middle managers moulding international strategy

long range planning

Long Range Planning 37 (2004) 51–66 www.lrpjournal.com

Middle Managers MouldingInternational StrategyAn Irish Start-up in Jamaican Telecoms

Inger Boyett and Graeme Currie

This is a story of how a group of middle managers moved beyond just implementingtheir firm’s tightly prescribed strategy for developing an international venture to thepoint where it could be argued that they failed to accomplish the four clear strategicobjectives set by the firm’s executive management. Instead, the authors suggest, theirsuccess was in collectively orchestrating an emergent strategy1 which provided theexecutive with a better, more profitable and durable embodiment of their strategicvision.

Operating between the parent firm’s original strategic intent and the political andeconomic realities of the host country environment, their strategic influence is worthyof close examination. They can be divided into two distinctive groups—parent countrynationals and host-country nationals—and the extent to which they co-operate with orobstruct each other will have a significant effect on the success of the enterprise.2 Themiddle management in this case example, an Irish company launching a mobiletelecommunications network in Jamaica, is drawn from both groups. This articleinvestigates the apparent autonomy from executive control afforded these particularmiddle managers to identify the contingent factors that appear to allow, or constrain,their positive transmutation of the original strategic objectives. The key questionsaddressed are first, how the two groups, both individually and collectively, played outtheir roles in shifting strategy, and second, once these contextual dynamics have beenidentified, how other executive management groups can learn from this Irish/Jamaicanexperience considering similar international ventures. The authors’ response highlightsthose elements of strategy design, organisational structure and human resourcemanagement that they believe are critical in maximising the strategic contribution ofmiddle managers to international ventures, and hence providing a better chance ofsuccess.�c 2003 Elsevier Ltd. All rights reserved.

0024-6301/$ - see front matter �c 2003 Elsevier Ltd. All rights reserved.doi:10.1016/j.lrp.2003.11.009

Figure 1. Typology of middle manager influence (from Floyd and Woolridge, 1992)

IntroductionOn embarking on an international venture, organisations are encouraged to enact a ‘trans-nationalstrategy’ to address potential tensions between host country demands and pre-existing organis-ational competence.3 This is a relatively broad and emergent strategy that is simultaneously sensi-tive to host country environments and the need for global efficiency. It is claimed that an organis-ation which adopts a trans-national strategy will operate with combination of location-bound andnon-location-bound advantages that will enhance performance.4 However, its advocates fail toidentify who might be the key players in enacting such trans-national strategies. Supported by aliterature that argues middle managers can make an important contribution to strategy beyondmerely implementing the wishes of executive managers,5 we suggest that middle managementlocated in the host country—both staff from the originating company and those hired locally—would seem a contender for the role of ‘key players’ and that their strategic influence is worthyof further examination.

Hence, this article examines the case of an Irish company launching a mobile telecommuni-cations network in Jamaica to analyse specifically how middle managers contribute to strategy ininternational ventures. It examines the contribution to the development of strategy of two distinctgroups of middle managers located in the host country—parent-country nationals (PCNs) andhost-country nationals (HCNs)—and outlines lessons for the effective management of middlemanagers for a successful trans-national strategy

… middle management should actively participate in the ‘thinking’ as

well as the ‘doing’ of strategy

Conceptual frameworkThe importance of the contribution made by middle managers to strategy is increasingly recog-nised—it is even posited that ‘middle managers are the only “men” in an organization who arein a position to judge whether [strategic issues] are being considered in the proper context’.6 Insupport of Bower, Burgelman points to the crucial role of middle managers in supporting initiativesfrom operating levels, combining these with a firm’s strengths and conceptualising new strategies.7

In considering the contribution of middle managers to strategy, this article draws upon the frame-work for middle manager involvement in strategy developed by Floyd and Wooldridge, who arguethat middle management should actively participate in the ‘thinking’ as well as the ‘doing’ ofstrategy. In support of their argument, they put forward a framework which, by outlining theupward and downward influence of middle managers in the strategic change process, allows fora consideration of this enhanced role (see Figure 1).

Applying Floyd and Wooldridge’s framework to the context of an international venture suggeststhat the ability of middle managers to make an enhanced contribution to strategy is dependentupon their ability to span the boundary between the organisation and the environment. Theysuggest that middle managers’ potential contributions to strategy are far beyond merely

Middle Managers Moulding International Strategy52

implementing the plans determined by executive management. They highlight the fact that middlemanagers synthesise information about the environment upward to executive management, whocan then process it in a way convergent with their strategic intentions. In doing so, middle man-agers are likely to infuse it with their interpretation, which may then lead them to championalternatives which modify executive management’s original strategic intentions in the light of actualenvironmental realities.

The geographical distance between where the originating corporate headquarters is based andwhere the international venture is launched may be great, and there may also be significant culturaldifferences between the parent and host countries. In this situation middle managers can fulfil animportant role as knowledge carriers about the endeavour’s host environment, and are conse-quently able to shape strategy. The problem that executive management face is ensuring thatmiddle managers act as an effective conduit for knowledge, whilst controlling their strategic contri-bution to ensure convergence with executive management’s strategic intentions.

