Hostname: page-component-8448b6f56d-sxzjt Total loading time: 0 Render date: 2024-04-23T22:38:14.865Z Has data issue: false hasContentIssue false

Africanization in British Multinationals in Ghana and Nigeria, 1945–1970

Published online by Cambridge University Press:  06 February 2019

Abstract

Multinationals experienced significant legitimacy challenges in less-developed countries between 1945 and 1970. Corporate responses to these challenges cover three distinct periods. Unsuccessful postwar attempts focusing on colonial welfare concerns were followed by pragmatic endeavors intended to repair corporate reputations by Africanizing senior management. By the 1960s, this had become a common approach to legitimization. The challenges of Africanizing ethnocentric multinationals led to organizational changes: internationally diversified multinationals were better able to decentralize subsidiary management, while the late 1960s saw regionally focused multinationals absorbed by more diversified multinationals. Organizational survival was directly linked to legitimacy advantages derived from Africanization.

Type
Research Article
Copyright
Copyright © The President and Fellows of Harvard College 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I gratefully acknowledge the helpful comments I received from the editor and anonymous reviewers, as well as from many colleagues over the years at seminars and conferences. This includes the conference on the Nationality of the Company in Frankfurt, Germany, in 2017; the Association of Business Historians Annual Conference in Glasgow, Scotland, in 2017; the re:Work workshop on Multinationals and the Organization of Work in Berlin, Germany, in 2015; and the Business History Conference in Frankfurt, Germany, in 2014, where a previous version of this paper received the Halloran Prize in the History of Corporate Responsibility.

References

1 Bucheli, Marcelo and Aguilera, Ruth V., “Political Survival, Energy Policies, and Multinational Corporations: A Historical Study for Standard Oil of New Jersey in Colombia, Mexico, and Venezuela in the Twentieth Century,” Management International Review 50, no. 3 (2011): 347–78CrossRefGoogle Scholar; Yacob, Shakila and White, Nicholas J., “The ‘Unfinished Business’ of Malaysia's Decolonisation: The Origins of the Guthrie ‘Dawn Raid,’Modern Asian Studies 44, no. 5 (2010): 919–60CrossRefGoogle Scholar; Stockwell, Sarah E., The Business of Decolonization: British Business Strategies in the Gold Coast (Oxford, 2000)CrossRefGoogle Scholar.

2 Bucheli, Marcelo and Salvaj, Erica, “Reputation and Political Legitimacy: ITT in Chile, 1927–1972,” Business History Review 87, no. 4 (2013): 729–56CrossRefGoogle Scholar.

3 Bucheli, Marcelo and Kim, Jin Uk, “The State as a Historical Construct in Organization Studies,” in Organizations in Time: History, Theory, Methods, ed. Bucheli, Marcelo and Wadhwani, R. Daniel (Oxford and New York, 2014), 256Google Scholar.

4 Suchman, Mark C., “Managing Legitimacy: Strategic and Institutional Approaches,” Academy of Management Review 20, no. 3 (1995): 574CrossRefGoogle Scholar.

5 There are a few exceptions to this. See Maguire, Steve and Hardy, Cynthia, “Discourse and Deinstitutionalisation: The Decline of DDT,” Academy of Management Journal 52, no. 1 (2009): 148–78CrossRefGoogle Scholar; Sine, Wesley D. and David, Robert J., “Environmental Jolts, Institutional Change, and the Creation of Entrepreneurial Opportunity in the US Electric Power Industry,” Research Policy 32, no. 2 (2003): 185–20CrossRefGoogle Scholar7.

6 Geoffrey Jones, “Multinational Strategies and Developing Countries in Historical Perspective” (Harvard Business School Working Paper No. 10–076, Boston, 2010); Casson, Mark and Lopes, Teresa da Silva, “Foreign Direct Investment in High-Risk Environments: An Historical Perspective,” Business History 55, no. 3 (2013): 375404CrossRefGoogle Scholar; Maurer, Noel, The Empire Trap: The Rise and Fall of U.S. Intervention to Protect American Property Overseas, 1893–1976 (Princeton, 2013)Google Scholar.

7 Friedman, Walter A. and Jones, Geoffrey, “Business History: Time for Debate,” Business History Review 85, no. 1 (2011): 2CrossRefGoogle Scholar.

