Information Strategy Planning in the Democratic Republic of Congo:
The Case of Bralima
Kaeye Rijnks December 2005
Information Strategy Planning in the Democratic Republic of Congo:
The Case of Bralima.
Master Thesis: Industrial Engineering and Management Science – Information Technology
Author:
Kaeye Rijnks +31619354768 k_rijnks@hotmail.com
Student number:
1159771
Supervisors:
University of Groningen 1st supervisor:
Dr. P.E.A. Vandenbossche 2nd supervisor:
Drs. D.J. Schaap
piet.vandenbossche@ssaglobal.com
d.j.schaap@bdk.rug.nl
Bralima S.A.R.L.
IT Department:
Marc Ortolo
Production Department:
Sander Molkenboer
marc.ortolo@heineken.com
sander_molkenboer@heineken.com
Company:
Heineken International:
Bralima S.A.R.L.
1, Avenue du Drapeau BP 7246
Kinshasa (Gombe/Barumbu) Democratic Republic of Congo
F o r e w o r d
This thesis concludes the final stage of Industrial Engineering and Management Science, specialization Information Technology, at the University of Groningen. The concluding phase includes a stay in a company to perform a research into a business science oriented problem. For writing my master thesis I had the change to carry out the research at Bralima, in the Democratic Republic of Congo.
For the research I have worked and studied at Bralima for four months. The intended stay of five months was shortened because riots were expected, as the elections were postponed.
The volatile environment of Bralima and the culture of Congo inspired the subject of this thesis.
I believe it would be a missed opportunity when I did not integrate the specific features of Congo in the thesis. Therefore, in order to utilize the interesting aspects of doing an internship in Congo fully, culture played an important role in this IT focused research.
I have had a very interesting and educating time in Congo, and above all, it was very entertaining. For giving me the opportunity to do my internship at Bralima I would like to thank Hans van Mameren. For the guidance during my stay at Bralima I would like to thank Marc Ortolo and Sander Molkenboer. For the supervision during the entire research I would like to thank especially Piet Vandenbossche and for the extra support Dirk Schaap.
Kaeye Rijnks
Groningen, December 2005
S u m m a r y
This thesis explores the methodology of information strategy planning (ISP) in the Democratic Republic of Congo. It studies the Congolese cultural influences on ISP, by performing a case study research at Bralima. Bralima is a brewery in the DRC owned by Heineken. The rationale for this research is the idea that Western IT approaches and techniques cannot be bluntly copied in the Congolese culture (e.g. Blunt and Jones 1997, Thomas 2002, Jackson 2004).
The main objective of this research is composed as:
Analyse the applicability of information strategy planning in the Democratic Republic of Congo.
The research question is:
How does culture influences information strategy planning in the Democratic Republic of Congo?
The research question is divided into two different sub questions to analyse (1) the influence of culture on decision-making and the resulting Congolese management implications (CMIs) (according to Jackson 2004), and (2) the influence of these Congolese management implications on ISP (according to Martin 1990). The model in figure 0.1 shows the relations of culture and decision-making and the influence of the CMIs on ISP. The relations 1A-1B and 2A- 2G are the specific relations that are researched to answer the two sub questions and subsequently the research question.
Figure 0.1. Conceptual Model.
This research is conducted according to the case study research design as developed by Yin (2003). This research strategy is chosen because of three factors: (1) the research question is in the form of a ‘how’ question, (2) the study does not require control over behavioural events, and (3) it focuses on contemporary events. Besides these three general reasons developed by Yin (2003), two other more specific reasons argue for a case study. The first is that Yin (2003) states that when in a environment where ‘conventional theories does not apply, the case study research the best way to conduct research’. This statement is in line with the reason of this research: the conventional Western approach of ISP does not necessarily apply in Congo. The second reason is that it is possible to generalize the specific case of Bralima to a more general phenomena according to the methodology of Yin (2003). This means that the results of this specific case of ISP in Bralima can be generalized to a phenomena of ISP in the DRC. Using a generalization makes this case study more interesting in the environment of Congo. The generalization of a case is conducted by using a case theory. This means that a general approved theory is tested on a specific case. The case theory of this thesis is: ‘information strategy planning in the Democratic Republic of Congo is influenced by cultural factors’. After answering the research question, it is possible to asses the validity of the case theory, and conduct the generalization to a more general phenomena for the situation in the DRC (Yin 2003).
The first part of the analysis in this thesis is focused on the first sub question: the
making in Africa of Jackson (2004) is used to analyse the influence. The approach used in this thesis is first, to explore the influence on decision-making in Congo, and second analyse the resulting Congolese management implications. The analysis is conducted by studying literature concerning culture in Congo and the effects of this culture on decision-making, studying facts and figures of Congo to analyse the current situations, and exploring the situation at Bralima according to the findings of literature and the facts and figures. The resulting Congolese management implications are low development and education, hierarchical power relations, diverse cultural groups and inequality, highly corrupt, and risk adverse.
The second part of the analysis in this thesis is focused on the second sub question: the influence of these management implications on the ISP as developed by Martin (1990). This thesis conducts a ISP for the case of Bralima. Because of the cultural influence on the top level of ISP, the ISP as discussed by Martin (1990) is not fully applicable on the case of Bralima. Due to low development and education in Congo the ‘technological impact analysis’ is not necessary. The components of ‘analysis of goals and problems’, ‘critical success factor analysis’, and ‘strategic vision’ are influenced by culture and remain important in the Congolese context. The bottom level of ISP is not influenced by culture, however enterprise modelling is important to conduct during ISP.
