and
knowledge are interpreted through cultural lenses and the transfer or diffusion
of organizational knowledge is not easy to accomplish across cultural
boundaries (Bhagat et al 2002)
Ethnic groups around the world observe the lifestyles and cultural values of
other countries and some are interested in adopting part of the lifestyle and
values but others reject it completely (Kirkman and Shapiro 2000) The
effects of new technologies on improving efficiencies of multinational and
global corporations are well known but it is not known how these new
technologies especially computer-mediated communication and the Internet
31
might create significant shifts in the cultural patterns of different ethnic groups
(Kirkman and Shapiro 2000) or on their ways of doing business
In essence there in need to explore how the spread of ICTs is affecting the
progress of globalization in different parts of the world by incorporating the
role of cultural syndromes organizational cultures and other processes
which has recently been attempted by scholars such as Bhagat et al (2003)
and Gibson and Cohen (2003)
Information and Communications Technology (ICT) has become a catchword
with different interpretations and viewpoints even among experts As the
name suggests ICT encompasses all the technology that facilitates the
processing transfer and exchange of information and communication
services In principle ICTs have always been available since the advent of the
printing press The only difference is that from the late twentieth century rapid
advances in technology changed the traditional ways in which information was
processed communications conducted and services available (Adu 2002)
These technological advances have changed business operations and the
way people communicate They have introduced new efficiencies in old
services as well as numerous new ones One could even imagine going as far
as replacing the term Post-industrial Society with ldquoInformation Society that
is a society where the ability to access search use create and exchange
information is the key for individual and collective well-being (Kaplan 2001)
32
Globally entrepreneurship is considered as the engine of economic
development The SME sector has the potential to address socio-economic
challenges facing both developing and developed countries Without small
business development it is argued that economies stagnate unemployment
levels continue to rise and the general standard of living deteriorates
Information and communications technology (ICT) has been identified as a
major area of need to develop the SME sector in areas of information
provision access to national and international markets and other areas of
business development and support ( Ferrand and Havers 1999)
ICTs enable entrepreneurs to manage their businesses efficiently and thus
enhancing their competitiveness in the global market They can increase their
geographic reach improve efficiency in procurement and production and
improve customer communications and management For these reasons the
need to encourage and accelerate the uptake and optimal application of ICTs
by SMEs in different sectors of the economy cannot be overemphasized
(Ramsay et al 2003) The ICT sector has the potential to absorb prospective
entrepreneurs considering various business opportunities offered by the
sector Some of the business opportunities available within the sector relate to
systems integration application development database administration web
design and internet service provision The sector is also seen as an area with
major opportunities for the historically disadvantaged sectors of the
population It therefore becomes imperative for government to provide
mechanisms to accelerate the entry of SMMEs into the ICT sector (ILO 2001)
33
26 Cross Culture and International Business
Cross-cultural management advice rests on several assumptions in the
tradition of Hofstede (1997) that a) that national culture is comprised of norms
and values that can be readily identified and addressed b) that these norms
values and patterns of behaviour are stable and change at an extremely slow
pace and c) that national culture predominates over organizational culture
epistemic culture gender or other determinants of attitudes and behaviour
According to Hosftede (1997) national culture is comprised of norms and
values that can be readily identified and addressed
Organisational culture (common values and attitudes) affects organizational
success and innovation develops over time and may be difficult to change
ldquoThere is a relationship between an organization‟s culture and its
performance The pervasive nature of organizational culture means that if
change is to be brought about successfully this is likely to involve changes to
culturerdquo (Mullins 1999)
An alternative view sees culture as more complex context-specific and
dynamic For example Weisinger and Trauth (2003) examined the interaction
of national cultures the IT industry culture and a particular firm‟s
organizational culture They observed that the resulting situated culture ldquois
fluid contextually dependent and created by actors within a group who may
hold conflicting assumptions and world viewsrdquo In other words culture is as
what it is because of what it does This means that management must ensure
34
that key capabilities for example marketing analytics or process controls are
developed and nurtured across the organization
Successful global managers recognize that they cannot respond to every
unique opportunity that local settings offer Thus there is an inherent tension
in cultural sensitivity a management team which is ldquotoo sensitiverdquo to cultural
and structural features exposes the organization to the risks that come with a
lack of focus and coherence while managers who do not take cultural and
structural features into account expose the organization to the risks that come
with organizational rigidity (Myres and Tan 2002)
According to Mistry (1999) entrepreneurial networks and clusters in sub-
Saharan Africa have not generally produced the kind of strong transnational
links that characterize Asia‟s flourishing pattern of industrial diffusion The
author states that the reasons for this are complex differences in geography
different models provided by leading countries in the neighbourhood and
policies adopted by governments in the respective regions Chinese business
networks are responsible for some of the information ideas and capital that
helped launch the small Indian Ocean nation of Mauritius as an important
centre for export-oriented industry The Chinese networks in Mauritius also
continue to facilitate a role that Mauritius first began to play in the eighteenth
century they serve as a gateway for overseas Chinese entrepreneurs
interested in investing both in Mauritius and elsewhere in Africa (Mistry 1999)
35
27 Investing in Mauritius
There are a lot of advantages in investing in Mauritius The economy of the
country is stable and the graph of the economy and business is one the rise
for a considerable period of time The Mauritius government has undertaken a
sequence of strategic measures to support its course into offshore banking
manufacturing and financial services communication technology and tourism
keeping in mind the significance of foreign investment as a basis of
nourishment of the financial development (Dabee and Greenaway 2001)
According to Dabee and Greenaway (2001) tthere are various factors that
influence financiers to invest in Mauritius like accessibility of skilled labor
political constancy and venture-friendly institutions and regulations One of
the major factors for the development of Mauritius is the Foreign Direct
Investment (FDI) The government of Mauritius has given all the necessary
support to create the most favorable investment setting by the following steps
Building modern infrastructure
Endorsing suitable legislations
Commencing packages of investment inducements
Investing in human capital
Some of the advantages of investing in Mauritius are as follows
High-quality infrastructure with superb transportation
Democracy and a steady government
Free market financial system fastened on export slanting activities
Excellent system of sea and air transport
36
High standard of living good international schools
A highly educated bilingual and responsive work force
Knowledgeable financial segment providing outstanding services
Constructive market contact and good inducements ( IBP 2002)
Mauritius has various sectors where investment can be made like Information
and Communication Technology and manufacturing For doing business in
Mauritius registered trademark is required The trade marks for business are
issued by the registered Patents and Trademarks sector of Ministry of Foreign
Affairs International Trade and Cooperation In the country of Mauritius a
foreigner is eligible to hold 100 shares In this case one of the directors of
the company has to inhabit in Mauritius and the foreign individual has to
obtain a sanction from the Office of Prime Minister (IBP 2002)
In Mauritius the laws concerning income tax is based on the English law of
income tax The companies in Mauritius are lawfully accountable to pay out
income tax on their profits at an even rate of 25 A company which is
included in the country or has its scheming benefit in the country is measured
for tax reasons to be an occupant corporation To the Mauritius companies
various types of tax incentives are granted The companies that hold
certificate for Tax inducement are responsible to tax at an abridged rate of
15 while the scheduled companies are accountable to pay tax at the rate of
25 ( Dabee and Grrenaway 2001)
37
CHAPTER THREE
METHODOLOGY
Having looked at culture to some depth this chapter explains the methods
used in carrying out the study The study used mixed method approach to
allow for data corroboration and dynamism since the subject in question
needed dynamism and sensitivity in approach
This research mixed both qualitative and quantitative approaches to try and
get best possible research by combining both features because they
complement each other Quantitative data techniques condense data in order
to get a bigger picture whereas qualitative techniques are data enhancers