8 For Africa, see Cohen, Andrew, “Lonrho and the Limits of Corporate Power in Africa, c. 1961–1973,” South African Historical Journal 68, no. 1 (2016): 3149CrossRefGoogle Scholar; Decker, Stephanie, “Corporate Political Activity in Less Developed Countries: The Volta River Project in Ghana, 1959–1966,” Business History 53, no. 7 (2011): 9931017CrossRefGoogle Scholar; Genova, Ann, “Nigeria's Nationalization of British Petroleum,” The International Journal of African Historical Studies 43, no. 1 (2010): 115–36Google Scholar; Murillo, Bianca, “‘The Modern Shopping Experience’: Kingsway Department Store and Consumer Politics in Ghana,” Africa Today 82, no. 3 (2012): 368–92CrossRefGoogle Scholar; van den Bersselaar, Dmitri, “‘Doorway to Success?’: Reconstructing African Careers in European Business from Company House Magazines and Oral History Interviews,” History in Africa 38 (2011): 257–94CrossRefGoogle Scholar; Verhoef, Grietjie, “Nationalism, Social Capital and Economic Empowerment: SANLAM and the Economic Upliftment of the Afrikaner People, 1918–1960,” Business History 50, no. 6 (2008): 695713CrossRefGoogle Scholar. For Asia, see: Köll, Elisabeth, From Cotton Mill to Business Empire: The Emergence of Regional Enterprises in Modern China (Cambridge, Mass., 2003)CrossRefGoogle Scholar; Smith, Andrew, “The Winds of Change and the End of the Comprador System in the Hongkong and Shanghai Banking Corporation,” Business History 58, no. 2 (2016): 179206CrossRefGoogle Scholar; Yacob and White, “‘Unfinished Business’ of Malaysia's Decolonisation.” For the Middle East, see Abdelrehim, Neveen and Toms, Steve, “The Obsolescing Bargain Model and Oil: The Anglo-Iranian Oil Company 1933–1951,” Business History 59, no. 4 (2017): 554–71CrossRefGoogle Scholar. For Latin America, see Haber, Stephen, Maurer, Noel, and Razo, Armando, “When the Law Does Not Matter: The Rise and Decline of the Mexican Oil Industry,” Journal of Economic History 63, no. 1 (2003): 132CrossRefGoogle Scholar; Bucheli, Marcelo, “Major Trends in the Historiography of the Latin American Oil Industry,” Business History Review 84, no. 2 (2010): 339–62CrossRefGoogle Scholar; Miller, Rory, “British Investment in Latin America, 1850–1950,” Itinerario 19, no. 3 (1995): 2152CrossRefGoogle Scholar.

9 For example, Gendron, Robin S., Ingulstad, Mats, and Storli, Espen, eds., Aluminum Ore: The Political Economy of the Global Bauxite Industry (Vancouver, 2013)Google Scholar.

10 Pfeffer, Jeffrey and Salancik, Gerald R., The External Control of Organizations: A Resource Dependence Perspective (New York, 1978)Google Scholar.

11 Suchman, “Managing Legitimacy,” 574.

12 Suchman, 574.

13 Aldrich, Howard E. and Fiol, C. Marlene, “Fools Rush In? The Institutional Context of Industry Creation,” Academy of Management Review 19, no. 4 (1994): 645–70CrossRefGoogle Scholar.

14 Suchman, “Managing Legitimacy,” 578.

15 Suchman, 579.

16 Suchman, “Managing Legitimacy,” 582.

17 Bucheli and Kim, “State as a Historical Construct,” 249.

18 Decker, Stephanie, “Postcolonial Transitions in Africa: Decolonization in West Africa and Present Day South Africa,” Journal of Management Studies 47, no. 5 (2010): 791813CrossRefGoogle Scholar.

19 Bucheli, Marcelo and Sommer, Gonzalo R., “Multinational Corporations, Property Rights, and Legitimization Strategies: US Investors in the Argentine and Peruvian Oil Industries in the Twentieth Century,” Australian Economic History Review 54, no. 2 (2014): 145–63CrossRefGoogle Scholar.

20 Kostova, Tatiana and Zaheer, Srilata, “Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise,” Academy of Management Review 24, no. 1 (1999): 6481CrossRefGoogle Scholar.

21 Bitektine, Alex, “Toward a Theory of Social Judgments of Organizations: The Case of Legitimacy, Reputation, and Status,” Academy of Management Review 36, no. 1 (2011): 151–79CrossRefGoogle Scholar.

22 Decker, Stephanie, “The Silence of the Archives: Business History, Post-Colonialism and Archival Ethnography,” Management & Organizational History 8, no. 2 (2013): 155–73CrossRefGoogle Scholar.