This thesis concludes that ISP in Congo is different from the ISP as Martin (1990) describes it. This means that the case theory is approved in this thesis. Figure 0.2 shows a recommendation for ISP in the DRC. This model is the representation of the generalization of the case of Bralima. The case of Bralima results in specific adjustments of ISP. These adjustments are generalized to the DRC in the form of a improved model for ISP in the DRC (generalization to a phenomena according to Yin 2003: 144-5).
ISP for the DRC is divided into three main areas of interests: information processes, management and employees. The choice for this division is made because of the different focus during the decision-making process of ISP. The focus on information processes and management is the same as Martin’s (1990) ISP, the focus on employees is a new focus area of ISP in the DRC.
Figure 0.2. Information strategy planning in the DRC.
In the phase ‘focus on information processes’. The enterprise modelling is conducted.
Any approach to the enterprise modelling is appropriate, as long as it describes the information processes sufficiently. Most important detail of this phase of ISP is that it is not (or barely) influenced by the Congolese culture. In the phase ‘focus on management’ a strategic vision, the critical success factors, and the goals and problems should be analysed and discussed with the management. The third phase of ISP is called ‘focus on employees’, and contains a ISP impact analysis. A new feature of ISP specific for the Congo situation. The influence of culture on the resistance to change is a important factor. In the modified ISP, a ISP impact analysis should be conducted, to be able to have a better insight in the possible resistance to change. Martin’s (1990) recommendation is to perform the ISP top down. In the model of figure 0.2, a recommendation for the sequence is incorporated. The first step is the enterprise modelling. The second step is the strategic vision analysis. The third step is a iterative process of the critical success factor analysis, the analysis of goals and problems, and the ISP impact analysis.
T a b l e o f C o n t e n t s
I. INTRODUCTION: ‘PELISA NGWASUMA’ 1
I.1. INTRODUCTION 1
I.2. HISTORY OF BRALIMA 3
I.3. THE COMPANY BRALIMA IN THE ‘OPEN SYSTEM MODEL’ 5
I.4. BEHAVIOUR AND PROCESSES 6
I.5. STRUCTURE HEINEKEN INTERNATIONAL N.V. AND BRALIMA S.A.R.L. 8
I.6. TECHNOLOGY OF BRALIMA 9
I.7. GOALS AND STRATEGIES OF HEINEKEN AND BRALIMA 10 I.8. INTRODUCTION TO THE CULTURE OF CONGO 11
I.9. THE CONGOLESE ENVIRONMENT 12
I.10. INPUTS AND OUTPUTS 14
I.10.1. BRALIMA’S PRODUCTS 14
I.10.2. DISTRIBUTION IN KINSHASA 15
I.11. SUMMARY 15
II.2.1. CURRENT SITUATION 18
II.2.2. PROBLEM DIAGNOSIS 19
II.2.3. LACK INFORMATION SUPPLY AND QUALITY (IN CONGO) 22 II.2.4. REPAIRING THE ‘MACHINE’ OF BRALIMA:INFORMATION STRATEGY PLANNING 22 II.2.5. INCORPORATING THE ‘ORGANISM’ AND ‘MIND’ OF BRALIMA IN ISP 25
II.3. PROBLEM STATEMENT 26
II.3.1. MAIN OBJECTIVE 26
II.3.2. RESEARCH QUESTION 26
II.3.3. SUB QUESTIONS 26
II.3.4. CONCEPTUAL MODEL 30
II.4. THE RESEARCH STRATEGY:CASE STUDY RESEARCH 31
II.4.1. SELECTING THE RESEARCH STRATEGY 31
II.4.2. CASE STUDY RESEARCH DESIGN 33
II.4.3. GENERALIZATION OF A CASE STUDY RESEARCH 34
II.4.4. CONCEPTUAL MODEL OF THE UNIT OF ANALYSIS OF THE CASE BRALIMA 36
II.5. SUMMARY 38
III. CULTURAL INFLUENCE ON DECISION-MAKING IN THE DEMOCRATIC
REPUBLIC OF CONGO 39
III.1. INTRODUCTION 39
III.2. CONGOLESE CULTURAL INFLUENCE ON DECISION-MAKING 41
III.3. EXOGENOUS FACTORS 43
III.3.1. SOCIAL FACTORS 44
III.3.2. POWER RELATIONS 44
III.3.3. CULTURAL RELATIONS 46
III.3.4. EDUCATION 48
III.3.5. SUMMARY EXOGENOUS FACTORS 48
III.4. DOING BUSINESS IN CONGO:AFRICAN MANAGEMENT SYSTEMS 49 III.5. FINDINGS: FROM POST-COLONIAL TO POST-INSTRUMENTAL 51 III.6. MANAGING BRALIMA’S ORGANIZATION DECISION PROCESSES 52
III.6.1. ORGANIZATIONAL GOVERNANCE 53
III.6.2. HUMAN VALUES 55
III.6.4. ETHICS 57 III.7. DECISION-MAKING IN BRALIMA:CONGOLESE MANAGEMENT IMPLICATIONS 58
III.8. CONCLUSION 60
IV. BRALIMA’S INFORMATION STRATEGY PLANNING 62
IV.1. INTRODUCTION 62
IV.2. PHASE 1:FOCUS ON BRALIMA’S MANAGEMENT 65
IV.2.1. ANALYSIS OF GOALS AND PROBLEMS 65
IV.2.2. CRITICAL SUCCESS FACTOR ANALYSIS 69
IV.2.3. TECHNOLOGY IMPACT ANALYSIS 81
IV.2.4. STRATEGIC SYSTEM VISION 82
IV.3. PHASE 2:ENTERPRISE MODELLING 83
IV.3.1. THE OVERVIEW OF THE FUNCTIONS OF BRALIMA 85
IV.3.2. ENTITY-RELATIONSHIP MODELLING 91
IV.4. PHASE 3:FOLLOW-ON FROM STRATEGIC PLANNING 95
IV.4.1. CURRENT SYSTEM ANALYSIS 95
IV.4.2. TECHNOLOGY PLANNING 97
IV.5. PHASE 4:INFORMATION STRATEGY PLANNING AND THE CONGOLESE MANAGEMENT
IMPLICATIONS 98
IV.5.1. INFLUENCE ON THE PROCESS 100
IV.5.2. INFLUENCE ON THE OUTCOME 101
IV.6. CONCLUSION 104
V. CONCLUSION AND RECOMMENDATIONS 107
V.1. INTRODUCTION 107
V.2. CONCLUSIONS 108
V.3. LIMITATIONS AND RECOMMENDATIONS FOR FURTHER RESEARCH 113
xi
Africa and the Democratic Republic of Congo. = Brewery of Bralima in the DRC.
