TNC.6 UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION The Bata Shoe Company Types of production and transfer of skille by Nicola SWAINSON ‘The views expressed in this document, the selection of facts presented and the opinions stated with regard to those facts are the responsibility of the author and do not necessarily reflect the views of Unesco, Copyright UNESCO, 1978Ie Ile Iq. Ive TABLE OF CONTENTS fa) Historical bac’ground (>) The Bata production process Labour and Training in Bata (a) Managoment Traixing Programmes (>) Operatives (0) Engineering Section “(a) Sales state Indigenous Capiteliom and the Bata Shoe Company (a) -Kenyanisation with the Bata Shoe Company ‘») Indigenous extorprises and the spill-over of skills Conclusion Footnotes Appendix 1 - Participation in Courses: between 1968 and 1972 Appendix 2 - Examples of Extended Training Courses offered to Kenyan Trainees Overseas Appendix 3 - Regional Courses of tho Bats Shoe Company - 2976 Appendix 4 - fee igrngonont positions filled by expatriates 1976 Appendix 5 - Bxamplos of Short Kanagement Training Courses within the Bata Shoe OrganisationTHE BATA COMPANY ‘TYPE OF PRODUCTION AND TRAISFER OF SKILLS ‘The object of this paver is to examine firstly the nature of the produc~ tion operations of the Bata Shoe Company in Kenya, and scoondly the treining given to local personnel in light of those operations. However, before doing so it is necessary to examine the evolution of Bata's production aysten from the historical perspective), I. WB BATY. SHOE COMPANY IN KENYA (a) Historical background The Parent Company: The Bata Shoe Company was ecteblishod in what ic now Czechoslovakia ‘ut was then a part of the Austro-Hungarian Empire before 1914, end at an early ctage received a substantial boost in the form of large contracts for military Yoots and shoes placed by the Imperial Government. After the First World War the conpany expanded overrcas from its national Lace and set up produc- tion unite in uany parts of the world: end ty the 1930's, it hed established itself a8 a major international shoo firm with distribution and production units located in several different continents. During this period, tanning and shoemaking produo— tion units were sot up in Hest and Southern Africa. In 1935, the Bata Shoe Company (BSC) opened a distribution branch in Mombasa, .on the Kenyan Cozet, which was in a strategic position to captura the expanding market for shoes in East and Oevtral Africa. In 1939 the Ifonbasa. branch began to mamfacture low-cost rubber shoes for the African market which were then narieted, along with other Bata progucts imported from Czechonlovakia, in the Eest African region. In 1939, the hoadqarters of the Bata Shoo Company had to be moved fvom Nazi-occupied Czechoslovakia and from then onwards this international company ws rt from 2, Gans > Henyen edd rd £ country from the coast during the Second World War on the orders of the oolonic1 goverment which was concerned about the threat.of invasion-along the East African coast. A site offered ty the goverment 20.miles north of Nairobi, .where there was an ample supply of running water for the setting up of a tannery, was. selected for ‘the new factory which was located.on.p branoh.of the railway line.‘The Construction of ‘the tamiery and of e new leather factory was carried out between 1940 and 1950 by 45 Czech shoomakera and technicians who had left the parent company in Europe in the lste 1930's. Subsequently, in the mid~ 1950's, a rubber factory ani a bicycle tyre plant wore added to the existing complex. To give an idoa of the rapid expansion of the production capacity of the Bata plant in Kenya, 4n 1952 tho BSC wos mamfacturing juet over 1 million pairs of shoes per year, whereas by 1975 this total had risen to 7,639,451, while the labour force had expanded from nearly 500 to 1300 during the same period (see table I). By 1975, the Bata Shoe Compeny produced between 70 and 80 per cont of Kenya's total demand for shoes. Tho Bata Shoe Company and indigonous sills: During the 1950's Beta, along with the two other major tanning firms in Kenya, Bulleys Tannory (British) and Dragon Tannery (locally owned), suffered from an execs capacity in thoir plants. This was due partly to the rostricted denand for tanned leather on the local market and partly to compotition from imported Indian leathers. Boforo tho Second World War most of the artisan oobblora in Kenya ware Asians and they used leathor inported from India. After 1945, however, thore ‘was a great increzse in the mmber of African cobblers in small tayns in the rural areas. Contrary to the opinion expressed elcowhere thet foreign firma always stifle indigenous enter” prise, °*) I would maintain that at a particular stoge in its development foreign cspital can in fact promote tho opponite trend. During the 1950's, for instance, the loading tanning firme in Kenya (Bata and Bulleys) found it necessary to encourage domestic consumption of tannod leather, thereby directly fostering artiosnal shoomalcing. Theso foreign onterprisos accordingly supported moves by the colonial administretion to set up technicel training sdhools for artic shoomakers. (In 1961, International Development ‘gency (IDA) loans were extonted to artisan shoomakers).3" " During the late 1950's and early 1960'n small artican shoenakers mode approximately half a°million pairs of shocs por yoar, which for the tannerics #eprenented . yearly conoumption of 1 million ag. ft. of leather. However, doupite the fact that ‘thay oncowraged tho oxpansion of arti-cn shoomaking in order to ucll thoir