23 Howell, Martha and Prevenier, Walter, From Reliable Sources: An Introduction to Historical Methods (Ithaca, 2001)Google Scholar.

24 Wilkins, Mira, “The Free-Standing Company, 1870–1914: An Important Type of British Foreign Direct Investment,” Economic History Review 41, no. 2 (1988): 259–82CrossRefGoogle Scholar.

25 Ackrill, Margaret and Hannah, Leslie, Barclays: The Business of Banking, 1690–1996 (Cambridge, U.K., 2001)Google Scholar.

26 Austin, Gareth, “Capitalists and Chiefs in the Cocoa Hold-Ups in South Asante, 1927–1938,” International Journal of African Historical Studies 21, no. 1 (1988): 6395CrossRefGoogle Scholar; Deutsch, Jan-Georg, Educating the Middlemen: Political and Economic History of Statutory Cocoa Marketing in Nigeria, 1936–1947 (Berlin, 1995)Google Scholar.

27 Mr. Rawlings to Mr. Goddard, District Agent Accra, 26 July 1844, Mss Afr. S.825, 232 (ii), Rhodes House, Oxford University (hereafter, RHO); “Kojo Thompson Is Said to Be Fighting the Case of All African Merchants,” no newspaper name, n.d., Mss Afr. S.825, 232 (i), RHO; Deutsch, Educating the Middlemen, 257–58.

28 White, Nicholas J., “Imperial Business Interests, Decolonization, and Post-Colonial Diversification,” in The Oxford Handbook of the Ends of Empire, ed. Thomas, Martin and Thompson, Andrew (Oxford, 2017)Google Scholar.

29 Cooper, Frederick, “From Free Labor to Family Allowances: Labor and African Society in Colonial Discourse,” American Ethnologist 16, no. 4 (1989): 745–65CrossRefGoogle Scholar.

30 Colonial Office, Social Welfare in the Colonies (HMSO, 1945; rev. 1948); Colonial Office, Social Development in the British Colonial Territories: Report on the Ashridge Conference on Social Development, 3–12 Aug. 1954, Misc. Papers no. 523, (London, 1954), 44, appendix C.

31 Colonial Office, “Social Welfare in the Colonies,” 44.

32 Cooper, Frederick, Decolonization and African Society: The Labor Question in French and British Africa (Cambridge, U.K., 1996), 206CrossRefGoogle Scholar.

33 G. Cotgreave, District Agent Lagos, to Gates, Liverpool, 9 Nov. 1949, Mss Afr. s 825, 232 (ii), RHO.

34 Pedler, Frederick J., Business and Decolonization in West Africa, c.1940–1960 (Oxford, 1989), 9Google Scholar.

35 Stockwell, Business of Decolonization.

36 Uche, Chibuike, “Lonrho in Africa: The Unacceptable Face of Capitalism or the Ugly Face of Neo-Colonialism?Enterprise & Society 16, no. 2 (2015): 354–80CrossRefGoogle Scholar.

37 Decker, Stephanie, “Less Than an Empire and More Than British: Foreign Investor Competition in Ghana and Nigeria in the 1960s,” in Imagining Britain's Economic Future, c.1800–1975: Trade, Consumerism and Global Markets, ed. Thackeray, David, Thompson, Andrew, and Toye, Richard (London, 2018), 183203CrossRefGoogle Scholar.

38 Dumett, Raymond E., “The Gold Mining Centres of Tarkwa and Obuasi, Ghana: Colonial Administration and Social Change at Company Towns in an African Setting,” in Sozialgeschichte des Bergbaus im 19. und 20. Jahrhundert, ed. Tenfelde, Klaus (Munich, 1992), 850–51Google Scholar.

39 I. G. Jones, “Labour Conditions in Obuasi,” 1942, CSO 21/8/48, Public Records Administration and Archives Department, Accra, Ghana (hereafter, PRAAD); Stockwell, Business of Decolonization, 177.

40 I. G. Jones, “Report by the Labour Officer,” Mar. 1945, AGC Ms 14,171, v.97, Jan.–June 1945, London Metropolitan Archives (hereafter, LMA).

41 Maltby, J. and Tsamenyi, M., “Narrative Accounting Disclosure: Its Role in the Gold Mining Industry on the Gold Coast 1900–1949,” Critical Perspectives on Accounting 21, no. 5 (2010): 390401CrossRefGoogle Scholar.