I . I n t r o d u c t i o n : ‘ P e l i s a N g w a s u m a ’
Pelisa NGWASUMA!1 (Bralima: 4x20 ans 2003).
I.1. Introduction
30 June 2005, 45 years of independence of the Democratic Republic of Congo (DRC)2 (formerly known as Zaire, a Belgian colony). In most countries that would be a good reason for a nation wide celebration, the opposite is true in the DRC. Protesters in Kinshasa deluged the streets to show their disapproval of the leaders of the vast country. Most people on the street that day do not have jobs, and probably have to live with less than one US Dollar per day. Needless to say that Congo is still one of the poorest countries in the world today. Officially, that day supposed to be the election day. However, the President of the DRC, Joseph Kabila, postponed the elections to precisely a year later. That was reason enough for the people to riot the streets. After a harsh day in Kinshasa, ten people were left dead when police were shooting and driving their cars into the crowd.
The previous is an example that illustrates the volatile environment where Bralima S.A.R.L. 3, a full daughter of Heineken4, tries to make profits and increase its market share, by selling beer and soft-drinks. Founded over 80 years ago, Bralima has already undergone some major changes in its environment. Nevertheless, it remained the biggest brewery in the DRC (Annual Report Heineken 2004). With its headquarters in Kinshasa, Bralima is trying to increase the volume of production, and in doing so, increasing market share in this unstable environment (Bralima three-year plan 2005). In order to achieve these goals, Bralima is going through processes of decision-making. The same is true for every company, yet again, it is perhaps more difficult for Bralima in the Democratic Republic of Congo (e.g. Thomas 2002, Jackson 2004).
One of the departments of Bralima where decision-making is perhaps more difficult than in the Western world is the IT department. IT approaches and techniques that are used for decision-making in this department are developed in, and for, the Western world. Therefore, when IT people are conducting projects in Congo they have to bear in mind that the specific difficulties of the Congolese environment are not incorporated in the Western approaches (see e.g. Blunt and Jones 1997, Thomas 2002 and especially Jackson 2004). This thesis studies the implications that arise when the IT department tries to improve the situation of Bralima using a Western approach. In more detail, this thesis analyses the functionality of a well known Western approach of IT in the Congolese context: information strategy planning (ISP) as developed by Finkelstein and Martin (1981). ISP has two main goals: (1) ‘to link information technology and systems planning to the strategic business planning in order to help the strategic planning and help building of control mechanisms to implement the plans’, and (2) ‘to create an architectural framework into which further analysis and design will fit so that separately developed systems will work together’ (Martin 1990: 17-18). ISP has been used frequently and is analysed thoroughly in companies in the Western world.
The aim of this thesis is to analyse the applicability of ISP in companies in the Democratic Republic of Congo. The rationale for this analysis is that Jackson (2004), notices that it could be very difficult to make management decisions in a volatile environment in Africa with its specific culture. He states that ‘employing concepts and principles of governance borrowed from Western management, through Western education, and by using Western practices may not be appropriate’. Moreover, Thomas (2002) notes the difficulties (because of the cultural
3 S.A.R.L.: ‘Société à responsabilité limitée’, translation: Private Limited Company (PLC).
influence on behaviour and other environmental factors that are difficult to observe for a foreigner), when managers with Western background make decisions in an organization where another culture predominates. Blunt and Jones (1997) already noticed a change in Africa. Where Western theories always were copied bluntly, the new trend is that managers are more reluctant when applying the theories and practices from the US and Europe. This new approach towards Africa is sketched out by Jackson (2004) nicely, he believes that these Western principles should not be rejected for the African situation, but should be put in place in their cultural context. That is exactly what this thesis does, putting the Western principle of ISP in the Congolese cultural context.
The remainder of this introduction will illustrate what kind of company Bralima is and under what circumstances it does business. This assures a thorough understanding of Bralima in the Congolese market, which will be important for the remainder of this thesis. To explore Bralima, first a description of the history of Bralima will be provided. The second phase in the portrayal of the company is conducted with help of a framework to assure all components of Bralima are explained.