making it possible to see issues more clearly (Dawson 2002 Neuman 2000)
Attempt was made to keep in line with recommendation made in the Leeds
Declaration proposition number 6 which calls for the application of multiple
methods and perspectives to try and understand social and cultural issues
(Hunter and Lang 1993) Mixing qualitative and quantitative methods also
called positivist and interpretive respectively (Gilbert 2001 and Bowling 2002)
is effective in a complex issue study such as this one because they highlight
different perspectives of the same problem in this case - the public in parallel
with the individual level(Gilbert 2001) This is because quantitative methods
adopt a numerical approach to data collection and analysis to provide macro
level perspective whereas qualitative methods provide micro level perspective
through collecting data from individuals (Ibid)
38
There was also use of impersonal (public) documentation using official
records which were more library based research (Grbich 1999) on top of
theory generating field based methods (Ibid) Many researchers (Bowling
2002 Neuman 2000 Grbich 1999 Denscombe 2003 and Gilbert 2001)
concur that neither of the methods is superior to the other but just different
each having its strengths and weaknesses (Dawson 2002)
The study sought to explore the attitudes behaviour subjective meanings and
experiences of the participants making qualitative approaches best suited
because they emphasize the importance of context (Neuman 2000) However
to generate objective and factual (Maynard and Purvis 1994) statistical
figures quantitative research was more suitable Hence mixing of methods
(Dawson 2002 Denscombe 2003) to counteract weaknesses in both
approaches to give breadth and width to the study (Maynard and Purvis
1994) The flexibility of qualitative research allowed for re-focusing and
refinement of the tool dependent on participants‟ reactions throughout
(Neuman 2000) to pick up any emerging evidence thus applying the
grounded theory approach (Dawson 2002)
39
31 Research Setting
Mauritius is a volcanic island of lagoons and palm-fringed beaches in the
Indian Ocean Southern Africa east of Madagascar with a population of
about 12 million has a reputation for stability and racial harmony among its
mixed population of Asians Europeans and Africans The island has
maintained one of the developing worlds most successful democracies and
has enjoyed years of constitutional order since independence in1968 Over
the past three and half decades the country has been transformed from one
of the poorest in the world to a middle income country with per capita Gross
Domestic Product US $7000 (World Bank 2006) It has preserved its image
as one of Africas few social and economic success countries that mainly
depends on sugar and clothing export and a centre for upmarket tourism But
Mauritian exports have been hit by strong competition from low-cost textile
producers and the loss of sugar subsidies from Europe Consequently
attention has turned to diversification in line with global trends
To this end SMEs have been identified as important instruments to achieve
economic diversification Today the government vigorously supports SMEs
through a range of strategies eg the creation of a business friendly climate
via import liberalisation tax reforms and the launch of the SME Partnership
fund which gives subsidized loans to aspirant SME owners and makes the
availability of finance and facilitating access in particular for those enterprises
that have viable projects but are short of equity The Small Enterprises amp
Handicraft Development Authority (SEHDA) was created following the merger
of the Small amp Medium industries Development Organisation (SMIDO) and the
National Handicraft Promotion Agency (NHPA) The aim of the merger is to
40
rationalize and optimize the use of resources dedicated to the small business
sector in Mauritius
Various cultures and traditions flourish in peace though Mauritian Creoles
descendants of African slaves who make up a third of the population live in
poverty and complain of discrimination Mauritius was uninhabited when the
Dutch took possession in 1598 Abandoned in 1710 it was taken over by the
French in 1715 and seized by the British in 1810 The culture of the country
reflects its diverse ethnic composition There are many religious festivals
some important ones being (in random order) Divali (the hindu festival of
lights in October) Christmas Cavadee (a penitence festival of the south
Indian tradition of hinduism in January) Eid ul Fitr (celebrating the end of the
period of fasting in Islam As the Islamic calendar does not correspond to the
Gregorian calendar the date of its celebration in the year tends to vary In
2003 it was celebrated in November) With such a strong history diverse
culture and such a promising economy painted above makes Mauritius a rich
setting to investigate culture and small medium business entrepreneurship
32 Methods
As justified already this study applied method mix to exploit the benefits of all
methods used while minimising the effects of their weaknesses The obvious
benefit of method mix is that it involves more data which is likely to improve
the quality of research (Denscombe 2003) and that is what the researcher
sought to achieve In deciding which method to use it was acknowledged that
the chosen methods were not superior in any way but more suited to the study
41
circumstances based on the premise of ldquohorses for courses (Denscombe
2003 page 83)
A Questionnaire used in the online web survey allowed for collection of
data from large numbers of participants economically since the project had
financial and time limitations (Ibid) The other advantage of survey exploited is
generation of quantitative data However weaknesses of the method
(empiricism lack of depth and accuracy of responses) were a challenge The
questionnaire was open ended and was completed by the participant in the
absence of the researcher Any questions arising from the participant not
understanding or misinterpreting the question where not taken care of Focus
groups were used to gain depth into some of the emerging issues from
questionnaires to gain insights into the issues surrounding widow inheritance
and to validate some of the data (Denscombe 2003) Telephone and face to
face interviews were used to gather to gain in-depth information on the
issues
All accessible literature on culture and investment in Mauritius as well as
other parts of Africa was reviewed to get insight into any related work to
identify key issues and current knowledge gap so as to sign post this study for
any audience (Ibid)
42
33 Research Participants and sampling
It was difficult to get exact demographic data for each sector Consequently it
was not possible to use any scientific sampling techniques The study
therefore used non-probability sampling (Neuman 2002 Bowling 2002
Denscombe 2003) targeting urban based population
The sample baseline characteristics were
SME managers from aged 18 years and above and over 65 was the
limit Any religion faith Any socio-economic background and residents
of Port Luis and surrounding areas
To sample for quantitative data purposive and snowballing sampling
techniques were used because it was not possible to apply any statistical
formula in getting the samples since there was no single list of SME managers
and other stakeholders to use with any form of probability sampling
Participants were snowballed from one sector to another until the whole
sectors were covered For the focus groups homogenous and critical case
(Grbich 1999) sampling was used to get particular sub group to provide
details In this case to get government officials and the private sector who
were strong enough to talk about their experiences
A total of 161 participants were reached from all the sectors These included
SME manager government officials and the private sector The researcher
wishes to point out that these numbers were not conclusive The numbers
could be much higher because in case the researcher phoned the participants
they were not available to take the call there was no time to go back to
43
ascertain the details Those who were not willing to take part in the study were
also excluded from the above figures For the focus groups discussions 5
government officials and the private widows were invited and used Skype
technology to do a conference
The times when the participants were contacted met were entirely dependent
on participant availability and other events at the time (Gilbert 2001) It varied
between 800 am and 700 pm in the evening because of the time differences
UK and Mauritius time Care was taken to avoid compromising times such as
late in the evening or culturally sensitive days such as weekends when people
were engaged in funerals and church services in this case
The participants showed weariness towards the study because as they put it
ldquoa lot of people come along claiming to collect data to help but never show up
againrdquo
34 Data collection Instruments
The researcher developed an online quantitative data collection questionnaire
(web survey form) which was posted on the university web server with help of
the department technicians A multiple recipient list was created from the
details in the SEHDA website and was randomly sent to the recipients These
only included the SME managers from the seven sectors About 20 contacts
were selected from each sector which made a total of 140 participants
Telephone interviews were made to about 17 government officials and the
private sector who were later divide n to focus groups and a teleconferencing
44
was organised on Skype Face to face interviews were done with government
officials from the Mauritian High Commission in the UK
Apart from the questionnaire an Olympus VN 2100 PC Digital Voice Recorder
was also used during the focus group discussion with the permission of
participants also on telephone interviews and face to face interviews This
was tested set and correctly positioned by the telephone speaker before the
session began to ensure proper functioning It was fitted with a mini
microphone to improve recording quality The digital voice recorder small in
size (only 68 grams in weight) proved user friendly because it was not