Floyd and Wooldridge argue that the capacity of middle managers to span theorganisation/environment interface is influenced by their functional role: for example, middlemanagers in marketing are better positioned than inherently internally focussed operations man-agers. In an international venture this may be further complicated because one cadre of middlemanagers are drawn from the country in which corporate headquarters is located (PCNs) andanother from the country in which the international venture is launched (HCNs). PCNs, beingmost familiar with executive management’s strategic intentions, act as the ‘trusted person on site’,so that executive managers can exert control in the host country over the international venture.8

In contrast, HCNs are most familiar with the host country environment but not necessarily theexecutive management’s strategic intentions.9 If middle managers are to make an enhanced contri-bution to strategy, it is likely that PCN and HCN middle managers will need to interact closelyso that knowledge about executive management’s strategic intentions and the environment of thehost country is combined.

Will their roles complement each other, to give a performance-

enhancing combination of location- and non-location-bound

advantages?

As a starting point to examine this, we have used Floyd and Wooldridge’s framework to assessthe contribution of PCN and HCN middle managers to international strategy, and then considerhow their respective roles influence their interaction. Will their roles complement each other,combining the familiarity of PCN middle managers with the executive’s strategic intentions withthe HCN middle managers’ knowledge of the host environment, to give the international venturea performance-enhancing combination of location- and non-location-bound advantages? Or, con-versely, will a lack of integration between these two groups damage the potential for organisationalsuccess in a foreign venture?

MethodologyThe research focus of this article is a longitudinal case study that documents the start-up and firstand second years’ operation of Digicel (a privately owned mobile phone company with its headoffice in Ireland) in the post-deregulated telecommunications market of Jamaica—one of the manyentreprenuerial ventures of Denis O’Brien.10 Paauwe and Dewe note that studies of internationalventures tend to be survey-based and produce a ‘snapshot’ of organizational structures, that riskunderplaying, for example, the importance of the management of process. Maintaining that thereis currently no simple recipe for an organisation to develop the necessary trans-national approach

Long Range Planning, vol 37 2004 53

to mediate the multiple demands of efficiency, local responsiveness and organisational learning,they argue for more longitudinal case study research, because management interventions arestrongly dependent upon the organisational characteristics of the international venture and thenature of the environment in which it operates. They also suggest a case study approach is mostlikely to produce the type of rich data that will illuminate and complement survey-based approach-es.11

The main source of case data utilised in this article is a series of semi-structured interviewscarried out at the time of the company launch and during the first and second years of thecompany’s life. In total, forty-five semi-structured interviews were undertaken with twenty-nineindividuals (see Figure 2).

Having carried out access negotiations and generalised discussions with the Chairman of Digiceland his Personal Assistant, formal interviews began in April 2001 with the three Dublin-basedexecutive directors (including the Chairman). These individuals were the key players in the acqui-sition of the Jamaican licence and the formulation of the strategic vision driving the Digicel ven-ture. These interviews aimed to gather data about the company’s strategic intent, context andalso to identify appropriate questions for the subsequent hour-long semi-structured interviewsundertaken in early May 2001 at the company’s offices in Kingston, Jamaica. This initial patternof first interviewing the executive managers in Dublin to inform the forthcoming round of middlemanager interviews was repeated throughout the project timespan. All interviews were taped, tran-scribed and checked for factual accuracy, and then discussed and coded manually by the authors.

Interview data was supplemented by observation in which hand-written notes were taken. In

Figure 2. Digicel project interview schedule


particular, one of the researchers spent time socialising with the Irish middle managers during thetwo periods of two weeks spent gathering data on the island in May 2001 and April 2002. Thiswas a particularly important source of data when executive managers were visiting the island, asone of the main ways in which the Irish middle managers influenced strategy was through informalconversation with the directors in the social arena. This was described as ‘the way the Irish runthings’ [Irish middle manager]. Influence was also exerted by the Irish middle managers on theirfairly regular visits to the Dublin office, where they had direct access to the executive directors.(Rather than observation, the researchers had to rely on the middle managers’ and executives’accounts of these meetings given during the interview process.) It should be noted that Jamaicanmiddle managers rarely enjoyed the same access to executives.

the Irish middle managers influenced strategy … through informal

conversation with the directors in the social arena

Finally, where relevant, secondary documentation was collected, providing valuable backgrounddata about the Jamaican economic and business context. In addition the company made availableposition papers and memoranda detailing the developing strategic vision before start-up, although,surprisingly considering the geographic distance and the need for strategy communication betweenthe executive developers and the organisation-based implementers, there was little formal post-launch planning documentation available either in Dublin or Jamaica. This was a further indicationthat meaningful communication within the Digicel organisation was mainly verbal.

Case contextIn the spring of 2000, Digicel acquired a mobile phone licence in Jamaica for US$47.5m. After ayear building the mobile phone network and staffing their new company, Digicel Jamaica begantrading in April 2001 with a projected first year customer base of 100,000 subscribers. After onlyone month they had in excess of 30,000 customers and within two months had exceeded theirfirst year target. By their first year-end they were able to boast more than 365,000 customers. ByMay 2002, Digicel had become a phenomenally successful enterprise, having almost overtaken theincumbent provider (Cable & Wireless) in mobile phone subscriber share. By the end of 2002they had invested US$400m in Jamaica; built a high technology mobile phone network with fullcoverage across the island; established a call centre and headquarters in Kingston and a subsidiaryoffice in Montego Bay; directly employed over 390 people (and were responsible for over a further1000 jobs) and were managing an extensive network of independent dealers.