I.2. History of Bralima5
After World War I, Belgian businessmen came to visit the present Democratic Republic of Congo to evaluate the opportunities to invest in the country. They were aware that the government was interested in producing beer for the local population, due to the fact that the beer produced by the inhabitants themselves caused major health problems. A brewery, which could brew a high quality beer, would be a good alternative for the current local available beer. The investors decided to set up a brewery and on 23 October 1923 the ‘Brasserie de Leopoldville’ (after the independence changed in Bralima) was established. After the foundation the first beer was produced on 27 December 1926.
Major problems appeared in this start-up phase of the establishment of the brewery. The government did not authorize to sell beer to the neighbouring countries. Other problems appeared with the level of price, which appeared to be too high according to the purchasing power of the
imported, which seemed to have a superior quality in comparison to the locally produced beer.
Finally the economical crisis in the world started which seemed to have its impact on the Congolese economy.
Around 1945 the brewery was gaining benefits from the economical boom in the DRC.
This results in a growing confidence in the economical forecasts. From 1950 to 1958 Bralima decided to maintain operations in five breweries in Congo: Kinshasa, Boma, Bukava, Kisangini, and Mbandaka (see map of Africa and DRC). Following the independence trends, Bralima’s shareholders decided in 1960 to stay in Central Africa, keep the production facilities in working order, hire local people, train them and start to invest in soft drinks production plants within all breweries. In spite of the Zairianisation6 and the economical crisis in 1973, the brewery in Kinshasa was modernized with a new brewing room, with a capacity of more than 400,000 litres per day. The old copper installations were not in use anymore.
In 1987 the Heineken Group becomes the major shareholder of all Bralima’s production plants. One year later Bralima inaugurates in Kinshasa the ‘Brasserie de l’an 2000’ (translation:
Brewery of the year 2000) with twelve 250,000 litres capacity, new stainless steel tanks and a new 30,000 litres per hour beer filter. Operations are completely automated with a central cleaning station, a water sterilizing installation, three yeast tanks and a 24,000 bottles/hour capacity labellers.
In 1992 Bralima bought Compagnie Industrielle de Boissons (CIB), mainly a Coca-Cola bottler and owner of a soft drink plant in Lubumbashi. Four years later Bralima opened ‘Ecole de Brasseries de l’ Afrique Centrale’ (EBAC) (translation: school for breweries of Central-Africa) with as main purpose the training of technical employees for seven countries. In 1998, when it was the 75 years anniversary of Bralima, the brewery bought the BONAL Company (‘Boissons Nationales’, translation: National Drinks), Pepsi Cola’s main bottler. That meant that Bralima owned practically a monopoly on soft drinks in Congo.
In 2002 Bralima radically changed Congo’s brewers local context, introducing ultra modern bottling lines. In 2003 Bralima received an ISO 9001 certification as a result of its excellent work and effort. Recently, Bralima started an intensive program of modernisation at the plants at Kinshasa and Boma, which were re-equipped with new, state-of-the-art equipment. The
6 The confiscation of small and medium enterprises of foreign nationals and their free distribution
upgrade of the other facilities will follow soon. This to ensure the high quality of Bralima’s products.
Although Bralima’s sales were down for the last few years due to political instability, restructuring of the production facilities, new marketing programs and focusing on costs enabled it to post an improved financial result. The current market share in the domestic beer market is 45% and the aim is to increase this share, and the revenues as well, every year. When including the soft drinks, Bralima has almost 60% of the market share. Bralima employs around 1500 people, whereas the brewery in Kinshasa is the largest employer inside the Bralima organization.
I.3. The Company Bralima in the ‘Open System Model’
The remainder of this chapter describes Bralima and the environment of Bralima. In order to completely appreciate the way of doing business of Bralima, all aspects of the company are described. Only after the company and its environment is thoroughly explored, it is possible to make a justified selection of a research strategy (Yin 2003). Nadler (1993) adds that the ‘ability to explore a problem situation, to make appropriate evaluations, and to propose recommendations, conceptual tools should guide the development of a study through all its stages’. One of those conceptual tools is the methodology of describing the organization.
Different methods exist for describing companies. The description of Bralima is based on the methodology of organizational development. Organizational development sees an organisation as an open system, with a boundary but interacting with the environment (Nadler 1993, Harrison 1994). The rationale for the choice of the organizational development methodology is that it looks at all aspects of a company, including the environment, when the organization is undergoing a change. Moreover, when a company is changing, all components of the organization will change because all features are interrelated (Nadler 1993, Harrison 1994, Boonstra 2002). Since this thesis describes a change of Bralima (ISP incorporates changing the company) where the environment plays an important role, organizational development is chosen to form the basis for the description of Bralima.
The remainder of this chapter uses Harrison’s (1994) ‘open system model’ to analyse
Figure I.1: Open System Model (Harrison 1994: 29).
Harrison (1994) distinguishes in his model (1) the behaviour and processes of the organization (see section I.4), (2) the internal company structure (see section I.5), (3) the technology used in the organization (see section I.6), (4) the company goals (see section I.7), and (5) the culture of the organization (see section I.8). Besides the internal company structure, Harrison (1994) depicts the environment (see section I.9) and the input and output of the company (see section I.10). The following sections describes Bralima according to this framework.
I.4. Behaviour and Processes
The description of behaviour and processes includes the ‘prevailing patterns of behaviour, interactions and relations between groups and individuals’ and the production processes at Bralima (Harrison 1994: 30). Since the patterns of behaviour and the interactions are the subject of chapter III, this section focuses on the processes of Bralima.