intruding too much into the face of participants as opposed to older recording
devices There was a pair of AAA batteries on standby in case the batteries in
use ran flat during the session
35 Ethical Considerations
This study involved very little of sensitive issues but it strived very much to
adhere to the fundamental principles of Human Research Ethics of Respect
for Persons Beneficence and Justice The researcher ensured autonomy self
determination and protection of vulnerable persons through informed consent
participation confidentiality and thorough explanation of what the research
was all about to those with limited knowledge and education Any risk that
might have resulted from the study was minimised as much as practically
possible and the researcher took full responsibility for the protection of
participants There was no form of discrimination other than on participant
baseline characteristics
45
The study also upheld the six key ethical research principles as stipulated by
ESRC - UK (ESRC 2005) To ensure anonymity pseudonyms were used for
participants The information gathered was safely protected through password
use on the computer system and only the researcher had access to the
information The researcher was responsible for storage and destruction of
any information no longer needed such as audio files after transcription
Research respondents participated in a voluntary way free from any coercion
and free to withdraw at any point should they felt uncomfortable
The first ethical committee whose approval was sought was the University of
Sheffield Ethical committee after which the researcher sought ethical approval
from Mauritian authorities through the relevant ministries It was not straight
forward getting ethical approvals in Mauritian but ultimately the ministry of
SMEs approval was obtained
36 Procedure
After all the necessary approvals were obtained the researcher wrote an
explanatory letter (Grbich 1999) or bdquoparticipant‟s information sheet‟ (appendix
5) which included information on informed consent (Denscombe 2003)
After piloting the tools the researcher started by making calls to make
appointment for interviews As the quantitative data collection went on
recruitment of participants to take part in qualitative aspect was done
simultaneously due to time constraints The researcher used individual
judgement to asses those participants who would be courageous enough to
respond to the questionnaire online and to the interviews The managing
46
director for RCBusiness Support Ltd also provided a number of potential
respondents who were used at the initial stages of the study Each interview
session lasted averagely 50 minutes The researcher went to organise the
teleconferencing for the focus group on Skype which also lasted for average
50 minutes
37 Data Analysis
Since the distinction between quantitative and qualitative research is not
watertight (Denscombe 2003) data analysis embraced both because they
have similarities and differences (Neuman 2000) There was analysis of
words and numbers thus holistic versus specific focus (Denscombe 2003)
The analysis adopted a five stages approach (Denscombe 2007) The first
stage was data preparation followed by data exploration analysis
presentation and finally validation
Though some researchers champion for advanced inferential statistics
(Denscombe 2007) the researcher opted for descriptive statistics for the
quantitative data analysis because they still remain effective ways of data
analysis and presentation (ibid) The research data involved nominal as well
as discrete and continuous data which could effectively be analysed using the
chosen method The data was grouped frequencies were described and
finally any linkages were identified The end product of the analysis process
is presented in the results section in various formats Basic statistical
techniques were used to give the data additional credibility in terms of
interpretations of the findings (Denscombe 2007)
47
For the qualitative data the first thing was to back up the original voice
recorded focus group discussion into a password protected lap top This
ensured not only the security of the data but also a back up in case of data
loss The researcher then listened to the recording several times to familiarise
himself with the data after which transcription took place After that the data
was interpreted and categories themes were identified since thematic
analysis was employed The Putz (2000) model was used as a guide to
finding themes The findings are presented in the results section
38 Planned programme of dissemination
The study findings were disseminated to all relevant stakeholders in print
format including the university as part of the postgraduate degree requirement
in academically fulfilling format Two copies of the report were sent to the
Ministry of SMEs in Mauritius and two copies to the Board of Investment of
Mauritius in the UK as part of the requirements of ethical approval and
research permission granted by the ministry
Finally it was hoped that the report would meet publication requirements so
that it could get a wider audience through a reputable journal
48
39 Time scale
The study was anticipated to take the following breakdown from the time all
ethical approvals and consent were obtained
Table 1 Table showing the study time scale
Stage Time allocation Action item Accountable person
I Weeks 1 - 3 Research set up Sampling and
access to participant negotiations
Angelinah Boniface
II Weeks 4 - 12 Data collection and Analysis Angelinah Boniface
III Weeks 12 - 16 Analysis Report writing and
dissemination
Angelinah Boniface
310 Limitations and Delimitations
This study was not fully funded as such high telephone costs travelling
affected the exercise Only business people in Mauritius both men and women
were interviewed The study covered both local and foreign investors
Participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
49
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
A major limitation is a low response rate of the questionnaire and therefore a
representative sample of the SME population was not achieved Thus any
conclusions made from the analysis of the collected data cannot be
generalized to the broader SME population Bias may have been inadvertently
introduced during interviewing caused from such things as leading questions
50
CHAPTER 4
RESEARCH FINDINGS AND DISCUSSION This chapter aims to discus the research findings from the study The chapter
is divided into two sections the first part presents and discusses the
quantitative data and the second part discusses qualitative It is therefore
worth mentioning that the Putz (2000) model was used to guide the
qualitative data analysis and some of the themes were taken from the model
and some were generated from the research findings It must be noted that
any findings uncovered from this study cannot be generalized to the broad
public domain regarding SMEs
Section A of the questionnaire and the interview guide included questions that
collected background information on the SME managers and the responding
firms These data constitute the substantive material for analysis in the
ensuing sections The tables below depict the socio demographic
characteristics of the survey participants age group gender educational level
and experience as ownermanager In the following sections there aspects
are discussed
51
41 RESPONDENTS RATE ACCORDING TO SECTORS
TABLE 2
SECTOR SEHDAS SURVEY SENT
SURVEY RECEIVED
RESPONSE RATE
Leather and Garments
1678 20 12 60
Wood and Furniture
2196 20 11 55
Paper Products and Printing
1541 20 9 45
Chemical Rubber and Plastic
1376 20 11 55
Pottery and Ceramic
793 20
17 85
Jewellery and Related Items
1674 20 13 65
Fabricated Metal Products
1267 20 14 70
TOTAL 7 140 101 72
Table 2 shows the response rates from various sectors of SME in Mauritius
which were targeted by the online survey As the table indicates pottery and
ceramic sub sector had the highest response rate (85) with paper products
sector giving the least response rate (45) Overall 72 response rate from
all the targeted sectors was satisfactory It is worth mentioning that the total
number of participants adds to 140 since this question was only directed to
sectors not to other stakeholder in the research sample
52
42 DEMOGRAPHIC PROFILE PARTICIPANTS
TABLE 3 AGE GROUP AS PER PARTICPANT
AGE GROUP FREQUENCY PERCENTAGE
-25 7 43
26-35 34 211
36-45 53 329
46-55 35 217
56-65 22 137
gt 65 11 63
TOTAL 161 100
Evidence from most of entrepreneurial literature suggests that self-
employment becomes an increasingly attractive option as one nears middle
ages As can be seen in table 3 respondent‟s ages ranged from 25 to 65 and
the largest proportion (329) of the participants was in the age range of 36ndash
45 Additionally participants were biased towards the age ranges of between
36 and 65 and away from the under 25 and over 65
TABLE 4 GENDER PROFILE AS PER PARTICIPANT
GENDER
Male 116 720
Female 45 280
TOTAL 161 100
53
In relation to gender the research sample was predominantly male (72) a
striking although unsurprising demographic characteristic that reflects the
composition of the larger business sector in the country as a whole
Consequently only (28) were females This is clearly illustrated in table 4
above
TABLE 5 EDUCATION PROFILE AS PER PARTICIPANT
EDUCATIONAL LEVEL
Primary 8 50
Junior-level 29 180
O-level 78 484
Diploma 34 211
Higher Degrees 12 75
TOTAL 161 100
As evident from table 5 the educational levels attained by respondents varied
considerably as follows Primary School Certificate (8 or 5) Junior
Certificate (29 or 180) Ordinary Level (78 or 484) Diploma (34 or
211) and higher Degrees (12 or 75 ) On the whole though the data
suggest that the educational levels of our respondents are low the largest
proportion (398) possessing an Ordinary Level certificate
54
TABLE 6 YEARS EMPLOYED AS CEO AS PER PARTICIPANT
Years Of Employed as CEO
0-3 44 273
4-7 88 546
8-14 15 94
15-19 11 68
Over 20years 3 19
TOTAL 161 100
Not surprisingly table 6 shows that most of the responding executives did not
have education that emphasized a business curriculum This can be
understood with respect to the Mauritian educational curriculum which largely
overlooked business subjects until very recently