own leather, the leeding tanning compa nies took stringeut precautions to prevent any steps by the ‘loch administration 1 to excourage the dovelopmont of rural taineriss. When sous clouonts in the 1 acninistration did try to push through’ proponel to establish rural tanneries, ‘the: sore mot by tho following argiments fron’ the Secretary of the Rast African ‘Tenzors Association »i. the ‘opening of auch tanneries is eqiivalent: to introduoing ‘tho ox-wagon as a means of transport where the modern diosel lorry is already opos ting, sinco our tanneries are capital intensive. (4). tn their ain of restrict- ing the emorgence of competing rural tanneries the two dominant tanning firms in Kony, Bata and Bulleys, wore completely successful.3 -3- However, the collapse of artisan shoemaking became inevitable during tho 1960's because of the high unit costs of production in comparison with those of tho machine-nade products of tho Bata Shoo Company. During the 1950's and 1960's around 1/2 million paire of han’-mide shoos wore produced uvory yoar, wut by the 1970's this mmbor hed dropped by half, doepite the expanding for market choos. Tt ip clear thnt although beta did not actively éiecourage artisan shoomaking in Kenya (quite the reverse, in fact, at ono particular stage of its development), the odvantages of capital intensive mass shoe production have rendered artisan shoe production redundant, because of its high production costs. (b) The Beta production procoss: ‘he structure of the Bata subsidiary in Konya was clcarly doterminsd from tho outset ty the overall pattern of operations of tho Bata Orgenisation ‘through out the world. Indeed, tho whole pattern of education and training of workers and management is in line with the international orgenisotion of the companys As with many other larga multinational corporations, Bata's operations are hightly interproted end carefully controllcd fvom start to finish of the production process. To give an iden of the world-wide integration of this process, ‘the company owns ostates in Woot Africa on which rubber is gr wn to supply Bata shoo factories in other parts of the world; virtually all the leather used by Bata fectorics comos fron Bata tanneries; and all Bata products are distrivuted tumough Bata's oun caloe networks. In 1975 tho company usd 89 production subsi~ @iarios and cnother 10 or so marketing 2omp2nies, bringing the tot«1 mmber of Bata companios through owt the vorlé to around ono Imnéred. The fpfm of nroduction adopted by the Bata subsidiaries reflects the technical sophistication ‘common to major industries operating on a world-wide scales mus, although tho toolinology omployed in the Kenyan subsidiary is not os advanced ag in Data's Buropocn and North Auerican branches, tho forn of production utiligod in of « capital intencive nature. This ie in keeping with tho fact that Bate, in Kenya hes alveys beon oriented largely towards eupplying low cost footraer 4o the local East Affitan'market. . tion of ite output has been exported, mainly other African countries proportion of its shoe production oxported in one year by Bata was 43 par cent, although the average seems to be between 10720 per oent and only 8 por cent o- 5) The maximum output was ezporteé in 1975, for instancesTABLE I : Bata Sales 1951-1975 (in pairs of shoos) -4- Yoar Retail Wholesale . Export Total 1951 4a 3ST ° 871,224 1952 3T 63 ° 1,031, 763 1953 32 57 4 1,128, 336 1954 26 65 8 1,571,879 1955 27 1 3 2,104,618 1956 30 64 6 1,988, 374 1957 26 8 6 2, 398, 054 1958 27 65 8 2,229,400 1959 3 64 5 2,112, 203 1960 35 55 10 2, 086, 583 1961 33 52 4 2, 646,936 1962 10 5 14 2,278, 348 1963 12 81 7 2,994,610 1964 31 57 5 3,481,076 4965 25 70 5 5,625,082 1966 20 50 30 51831, 63 1967 20 37 43 44730) 219 1968 at 47 3 5,643,377 1969 23 46 x” 5,967,423 1970 24 53 23 6,471,077 1971 22 51 26 7,482,472 1972 24 60 16 7,520,013 1973 eT 65 8 1,279,988 1974 17 1 6 7,835, 703 1975 23 8 8 + 7,639,451Following the establishnent-of the rubber and plastics factories in the 1950's, Bata in Kenya switched to sophisticated production techniques using synthetics end rubber in preference to leather. The memfacture of synthetic shoos. requires a heavy initial outlay of capital for such fixed acsets es machinery, mich as injection moulding unite. However, once these have been installed, the unit costs of production are lower for plastic and rubber shoes than for leather shoes, which tale longer to mamfacture as they require more hand finishing. To give an indication of the difference in output per worker in the production of leather and cynthetic shoes, in 1955, the 500 operatives omployed in the lea~ ‘ther plent turned out approzinetely 1000 pairs of leather uppers per day, whereas the 200 workers in the rubber plant were mamfacturing 1500 pairs of rubber shoes per day. Labour productivity is thus higher in tho production of synthetic shoes, and it is significant that the proportion of synthetic to leather shoes had risen dramatically by 1976 whea the company tured out 5 1/2 million pairs of rubber, plastic and toxtile shoos and only 2 million leather shoes. In 1975 the leathor factory war evill nore labour intoncive compared to the cynthetic chee production, with tho rubber and plastion factory enmloying 650 operatives and the leather factory 400 workers.” In rocont years even more advanced capital intensive production teckniques have been introduced. For instance, in 1972 S. Langdon uoted fron an interview with the compeny that in the late 1960's a xew method for making poots by means of which two workers conlé mate 500 boots as compared