The management structure consists of four executives, all Irish nationals—three Dublin basedwhilst the fourth—the CEO—is based in Jamaica although spending a considerable proportion ofhis time off-island. To varying degrees, all the Dublin based executives paid visits to Jamaica asissues surfaced, including the Chairman himself, Denis O’Brien. All of Digicel’s middle managersare based in Jamaica, and are drawn both from short-term contract Irish nationals and permanentcontract Jamaican locals. Numbers varied, but there were approximately twenty-five employeesduring the first two years of Digicel operation who could be described as a middle management.12

There were four main strategic objectives of the Dublin-based executive managers in launchingand developing the international venture:

1 To establish and develop rapidly a highly profitable mobile phone company in Jamaica byconcentrating on providing a better quality of service than that previously available;

2 To float and sell-on the company as soon as its profitability levels were significantly attractive,creating considerable gain for the start-up investors (mainly the Chairman and executivemanagers);


3 To construct a flat and flexible organization that mirrored the high technology and innovativecompanies of North American and European experience; and

4 To ‘Jamaicanise’ the company through devolving management responsibility from the Irishmiddle management to locally recruited middle managers, allowing the Irish to be withdrawnover a fairly short time frame.

It is against these four objectives that we now consider the contribution of the PCN and HCNmiddle managers to Digicel’s strategy, using a modified version of Floyd and Wooldridge’s frame-work that takes on board the synergistic relationship between the divergent and integrative levelsof their framework.

Empirical findingsFigure 3 provides a summary, relative to the chosen framework, of the influence that both PCNand HCN middle managers have had on the original strategic objectives of the Digicel executive.The examples are then developed using supporting evidence drawn from the interview data.

both (sets of) middle managers persuaded Dublin that building

success involved more than a superior product at an acceptable price

Strategic Objective One: Concentrating on product quality for rapid growthWhile executive managers had initially planned to build the international venture in Jamaica bycompeting with the incumbent through product quality and brand, both Jamaican and Irish middlemanagers persuaded Dublin-based executives that building a successful business in Jamaicainvolved more than providing a superior product at a market acceptable price. A simple productfocus might have facilitated an easier pan-Caribbean rollout and quick disengagement throughsell-off, but the information reaching Dublin was that ‘Jamaica is a small business community,everyone knows everyone and if you want to succeed you have to get involved. Historically too manyforeign investors have come in to Jamaica, taken what they could get and then run off. If Digicel areto beat the likes of Cable & Wireless, who have been here for a hundred years, it has to be seen asa key player in the country and not just in areas that are going to be revenue earners’ [Jamaicanmiddle manager]. This change of strategy focus can be seen in the public relations (as opposedto product advertising) activity of the company both pre- and post-launch. Whilst there werenewspaper advertisements and coverage of events (such as the world’s largest cargo plane bringingin network equipment) the Irish middle managers in particular suggested that corporate responsi-bility in the form of community involvement should provide the thrust of Digicel’s promotion inJamaica. Their sponsorship took many forms including support for ‘Carnival’—one of the greatJamaican annual events—as well as for hospices, orphanages, mental institutions and schools. Inaddition the Irish middle managers were widely reported as interacting with the island’s charitable,political and business communities, and encouraged Dublin-based executive directors to comeover and support them in this.

It is also interesting that over the research period the product bundle on which Digicel intendedto build its Jamaican enterprise began to be modified. Initially the only product being developedwas a mobile telephone network in Jamaica: however Digicel recently entered bidding for andacquired a landline licence. The Irish middle managers had reported back to the executives that,‘people over here see mobile phone companies as ones that can set up quickly and go away again.Although it’s not true, they think there is a lot less infrastructure. Getting into landline provisionmakes the company seem more permanent’ [Irish middle manager].


Figure 3. The strategic influence of Digicel’s middle managers

‘Nearly everything you need to do can be done in a number of ways.’

Strategic Objective 2: Selling up and moving onAnother element of this initial strategy was the requirement for a short time frame between launchand flotation, but the Irish middle managers reported back to executives that the speed of operationwhich might be expected in a European company was unlikely to be achieved in a Jamaican one.‘Nearly everything you need to do can be done in a number of ways. Jamaicans seem to need lots oftime to discuss all the different possible solutions in search of the best one, before they actually get


round to doing anything. I don’t want to discuss it for two weeks and get maybe the 100% rightsolution, I want to have the 95% solution, but I want to have it now’ [Irish middle manager]. Onesuggestion for the lack of work progress has been that, ‘it’s part of the Jamaican nature not toadmit that there is something that they don’t know. When you ask them, “Can you do it?” They say,“No problem I can do it”. Then they do something which isn’t right or more likely they just do nothingbecause they are not sure what to do’ [Irish middle manager].

Most of the executive management was prepared to modify and even alter their strategies insome cases to take account of this. However, the Chairman would not accept so obvious a slowingof his plans, and it was left to the Irish middle managers to find ways to facilitate his time scalestrategies. ‘We would say to the Chairman, “This is Jamaica not Ireland they just can’t move thatfast” and he would say “Well then change Jamaica!”’ [Irish middle manager]. Communication,linked to careful monitoring, became the crux of the Irish middle management’s tactics forimplementation ‘I think that you need to make sure that everybody fully understands why we aregoing to do this, understands the importance of it and when it needs to be done by. You have to makesure that they understand at the beginning, but also keep giving the message again and again through-out the process to make sure the job gets done the way it was agreed and within the timeframe thatwas agreed’ [Irish middle manager].