The research sample participants had been employed at their current firms on
average 1467 years and had an average of 12 years experience in the
manufacturing industry Four predominant job titles used by the senior
executives emerged from the questionnaireinterview responses Managing
Director (38) Director (26) Manager (20) and Chief Executive Officer
(16)
55
43 CHARACTERISTICS OF RESPONDING FIRMS
This section presents the descriptive statistics of the responding firms The
description focuses on age of the firm employment size firm revenues and
firm ownership
TABLE 7 COMPANY AGE PROFILE
Age of Company Frequency Percentage
1- 3 years 44 314
4- 6 years 68 486
7-10 years 19 136
11-15 years 7 50
Above 15 years 2 14
TOTAL 140 100
Table 7 displays the statistical data Of the firms responding the largest
proportion (486) was 4 to 6 years old Overall the sample reveals a skewed
distribution towards the ranges between 4 and 15 Also it is interesting to note
that 915 of the responding firms are mature that is beyond the start-up
phase
TABLE 8 EMPLOYEE PROFILE AS PER PARTICIPANT
Number of Employees
50-99 101 721
100-200 39 279
TOTAL 140 100
56
Unsurprisingly the vast majority of the responding businesses had fewer than
100 employees as depicted n table 8 with the largest proportion (701) in
the 50ndash99 employee categories The study found out that most small
companies would opt to have family and relatives as employees to minimise
costs Only 32 average of the firms were medium-size The preponderance
of small firms in the sample mirrors a more general pattern of firm distribution
in the country where medium and large firms are a conspicuous small
minority
TABLE 9 ANNUAL SALES AS PER COMPANY
Annual Sales
Less than R100 000 88 629
R101 000- R250 000 36 257
R251 000- R15 million 11 79
Above 15 million 5 35
Total 140 1000
As shown in table 9 the largest proportion of responding firms 88or 629
achieved a turnover below R10000000Only scant 11 or 79 posted annual
revenue in excess of R15 million
57
TABLE 10 OWNERSHIP AS PER PARTICIPANT
Ownership
Wholly Citizen 76 550
Joint Venture 42 293
Foreign Owned 22 157
TOTAL 140 100
Regarding ownership table 10 shows that an overwhelming majority or 550
of firms were wholly citizen-owned while the remaining 293and 157
were joint venture with citizen stake and foreign-owned respectively
44 Language
From most of the participants investors do not have to learn Local Mauritius
language since English and French are the official languages in the country
Since most of the investors to Mauritius are either English or French speaking
language as such is not a barrier to business practices and success for
prospective investors
ldquohellipwell it is not very important for foreign investors to learn languages
spoken in Mauritius because we can speak both English and Frenchrdquo
[Participant A5]
ldquohellipactually language is not barrier to English or French speaking investorsrdquo
[Participant A21]
58
Language is perhaps the most complex and perplexing aspect of the
Mauritian social mosaic (Rassool 1996) Contrary to the results that show that
language is not a problem for investors since most of the investors who come
to Mauritius are English or French speakers who normally fits well in the
society since these are the two official languages
This intricacy derives from the number of languages spoken combined with
the uses to which they are put and the socio-political connotations they bear
Baker and Stein (1977) scholars studying language use in Mauritius have
found that English is associated with knowledge French with culture
Creole with egalitarianism and other languages ancestral heritage
Consequently although Creole is the most widely spoken language in the
country French predominates in the media and English is the official
language of government and school instruction (Stein and Baker 1977)
According to the 1983 census the top five languages were Creole 541
Bhojpuri 204 Hindi 115 percen French 37 and Tamil 37 These
figures indicate the principal language used in the home Most Mauritians
however speak several languages
Literature suggests that global organizational structures need to adopt
common rules and procedures in order to have a common bdquolanguage‟ for
communicating across cultural borders (Kostova 1999 Kostova and Roth
2003 Gupta and Govindarajan 2000) This is directly reflected by the results
above that foreign investors need not to learn the local language of locals but
its important to create a common language within the organisation that is
59
understood by all stakeholders in the organisation for effective and efficient
communication
45 Religion
The study found that main religions in Mauritius are Hindu Muslim and
Christianity to a lesser extent Hindus make up approximately half of
religiously affiliated Mauritians Of the remaining Mauritians approximately a
third are Christians and about 15 Muslim followed by small Buddhist and
Sikh communities It is therefore imperative that a foreign investor considers
religion of the people of Mauritius before setting up a business Religion
The study also found out that various religions found on Mauritius tend to play
a major part in the islands cultural events and churches temples and
mosques are to be found everywhere Hindu and Tamil celebrations are part
of Mauritian cultural life
ldquohellipFestivals such as Divali (the festival of lights) Holi (in which participants
are covered in colourful powders) and Thai Poosam in which Tamil devotees
pierce their bodies with masses of needles as an act of penance are
popularly attended by Mauritianshelliprdquo [Participant A60]
ldquohelliphellipthere are also a number of diverse practices and superstitions
originating in beliefs brought from Africa and Asia Local sorcerers known as
longanistes or traiteurs are sometimes called in to settle arguments exact
revenge or administer love potionshelliphelliprdquo [Participant B41]
60
However all communities live together in harmony with each other regardless
of religion the study learnt
hellipHarmonious separatism is how we characterise our communal relations
in Mauritiushellip [Participant A13]
Since all citizens are ldquodescendants of slavery there are no tribes unlike
other African countries This has made integration and assimilation easier and
it makes it very easy for any SME to adapt to the local conditions due to pre
existing harmonyrdquohellip [Participant A13]
It is worth noting that businesses remain closed in public religious days but
the purchasing power remains the same regardless of whether it‟s a public
holiday or not
ldquohellipthe demand is not dependent on whether itrsquos a holiday or nothelliprdquo
[Participant A11]
ldquohellipit doesnrsquot matter really whether its holiday or religious holidayhelliprdquo
[Participant A21]
According to Stein and Baker (1977) the Mauritian society is noteworthy for
its high degree of religious tolerance Mauritians often share in the
observances of religious groups other than their own In part as a result of the
multiplicity of religions Mauritius has more than twenty national holidays In
addition the government grants subsidies to all major religious groups
61
according to their membership (Stein and Baker 1977)This is also evident
from the results of the research
Ethnicity religion and language have been important factors in shaping the
way Mauritians relate to each other in the political and social spheres Despite
the fact that sectarian factors are less of a determining factor in peoples
social and political behaviour they remain an important clue to the peoples
past and self-identity (Rassool 2001) As a foreign investor understanding
the religious belies of a society and taking all the necessary details in to
consideration play a major role in an international business environment
setting (Hosftede 1980) For example observing religious holiday and making
sure employees get days off and annual leaves on such important days
having prayer rooms for those willing to pray at work and creating a non-
discriminatory environment for all employees
It is worth mentioning that while religion does not have a direct impact on
Mauritius investment since it an international business hub However it is
important for investors to take note of all the aspects of religion since it plays a
very important role in lives of the Mauritians For example there are religious
holidays as an employer it is important to follow the religious holiday calendar
and give annual leaves to employees on such important days
46 Social Life
For the interest of prospective investors the study found that the social life in
Mauritius is very much close to families and friends People all meet at open
markets for normal shopping and socialise over weekends ldquoeven ministers
62
managing directors of big companies go to open marketsrdquo [Participant
A12]
There is no busy night life in the country as well as cinema and theatres
because most people prefer home video entertainment ldquoMost people found at
social places like cinemas pubs clubs etc are employees and not
employersrdquohelliphellip [Participant A12] Prospective investors should therefore
know that they are likely to meet business associates at board rooms or at
their offices rather than at social centres
In a society where tolerance is a national virtue and ethnic conflicts are
invisible to the casual visitor it takes time to learn the dos and donts of
socialising ldquohelliphere in Mauritius you must realize that we walk on eggs
continuouslyhelliprdquo [Participant B36] For a peaceful and tolerant as Mauritius
undoubtedly is the diverse groups populating the island do not collectively
make up a nation Mauritius like any other island is a nation of nations and
compromise is the order of the day be it in politics in the economy in the
media or at a dinner party the study found
The study found out that unlike other African societies Mauritius people would
prefer to stay at home and watch movies play video games with kids or visit
friends and relatives to socialise or for a night out There are not many social
night clubs in Mauritius as compared to the United Kingdom ldquohellipmany homes
today have a Digital Video Decoders (DVD) sets and donrsquot see the importance
of going out to cinemas and would helliphelliphelliprdquo [Participant A12]