to the 35 workers neetod to produce 800 boots with the older technique. (8) One of the reasons given by the conpany for this change was that one of the sophisticated labour saving nachines had boer passed on from another subsidiary which no longer needed it. Lowaver, it is clear that this is part of a general policy of intro~ gucing mere advanced moans of production in order to increase productivity. Indood, cince the mid-1960's, there has beex a substantial shift in production fron “leether footwear to pve footwear, which i mamfactured largely fron imported chemicals. The firm hes two large injection moulding machines, one making pve boots and the other turning out fully formed sandalss ‘The company itsolf rationalises this move into capital intensivs forns of production and the increased use of synthetics and labour naving machi~ nery by stating that these techniques produce a higher quality footwear (fron ths point of view of durability end appoaranoo); and the lower unit costs of production.makes it possible to sell this synthetic footwear at low prices on the local market. Because of these factors the proportion of leather shoes. to those made with synthetios will always romain low, olthough some increase in the sales of leather footwoar can be ‘expected ao a result of-the rapid expansion of tko oval Kenyan shoe market and tho incrsaning. affluence of a small section of thoBata is, in fact, more likely to diversify into other lines of productions For instance, in 1974 a loatherboard unit was opened which mamfac- tures a herd loather-type product out’ of comprossed shavings from the tannery, which are mized into a pulp with chemicals, and then flattened into boards. Ono half of this product is used for making suitcases and inner soles and the other half sold to local whoemekere and retailorne In the early 1970's the capecity of Bata's leather factory was expanded by 25 per cont end tho tannery was also extended. ‘he company moved into tho cyport of wet blue hides from the tannery on an increased scale. This, in brief, in the type of production that has emerged after 36 years of Bate shoe namfacturing in Kenye. It mst now be related to the training of porcomel end the transfor of skills, which is the main subject of ‘this paper. ‘TI. LABOUR AND TRAINING IN BATA ‘Tho high labour pr ductivity developed at the Bata shoo factory in Konya over the past decade could not have boon echioved if tha training of local personnel had not been regarded as an important fector in the company's operations. As wo have scex, labour productivity has risen steeply since the early dayse In 1954, for instance, the company omployod a total of 525 workers (excluding management) and mamfocturad 1,571,879 veirs of shoes; by 1974 just ovor couble the mmber of employesn /1305) produced nearly five times that mumber (7,835,703) This is largely because, like most firme with an integrated type of proéuction, the company has always tried to maintain a specialised work force and to minimize the labour turnover. {a) Management Training Programmes: From the outset it was in the interests of the Bata Shoe Company to raise the work standard through training progranmes for local management and supervisory staff. It was to thie oni that in 1955 the coapany emtebliched a Technical Training Echool at their Limru fectory 7?’ This Bate Technical School (Buc) which formed the basis of Bata's training cystem in Konya until :the late 1960's when it was closed down as tho emphasis shifted to other fons of training, provided o three year in-sorvice courso for local management trainees. “It was ope;od at @ time when goneral oducation stanlards inthe country. were: not parti~ culcvly high, and the courso wes dsoigned ‘to provide’ the ‘students with dn‘ all vornd education (in english)‘ in’ell aspecte of #hoomaking. . This-school was to cat tasn the haaie fom thaiy Konyan nanugement team by the 1970'The BIS offered courses for between 25 an‘ 30 trainees per yoar, and the success rate of the students uniertaking this training was around 70 por cent. The training was regarded by the company as boing of a preparatory naturo, efter completing the BTS course tho trainces were sont to differont vections of the factory end then, later on to moro specialised courses oversoas in specific aroas of production ‘such as machining or tanning). The Bata Training School wos closed in the lato 1960's, as by then ‘the oducational standards in Konya had reached @ point whore it was folt that a asic training course was no longer uecensery. Increasingly tho applicante for nenogoment posts in the compeny were boing drown from those who had already acquired tho basic technicn] or edveationel qualifications, (") ana the company presumably calculated that the expense of such a course (each 3 year course in the early 1960's costs approximately per student £1800) was no longer justified. Daring tho 1960's tho BTS basic training wao cupplenontod by on tho job treining followed by longer training courses overscan. Fron the early 1960's several students wore sbroad sent each year to follow 2 or 3 yeer diploma courses at various institutions outside the Bats organisation, for instance the lational Ieathersellers College and Cordweiners College ia London, the National Colloge of Rubber Technology {UK}, and so on. Around 12 trei:ees per yoor wore sont cn these coursos overseas, mainly to England and Italy. Tic overseas componont of Bata's nanagenent training ic still being coutimed, clthough the mmbere cont on tho longer courses scoms to havo beon reduced. The conprny sooms increasincly to favour