Figure I.2 portrays a simple overview of these processes. For the production and packaging of the products two different inputs are necessary: the input of raw materials for the
suppliers supply the raw materials. The other input originates from collecting the empty crates and bottles at the customers. Bralima works according to the so-called ‘plein pour vide’
(translation: full for empty) principle. This means that when a customer wants to purchase a full crate of for example Primus beer, this customer has to provide an empty crate with empty bottles of Primus beer. Eventually two different distribution methods ensure the input of the empty crates and bottles. These methods of distribution are explained in section I.10.2.
Figure I.2: Global Production Process.
The blue boxes represent the processes of Bralima (the differentiation in thick blue outline is explained in section II.2.1); red boxes represent outdoor processes. Note that outdoor means outside the premises of Bralima. Bralima is responsible for the distribution and the
materials (e.g. labels), the packaging process produces the ready products. External suppliers deliver products needed for the production of new bottles, the production of beer and soft drinks, the maintenance of the brewery, and the packaging materials.
I.5. Structure Heineken International N.V. and Bralima S.A.R.L.
Harrison (1994: 30) sees the structure of an organization as ‘enduring relations between individuals, groups, and larger units’. When completely describing the structure of Bralima, the starting point is that Bralima is part of the Heineken corporation. Heineken International N.V is a multinational organization with its headquarters in the Netherlands. Apart from brewing and selling its own Dutch brands (e.g. Heineken, Amstel and Brand) all over the world, it owns a great deal of local breweries situated in a number of different countries worldwide7 (see appendix A1). Heineken and its subsidiaries employ over 61,000 people (Annual Report Heineken 2004).
Bralima is grouped with other African breweries into a cluster called Multi Market Operations of Sub-Saharan Africa (MMO SSA). This cluster is active in Angola, Burundi, Cameroon, Chad, Democratic Congo (or Congo-Brazzaville), Ghana, Nigeria, Rwanda, Sierra Leone, and the DRC (Annual Report Heineken 2004).
Kinshasa is Bralima’s main brewery in the DRC and therefore headquarters are situated in Kinshasa (for the other breweries in the DRC see the reference map on page vi). Since this research is conducted on the brewery at Kinshasa, the scope of the structure will be limited to this brewery only. The director of Bralima is Hans van Mameren, together with the directors of the four major departments Finance, Marketing, Production, and Human Resources they form the board of directors of Bralima (see appendix A2).
The IT department reports to the finance department and is managed by Philémon Mizele. Marc Ortolo is consultant of the IT department and his mission is to professionalize this department (see appendix A3). Sander Molkenboer is Kinshasa Brewery Manager, he is responsible for the production of the brewery in Kinshasa (see appendix A4).
I.6. Technology of Bralima
This section portrays the technology of Bralima. Harrison (1994: 28) defines technology in a company as ‘tools, machines, and techniques for transforming resources into outputs’. Because Bralima is a operational company of Heineken, the technology used at the brewery has to be up- to-date (Bralima three-year plan 2005). Heineken strives to have modern brewery technology at all the breweries. This to assure the best quality of beer and soft drinks for its customers (Annual Report Heineken 2004). There are differences however between the Kinshasa sites and the breweries in the other cities of the DRC. The modernization of all sites is planned in the future however.
Technology in Congo in general is at a very low level compared to the Western world standards. Because of the great instability of the country it is very risky for businesses to start expensive programs to improve technology. One of the technologies that has made a great development in recent years is mobile telecommunication. The mobile telephone is ideal in Congo and Kinshasa because of the lack of a structured analogue phone line system. The suppliers of the mobile phone services are fighting for market share and are investing a lot in marketing. Bralima tries to use the good mobile infrastructure to sell products to customers easier.
Since the Congolese money is of very little value, customers who are ordering large amounts of crates, have to count large amounts of money. During the distribution this takes too much time.
Momentarily Bralima is testing the use of mobile payments.
Another important technological factor is the unreliable power supply in Kinshasa.
Electricity breaks down several times a day, sometimes a couple minutes but most of the times more than an hour. This has a great impact on businesses because getting work done without a computer or a machine is often impossible. The big and financially strong companies in Kinshasa have taken measures to reduce the impact of an electricity breakdown but these measures are very expensive, and most of the time they don not work for all the parts of the company. Obviously, the production is the most important focus, and therefore the other departments lack power during power blackouts.
Whereas the brewery facilities are in good shape, the IT environment of Bralima cannot
customers, stock, planning, and other financial data. Between 1995 and 2000 ISHA was implemented at Bralima. It is an information system specially developed for the Heineken breweries in Africa. ISHA reports to the management by regular printouts and especially using the Management ISHA (MISHA) reporting tool.8 As for the production department of Bralima, ISHA covers momentarily the entrance of the empty products and the output of ready products of Bralima. ISHA has knowledge of the number of empty products entering the brewery and the ready products leaving the brewery. Information concerning clients, routing, payments, etc. are attached to the number of products in ISHA. The information flow inside the warehouses is not covered by ISHA. Word files, Excel files, and notes on paper or blackboards momentarily document the sections of the process not covered by ISHA. For reference have a look at figure I.2.
In chapter IV a more detailed analysis of the IT technology is conducted. For now, it is sufficient to realize that the technology in Congo is of low quality and to have a idea what the most important information system ISHA does.