63
This does not come as a surprise since literature suggests that Mauritius
though it is multicultural society and an international hub for business there
are a quiet peaceful and tolerant nation and would prefer to keep their space
(Stein and Baker 1977)
47 Market Accessibility
The study found that as first foreign investor Mauritius government has open
market programme When the free operational zone initiative began investors
imported raw materials imported duty free and foreign companies had to
show transformation of raw materials into fished exports since the
government‟s aim was to increase exports thus improve balance of trade
However in the early stages the initiative did not work as expected because
of certain barriers
Lack of adequate government incentives to lure more investors
Too much repetition meaning most of the companies where doing the
same thing
Lack of skilled human resources
The scenario is summarised by participant B3 in the following
statementldquohelliphellipour people did not have culture of businessrdquo
For more access to the markets further initiatives were put into place The
government assured investors of freedom of capital movement that is the
investors were guaranteed that they would bring their money into and out of
the country whenever they felt like doing so In addition the government
64
embarked on providing more facilities (industrial buildings) and infrastructures
all over the country opening up rural areas because towns already had
infrastructures Lastly first time investors were provided with free access to
customs thus maintaining the earlier option of tax free imports
While Mauritius was doing all these events elsewhere in the world played to
their favour European Union and USA were imposing import quotas on
Chinese and Indian imports to prevent damping So these investors had to
look for alternative markets and Mauritius turned out to be one of such
markets But the government had to act quickly to avoid bdquotransit investors‟
ldquohellipthey are investors who want to do business when it favours them but when
they begin to loose certain privileges or profits get diminished then they take
offrdquohelliphellip [Participant B3]
To avoid this foreign investors were made to transfer skills and knowledge to
local community which led to emergence of Mauritius community of
manufacturing
ldquowho started from easy stitching like socks pyjamas bras etc and later
upgraded to big Mauritius labelshelliprdquo [Participant B3]
The study further found that the initiative did not stop there The government
further established Mauritius Enterprise Development Investment Authority
(MEDIA) in 1985 which took lead in looking for prospective investors from
65
Europe USA Hong Kong and India among others Any willing investor was
transported to Mauritius and accommodated freely on government accounts to
tour the country and carry out investment feasibility studies This helped to
popularise the investment opportunities in Mauritius and attracted many more
investors Currently MEDIA has been transformed into Mauritius Board of
Investment which is no longer in charge of managing industries but
ldquopromotes Mauritius businesses abroad and participates in trade fairs to
further open uprdquo [participant B3]
The study also found out that there are specific niche markets for foreign
investment in Mauritius namely the Offshore Industry the Financial Industry
the Construction and Tourism especially in the area of high class luxury
property market in form of villas hotels and apartments and of recent the
Information Technology (IT) industry These industries cover a large spectrum
including SMEs
ldquohellipone of these sectors makes a very good investment for any investor
especially the construction industryhelliprdquo [Participant A89]
The results agree with Putz (2000) which notes that niche markets make
establishing a business by immigrants easier because the immigrants needs
for consumer goods create a specific demand This is evidence by all the
incentive the Mauritian government have put in order to attract foreign
investors in to country for the benefit of the Mauritian population Furthermore
Putz (2000) emphasise the opportunities offered by the host country including
66
access to the market and job market conditions as important factors for
international business
48 The role of ICT to SME business in Mauritius
The study found that Mauritius has a very well established ICT sector It has
formed the backbone of SME success in Mauritius As early as 1990 the
country provided hellip ldquothe fastest broadband in the world to help SME business
investors who were each allocated free 2MB internet accessrdquohellip[Participant
A 23] Recently the government has in turn invested a lot of money in
developing a cyber city a few kilometres away from the capital Port Louis
which will form the hub for future investments
This high level of ICT development in the country has created SME in areas
such as offshore financial services calls centres and enhanced tourism
industry growth Any prospective investors are guaranteed of highly
developed ICT backed up by highly qualified local human resources The
offshore investment sector has even been further boosted byhellipldquobilateral
agreements with India allowing companies registered in Mauritius to transfer
funds to India tax freerdquohellip[participant B13]
It is hoped that in helliprdquo5 years time the whole island will have free wifi
connectivityrdquo participant B33 The country not only makes use of its advanced
ICT sector but has become a big player in the region as well For example
Mauritius state informatics computerised South African government in 1996 It
has also won other computerisation contracts in Zambia Zimbabwe Namibia
Kenya and Ghana To sustain such success ldquopartnerships have been formed
67
with global players such as Microsoft to provide training not just to Mauritius
nationals but other scholars from the South Eastern Africa region as
wellrdquohellip[participant B13]As matter of fact the government of Mauritius has
invested billions in building s cyber-city a few miles aware from the capital
Port Louis
ldquoits opening in July this year and it is expected to be the centre of attraction
for investorsrdquo [Participant B13]
ldquoactually the government invested in this cyber-city with the intention to
attract European and American investorsrdquo [Participant A6]
From these results there is evidence that technology plays a major role in
SME development Technology particularly computer-mediated
communication has been hailed as a major force in creating cultural
convergence around the world and facilitating the spread of IB Autonomous
business units of global corporations are continuously connected not
necessarily in large physical structures but in global electronic networks
functioning interdependently Some authors even state that physical distance
is no longer a major factor in the spread of global business (Cairncross 2001
Govindarajan and Gupta 2001)
68
48 Governance and the role of women in SME sector
in Mauritius
Mauritius is a multicultural country with ldquo70 of the population of Chinese
Indian ancestry 2 white French origin and the remaining mixed race ndash
creolesrdquo [participant A17] Europe has not have a lot if cultural influence on the
country and predominant cultures are Asian African cultures Study found
that common folklore popular songs in Mauritius would also be ordinary
found on other African countries such as Senegal Mozambique Cameroon
and Sierra Leone among others signifying deep rooted African traditions
The government maintains ndash discrimination laws for either gender In the early
stages of SME development women provided the bulk of the labour in the
rural areas as industries moved away from cities into the rural areas There
are concerted efforts to get women into jobs especially leadership roles
ldquowomen themselves are too slow to act and take advantage of the
government incentivesrdquo
The study found out that woman in Mauritius do not occupy positions of
strategic power decision making This is not a surprise because it is the same
with most Southern African countries The government of Mauritius has put a
lot of structures to support women in business but women are taking it slow to
utilize these structures
69
There are many government agencies and organizations headed by women
and even cabinet posts but most women would rather stay out of politics
becausehelliphellipldquopolitics can get very dirty involving personal lives of politicians
which men donrsquot mind but women do mind a lot aboutrdquohellip[participant A 17)
However in other sectors like education and healthcare there are many
women represented in the labour force
The study also found out that just like any other society one can not ldquohellipstop
some kind of abuse for both males and females There are cases of both
female and male harassment but the law comes in to protect such victims
There are also cases of petty crime and rape involving women either as
perpetrators or victimsrdquohellip [Participant A13]
According to AllAfrica Global Media (2008) the winds of change are blowing
across the island of Mauritius and many men in this traditionally conservative
nation are working hand in hand with women to see that the common sense of
gender equality prevails The absence of women at the decision-making table
usually means the absence of their priorities and needs Irrespective of the
Southern African Develoment Community (SADC) Declaration there are so
few women in politics This is evident from the results of the study which found
that women will rather do health jobs and education than to play the dirty
tricks of politics
Women councillors make up a mere 37 in the Moka-Flacq District Council
This is the lowest figure not only in Mauritius but also in the SADC region
70
This is far from the 2005 30 target not to mention the 50 goal now being
set for the region and included the draft Protocol on Gender and Development
up for review at the August SADC Heads of State Summit ( AllAfrica Global
Media 2008)The results found out that there is also a few representations of
women in business Women do mostly the dirty jobs of caring for children and