soning managenont trainces to shortor internal coursos.oversoes organised by the Bata Shoe Orgenisation. These courses, which aro hold in other Bata subsidiarios overseas, cover a wide vericty of subjects administration, uarketing, engirsoring end so forth and usually last for periods of botwecn 5 days aad 4 woe':s (soe appendix for details of tho courses). It may be added. that since 1970 the firm hos been able to recruit 3 mmber of menzgomont trainees “*o have alroady graduated in such spocielised fields ra accounting and engineering. This once again saves the company the expense of training people to such a hich: level, although graduates on the other hand, tend to leave the company more easily. Tho progross of memgonont traiiees at Limru is assersed dn tho §od every 6 nonths by mecns of tests given at courses hold at tho factory in Kenyas It is hero that candidates aro solocted to attond specialist oversean courses, either long or short. Most trainees attend one’ or two short ours oolsee 7” each year in one particular area in order to consolidate their on-the-Job ‘troining in that sphere. As already acted the oversoas courses are mainly gion at Beta, gubsidiaries in other ports of ths world, in order to ensure a jinifor: type 6f training throughout the organisation and algo to foster a high level °-8- courses lasting several woeks to the firme that supply machinery to Bata factories ~ for example, to the Pfaff sewing machine company if Germany. However, ‘tho courses held within the Bate organisation ere probably the most important since they enable the firm to familiarise the treinecs with the organisation global structure of productions ‘ (>) Operatives: Like the mancgonont otructure, the division of lebour among’ tho workers follows the petturn cotcblished throughout the World-wide Bata organi- sation. Operatives are solectod initially after a small vioual and written test, which assumes a working knoledge of English. MThia selection has apparently been nade more rigourovs letoly in keeping with the educational standards; and there is acid to “he a great doal of compotition among achool leavers for operatives ponitions in the Bata Skoe Companys Operatives tend to specialise in one of tho departnonts of the factory, for instance the leather workshop or tho tannery, although within theso large departments they are moved around between the diffe rent sections. ‘There are nine grades of factory operatives in the Bata plant &t Limru. In common with most large mltinational enterprises, the firm has encouraged a strict division of labour, and the nino operative grados aro based on the grading of the machine rather than the operative; the worker therefore moves up the scale by graduating through the machinory, aftor passing a omall proficiency test. ‘The shoo and Leather Workers Union has opposed this strict system of grading operatives on tho grounds that thoro should be fcwor grados, but this has not affocted the company's polioy. ‘fbove ths operative grades therc ie a mupervicory level of worl:ors known 2s “ey operators", who havo groator opportunitios for earning highor monthly wages throvsh incontivos based on productivity. In addition to their normal wago of K.Shr. 560/=per month, they can earn an edditionel 400/= por north, bringing their total vege to a ound K.Sho. 1000/-+ This ie in contrast ‘to the operative grades, where the lowest (Grade 9) receives a basic monthly wego of 326/» and the highost (Grado I) a basic wage of 464/=» (12) rn addition ‘to the permanent operatives, all of whom are placed on a 1 month probation et the noginning of their period of employment, thove are mmerous ouxiliary ataff ~ ac érivera, cleaners, an‘ so on - who require no formal training, and who tend” to romain in one particular job category. Although thire has been no formal strike since 1973 (duo to the Presidential ban on industrial sotion), over tho pact 10 yours the:e has been a riso in the mony wage level (13) ‘én vintciishd” 2a in the Bete Shoe ccupaxy.'3*) For instanoo the avarege wage of a worker” at cote hed risen from KeSh. 416/2 per month in 1966 to. K.She 522/. ta 4in 1975 of 300/m0 ‘ Pinally, it may be noted that those earning more than KS. 1300/~ per month are counted as managerial staff and cannot join a union ‘MMBUE 2: Bota Shoe Company — Wages and Nmbers Employod’ Yoar Namber of Total Voge Shs. per Employees. Bill Month 1966 981 4,907,000 416/= 1967 944 5,623, 000 496/= 1968 1059 6, 264,000 492/= 1969 1092 5,300,000 la 1970 1183 5,485,000 3B6/= 1971 1349 6,146, 000 319/+ 1972 4459 7,057, 060 403/+ 97 1367 7,801, 000 415/+ 1974 1305 8,177,000 520/= 1975 1301 9,051,000 580/= (c) Bugincering Soction: It is the company's policy to be technicclly self-sufficient in so fer as tho maintenance of machinery is conoorned end in 1975 the enginnooring department consisted of 120 technicians and engineers. In addition each depart~ nent in the factory hee & techuiciens whone sole task is to riaintain the nachinory of thet particular section. The lover lovol ‘technicians reotive their asic training on the job, Yt supervisory and managonént levels dreveually tredneé overscan on long or ehort courses. ‘Tho uppor atratum of ‘the ongineering dopartnent in rtaffod by university gradvaten, and the company takes oi one or two now ones each year for technical management training. Howevér, despite tho company's attemptn over thé past few years to Africanise this department, in 41976 the three top ‘positions of ovorhaule engineer) maintoninoo engineer and machinery ‘overhauls enginedr wore still held Ly non-citizen Indiens. Nevertheless, all