Further, one of the Irish middle managers was apparently responsible for modifying the com-pany’s distribution strategy. He developed long-term dealership alliances with some independentlyowned distribution outlets (not a originally planned strategic intent) in return for the outletsselling the Digicel product exclusively. This remained hidden from executive management’s view,in large part because they were focusing upon other international ventures and ‘left us to our owndevices in Jamaica’ [Irish middle manager]. With such alliance agreements, middle managementon the ground, on the face of it, has committed the Digicel executive to long-term market relation-ships, a strategy at odds with their intention to disengage from Jamaica swiftly.

Strategic Objective Three: A flat and flexible organisationThe Jamaican middle managers, arguing the need for a more hierarchical structure to be introducedin the company, were joined over time by their Irish colleagues, who, contrary to their naturaldisposition and experience-led championing of ‘flat and flexible’, were clearly being influenced bythe environment in which they found themselves. However, each group’s rationale for change wasdifferent: first, the Jamaican middle managers complained that Jamaican culture requires stricthierarchical activity, so the company needs to mirror this rather than something that fits well inEurope. Second, the Irish middle managers reported to executive management that the Jamaicanworkforce was not yet sufficiently developed to take on board the responsibilities of devolvedauthority or individual empowerment.

An interesting example of this divergence is that it was the Irish middle managers who claimedresponsibility for instigating the renaming of Digicel’s Chief Operations Officer—becoming theChief Executive Officer with no change in role, so that he could be afforded his rightful positionin the Kingston business community, seemingly denied to him whilst he sported what was, in theJamaican managers’ terms, a ‘middle management’ label.

But status was not the only argument for a move from a flatter organisation. Jamaica’s culturalhistory has offered many examples of perceived business and government corruption, and,Jamaican middle managers suggested, these could only be avoided by maintaining the strict rulesof separateness afforded by a steep hierarchy. They emphasised that they should not only remaindistant from employees that they managed, but also from their Irish middle manager counter-parts—in fact all groups should remain separate. ‘I am very aware of the fact that being too friendlywith people could cause me to compromise my position. I don’t want people to think I’m close to thisperson or that person, so I deliberately don’t socialise with my subordinates or superiors. I just thinkit’s important to retain a distance’. [Jamaican middle manager]


But it was the elusive ability to motivate the workforce that drove

Irish middle managers towards more hierarchical structure

The second argument espoused for the need to develop the organisation with clear hierarchicalrole responsibility and authority was based on the Jamaican workforce not yet being sufficientlyadvanced to embrace the devolution of responsibility inherent in the flattened, flexible Europeanorganisation. ‘Our culture in Jamaica from a professional standpoint is not a managerial type culture.We are not used to making decisions. We are used to saying this is the problem, you are my manager,you need to fix it for me and come back and tell me when you’ve solved it’ [Jamaican middle manager].

But it was the elusive ability to motivate the workforce that seemed to drive the Irish middlemanagers towards the greater level of supervision and monitoring afforded by the introductionof a more hierarchical structure at Digicel. In Jamaica a common expression is ‘soon come’, adescription for foreigners’ perception of the slow pace of activity of the native Jamaicans. ‘Wewere in a way completely naı̈ve to think that we could just come in, the 12 of us, and say, right lads,it’s a launch situation. There is no coming in and going home, you come in and you do the work ‘tilit’s done and then you can go home’ [Irish middle manager].

As the company grew many of the Irish group recognised that they were in fact becoming moreauthoritarian and dependant on hierarchical control in order to get business deadlines met. ‘Theywant to talk and talk and suddenly you just have to say that’s it—do it because I say so’ [Irishmiddle manager].

By the spring of 2002, the Irish middle managers were reporting the same reasons as had pre-viously been proffered by their Jamaican counterparts for the need to formalise role descriptionsin terms of authority and responsibility, their position within the organisational hierarchy andtheir determination on a matching hierarchy of rewards. Within six months of start-up, theJamaican Human Resource Manager had instituted three iterations of a local organisational struc-ture document, and each iteration became more hierarchical and prescriptive in detailing directline responsibilities. For example job titles changed: Jamaican middle managers who started as‘Project Leader’ or ‘Manager’ became ‘Director’ or ‘Assistant Director’. ‘This is similar to the waythat Cable and Wireless [the ex-monopoly provider of telecommunications in Jamaica] organisesitself’ [Jamaican middle manager]. One Jamaican middle manager, reflecting on his position inthe hierarchy, describes how, ‘I don’t do everything like the Irish managers do. I’ve got a secretary whoprotects me from all and sundry wandering into my office all the time’ [Jamaican middle manager].Interestingly, the Irish middle managers are left off most iterations of the chart because ‘Theydon’t really fit into the chart. They are specialists … sent out here to do a job. The Irish don’t reallyhave a line manager here, except I suppose .. [the CEO] and shareholders back in Dublin’ [Jamaicanmiddle manager].

... given executive management’s attention upon other ventures,

changes made by middle managers in Jamaica escaped censure.

However, as the Jamaicanisation element of the strategy became more difficult to pursue, theIrish middle managers were added to the chart with hierarchies of local middle managers and firstline managers below them. In general the most popular Irish middle manager title recorded atthis stage was ‘Manager’. The Jamaican middle managers on the other hand were being describedin the majority of cases as ‘Director’, even where they had members of the Irish middle manage-ment contingent mapped as their direct line manager. Although this may appear inconsistent, itlinks to the subject of the next section of this article—the executive management’s intention that


the organization ‘Jamaicanise’—where it can be argued that the organization did indeed become‘Jamaicanised’ but in a different way to that intended by executive management back in Dublin.Again, given the Dublin-based executive management’s attention upon other international ven-tures, changes made by middle managers in Jamaica escaped their censure.