their families and do not have the courage to enter the business sector This is
not surprising especially in the SADC region women play the minority role
and are rarely represented at the strategic decision making level hence their
needs are always neglected resulting in women poverty
49 Challenges faced by the country and hence SME investors
Stiff competition from other countries such ashelliphellipldquoBotswana Vietnam and
South East Asia in the textile industry due to cheap labour Maldives and the
Caribbean Islands for tourism difficult in Training enough qualified personnel
in ICT to cope with demand International competition and access to fundsrdquo
hellip[participant B13]
To face these challenges the study found that the country has expanded
tertiary education and formed partnerships with foreign universities such as
ldquoFrench Scientific University which has been running Medical school in
Mauritius for 10 years By the time of this study an agreement had been
reached by Thames valley university (UK) to open up campus in
Mauritiusrdquohellip[participant B15] The aim of the government is to offer high
quality education to students from the region as well as far away like China at
affordable cost and to compete with European universities Further to
71
educational development the study also found out that the country is striving
to create partnerships with ldquoresearch organisations and to create high quality
healthcare so as to benefit from health tourism where would just travel to the
country to get affordable high quality specialised health carerdquohelliphellip [Participant
A3]
Finally results show that there is stiff competition from different sectors of
business and other force which needs to be taken into consideration when
doing business internationally Globalization tends to redistribute economic
rewards in a non-uniform manner a backlash against globalization may occur
in countries often confronted with unpredictable and adverse consequences of
globalization causing them to revert to their own cultural-specific patterns of
economic growth and development (Guilleacuten 2001) It essential to know all
the factors surrounding the business sector and understanding all the
business practices before investing to avoid any loss
72
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Research on culture and IB is definitely a bdquogrowth‟ area because the business
world is in many ways becoming one The researcher concluded the following
based on study findings
Firstly the cultural diversity and harmony of the island make Mauritius a
unique place in the world It is also known for its social peace political stability
and racial harmony Its steady economic growth over the years coupled with
its nation‟s social cohesion and prosperity ensure continuing development
Secondly Mauritius enjoys a literacy rate over 80 percent Skilled labour
graduates and qualified professional including lawyers engineers IT
programmers consultants accountants and chartered secretaries are
available to suit virtually all business needs in two international languages
English and French Language is therefore not a barrier to foreign investment
In addition academic training at the University of Mauritius and the newly
established University of Technology a comprehensive system of vocational
training through the Industrial and Vocational Training Board (IVTB) ensures a
ready supply of skills in a number of fields such as tourism engineering
electronics jewellery ICT printing and textiles
Thirdly In view of the importance of foreign investment as a source of
sustenance to economic growth the government of Mauritius has taken a
series of policy measures to encourage its flows into manufacturing offshore
73
banking and financial services information technology communication and
tourism As far as foreign investors are concerned Mauritius offers itself as an
attractive destination because several positive features such as political
stability availability of skilled labour and investment-friendly rules and
institutions
Fourthly after a sustained growth path over the last three decades based on
sugar textiles and tourism Mauritius is now shifting gears to move towards a
higher stage of economic development so as to consolidate its position as a
premier international hub Foreign Direct Investment (FDI) has played an
important role in the development of Mauritius and will again be decisive when
the country embarks on high value-added capital intensive and knowledge-
based activities
Fifthly the government plays the role of a facilitator and has endeavoured at
all times to create the most conducive investment environment by enacting
appropriate legislations building state-of-the-art infrastructure investing in
human capital and introducing packages of investment incentives for the
manufacturing financial services and ICT sectors so as to enhance the image
of Mauritius
In this respect the Board of Investment (BOI) is the first contact point for
anyone investing in Mauritius Operating under the aegis of the Ministry of
Finance the BOI was established in March 2001 under the Investment
74
Promotion Act to give a new impetus to foreign direct investment The BOI is
the apex organization for the promotion and facilitation of investment in
Mauritius The primary role of BOI is to stimulate the development expansion
and growth of the economy by promoting Mauritius as a competing business
and service centre It aims at streamlining the legal framework and to make
better provision for the promotion and facilitation of investments in Mauritius It
acts as a facilitator and provides a one-stop shop service to both local and
foreign investors ensuring reliable and speedy processing of applications The
BOI receives processes and approves all applications for investing in
Mauritius It also assists investors in obtaining the necessary secondary
permits and clearances from relevant authorities thus ensuring a speedy
implementation project
Six Mauritius pursues a liberal investment policy and actively encourages
foreign direct investment in all sectors of the economy Attractive packages of
both fiscal and non-fiscal incentives tailor-made to the needs of each priority
area of development are offered to investors Excellent opportunities for
investment in Mauritius exist in various sectors of the economy including
manufacturing information technology knowledge industry regional
headquarters tourism and leisure financial services Freeport activities
amongst other sectors Some of the priority areas are in Information and
Communication Technology which is set to a play a lead role in the economic
development of the country in the medium and long terms The availability of
high bandwidth connectivity (with SAFE Project and international Gateways)
at near global parity in quality and tariff on the one hand and the setting up of
75
dedicated IT habitats including the Cyber city at Ebeacutene on the other hand
plus total Government support to this industry are testimony of the importance
of this industry to Mauritius Others include the manufacturing sector textiles
and apparel the spinning sector electronics and light engineering medicals
and pharmaceuticals agro-business leather products and jewellery and
watches
The export-oriented manufacturing sector has been the backbone of the
Mauritian economy for the past three decades This sector remains a major
constituent of the Mauritian economy in terms of foreign exchange earnings
employment and contribution to GDP and is called upon to continue to play
an important role in the consolidation and diversification of the industrial base
of the country certain
Lastly some incentives provided by government to foreign investors In the
manufacturing sector these include among others
No customs or duty or sales tax on raw materials and equipment
No tax on dividends
No capital gains tax
Free repatriation of profits dividends and capital
50 relief on personal income tax for expatriate staff
New incentives for the ICT Sector consist inter alia of
the availability of tax holiday up to year 2008 for specified
pioneering high-skills ICT operators typically geared towards the
export market such as software development multi-media and to
high-level ICT training institutions
76
customs duty-free import of ICT and similar equipment
50 relief of personal income tax for a specified number of foreign IT
staff
duty-free import of personal belongings of foreign IT staff
effective fast track procedure for procession of visa and work
permits for foreign staff including spouses
From the above the research concludes that Mauritius being a multicultural
society as it is the culture they share does not have a direct impact on
investment in Mauritius because of it is an international hub for business It is
also expected that from the results the situation is not going to change after
time but will keep in this shape for a long since it is the government incentive
to attract more investors into the country However there are certain aspect of
culture eg believes that foreign investors need to understand and take into
consideration This study recommends any prospective investor to make good
investment in to Mauritius without fear
77
CHAPTER SIX
REFLECTIONS FROM THE STUDY
The views derived from this study might not be directly applicable to the whole
region because of variations in socioeconomic settings in various parts of the
Mauritius Also views expressed in this study were obtained mainly from
urban based managers and respondents and might not be similar to rural
based SMEs from the same community or area
Some scholars might not support the sampling techniques used but they
were the most practicable given the circumstances
Legal practitioners in Mauritius were supposed to be part of the sample but
they were hard to reach with some declining to participate
Demographically and geographically the sites were larger than anticipated
given the time and resources available for the study
Lastly the study was limited to the previous 20 years which might have
yielded same generational trend missing the opportunity to get data across
various generations within the sites
78
CHAPTER SEVEN
FUTURE RESEARCH
With more funding and resources a similar study could be conducted