these positions are boing understudied for futiire ‘takeover by indigenous Konyans who :ecoived basic training’ at tho’ Bats Teining School and’were latcr sent to polytechnic courses in Konya and abroad to obtain further ongineering qualifications. :-10- (a) Sales State: As in other Bata companies, it is the Kenya subsidiary's policy to control the distribution as well as the conditions of production of its commodities. Ever since the company began mamifaoturing shoes in Kenya in 1939, the firm controlled the distribution of its footwear throughout the country through its own wholesale and retail outlets. However, since 1974 when 8 section of the Kenyan trading class demanded participation in the distribution of goods locelly namfsoturea by foreign firms, Bata has been forced to distritute-its products through oitisen-owned wholesale and retail agents throughout Kenya. Prior to that time the company owned 36 shopo in Kenya through which ite shoos were distributed end whose sales otaff were trained by the company. ‘The ownership of these shops was transfered to Kenyan citizens after 1974, but the staff and sales ctructure remain closely supervised vy Bata which, oven after the citisen distribution decree, contimes to determine the pricing and training policies of the shope. The salen staff of all Bata shops, from managers to shop assistants, are trained by the company, which provided four courses each year lasting for one wook and covering 211 the essential subjects of salemanship. Managers attend 2 or 3 courses every year lasting 3 days, and.toooive more detailed training in a varisty of aibjects extending fron accounting and nercbenéising to displays. (4) Bate supplies the shops themselves with furniture ana displaye oquipment, and also lends the citigen traders the necessary funds for the purchase atock. This is another way in which the foreign subsidiary is able to retein en informal hola over the nethog of distribution. In addition, all ‘shop managers have the Beta procedure mamal to supplenent their training instructions, so that the wholesale and retail distribution system of shoos is supervised, although not fully controlled by Ratae Indeed, sinoe the shops have. been taken over by citizen ommers, Bata hae not been fully successful in ite efforts to force them to se11 Bata products only, and several shops, sel) imported and Joc:11y-made Tiger brand shoes-in the sane display as Bata shoes. ‘The Company strongly discourages this practice and in some cases has even terminated ite sgr-onent to supply its own footwear where this diversity exists., The treders can however, have reoourse ‘to. the Chamber of Commerce in the event of pressure « boing exrted.on the in thie way by the foreign coupany...(19)III. INDIGENOUS CAPITALISM AND THE BATA SHOE COMPANY (a) Kenyanisation within the Bata Shoe Company {b) Indigenous enterprices and the spillover of skille outside the Bata Shoe Company ; 5 (a) Kenyanisation: Since the mid 1960's the avowed policy of the Kenya Goverment, reflecting the development of indigenous capitalism in Kenya, has been to put pressure on foreign firms to Kenyanise their management structure. In ordor to furthor this aim the Kenyanisatior. @Perconnel Buroan (PB) was sot up in 1967 an part of the Ministry of Labour. ‘This Bureau was given powers to investigate and direct the progress of Kenyanication in all foreign-owned firms operating in Kenyae Under the regulations of the KPB, all foreign firms wore required to submit yearly reports on their Africanisation plans, to justify the retention of every expatriate person and to give details of the training of Kenyan replaconents. ‘This scheme vas to be coordinated through the Imigration Department. . In aggregate terms, it is clear thet between the mid-1960'n and the mid-1970's the Bata Shoe Company swceedal. in training a large core of Kenyan managers. However, at the time of writing (1976) all the kay pocitions in the Bata management structure, iso. the heads of dopartmonts, are otill retained by non-oitizena who have Kenyan underetudies. ‘The overall trend is none the lens clear from mumber of Kenyan managers: in 1968 the company employed 60 expatriates in a managerial team of between 100 and. 150, whereas by 1976 out of a total nanagenent staff of 200, only 21 non-citizens remained. ‘1®” (This mmber includes four Bast. strican-born non-citiven Asians). In the late 1960's thorc were mmorou:: compledts about the | onployment of expatriate personnel in Bete, but by the 1970's the company was rosponding to cuch presmure by speoding uy ite lonalisetion programme. By this ‘time also: the firm wes able to use the individuale who had passed: through the Training School established’ at Limaru in the 1950's... By the late 1960's and eerly 1970'o, there was a group of Kenyan managers who hag reached quite a high level in tho hierarchy (such as asvintant nanegers-of a departmont) having pc7ced through the BTS and undergone supplenentary training abroad. Howovor in the late 1960's, several disputes eroge between the Kenyanisation Bureau and the company concerning the paog.of the latter's Afrioanisation programme. In 1969, for instance, = dispute eroses. over: the: renewal of. the’ two-year contract of Bata's ohief accountant, a non-oitizen Indians “he attitude of, the Ministry of Labour wes made ‘clear in this message from the:Kenyaniantion Bureau to the Bata eens il SRMa tm AMMO et cee i ng I gd a i ia a ea a tt ra-2- ‘ee. you may not be avare that Mr. X'e permit wae ismed with my approval and the only.zeason I wrote to you later was to check that his appointment does not in any wan hinder pronotion of ofti~ tons already engaged in employment.’ T have been aware for sone timo that you have a training school and fron there you send your technicians abroad for ‘fruther treining, ani at the somo tine you were allowed to import expatrictes for jobs that cen easily bo done by oitinens..+ lot me make i% quite olear that the permit operation is not meant to deny Kenya the services of exports from abroad that various intwstries will need from time to time in order to boost Kenyan goods, and in that regard you and other enployers will contime to have our cupport. However, in doing : 0 I shall neod to te convinced ‘that the people coming are indosd exports and that their skillo are not locally avaitavie.+ (17) Tho Kenyonisation Bureau has not only triod to supervise the phasing out of oxpatriate staff Int has elso provided tho company with assistance in recruiting local personnel. In 1971 the Bata Shoe Conpany actually wrote- to ‘tho Bureau complaining of the difficulties obtaining suitable trainees for the. electrical enginsering department and requosting the Burosu assistance: ‘eee Our training programe requires that we urgently recruit at least threo young men aged about 22 years to work with.us in the electrical enginsering depart~ nents Our minimm qualification Tequironents.would be. having - attained Form 4 and those.¥ho.~13- already have some basic Lnowledge of electricity and mechanical fitting. We have had a conside- rable mmbor of youngsters through cur hands but it is proving to be aiffioult to rotein hom. Tt is not e question of our wages being low as we pay competitive rates ++. if you are able to send us soao young men for intorview wo wonder whother you wculd pleaso emphasize to any prospective candidate how interested se are to onsure contimity of sorvice, not merely to come here anid gain experience...‘ /18) In genoral, while it would seom that the Bats Company ima avoided any major conflict with tho Coverme:t over the Kenyenisation of its nanagoment staff, it has been insistent on retaining expatriates in certain key posts for specified periods. In 1973 there wee a dispute over the length of the work permits granted to two expatriate managers. The company accusod the Principal Inmigration Officer of going back on a prior agrocnent betwoon that Department, the Kenyanisation Purean ani the Bata Shoo Conpauy concerning the longth of 5 of the non-citizons' work pormits. The outcome was thot the company was allowed an extension for two out of the five permits roqvested. ‘To justify renewal of two expatriates in the Accounts Department, Bata made the following points to the Kenyanisation Bureau: wo decided that ia order to speed up the procoss of Keryanisctio: of the two ecco~ unting positions it was best for us to recrvit university gradvates who could assim‘late the practical expects of the job in the shortest possible timo. However, theso graduates would regrire at least ono yoar to bo conversant enough with the various aspects of the job to take over saet (19)‘The Shoe and Leather Workers' Union generally hes little say in Bata's training or Africanisation programmes. However in 1969, the Union in a move to support African managers, lodged @ complaint with the Kenyanisation Bureau objecting to the mmber of “whites imported from abroad". These, the Union argued, were holding back Africans who were equally qualified for the positions to be billed but were being passed over in favour of expatriatos. Refering to one of those positions in the leather factory, the Union commented: ‘eee Ip Xs bad overseas training for 2 yoara instead of being promoted to Assistant Dopartnent Mamger he is only forenan with no responsibility ani cannot ever signe gate pase. khoad of him there are tvo whitene.. tho Union is et your requect rezared*to maintain good industriel relations if the heavy importation of whitos 15 stoppeat. (20) While it is probable that this complaint had little immediate effect, it is interesting to note that this African manager finally attained tho renk of Assistant Factory Manager in 1975 - but then left the Company to establish his own shoe firm ! By tho lato 1960's quite strong pressure sooms to have beon brought to bear by the Kenyenisation Bureau on the Bata Shoe Company which wae required to give detailed justification for the retention of oxpatriates in managerial pooitions; and throats to withdraw work pormitn have beon used by the Govornmont to enforce the directives on Kexyanisation. By 1976, considoreble progress had beon made in this direction and the management programme called for tho phacing out of oil tho remaining 21 no'-citizons over a period of 3.5 yoare. Of thooe top 21 manegement positions, only two had no Kenyan undorstudies, and ‘they were tvo of the most important posts in the company: those of Managing Dirootor and Production Manager. Indeed, in most foreign companies oporating in Kenya the position of Managing Director is usually filled by a meubor of the paront companys (21) ms conpaty's official oxplanation for the leck of an understudy for the position of production manager was that the candidate mest be in charge of @ production dopartment, and in 1976 all the top production managers (tennory, rubber factory, leathor factory) were expatriates. The Production Yan gor will premunably be selected from among the Kenyan understudies to the heads of these main production departments.What kind of educational background is required of those 19 Kenyan manager understudies who will ultimately take over the key top positions in the Bata