Strategic Objective 4: JamaicanisationDuring the first set of interviews, the Irish middle managers reported having stayed very close tothe hotel in which many of them were based, mainly because of their anxiety about personal safetyin one of the world’s most dangerous cities.13 But, by the second series of interviews, they weremore confident in moving around the island. For example, they would now spend their weekendsat various locations and venues ‘on island’ rather than ‘Escaping to Miami. It’s close and you canquickly regain a bit of freedom to behave like you would back home. Not acting like a prisoner in theconfines of your apartment or the office.’ [Irish middle manager] This change may seem relativelyunimportant except that it meant the Irish middle managers gained opportunities to mix sociallywith Jamaicans outside Digicel. Perhaps inevitably they all reported having gained a deeper under-standing of the Jamaican culture through these relationships. The Irish middle managers also beganto be asked to join to local charity committees or extra-curricular business-linked groupings. Theirexperiences in these environments also increased the group’s appreciation of Jamaican culturalnorms. In other geographical contexts this understanding might have been developed in the workplace and in this case in particular through interaction with Digicel’s Jamaican middle managersat work, as well as socially. On the one hand, Jamaica is a small community conducive to easyinteraction by ‘similar’ individuals, but, on the other, as previously highlighted, it is heavily strati-fied society determined by financial measures. As a result Jamaican middle managers saw the Irishmiddle managers as being part of an elite to which they might aspire, but didn’t yet belong. Hence,they were guarded with Irish middle managers and preferred not to interact with them socially[reported consistently by both groupings]. Nevertheless, through wider contact with Jamaicansoutside Digicel, the Irish middle managers increased their exposure to the host country environ-ment. One Irish middle manager suggested this process could have been accelerated by an orien-tation or induction about the likely cultural issues prior to going to Jamaica: ‘If I had had a betterunderstanding of what to expect I am sure it would have been better. Half my mind for the first sixmonths was on the violence, the slowness of everything and how to cope’ [Irish middle manager].

On first arrival in Kingston the researchers found a group of Irish middle managers with a clearbelief that they would be moving to other islands within a matter of months to repeat the start-up activity, leaving Jamaican counterparts behind to continue Digicel’s operational growth. At thisstage the Jamaican middle managers did not seem so confident. Because of Jamaica’s poor econ-omic situation, ‘People strive for a job outside Jamaica and the next best thing is a job with a foreigncompany here. Experience has shown us that it is only the foreign companies that survive’ and‘Jamaicans only value foreign products and services. They know Jamaican stuff will fall apart daysafter buying it or the service will be poor. If it ever arrives at all!’ [Jamaican middle manager] As aresult, the Jamaican middle managers were understandably reluctant for Digicel to disengage fromJamaica. By the second interviews the Irish middle managers shared their sentiment, and wereciting a further reason for their decision, that of reservations about the capabilities of Jamaicanmanagement. ‘If we took the Irish management out of here right now, this thing would go down thepan, that’s a fact’ [Irish middle manager].

Executive managers were also voicing similar sentiments by this stage in the company’s life, ‘Idon’t think there’ll ever be a time when we can all go home and Digicel will be left without an Irishor a European management’ [Executive director]. Perhaps not surprisingly by the summer of 2002,while some of Irish middle managers had moved on, a significant cohort were involved in negoti-ations for contract extensions with Dublin—extensions which were now being prepared on theassumption that they would be based in Jamaica. A different strategy of pan-Caribbean develop-ment seemed to be emerging which retained Jamaica as the hub of operations, rather than thefirst of a necklace of start-ups and sell-offs strung out across the region.


The Irish had been surprised by the lack of Jamaican enthusiasm for

an entrepreneurial start-up with its inherent excitement and risk.

The Irish middle managers had been surprised by the seeming lack of their Jamaican counter-parts’ enthusiasm and motivation for working in an entrepreneurial start-up with all its inherentexcitement and risk. The whole question of Digicel’s aim that the organisational structure emulatethe European flat and flexible organisation, while simultaneously becoming ‘Jamaicanised’, couldhave become a real issue for the company’s strategists, but instead changes and modifications tothe initial concepts are beginning to become very apparent.

However, they hadn’t totally given up on the executive director’s vision for a dynamic, flexibleand ‘Jamaicanised’—as well as profitable—organisation, even if the vision looked now like it wouldtake longer to realise than they had expected. And, even if so far only being reported by a minority,the predicted organisational learning is starting to take place amongst the Jamaican middle man-agement; ‘I’m trusted by the Chief Executive Officer to do things. I now cascade my trust in peopledown and that is so much harder than just retreating into the hierarchy and ordering them about.But when it works it is so much more effective.’ [Jamaican middle manager]. The Irish middlemanagers have also begun to modify the company’s recruitment strategy on the basis that ‘youcan spot the difference between the person who’s worked and lived in Jamaica all their life and aJamaican who has worked abroad’ [Irish middle manager]. The new strategy, rather than restrictingtheir recruitment search to Jamaican locals, is now actively seeking out potential applicantsamongst Jamaican nationals living abroad. They have identified Jamaicans living and working inthe USA, in particular, as having become used to the culture of working required by executivedirectors in Dublin. Accompanying this change in recruitment and selection strategy, they havealso modified reward systems. Ironically in doing so, they were Jamaicanising the organization:‘In Jamaica salaries must reflect the cost of living, which is relatively high, rather than the worth ofthat person in the labour market. Also productivity is lower than that of the Irish or US labourmarkets. This all means that the performance related pay system the investors want won’t work here.We can’t recruit or retain the right people. It has been an uphill battle to get them [executives] tounderstand that, but I think we are just about there’ [Irish middle manager].