throughout a wider geographic region and encompassing all categories of
SMEs micro small and medium Furthermore with more time a greater
number of interviews could be conducted which would provide richer data that
would be more in depth for conclusive analyses to be made Additionally
participation is voluntary as this study must follow the university Ethics
research policies involving human participants This resulted in questions
sporadically unanswered information such as age may be withheld by the
respondent resulting in missing data or missing data in entire sections of the
questionnaire altogether leading to non response bias This is relevant to
interviews with the participants as well due to time constraints of the study
and with the SMEs in depth interviews could not be conducted therefore
data collected via this method was limited
Moreover mention of all relevant literature was impossible due to time and
length constraints Although there are vast amounts of journal articles in this
area of study only specific articles were chosen relating mostly to SMEs
Two variable statistical analyses are not used because the data collected is
too little to deliver a statistically valid analysis Therefore only single-variable
statistics are presented As well this study is limited to the client contacts of
SEHDA Those enterprises that are not represented in the database are not
represented in the study Also there is not much evidence on when the
database is updated Some of the enterprises represented may no longer
79
exist and some of the new ones information is not available yet in the
database With more time and resources a study that included a wider
random sample size and access to all general SME businesses would be
useful
WORD COUNT 16 969
80
APPENDICES APPENDIX 1 MauritiusData Profile
2000 2005 2006
World view
Population total (millions) 119 124 125
Population growth (annual ) 10 08 08
Surface area (sq km) (thousands) 20 20 20
Poverty headcount ratio at national poverty line ( of population)
GNI Atlas method (current US$) (billions) 444 653 681
GNI per capita Atlas method (current US$) 3740 5250 5430
GNI PPP (current international $) (billions) 891 1239 1334
GNI per capita PPP (current international $) 7510 9970 10640
People
Income share held by lowest 20
Life expectancy at birth total (years) 72 73 73
Fertility rate total (births per woman) 20 20 20
Adolescent fertility rate (births per 1000 women ages 15-19) 39 40 41
Contraceptive prevalence ( of women ages 15-49)
Births attended by skilled health staff ( of total) 100 99
Mortality rate under-5 (per 1000) 18 15 14
Malnutrition prevalence weight for age ( of children under 5)
Immunization measles ( of children ages 12-23 months) 84 98 99
Primary completion rate total ( of relevant age group) 105 97 92
Ratio of girls to boys in primary and secondary education () 98 100 103
Prevalence of HIV total ( of population ages 15-49) 06
Environment
Forest area (sq km) (thousands) 04 04
Agricultural land ( of land area) 557 557
Annual freshwater withdrawals total ( of internal resources)
Improved water source ( of population with access) 100
Improved sanitation facilities urban ( of urban population with access) 95
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita) 23
Electric power consumption (kWh per capita)
Economy
GDP (current US$) (billions) 447 629 635
GDP growth (annual ) 40 46 35
Inflation GDP deflator (annual ) 37 48 41
Agriculture value added ( of GDP) 6 6 6
Industry value added ( of GDP) 31 28 27
Services etc value added ( of GDP) 63 66 68
Exports of goods and services ( of GDP) 63 57 60
Imports of goods and services ( of GDP) 65 61 67
Gross capital formation ( of GDP) 26 23 25
Revenue excluding grants ( of GDP) 220 214 215
Cash surplusdeficit ( of GDP) -11 -21 -30
States and markets
Time required to start a business (days) 46 46
Market capitalization of listed companies ( of GDP) 298 416 567
Military expenditure ( of GDP) 02 02
Fixed line and mobile phone subscribers (per 100 people) 39 82 90
Internet users (per 100 people) 73 241 145
Roads paved ( of total roads) 97
High-technology exports ( of manufactured exports) 1 2 24
Global links
Merchandise trade ( of GDP) 82 84 91
Net barter terms of trade (2000 = 100) 100 109 115
External debt total (DOD current US$) (millions) 1713 2153 1997
Short-term debt outstanding (DOD current US$) (millions) 767 1363 1363
Total debt service ( of exports of goods services and income) 181 72 71
Foreign direct investment net inflows (BoP current US$) (millions) 266 39 107
Workers remittances and compensation of employees received (US$) (millions)
177 215 215
Official development assistance and official aid (current US$) (millions) 20 34 19
Source World Development Indicators database April 2008
81
APPENDIX 2
SUMMARY GENDER PROFILE (Mauritius)
Mauritius
Sub-Saharan Africa
Upper middle income
1980 1990 2000 2004 1980 2004 1980 2004
GNP per capita (US$) 1210 2300 3690 4640 652 601 2391 4769
Population
Total (millions) 10 11 12 12 3850 7258 4394 5762
Female ( of total) 507 501 502 503 503 501 515 514
Life expectancy at birth (years)
Male 63 66 68 69 47 46 63 66
Female 69 73 75 76 50 47 71 73
Adult literacy rate ( of people aged 15+)
Male 848 884 954
Female 750 805 942
LABOR FORCE PARTICIPATION
Total labor force (millions) 0 0 1 1 157 299 193 256
Labor force female ( of total labor force)
37 34 34 35 43 42 42 41
Unemployment
Total ( of total labor force)
33 88 102 12
Female ( of female labor force)
36 96 126 134
EDUCATION ACCESS AND ATTAINMENT
Net primary school enrollment rate
Male 91 96 94 68
Female 92 97 96 60
Progression to grade 5 ( of cohort)
Male 97 99
Female 98 99
Primary completion rates ( of relevant age group)
Male 61 105 98 66 95
Female 63 104 102 56 96
Youth literacy Rate ( of people aged 15-24)
Male 912 937 978
Female 911 954 974
HEALTH
Total fertility rate (births per woman)
27 23 20 20 67 53 31 20
Contraceptive prevalence ( of women aged 15-49)
75 26 76 22 69
95
82
APPENDIX 3
DATA COLLECTION FORM FOR THE SURVEY Sitehelliphelliphelliphelliphellip Participant numberhelliphelliphelliphellip MANAGING DIRECTOR CEO MANAGER
Age group -25 26 ndash 35 36 - 45 46-55 56-64 65+
Education Nursery ndash Standard 4
Std 5 ndash 7 (8) Form 1 ndash 2
Form 3 ndash 4 or A level
College University
Employment Yes No Business (what type)
Partnership Whole Citizen
Joint Venture
Age of Company
1-3 years 4-6 years 7-10 years
11-15 Above 15yrs
Number of Employees
10-25 50-99 100-149 150-200
Place of birth
In the constituency
Outside the constituency
Where
Residence Rural Urban Where
Before starting business
After business
Children
Boys Number
Girls Number
Any born a Yes None
Are they in school
Yes No Some
Working Yes No Some
Annual Sales
Balance Sheet
Less than R1000000
R101 000- 250 000
R251 000- 15 million
R 15 million +
Years Employed as CEO
0-3 4-7 8-14 15-19 Over 20 years
83
APPENDIX 4 Qualitative data questionnaire The following questions were used as a guide during the focus group discussions However they were not followed in the strict order or wording as they appear here
SOCIAL INCLUSION EXCLUSION
I am going to ask you questions regarding support you think the society could give foreign investors There is no right or wrong answers it is just about your opinion
a) How do you feel about foreign investors coming to Mauritius
b) How has your friendship with foreign business before and after they arrive in Mauritius
c) Do you keep in touch with foreign businesses around you and prospective investors
d) In your opinion how does foreign business feel about Mauritius
e) Are foreign businesses doing well or badly
f) What support structures or government incentives are there for foreign investors
g) What kind of support would you like to receive from the government
BUSINESS ATTITUDE AND BELIEFS
I am now going to ask you some general questions about business and your opinions about it
a) How would you describe the general business environment
b) Do you find it difficult to do business with people from different countries of the world Why
c) What do you believe the first thing to do on the morning before opening
your business (Local people) Why
d) How best can the Mauritius people be motivated into business How do you get over them
84
e) What areas do local people consider as niche areas for foreign
business
f) How do local people organize their business Why
g) As a local business person what would you consider as abomination of business in Mauritius Why
h) What is the role of women in the business sector
CULTURE
I am now going to ask you questions about the your culture
a) What are your views about business culture in Port Louis
b) What are the challenges of national culture on business practices in your opinion
c) What are the benefits of culture on business practice
d) Do you think foreign investors need to know the local language when investing in Mauritius
e) If you were to advice a foreign investor what would you want them to know about Mauritius
f) How do you think the family daily practice influences business in
Mauritius
g) What business actions of behaviors are sensitive to the local people
h) How best can foreign investors assimilate with the local business people
i) What do local people like to buy on weekends week days public religious holidays
j) What marketing strategies violet the culture of Mauritius ndashwomen naked Eating behavior Etc
85
APPENDIX 5
Introductory letter consent form
TITLE CULTURE AND INTERNATIONAL BUSINESS
ENTREPRENUERSHIP A CASE STUDY OF MAURITIUS
INTRODUCTION
I am Angelinah Boniface a student pursuing Masters of Science in
Information Systems the University of Sheffield United Kingdom I am
conducting a study on the Impact of culture on small and medium
enterprises for my dissertation The study is expected to last 3 months and a
report of the findings will be availed to all interested stakeholders including the
university as part of course requirements
PURPOSE OF THE STUDY
This study is intended to gain insight into views and opinions about
widowhood and inheritance in relation to health and well being of participants
and the community at large Evidence from this study may be useful in future
government and development agencies‟ planning and provision of relevant
interventions for the benefit of the whole community
VOLUNTARINESS AND CONFIDENTIALITY
