editor@adonis-abbey.com UK: 0207 795 8187 / Nigeria:+234 705 807 8841
Table of Contents :
Editorial Comment: Challenges of Enterprise-Driven Economic Growth in Africa
John Kuada4
There is a growing concern within the development research and policy communities today about the persistent sluggish economic growth in most African countries despite the general upturn in the world economy during the last two decades and the general reduction of poverty in most developing countries. The search for explanations for Africa’s poverty has stretched from considerations such as corruption, poor governance and institutional problems (Killick et al., 2001), to the limited attention to private enterprise development (Fafchamps et al., 2001). The African Union has recently estimated that corruption costs Africa 148 billion US dollars per year, thereby increasing the costs of business transactions in Africa by up to 20 per cent. Similarly the World Bank estimates that corruption impedes growth rates by 0.5 per cent per year. There is also the problem of weak supply side of the economy due, partly, to low levels of entrepreneurial activities throughout Africa. Other scholars have shown that the impacts of the activities of external agents such as donor organisations and Multinational Corporations (MNCs) operating in Africa have not always been positive, as expected by economic theorists. Based on this understanding, it makes sense to argue that reversing the downward trends in growth and development in Africa requires the joint and consistent effort of a multiple set of actors – foreign and local firms, governments, the bureaucracy, the donor organisations and the civil society – all pulling in the same direction.
This study reports the results of an empirical investigation into the antecedents and degree of market orientation of a subsidiary of a Multinational Corporation (MNC) located in Ghana. The study is premised on the understanding that MNCs transfer “best management practices” through their subsidiaries to local firms in developing countries and thereby upgrade the managerial knowledge and performance of these firms. This takes place through linkages with their local suppliers and customers. The results show the MNC to be market oriented. They also support evidence from previous studies that top management emphasis combines with organisational characteristics such as inter-departmental connectedness, and market-based reward system to influence the degree of market orientation of firms. The company’s customers have validated the self-assessment of market orientation made by the company’s employees. The study has not however fully established any adoption of market-oriented practices by the customers of the company.
The present paper challenges the logic underlying contemporary economic growth policies and strategies in Sub-Sahara African countries and argues in favour of enterprise-driven economic growth and poverty alleviation. It presents an integrated model of economic growth based on social network theory, cultural theory and entrepreneurship theory, with an emphasis on “soft asset” leveraging mechanisms. The paper further discusses the relevance of this model for understanding enterprise development in Africa and outlines its policy and research implications.
Key words: economic growth, entrepreneurship, economic sociology, social networks, Africa
Annual Subscription Rate |
Individual Subscriptions |