I.7. Goals and strategies of Heineken and Bralima
Goals and strategies are ‘future states sought by the organization’s dominant decision makers’
(Harrison 1994: 29). Heineken’s goal at all times, is to defend and strengthen its leading global market position and preserve its independence. Heineken’s strategy for attaining this goal is to:
achieve a level of sales and profitability, which makes it one of the world’s largest and financially best-performing brewing groups, maintain a strong portfolio of beer brands, with Heineken as the leading international premium beer, maintain strong local market positions, a good sales mix and an efficient cost structure by combining the sale and distribution of the international Heineken premium brand with that of strong local brands, and fulfil its corporate social responsibility, particularly with regard to policy on alcohol abuse, social and environmental issues (Annual Report Heineken 2004).
Bralima is one of the operational companies of Heineken where there should be a strong and efficient mix of Heineken and local beer and soft-drinks. Since Heineken was only imported in the DRC last year, the Heineken brand is not yet as strong as management would like to.
8 Information ISHA from interview Emery Kadiambiko (Applications Manager IT Department)
Bralima’s main objectives are therefore: increasing market share, maintaining affordability, and improving availability of Heineken. Bralima and its main competitor BraCongo have approximately half of the market dominate the Congolese market. Bralima wants to put increased pressure on this one competitor to force it out of the market. The expectation is that Bralima will win this fierce combat for market share due to the in comparison up to date brewery facilities, the brand Heineken, and the licence to produce Coca-Cola (Bralima three-year plan 2005).
To achieve the objectives stated above Bralima wants to increase the productivity of the brewing, warehouses, and packaging processes. Therefore Bralima has to operate more efficiently and effectively. By doing this Bralima introduced the company wide Heineken policy of Total Production Management (TPM). The main ideology of this way-of-doing-your-business is that every loss is unacceptable. The main concept is to start with the biggest problem and work your way through it from there, attacking one problem at the time9.
I.8. Introduction to the Culture of Congo
Harrison (1994: 30) sees culture as ‘shared norms, values, beliefs, and assumptions, and the behaviour and artifacts that express these orientations’. As will be discussed in chapter II, culture is a defined in numerous ways. For this section this definition is sufficient, later on in this thesis a more detailed definition of culture is conducted.
Apart from the definition, culture is diverse and difficult to define all over the world, but especially in Africa due to the large amount of different tribes. Moreover, colonial powers divided the countries not by tribes, but by mutual agreements (Jackson 2004). For this reason this paragraph only gives a short introduction into the Congolese culture. It gives a summary of the people living in Congo. In this thesis chapter III, is dedicated to the total exploration of culture in this part of Africa.
The CIA World Fact Book states that ‘the population of Congo the population of the Congo comprises approximately 200 ethnic groups, the great majority of whom speak one of the Bantu languages. In addition, there are Nilotic speakers in the north near Sudan and scattered groups of Pygmies (especially in the Ituri Forest in the northeast). The principal Bantu-speaking
ethnic groups are the Kongo, Mongo, Luba, Bwaka, Kwango, Lulua, Lunda, and Kasai. The Alur are the main Nilotic speakers. In the 1990s, Congo also had an influx of immigrants, particularly refugees from neighbouring countries. French is the Congo’s official language, but it is spoken by relatively few persons. Swahili is widely used in the east, and Lingala is spoken in the west;
Tshilaba is also common. About 50% of the inhabitants are Roman Catholics and 20% are Protestants. A substantial number are adherents of Kimbanguism, an indigenous Christian church. Many also follow traditional religious beliefs, and about 10% are Muslims’. This quotation portrays the diverse population of Congo. The rationale for this explanation it to make clear that decision-making in Bralima includes getting along with many different cultures.
I.9. The Congolese Environment
According to Harrison (1994: 30) the general environment ‘includes institutions and conditions having infrequent or long-term impacts on the organization’. This includes, besides matters as the economy, political situation and the legal system, ‘the local or national culture within the organization operates’. This makes that the environment and the culture are related. In the next chapter this linkage is further discussed. This section discusses the country characteristics of Congo briefly.
To begin the description of the environment of Bralima, the Democratic Republic of Congo has 58 million inhabitants, an approximate 6 million live in the capital Kinshasa.
According to Romkema (2005), the people of Congo have a low live expectancy rate, and a high infant mortality rate. The population of the country is relatively young and growing with 2.99% a year. Family communities are mixed because polygamy is a widely accepted factor. The leader of the community is the one who has the job with the highest earnings. For example the salary of a Bralima-employee can support a community with up to 40 people.
Johnson (2005) states that the Democratic Republic of Congo has been a model of a predatory state10 for some time. War devastated the country from 1998 till 2003. Johnson (2005) believes that today Congo is in transition, ‘a transition from war to peace which is supposed to finish in elections in June 2006, but also a transition from a predatory to a developmental state’.
Congo’s road to economic recovery is long: According to the World Bank, with 4% annual growth the DRC would take 200 years to reach the per capita income of 1960, the year of
independence. The transitional government in Kinshasa operates within an economic policy framework whose parameters were set by the international community before it came into office.
The government has no power over its own economic policies or over the use of donor money.
Therefore, Johnson (2005) argues that it cannot renegotiate existing agreements; it can only implement them and influence the way their benefits are distributed amongst office-holders, contractors and the population. It is very difficult for this government to govern the DRC since the country is ravaged during the war.