Your participation in this study is purely voluntary and you can withdraw
at any time should you feel uncomfortable to proceed Information obtained
from this study will be used for no any other purpose other than the
dissertation It will be kept confidential only accessible to the researcher and
pseudonyms will be used to ensure anonymity and confidentiality of
participants and location The researcher will strive to treat all participants
with dignity respect equality and minimise possible harm that might arise
from the study
Agreeing to take part in this study will be treated as your consent to be
involved in this research BUT YOU HAVE THE RIGHT TO WITHDRAW
THE CONSENT
86
RISKS AND BENEFITS
There are no risks to the questions that will be asked If at any point you feel
uncomfortable to answer any question please feel free to ignore such to avoid
any harm
There is likely to be no immediate benefits to you as a participant However
the information obtained in this study will go a long way in informing the
younger generation and wider audience about the culture It might also be
used by the government and other development agencies to plan for
interventions relevant to the needs of widows in your community in the future
based on the evidence you have provided in this study
CONTACTS
The researcher can be contacted at +44 0791263163 lip07acbshefacuk
or linabonyahoocom in case of any questions issues
In case of any problems that need university attention my supervisor can be
contacted at kalbrightshefacuk
PLEASE DONrsquoT TAKE PART IN THIS STUDY IF YOU ARE BELOW 18
YEARS OF AGE
Thank you very much for your anticipated cooperation
Researcher‟s signature Participant‟s signature
helliphelliphelliphelliphelliphelliphelliphelliphellip helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
87
REFERENCES
Bhagat RSet al (2002) Cultural variations in the cross-border transfer of
organizational knowledge an integrative framework Academy of
Management Review 27(2) 204ndash221
Boyacigiller NA amp Adler NJ (1991) ldquoThe parochial dinosaur organizational
science in a global contextrdquo Academy of Management Review 16(2) 262ndash
290
Bowling A (ed) (2002) Research methods in health Investigating health and
health services Buckingham Open University press
Dabee R and Greenway D (2001)The Mauritian Economy A Reader
PalgraveNew York
Dawson C D (2002) Practical research methods A user friendly guide to
mastering research techniques and projects Oxford How to Books Ltd
Denscombe M (ed) (2007) The good research guide for small scale social
research projects Berkshire Open University Press
Denscombe M(ed) (2003) The good research guide For small scale social
research projects Maidenhead Open University Press
Economic And Social Research Council (2005) ESRC research ethics
framework [online]
httpwwwesrcsocietytodayacukESRCInfoCentreopportunitiesresearch5
Fethics5Fframework [ Accessed May 05 2008]
88
Gilbert N (ed) (2001) Researching social life London Sage Publishers
Grbich C (1999) Qualitative research in health An introduction London
Sage publications
Hunter D amp Lang T (1993) The Leeds declaration Leeds Nuffield Institute
for Health
Neuman L W(ed) (2000) Social research methods qualitative and
quantitative approaches Needham Heights MA Allyn amp Bacon
Maynard M amp Purvis J (1994) Researching womens lives from a feminist
perspective London Taylor and Francis group
Muuka GN (2002) Africas informal sector matters a challenge to scholars
to close the knowledge gap Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
Business and Development International Conference Port Elizabeth April 3-
6 pp1-6
Southwood R (2004)The impact of ICT on SMEs ndash a motor for future
economic growth in hard-pressed times [Online] Balancing Act news update
wwwbalancingact-africacomnewscurrent1html [Accessed 26 January
2008]
Machacha L (2002) Impact of information technology on small and medium
enterprises (SMEs) in Botswana Proceedings of Expanding the Horizons of
African Business and Development The International Academy of African
89
Business and Development International Conference Port Elizabeth April 3-
6 pp277-82
Organisation for Economic Co-operation and Development (OECD)
(2000)OECD study highlights role of small and medium enterprises in job
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Commonwealth Secretariat UK (2006) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius London Commonwealth
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Reed DM (1998) Using the Business Excellence Model in Small Service
Business British Quality Foundation
Taylor AW amp Adair RG (1994) ldquoEvolution of Quality awards and self
assessment practices in Europe a case for considering organisation sizerdquo
Total quality Management 5 (4) 227-237
United Nations (1993) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York
Johanson J amp Wiedersheim-Paul F (1995) The Internationalization of the
Firm - Four Swedish Cases Journal of Management Studies 20 (3) 123-139
90
Chui ACW Lloyd AE and Kwok CCY (2002) The determination of
capital structure is national culture a missing piece to the puzzlerdquo Journal of
International Business Studies 33(1) 99ndash127
Earley PC amp Gibson CB (2002) Multinational Teams A New Perspective
Lawrence Earlbaum and Associates Mahwah NJ
Gibson CB (1999) ldquoDo they do what they believe they can Group-efficacy
beliefs and group performance across tasks and culturesrdquo Academy of
Management Journal 42(2) 138ndash152
Hofstede G (1980) Cultures Consequences International Differences in
Work-Related Values Sage Newbury Park CA
SMIDO (2006)A new Vision For SMEs Development Mauritius
Government Printer Port Louis
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Stone A (1997) SMEs and Technology why should we make special efforts
to help World Bank
Bhagat RS et al (2003) Knowledge in Cross-Cultural Management in Era
of Globalization Where Do we Go from Here in D Tjosvold and K Leung
91
(eds) Cross-Cultural Management Foundations and Future Ashgate Englan
155ndash176
Cairncross F (2001) The Death of Distance Harvard Business School Press
Boston MA
Commonwealth Secretariat UK (2005) Looking Outward A study of small
Firms Exports Policies ampInstitutions in Mauritius Commonwealth Secretariat
Drucker PF (1995) Managing in a Time of Great Change Truman Talley
BooksDutton New York
Guilleacuten M (2001) ldquoIs globalization civilizing destructive or feeble A critique
of five key debates in the social science literaturerdquo Annual Review of
Sociology 27 235ndash260
Gibson CB and Cohen SG (2003) Virtual Teams that Work Creating
Conditions for Virtual Team Effectiveness Jossey-Bass San Francisco
Grazol P et al(2004) ldquoThe Effect of Culture on IT Diffusion Email and Fax in
Japan and the US Information Systems Researchrdquo Journal of International
Consumer Marketing 16 4 pp 29-64
Greider W (1997) One World Ready or Not Crown Business New York
92
Gertler MS (1997) The Invention of Regional Culture In Lee R and Willis J
eds Geographies of Economies London Arnold
Govindarajan V and Gupta AK (2001) The Quest for Global Dominance
Transforming Global Presence into Global Competitive Advantage Jossey-
Bass San Francisco
Haire M et al(1966)Managerial Thinking An International Study Wiley
New York
Heuer M et al(1999) Cultural stability or change among managers in
Indonesia Journal of International Business Studies 30(3) 599ndash610
Hofstede G (1997) Cultures and Organizations Software of the Mind New
York McGraw-Hill
Hofstede GH (2001) Cultures Consequences Comparing Values
Behaviors Institutions and Organizations Across Nations London Sage
Publications
Hoecklin L (1995)Embedded Autonomy States and Industrial
Transformation Princeton NJ Princeton University Press
93
IBP USA (2002) Mauritius Investment and Business Guide IB Tauris and Co
LTD London
Kerr C et al (1960) Industrialism and Industrial Man Harvard University
Press Cambridge MA
Kirkman BL amp Shapiro DL (2000) ldquoUnderstanding why team members
won‟t share an examination of factors related to employee receptivity to team-
based rewardsrdquo Small Group Research 31(2) 175ndash209
Lisenda L (2003) Small and medium-scale enterprises in Botswana their
characteristics sources of finance and problems BIDPA Gaborone
Mauritius Chamber of Commerce and Industry ldquo Country Profilerdquo(Sep 2005)
Meredith GG (ed) (2004) Small Business Management in Australia
McGraw-Hill Sydney
Mistry PS (1999) ldquoCommentary Mauritius ndash quo vadisrdquo African Affairs 98
(393) 551ndash69
Mullins LJ(ed) (1999) Management and Organizational Behavior 5th ed
London Financial Times Pitman
94
Myers MDamp Tan FB (2002) ldquoBeyond Models of National Culture in
Information Systems Researchrdquo Journal of Global Information Management
10 (1) 112-134
Putz R (2000) ldquoCulture and entrepreneurship views from the middle and
lower level managersrdquo Journal of Business Ethics 22 145- 153
Scottish Economic Statistics Scottish ExecutiveONS IDBR (2005)Size
Analysis of Welsh Business SDR 692004Statistical Press Release URN
0440
Straub D et al (2002) rdquoTowards A Theory-Based Measurement of Culture
Journal of Global Information managementrdquo 10 (1)
Schaeffer RK (2003) Understanding Globalization The Social
Consequences of Political Economic and Environmental Change Rowman amp
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SMIDOA new Vision For SMEs Development(May 1996)
SMME Task Force Report (1998) Small medium and micro-enterprises task
fore force report Government Printer Ministry of Commerce and Industry
Sondergaard M amp Hofstede G (1994) ldquoA study of Reviews Citations and
Replicationsrdquo Organization Studies 15 (3) 447-456
95
Schein EH (1992) Organizational Culture and Leadership Jossey-Bass
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Stone A ( 1997) SMEs and Technology why should we make special efforts
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Statistical Press Release (2005) URN 0592 Office for National Statistics
Weisinger JYamp Trauth EM (2002) ldquoSituating Culture in the Global
Information Sectorrdquo Information Technology amp People 15 (4) 306-320
United Nations (2005) Small and Medium -sized Transnational Corporation
Role Impact and Policy implications United Nations New York