Accompanying a change in recruitment and selection strategy, they

have also modified reward systems

As a result, over time, the organization in Jamaica has operated different incentive schemes forthe Irish and Jamaican middle managers. On top of a basic salary the Irish middle managersenjoy share options and hence their overall reward potential is significantly linked to companyperformance. In addition their package covers the basic ex-patriot norms, i.e. housing, healthcare,insurance, travel home, etc. The company also provided them with a car, but notably one of abulk purchase made by Digicel of second-hand Japanese cars dumped in Jamaica after being ref-used entry into the US. Meanwhile, the Jamaican middle managers’ salaries were made up whollyof a basic salary with no performance-related element, and the company provided them withindividually-purchased top-of-the-range cars to cater for their greater concern with status.

Three of the Jamaican middle managers were exposed to parent company culture by visitinghead office in Dublin, and this provided them with a significant opportunity to influence executivemanagement’s conception of strategy. Prior to this, they had had to rely on the Irish middlemanagers acting as a conduit to the executive for their views, but now ‘we actually got the chanceto sit down and talk to them to explain about Jamaica and its distinctiveness. To say, for example,


“yes I agree with you that people be empowered but it’s difficult in Jamaica because they are not readyyet”’ [Jamaican middle manager]. While atypical of the Jamaican middle managers, two of thethree claimed to ‘enjoy the responsibility and excitement of having something to do and just get onwith it with no-one hanging over your shoulder’ [Jamaican middle manager]. On their return toJamaica, the two continued their enhanced relationship with the executive when the Dublin execu-tives were in Kingston. They were now clearly engaging in the same influencing strategies asobserved in the Irish middle manager group, claiming ‘that’s the way the Irish do business. It’s allabout talking and arguing your point’ [Jamaican middle manager]. By socialising with the executiveaway from the workplace these HCN middle managers built up more effective relationships withtheir Irish counterparts: ‘I can explain clearly to my Irish colleagues how what he wants to do won’twork. We can then sit down and work out an Irish–Jamaican solution to the problem’ [Jamaicanmiddle manager].

DiscussionIt is the unusual situation of the Digicel enterprise as an international start-up in a third Worldeconomy with significant environmental problems that has provided a unique stage on which toexamine Floyd and Wooldridge’s premise that it is middle management’s superior knowledge ofthe operating environment that provides the basis for their influence on company strategy andthat, therefore, their role moves beyond mere implementation. It is also significant that in thiscase example, the middle management under scrutiny comprises two distinct groups—PCNsand HCNs.

their synthesis of information has led them to promote modification

... and to ... propose direct alternatives to the intended strategy.

In this case it is very clear that, during the first two years of the international venture, the Irishmiddle management has had a considerable influence on the strategy formulated by the company’sexecutive. Significantly, the Irish group, being less knowledgeable of the external environment,appear to focus on facilitating and implementing the executives’ intentions by translating thestrategies developed under the influence of a European business environment to the Jamaicancontext. Over time this has changed, and their influence can clearly be discerned to have takenthree forms highlighted by Floyd and Wooldridge. First, their synthesis of information has ledthem to promote modification of the executives’ original intent and second, they have proposeddirect alternatives to the intended strategy. To a large extent these two forms of influence arerelated. For example, Irish middle managers have presented arguments to executive management,in informal settings, that the success of the organization depends upon the perception of the localcommunity that Digicel is going to stay for the long term in Jamaica. They successfully presenteda case that a landline licence be acquired and that Digicel engage much more in the local businessand social communities and support local charitable causes. This is counter to objectives set outby executive managers, but has resulted in a superior presence within the country and communitybecoming a major element of the firm’s strategy, whilst (despite its rapid growth) time frames forthe company’s flotation and sell-off seem to be extending. Similarly, the Irish middle managerswere suggesting that they could not be replaced locally and hence an Irish component would bea continuing requirement of the company. New contracting with this group of employees by theexecutive management reflects the success of this lobbying.

The third of Floyd and Wooldridge’s forms of influence is illustrated by the Irish middle man-agers apparent support for and ‘shielding’ of more ‘radical’ activities within the areas they managethat lie outside executive management’s official expectations. This role, ‘facilitating adaptability’,was one that Floyd and Wooldridge found little evidence for in their study. That middle managers


in our study took up this role could be due to the greater geographical and cultural distance ofan international venture or because executive management were focused upon other businessventures. The result was that the Irish middle managers enjoyed some discretion in Jamaica andwere able to try out local initiatives relatively free from executive management surveillance, suchas the variations to the distribution and reward strategies and to the organizational structure. Inaddition, their growing contextual knowledge has influenced the intention of developing a ‘flatand flexible’ organisation mirroring the cultures and values that would be expected in a innovativeEuropean company, and Digicel seems to have embraced a more authoritarian style of managementwith clear levels of responsibility and authority and (in Jamaican terms) suitably titled andrewarded incumbents.

the Irish middle managers enjoyed discretion in Jamaica (to) try out

local initiatives free from executive management surveillance

Meanwhile, HCN middle managers have for the most part closely reflected the role traditionallyascribed to middle managers—implementing deliberate strategy—a role in which they occasionally‘blocked’ strategic intent. The case highlights that middle managers are not homogenous: unlikethe Irish middle managers, the Jamaicans, constrained by their culture, appeared unwilling and/orunable to respond to executive management’s aspirations that they take responsibility for problemsand act pro-actively.