42 Minutes of conference, 30 Nov. 1945, 4, AGC Ms 14,171, v. 98, July–Dec. 1945, LMA.

43 Cooper, Decolonization and African Society, 3, 19, 470.

44 Cooper, “Free Labor to Family Allowances,” 758–59.

45 Directors’ Committee, 32 The Gold Coast, 21.1.50, UNI/BD/DC, Unilever Historical Archives, Port Sunlight, U.K. (hereafter, UHA).

46 “Announcement by the Leader of Government Business in the Assembly,” 24 Apr. 1951, Mss Afr. s 825, 421 (v), RHO.

47 Cable from General Manager Accra, UAC, 21 Apr. 1951, Mss Afr. s 825, 421 (v), RHO.

48 Cooper, Decolonization and African Society, 468.

49 Stockwell, Business of Decolonization.

50 Hodgkin, Thomas L., Nationalism in Colonial Africa (London, 1956), 115Google Scholar.

51 526 Parl. Deb. H.C. (5th ser.) (1954) cols. 1623–28; Lynn, Martin, “We Cannot Let the North Down: British Policy and Nigeria in the 1950s,” in The British Empire in the 1950s: Retreat or Revival? ed. Lynn, Martin (Basingstoke, 2006), 144–63Google Scholar.

52 Colonial Office, Nigeria: Report for the Year 1948 (London, 1949), 3.

53 Pedler, Business and Decolonization, 8.

54 Rathbone, Richard, “Parties’ Socio-Economic Bases and Regional Differentiation in the Rate of Change in Ghana,” in Transfer and Transformation: Political Institutions in the New Commonwealth: Essays in Honour of W.H. Morris-Jones, ed. Lyon, Peter and Manor, James (Leicester, 1983), 143–56Google Scholar.

55 Perlmutter, Howard V., “The Tortuous Evolution of the Multinational Corporation,” Columbia Journal of World Business 4, no. 1 (1969): 9Google Scholar.

56 Walter Harragin, Report of the Commission on the Civil Services of British West Africa, 1945–46 (London, 1947), 10; Colonial Office, Nigeria: 1948, 127.

57 Morgan, David John, The Official History of Colonial Development: Guidance towards Self Government in British Colonies, 1941–1971 (London, 1980), 327Google Scholar.

58 See also van den Bersselaar, “Doorway to Success?” 284.

59 R. G. Dyson, “Mr. Dyson's West Africa Tour, 1952,” 15 Feb.–25 Mar. 1952, 39, 80/4328, Barclays Group Archives, Manchester (hereafter, BGA).

60 Colonial Office, Nigeria: Report for the Year 1953 (London, 1953), 5–6.

61 Colonial Office, Nigeria: Report for the Year 1950 (London, 1950), 53.

62 Commission on Post-School Certificate and Higher Education in Nigeria, Investment in Education: The Report of the Commission on Post-School Certificate and Higher Education in Nigeria (Lagos, 1960), 7, 64, 90; Dyson, “Mr. Dyson's West Africa Tour.”

63 Jolly, Richard, Planning Education for African Development: Economic and Manpower Perspectives (Nairobi, 1969), 104Google Scholar; Cooper, Frederick, Africa since 1940: The Past of the Present (Cambridge, U.K., 2002), 114CrossRefGoogle Scholar.

64 Harragin, Report of the Commission, 8.

65 Commission, Investment in Education, 5, 18.

66 J. B. Loynes, “Nigeria,” 26 Feb. 1958, 1–2, OV 68/5, Bank of England Archive, London (hereafter BoE).

67 G. A. Onagoruwa to General Manager (Staff), Feb./Mar. 1948, 38/906, BGA.

68 See, for example, UAC, Statistical and Economic Review, 25 (London, 1961), 62; Dyson, “Mr. Dyson's West Africa Tour”; W. W. Milne, “African Staff,” 12 June 1946, 38/9061, BGA; G. A. Onagoruwa to General Manager (Staff), n.d., 80/5044, BGA.

69 Frederick Seebohm, “Diary,” Ghana, 31 Jan.–9 Feb. 1954, n.p., 277/1, BGA; see also Burawoy, Michael, The Colour of Class in the Copper Mines: From African Advancement to Zambianization (Manchester, 1972), 37Google Scholar.

70 Manager John Holt to all District Agents, “African Managerial Staff,” 10 Dec. 1948, in Milburn, Josephine F., British Business and Ghanaian Independence (London, 1977), 74Google Scholar.