Shoe Company ? Out of the nineteen, 8 had attended the Bata Training School as tho first step in their carcer, usually in the early 1960's. ‘The level of formal quelifioetions would seem to be relatively low: 7 managers had GCE (General Certificate of Education) and 2 KJSE (Ke2ya Junior School Examinations). All nineteon had followed’ one or more courses of snecialised training at Bate subsi~ diaries abroad or at colleges in Enropes Most had whet was defined as "long experience", which would seem to indicate between six and twenty years with the company. Because of the high rate of “drop outs" among the understudies (mmerous African managers rceigned to ctart theit own businesses), tho firm has adopted a policy of appointing moro thaa one Kenyan manager understudy for the same position, ‘the mazimum mnber for any one position being threo. It is cloar thon that most of the understudies for the top management positions in Bata havo derived their experience from on-the-job training with the company rather than through formal study, although the fira, as wo noted earlicr, is certainly now aiming at attract~ ing personnel who alroady have qualifications. Wost of the 19 understudies for tho top mancgonont positions wore cchoduled to take over from the incumbent expatriates on the oxpiry of the latters present work permits, although in 70 per cent of cases o take-over date was fixed for 1979, three years after the (22) arawing up of the phesing-out schedule. (bv) Indigenous enterprises and tho spillover of skills: I have chown eleowhere °3) that indigenous capitalists in Kenya vegan moving into the sphere of production au well eu distributioa in the 1970's In the casa of choe mafufacturing thie happened in 1972, when five senior Kenyan managers at the Bate Shoe commeny left the firm to found their ow: choe company. Mins was formed in 1972 the Mger Shoo factory with a powerfiil local industriclist, Njenge Karune, a: the main sharholder and the five mansgerr holding tho remeining 40 per cont of the shareholding betwoon them. In tho ostablislment of any such eutorprise which compotes with foreign capital, the question of technology trans for is a crucial one. For the local: énterprise the problon of skillo transfer was simplified by the fact thet the five ex-Bata managere wore fron difforont scctions of the Bata organisation: the design, dopartuent, the rubber feotory, the accounts depertment, the tannery end the leather workshop. (The Generel Manager of the new local choo factory, for instance, hed been Assistant Manager of the leather faotory’st Bata, whose formal training at Bata had oot in the region of (5,670 in the lato 1969's)s All these local managers hod boon with Bata for tetwoen six and sixteon years, ond had followed intensive training courses abroad in their special ficlds. the yoar they resigned to form the lonal fim, they had all reached the upper end of the middle mansgenent levels at Bata and wore onrning between £2,000 and £2,500 por anmm. ‘24) two of the "defectors"= 16 - were in line for department manager positions and therefore potentially for the position of Production Nanager for the whole company in Kenya. Indeed, the General Nanager of the Tiger Shoe company made the following coment on his posi- tion in the Bata management hierarohy, "'... We were given responsibility without authority, which beconos frustrating". (25) The local firm found thet their msin problem at the outset of the enterprise was in raising capital and not in the area of training or skills transfer. The General Hanager emphasised that the training of operatives for the factory was no problem, as all tho managors of Tiger Shoes had derived considerable experience from Bata. A mumber of Bata operatives were taken along to the new factory, but it is significant that ceverel of them later returned to Bata because they were receiving lower wages in the local exterprice. (For instance, in 1975 the average monthly wages at Bata and Tiger were 580/= and 350/= respectively, with the average national wage being 30/2). (26) What was the reaction of the multinational corporation to this siphoning off of their own trained personnel to form a competing enterprise 7 Firstly it mst be noted that the threat to Bata's monopoly of shoe mamfacturing is @ long term one only as it will take the local firm a considerable tine to build up its productive capacity. For instance, the Tiger Shoe company employed 30 operatives in 1973 and 50 in 1976, whereas the employment figures for Bata in ‘those years was 1459 and 1301 respectively. The Tiger Shoe firm was opening a now extension to its factory in 1976 which was to raise production from 350 to 1000 paris of shoes per day or 260,000 por year. ‘Th‘s oan be conmared with Bata‘ yearly output of shocs, which atood at 7,639,451 in 1975. (27) purthermoite Decauge of the difficulties in raising finance for machinery, at the beginning ‘the local company was forced to make only leather shoes, which involve a high proportion of hand work. During the following two years (1972-1974), however, Shoemaking machinery was imported from Britain, Dermark and Germany. The knowledge which the Tigor Shoo Company managers had obtained at Bata was important ‘whea contacting suppliers of raw materials and machinery. To be able to compete with Bata shoos on tho Kenyan market, the iooci firm had to specialise to © largo extent in the production of higher quality leather shoes, as aynthotio shoes require the use of more complex machinery. Howovor, in 1976, the local firm, as part of its expansion programo, acquired an injection moulding machino, which can be used for the mamfacture of synthetic shoos and sandals. Ina few years timo thie ype of products will compete direo- tly with Bate products.