In considering the organisational context that frames the contribution of the two distinctivecadres of middle managers, our case supports Bartlett and Ghosal’s argument that organisationalstructure and management processes more broadly need to be examined. First, as Floyd and Wool-dridge reported, the most important condition for enhanced middle manager influence upon strat-egy is that middle managers span the boundary between the organisation and its environmentalcontext. Interacting between the organisation and its environment as a role that middle managersfulfil is particularly interesting in the context of international ventures since PCN middle managersin particular are having to bridge the geographical and cultural distance. As Harzing noted, theymust act as a ‘trusted person on site’, so that parent country executive managers can exert controlin the host country. At the same time, as Borg and Harzing found, PCN middle managers areexpected to understand and operate within the political, legal and socio-economic structures ofthe host country, and need to work effectively with people whose value systems, beliefs, customs,manners and ways of conducting business may be greatly different from their own.

It should be noted, however, that PCN familiarity with the environment was a relatively slowlearning process at Digicel, and was not aided by rather poor interpersonal relationships betweenPCN and HCN middle managers. They seemed sceptical of the contribution of each other andthis reinforced their tendency to work in isolation from each other, rather than interacting. ‘Oneminute they are saying it’s great they are here [the Irish] we can learn from them how to build asuccessful business. The next it is, who do they think they are coming to Jamaica and telling us whatto do!’ (Irish middle manager) And, ‘It’s alright for them working all hours God sends, living inhotels with no family responsibilities and then running off for long holidays when they get worn out—its not the same for us.’ (Jamaican middle manager) Not surprisingly, environmental understandingheld by HCN middle managers was not easily transferred to PCN middle managers.

What the outcome might have been (if Irish) executive management

(had not accepted) this venture-based emerging strategy is impossible

to determine.


ConclusionDigicel Jamaica was launched in April 2001, with four clear strategic objectives. But, as this articlehas identified, both their PCN and HCN middle managers have changed, modified and developedthe company’s original plans. What the outcome might have been had the executive managementback in Ireland refused to accept this venture-based emerging strategy is impossible to determine.But it is possible to report that Denis O’Brien’s Caribbean experience has been, and continues tobe, successful beyond his original projections. Digicel Jamaica now has over 600,000 customers,65% of the mobile market share, invested over US$225 million, and developed into the landline,roaming and e-mail markets. They have also, without selling-on the Jamaican operation, begunthe development of other networks in St Lucia, St Vincent, the Grenadines, Aruba, Dominica andGrenada.14 It is difficult to argue with the company’s statement that, ‘Digicel looks set to breakeven more records and continue being the benchmark for success in the telecoms sector.’15

The Digicel experience suggests that middle managements can make a significant contributionto successful strategy for international ventures, not least because they are positioned to bridgecultural and geographical distances. It is therefore important that international strategy architectsconsider a number of critical learning points that can be drawn from this article.

Firstly, that there are distinctive cadres of middle management. There is little research relatingto the role of HCN middle managers in international ventures, yet we would suggest the emergenceof an HCN middle manager cadre that are willing to make a greater contribution to strategy iscrucial. The success of international ventures may in fact be more dependent upon HCN than PCNmiddle managers—in particular, their knowledge of the host country environment is important.16

However, in the Digicel case this knowledge is poorly leveraged. Conversely, the Digicel PCNmiddle managers seem willing to contribute to strategy, but their ability to do so, at least initially,is compromised by unfamiliarity with the environment. An effective communion between the twocadres seems a crucial aspect of the strategic management process in international ventures andprobably the single most effective lever available to executive management attempting to blendthe PCN middle managers’ knowledge of corporate context and HCN middle managers’ knowledgeof the environment.

Second, that if improved interaction within the whole middle management group is desirablethen the executive management’s design for a venture’s organisational structure is crucial. Thegeneral management consensus today, and the Digicel Executive’s preferred option, of an integrat-ing non-hierarchical structure remains ultimately desirable. However, this truism has to be moder-ated by the Digicel experience, which clearly indicates that planned structures should be sufficientlyflexible to allow for possible local requirements.

... to improve interaction (within) the whole middle management

group … a venture’s organisational structure (design) is crucial. … To

allow scope for (them) to contribute to strategy requires that it is not

too detailed in the first instance

But the need for cadre interactivity should resonate beyond mere enhancement of associationopportunities. To allow scope for middle managers to contribute to strategy requires that it is nottoo detailed in the first instance. This is particularly pertinent when addressing strategy linked tothe human resource, for example reward systems. Additionally, to ensure that middle managersexercise discretion in line with expectations of executive management may require managerialintervention through human resource policies and practices. In the case of HCN middle managers,being less familiar with the corporate context, this might involve recruitment of those with experi-ence of working in the parent company’s geographic area or providing exposure to the parent


country’s approach to management. For the PCN middle manager group this could focus onspeeding up their understanding of the host country environment through pre-departure cross-cultural training.