The economy of DR Congo has declined drastically since the mid-1980s. Hoebeke (2005) reasons that the war, which began in August 1998, has dramatically reduced national output and government revenue and has increased external debt. Foreign businesses have reduced operations due to uncertainty about the outcome of the conflict, lack of infrastructure and the difficult operating environment (Hoebeke 2005, Johnson 2005). Conditions improved in late 2002 with the withdrawal of a large portion of the invading foreign troops. Several IMF and World Bank missions have met with the government to help it develop a coherent economic plan and President Kabila has begun implementing reforms. Much economic activity lies outside the GDP data, the hidden unemployment is huge. An estimated unemployment rate is 80% (Romkema 2005). Economic stability, aided by international donors, improved in 2003. Despite of growing stability and the fairly good outlooks, the GDP per capita is one of the lowest in the world with
$700 a year (Hoebeke 2005).
Besides the economical and political aspects of the environment, the beer market is also part of the environment (Harrison 1994). The size of the beer market in Kinshasa is always going up and down. These fluctuations are caused by price increases (inflation compensation), political unrest and temporary economic prosperity. The beer market is also influenced by the season. In the hot months of November, December and January, around 10% more beer is consumed than in the less hot months of June, July and August (Bralima three-year plan 2005).
In short, the environment Bralima is doing business in is volatile. It is difficult to fully understand and predict the situation. Therefore, it makes sense that Bralima and Heineken hesitates when decisions have to be made which concerns large amounts of money. For a more lengthy discussion of Congo and Kinshasa, Tayler (2000) provides an interesting book. He wrote
I.10. Inputs and Outputs
This section explores the inputs and outputs of Bralima. The outputs of an organization are
‘products, services, and ideas that are the outcomes of organizational action’ and the inputs are those resources that ‘contribute to the creation of its outputs’ (Harrison 1994: 30). Section I.10.1 gives a insight in the products Bralima is selling, and what kind of input is necessary to produce the products. Since the environment of Bralima is volatile and Kinshasa’s infrastructure is not in a good shape, it is also interesting in the manners Bralima is transporting the products to its customers. This is discussed in section I.10.2. The remainder of this thesis will not discuss the distribution, however this section is justified because it gives another interesting view on the difficulties of doing business in Congo.
I.10.1. Bralima’s Products
Bralima produces a wide variety of beers and other beverages, including e.g. Primus, Mützig (premium beer), Turbo King (beer with caramel), Guinness, alcohol-free Maltina and many soft drinks, which are bottled under license for the Coca-Cola Company. The total sales of beer in Kinshasa was 1,235 hectolitres in the year 2004. The market can be divided in the market for clear beers and the market for dark beers. The market for clear beers is 88% of the total market, the dark beers the remaining 12% (Bralima three-year plan 2005).
The input for the products exists out of two different components (see figure I.2). Firstly, external suppliers deliver the necessary ingredients for the production of the beers and soft drinks.
In order to produce the beer, Bralima needs the raw materials water, malt, rice, sugar, hop, and yeast. All the materials are tested in Bralima’s laboratory before used. For the production of the soft-drinks Bralima only adds water to the delivered syrup of the Coca-Cola company. Secondly, Bralima operates according to a system called ‘plein pour vide’ (translation: full for empty). As discussed, this means that when a customer wants to purchase a bottle of beer, this customer has to hand in a empty bottle of the same brand of beer. Besides the input through recycling of empty bottles, the bottle factory can produce new bottles when necessary. The combination of these two inputs guarantees for Bralima the production. Besides these two main components, other suppliers deliver packaging materials (e.g. labels), and maintenance products.
I.10.2. Distribution in Kinshasa
Distribution of Bralima in Kinshasa is done by two different distribution methods: ‘Service Rendu Domicile’ (SRD) and ‘Service Rendu Grossiste’ (SRG)11. SRD is the direct sales method of distribution of Bralima products to small customers. Small customers exist of single bars or small depots in Kinshasa. SRG is the distribution method for wholesalers, who are reselling the products to other small local bars or other customers.
For SRD every morning chauffeurs load their trucks with products to visit their clients and check if they have any demands. Every chauffeur has his own route with clients that he visits every day. When a customer wants to purchase Bralima products they show this by putting the empty products outside. The chauffeur and his carriers sell the products and retrieve the empty crates and bottles. Wholesalers order the products in larger quantities and this is done by telephone or the clients come to the brewery to order and pay the demand. Trucks of Bralima or trucks of the client transport the products to the wholesaler. When the payment is made this transportation normally does not take more than 24 hours. It is worth mentioning that the distribution is extremely important in a city where most people cannot move easily. It is vital that the products are brought to the people in order to be able selling the beers and soft drinks.
I.11. Summary
This introduction portrayed Bralima, a operational company of Heineken, that is doing business in the volatile environment of the Democratic Republic of Congo. It introduced the subject of this thesis, a analysis of the functionality of the western approach ISP in the Democratic Republic of Congo. The rationale for this subject was based on the reality that the managers of Bralima are Western managers or Congolese managers with Western education. Some authors (e.g. Blunt and Jones 1997, Thomas 2002, Jackson 2004), stated that Western managers should be careful when applying Western techniques and approaches in a volatile environment and the specific culture of African countries. However, Jackson (2004) believes that these Western principles should not be rejected for the African situation, but should be put in place in their cultural context. The
remainder of the introduction described the company Bralima according to the model of Harrison (1994).
Bralima is producing beer and soft-drinks. The production process start with the empty bottles that are retrieved with its customers. Bralima operates according to a so-called ‘plein- pour-vide’ (translation: full for empty) system. This means that when customers wants to purchase a Bralima product, this customer have to hand in a exact empty bottle. The empty bottles are stored in a warehouse for empty products and is transferred to the packaging process when necessary. During this process the bottles are cleaned and filled with beer or soft-drinks from the brewery, and finished with labels. The finished products are stored in the warehouse for ready products until Bralima’s distribution delivers the products to customers.