71 Nigeria, Federal House of Representatives, House of Representatives Debates, 29 Nov. 1961, cols. 3542, 3573, exchange between Chief Festus and Mr. W. O. Briggs.

72 Ibid.

73 E. Spears, 31 Mar. 1965, “Ashanti Goldfields Corporation,” AGC Ms24661, LMA. African senior executive manager of Barclays Bank Ghana, interview with author, Accra, 6 July 2004.

74 Minutes of Heads of Departments, 22 Apr. 1966, AGC Ms 14,171, v. 164, Jan.–June 1966, LMA; Ag. General Mines Manager to Secretary, 12 Sept. 1961, Ms 24,663, v. 1, July–Dec. 1961, LMA; Minutes of Heads of Departments meeting, 15 Feb. 1963, Ms 24,663, v. 4, Jan.–June 1963, LMA.

75 Dyson, “Mr. Dyson's West African Tour,” 15 Feb.–25 Mar. 1952, 36, 39; “List of Senior Staff – Nigeria,” 80/4328, BGA; R. E. Fleming and E. V. Whitcombe, “Visit to Nigeria and the Cameroons,” July 1960, 80/3466, BGA; Barclays to J. Milburn, July 1966, in Milburn, British Business and Ghanaian Independence, 85.

76 UAC, Statistical and Economic Review, 25 (London, 1961), 62.; Col. Westmorland to E. W. Morgan, 8 Mar. 1963 [dated 8 Apr. 1963 in error], AGC Ms 24, 665, LMA; Hamilton, “Intelligence Report,” No. 412, n.d., AGC Ms 14,171, v. 122, July–Dec. 1955, LMA; Awa, Eme O., Federal Government in Nigeria (Berkeley, Calif., 1964), 173Google Scholar.

77 “Ghana Board Members,” 80/3580, BGA; J. Wathen to G. N. M. Law, 29 Sept. 1961, 80/3580, BGA; Memorandum “CAST” to General Manager, 30 June 1960, 80/3580, BGA; Boreham to J. Crossley, 3 Jan. 1961, 80/3580, BGA; Wathen to Crossley, 20 Jan. 1964, 80/3580, BGA; Wathen's reminiscences, 1189/1, BGA; Jones, Trevor, Ghana's First Republic 1960–1966 (New York, 1977), 54Google Scholar.

78 D. L. G. Davies to G. N. M. Law, 16 June 1961, 80/4448, BGA; F. A. Boreham, “Mr. Boreham's Visit to Nigeria,” 3–19 July 1961, 2, 80/4448, BGA.

79 Fry, Richard, Bankers in West Africa: The Story of the Bank of British West Africa Limited (London, 1976), 190, 256Google Scholar.

80 “Draft: Africanisation – Recruitment, Training and Development,” n.d., UAC 1/9/1/5/5, UHA.

81 “The Impact of Africanisation on U.A. Group Activities,” n.d., UAC 1/9/1/5/5, UHA.

82 Andrew M. Knox, Coming Clear (London, 1976), 167.

83 Frederick J. Pedler, Report to Directors’ Conference, UNI/SC with TAC, 10 Dec. 1965, UHA.

84 See Knox, Coming Clear, 169–70. Senior executive manager of Barclays Bank of Ghana, interview with author, 6 July 2004.

85 Uche, “Lonrho in Africa”; Cohen, “Lonrho and the Limits.”

86 Ayowa Afrifa Taylor, “An Economic History of the Ashanti Goldfields Corporation, 1895–2004” (PhD diss., London School of Economics and Political Science, 2006).

87 Fieldhouse, David K., Merchant Capital and Economic Decolonisation: The United Africa Company, 1929–1987 (Oxford, 1994)Google Scholar.

88 Roy Barlow, former UAC employee (sailor, head office), interview with the author, 20 Oct. 2005, Liverpool.

89 Austin, Gareth, “African Business History,” in Routledge Companion to Business History, ed. Wilson, John (Basingstoke, 2016), 141–58Google Scholar.

90 Genova, “Nigeria's Nationalization”; Biersteker, Thomas J., Multinationals, the State, and Control of the Nigerian Economy (Princeton, 1987)Google Scholar.

91 Biersteker, Multinationals, 281, 244.

92 Clark to Marriott, 9 May 1975; Watt to Clark, 17 July 1975; Clark to Louden, 31 July 1975, all 1/2/2/7/9, UHA.