While this article can be viewed as drawing upon one company’s experience of internationalstrategy development to provide practical illustration for executive management wrestling withsimilar problems, its contribution to the academic debate surrounding international business strat-egy is, we believe, equally significant. The authors have elaborated upon the strategic role of middlemanagers in a particularly under-researched context—that of international business ventures—aiming to identify and explain the contingent factors that seem to influence the potential impor-tance of their role. The centrality of both PCNs and HCN middle management in developingtrans-national strategy has been thus emphasised. But there is an urgent need for more longitudinalcase-study based research to assess the extent to which context, structure and process interventionsplay a part in shaping the strategic role of middle managers in international ventures. Conversely,the question of whether the Digicel experience is unique demands a greater level of more survey-based research to assess to what extent our findings may be generalisable across a larger numberof international venture settings. But the story of Digicel certainly stands proof of the extent towhich on-the-ball middle managers can influence an international venture’s strategy as it movesfrom proposal to practice.

But it is possible to report that Denis O’Brien’s Caribbean experience

has been, and continues to be, successful beyond his original

projections.

References1. H. Mintzberg and J. A. Waters, Of strategies deliberate and emergent, Strategic Management Journal 6,

465–499 (1985).2. M. Borg and A. Harzing, Composing an international staff in A. Harzing and J. van Ruysseveldt (eds),

International Human Resource Management, Sage, London (1995).3. C. A. Bartlett and S. Ghosal, Managing Across Borders: The Transnational Solution in Harvard Business

School Press, Boston, MA (1989); C. A. Bartlett and S. Ghosal, What is a global manager?, HarvardBusiness Review September/October, 124–132 (1992).

4. C. A. Bartlett and S. Ghosal (1989)—see reference 2; C. A. Bartlett and S. Ghosal, Transnational Manage-ment: Text, Cases and Readings in Cross-Border Management. Homewood IL: Irwin (1992); A. Harzing(1995)—see reference 1.

5. J. L. Bower, Managing the Resource Allocation Process in Harvard University Press, Cambridge MA (1970);R. A. Burgelman, A process model of internal corporate venturing in a diversified major firm, Adminis-trative Science Quarterly 28, 223–244 (1983a); R. A. Burgelman, Corporate entrepreneurship and strategicmanagement: insights from a process study, Management Science 29, 1349–1364 (1983b); S. Floyd andB. Wooldridge, Middle management involvement in strategy and its association with strategic type: aresearch note, Strategic Management Journal 13, 153–167 (1992); S. Floyd and B. Wooldridge, Dinosaursor dynamos? Recognising middle management’s strategic role, Academy of Management Executive 8(4),47–57 (1994); S. Floyd and B. Wooldridge, Middle management’s strategic influence and organisationalperformance, Journal of Management Studies 34(3), 465–485 (1997); S. Floyd and B. Wooldridge, BuildingStrategy from the Middle: Reconceptualizing Strategy Process in Sage, Thousand Oaks, CA (2000).

6. J. L. Bower, Managing the Resource Allocation Process in Harvard University Press, Cambridge MA(1970)270.

7. R. A. Burgelman, A process model of internal corporate venturing in a diversified major firm, Adminis-trative Science Quarterly 28, 223–244 (1983).


8. A. Harzing, Strategic planning in multinational corporation in A. Harzing and J. van Ruysseveldt (eds),International Human Resource Management, Sage, London (1995).

9. M. Borg and A. Harzing, Composing an international staff in A. Harzing and J. van Ruysseveldt (eds),International Human Resource Management, Sage, London (1995).

10. See: Paul Sweeney The Celtic Tiger: Ireland’s Continuing Economic Miracle, Oaktree Press, Ireland (2000).11. J. Paauwe and P. Dewe, Organizational structure of multinational corporations: theories and models in A.

Harzing and J. van Ruysseveldt (eds), International Human Resource Management, Sage, London (1995).12. V. Smith, Managing in the Corporate Interest: Control and Resistance in an American Bank in University

of California Press, Berkeley CA (1997).13. Kingston has the second biggest per capita murder rate in the world. One of the Irish middle managers

was mugged at knifepoint days after arriving, while another group missed the shooting dead of theirlandlord by minutes.

14. Jackson, S. (2003) Digicel: here to stay, Jamaica Observer March 7th.15. http//www:digiceljamaica.com/about16. J. Bonache and J. Cervino, Global integration without expatriates, Human Resource Management Journal

7(3), 89–100 (1997); A. Edstrom and J. Galbraith, Transfer of managers as a coordination and controlstrategy in multinational organization, Administrative Science Quarterly 22(2), 248–263 (1977); I. Tor-biorn, Staffing for international operations, Human Resource Management Journal 7(3), 42–51 (1997).

BiographiesDr. Inger Boyett lectures in human resource management at Nottingham University Business School and is co-

director of its Centre for Public Leadership and Management. Her main research interests lie in the

management of change and the role of leadership, and she has edited a special edition of the International

Journal of Public Sector Management on these issues, as well as publishing her work in Public Administration,

Entrepreneurship & Regional Development and Long Range Planning. Before becoming an academic she spent

many years as a senior manager in further education. Nottingham University Business School, University of

Nottingham, Jubilee Campus, Wollaton Rd., Nottingham NG8 1BB. E-mail [email protected]

Dr. Graeme Currie is a reader in public sector management at Nottingham University Business School. His

main research interests lie with the role of middle managers in strategic change and knowledge management,

and his work has been published in the Human Relations, Human Resource Management Journal, The

International Journal of Human Resource Management and British Journal of Management. He also leads modules

on strategic management for Ecole Nationale Sante Publique (ENSP) France in connection with an EU-funded

training programme for hospital managers. Prior to becoming an academic he worked in personnel for the

Rover Car Group and as a health authority organisation development manager.


middle managers moulding international strategy

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