-7- Bata maintainsthat they gave every sesistance to the local firm in terms of information and contacts with suppliers. Tiger of course maintains that the opposite was the cass. However, despite these differing opinions, it has been established that Bate did try to block Tiger's access to sources of certain vitel materials at the outset of the enterprise. For instance, in 1973 there was an open dispute between Bate and the Mger Shoe company over the access of the Latter to supplies of eyelets. (8) ghe 1ocal tim scoured Bata of trying to prevent then from contacting the suppliers directly and of aot allowing them to purchsse eyslets brought into Kenya under Bata's own import liconce. The local firm, having a strong political baso with ite chairman and majority ehare- holder being Nje ga Karume, the National Chairman of CENA, an association of prominent Konyan businesamen, ablt to take the matter to the Prosident for arbi~ tration, It wae ultimately decided that Data should cell to oyolets the Tiger Company from its own supplies. It is likely that other such disputes arose over the new local firms occers to materials, but by now Bata hac probably taken the existence of this local competitor as a “fait accompli". The basic component of the Tiger Shoe Company's production is tanned leather, and clearly Bata would rofuso to sell cupplies of thie from their own tannory to the local compotitor. The Tiger Shoe company therefore obtains ite cupplics of high quelity tanned loather from Bnlleys Tannery, the second foreign-owned temery in Kenya of eny appreciable size, and it elao resorts to imported supplice. This obviously puts the loca) firms at a disadvantage, in terms of higher unit costs of production as compared with Bata, whicl. obtains the leather it neegs from its own tannery. The logical solution for the Tiger Company would therofore be cither to baild < tannery, which would be an expensive process, or to link up with an existing tannery in Kenyae Following along those Lines, early in 1976 another "technological break-away" from the Bata Shoe Company occurred when the Keryan Assistant Manager of the tennery left the firm and, with a prominent Embu businessman, established @ locally-owned tannery at Seganae There is, however, no evidence as yet to link this now enterprice with the local shoe factory. On the other hand there is nore positive evidence that somo kind cf allianco is being forged betwon the Tiger Shoo Conpony end Bulleye Tannery, aa Wenga Karune, the largest shareholder in the Tiger Shoe Cempany joined the Board of Directors of the foreign tanning fim in 1976+ It would soem quite likely that the same group of indigenous ospitalists involved in the production of shoos will aloo ettenpt to take ovor the forcign-omed tannary. (29)IW.» CONCLUSION In this paper wo have doscribed the progress made in the Afpicanisation of the management of the Bata Shoe Company in Kenya in recent years, and particularly between 1970 and 1976. This progress facilitated by. Bata's training progranmes and acoolerated the pressures exerted by the Konyani~ sation of porsonnel Bureau of the Ministry of Labour and other nationalist forces, also reflects the dovolopment of indigonous capitalism’ in Konya. In outlining the training given within the Bata Shoo Company we have attemptod to show how the actual content’ of training programmes and the level of tho skills trensfered is determined by tho nature of the production process prevalont throughout the world in that branch of induetry. In the shoe industy, as in so many others, the production process is based on the utilisation of sophinticetcd machinery an2 labour saving techniques in ordcr to maximize produotivity por worker. This concontrated production aimed at the mass market is typical of the Bata Shoe Company's operations everywhere and in Kenya, as olsowhore, it dctermines tho asture of the education and training provided ty the firm It also ¢eterminos the nature of tho local competition within the choe industry. For instancs, it is clear thet 4f any indigenous eaterprise is to compote with Bota in Konya it will havo to adopt the namo typo of capital intensive production ap that utilised in the mltinational corporation, even though initially tho typo of technology. may bo considerably more labour intensive owing to lack of finance for sophisticated machinery. The "spill-over" of skills from the m:1ti- national firm to local enterprise oited dn thie papor mut be located in the context of the samc form of capitalist industrial production. Konyan i.dus- trialicts have drawn on the pool of skills of the mltinational to sorvice ite own needs, but the looal fim will elso have to utilize capital intensive tech- niques if it is to be able to compote with Bata for the low-cost shoo market. Two main conclusions oan bo drawn from the study: first, that tho neture of any transfer of ckille {2 deternincd by conditions within the ‘Beta Shoo Company at global level; and necondly, that tho degree of localisation-of nenegemont within the subsidiary ie in diroct promotion to the pressures of nationalist policies which in the Kenyan oase reflect a particular stege.in the development of the indigenous bourgeoisie class. Indeed, the expansion of thie local capitalist olass into the sphere of production (industry) itself involves a transfer of trained manpower from the oxisting mltinational corporation to local enterprise. Moola SWAILNSON -.