Bralima is a Heineken company and is placed in the Sub-Saharan department of Heineken. Bralima is divided into a production department, a marketing department, a finance department, and a human resources department. The IT department is part of the finance department. The strategy of Bralima is based on increasing its market share in the DRC, and therefore increasing its sales volume.
The environment of Bralima is volatile. Congo has been in civil war till 2003. Although it is relatively stable now, the future is still unpredictable. In Congo many different cultural groups exist. These cultural groups are different in history and language what potentially causes troubles for companies that doing business in this vast country. The technology in Congo in general is not very well developed. Bralima is troubled by frequent power black outs and sometimes by a lack of fresh water to produce beer and soft drinks.
This chapter provided a introduction of Bralima and its environment. The next chapter portrays the specific problem that forms the basis of the subject of this thesis. In addition, it explores the objective and research strategy of this thesis. Many concepts introduced in this chapter will be issues in the remainder of this thesis. Especially the culture of Congo is discussed in more detail in chapter III.
I I . P r o b l e m D e f i n i t i o n
‘One should be careful when applying Western approaches and techniques in countries in Africa’.
Jackson (2004: 13)
II.1. Introduction
The introduction portrayed the volatile environment where Bralima is doing business with help from an example. Besides that, it explored the relevant characteristics of Bralima according to the model of Harrison (1994). The most important subject of the introduction was the explanation that a Western approach should be put in the cultural context of the country where it is applied (e.g. Blunt and Jones 1997, Thomas 2002, Jackson 2004). That will be the focus of this thesis.
The rationale for this point of view in this thesis was based on two important factors: the unstable environment of Bralima, and the fact that managers with a Western background making the decisions in Bralima. As discussed, the analysis of the Western approach information strategy planning (ISP) is based on a specific IT related problem in Bralima. The ISP methodology (as
specific IT problem of Bralima as expressed by its (Western) managers (see section II.2) on which the ISP is tested in Congo. It forms the input of the ISP for Bralima and the justification of the cultural focus of ISP in this research. The second section explores the objective of this research (see section II.3). The third section investigates the research strategy to achieve the objective of this thesis (see section II.4).
II.2. Background
This section defines the IT related problem of Bralima which forms the basis for the analysis of ISP in Congo. This section forms the input of the information strategy planning for Bralima in the DRC (the ISP itself is analysed in chapter IV). Moreover, this section justifies the cultural focus of ISP in this thesis. To explore the IT related problem, first the current problem situation is described in short, according to the people who experience problems in their daily activities (see section II.2.1). The next step analyses the problem associated with the current situation (see section II.2.2). In the third step the main problems are explored (see section II.2.3). Sections II.2.4 and II.2.5 investigate the different aspects of the current situation and provides the justification of the linkage of ISP with the Congolese culture.
II.2.1. Current Situation
Marc Ortolo (consultant IT department) and Sander Molkenboer (Kinshasa Brewery Manager) expressed the problem that the production department momentarily does not have enough control over the process of packaging and warehousing. For reference have another look at figure I.2 which portrays the current situation. The processes in the warehouses and the packaging (indicated with the thick blue outline) are momentarily dealing with a perceived lack of information supply. They believe that these phases of the production process are not optimised due to two reasons. Firstly, because ISHA12 (the financial software package introduced in section I.6) is not sufficient as an information system for the warehouse and packaging processes, and secondly because Heineken demands other solutions instead of ISHA.
In the warehouse for empty products, the empty crates and bottles from the SRD and SRG distribution13 (explained in section I.10.2) are registered. When the empty products enter the brewery premises, people give the input in ISHA which products and how many products have entered Bralima. At the time the products leave the warehouse for ready products, the numbers are put in ISHA. The ready products leave the warehouse at the time a chauffeur loads the products on his truck. Responsible managers believe that the process between the unloading of the trucks at the entrance and the loading of the trucks at the exit, is not controlled optimally. This because there is barely information of what happens in between (the difficulties that arise because of the insufficient information are explored in chapter 4). The production department and the IT department of Bralima would like to have more control than is obtained in the current situation.
This increased control is needed from the phase the empty products enter Bralima, till the time the ready products are handed over to the chauffeurs and registered in ISHA. ISHA does not function satisfactory as a information system for the warehouses and the packaging process: the information does not cover all processes and is not real-time available.
Thus, ISHA is currently not supporting the production processes adequately. From strategic level at Heineken headquarters, it has been decided that all OpCos should introduce the ERP package SAP to cover these processes. This means that the development of ISHA is not longer maintained: it is not useful to invest in ISHA to develop it to a more integrated solution, since this would be too expensive. However, SAP is too expensive to introduce at Bralima as well. Because of that there exists a demand for a cheaper solution.
II.2.2. Problem Diagnosis
This section portrays the diagnosis of the problem expressed in the current situation. De Leeuw (2002) defines the diagnosis as ‘the process of formulating the expressed problem to a real organizational problem’. He states that three different types of expressed problems exist that causes the difference between the current and the desired situation: ‘perception problems’, ‘goal problems’, or ‘real problems’. A simple explanation of these different concepts is provided when looking at the manner to solve the problems. When somebody has a perception problem it is possible to solve the problem by changing the perception, goal problems can be solved by
