The ever-increasing internationalisation of companies makes cultural factors a key dimension of success
Developing intercultural management skills is becoming a must as managers are confronted more than ever with international realities.
"With 15 percent growth, we had no problems with cultural differences. With minus four, in the heart of recession, we met with absolute horror! The Americans revealed their true nature and acted as total brutes, the French went into useless resistance, and the British betrayed everyone...." was the bitter comment of an international manager after four years of crisis, with all illusions lost on multinational fraternity.
In other words, when all is well, growth smoothes away problems, conflicts and differences. But when things get bad, an inevitable process sets itself into motion. It goes something like this:
Step 1: We have a problem, a bad problem;
Step 2: Someone must be responsible;
Step 3: It can't be me of course, so it must be the "other;"
Step 4: The best "other" has to be the one with a different passport;
Step 5: Ah, we have our culprit: It's the English, Americans, Koreans, Germans...
...and back come the old stereotypes. In the face of crisis, organisations crumble and natural communities spontaneously reappear opposing each other in an irrational fashion.
"In 1991, our Group had to reduce its headcount by 20 percent. We were profitable in Europe but had to follow suit with the U.S. where the group was losing all it had... So, don't talk to me about the Americans and their values... Many of my friends are still unemployed..."
In fact, company projects and value charters often cover up a devastating truth: Individuals have become but a means to the economic finality of the organisation. Haven't we replaced the word "personnel" with the words "human resources?" As if transforming a person into a resource - like money or raw material - was remarkable progress for the individual. Those words meant nothing to us, until the economic crisis gave them back their true meaning.
However, it remains true that a crisis is better overcome in close ranks than in division, and that a concentrated and homogeneous company resists better and reacts faster than a dispersed one. Also true, companies who prepare their management for international life have greater chances of success than the ones who only rely on on-the-job experience.
Mergers and Acquisitions: Managing Integration
In our 15 years' experience in the field of cultural differences, never have cultural issues appeared so critical. In response to the economic crisis and internationalisation, headcounts have shrunk, and managers have had to take on greater and wider responsibilities. Greater because they have to do more with less, and wider because new global organizations confront them daily with international realities.
It's no secret that post merger and acquisition performance often falls well below expectations. However carefully planned, allowances are rarely made for the seemingly irrational human responses that follow such decisions. Yet, post-merger and acquisition "blues" are a well-documented fact: Production drops, key people leave, performance and results sink, along with morale. "When we merged with this other pharmaceutical laboratory, both our companies were euphoric. Too euphoric maybe. Now, two years later, we are still suffering from disappointment..."
Integrating two companies sets into motion a massive change process. We already know how difficult it is to implement change, even in a single company. But in a merger or acquisition, the traumas of change are enhanced by the meeting of two different corporate cultures and practices. Even when companies share the same national culture, it is very tempting to blame the "other" when things go wrong or become uncomfortable. When the other company is foreign, the culture clash is two-fold, and before long, precious energy that should be used in pursuing company goals is wasted on nourishing internal conflicts or trying to solve them. …