...and back come the old stereotypes. In the face of crisis, organisations crumble, and all the wonderful principles that were the banner of the 1980's reconciled society - value charters, management practices, corporate cultures - are smashed to pieces. Natural communities spontaneously reappear within companies and oppose each other in an irrational fashion.

" In 1991, our Group had to reduce its headcount by 20%. We were profitable in Europe but had to follow suit with the US 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, left only with the great consolation of having supported the Group's strategy! ".

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. Indeed, 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 a remarkable progress for the individual. We tend too much to forget the meaning of words. But the economic crisis has given them back their real meaning....
However, it still remains true that a crisis is better overcome in close ranks than in division, that a concentrated and homogeneous company resists better, reacts faster and more coherently than a dispersed one. It is also true that, even when all is well, a company which works towards unity creates a better space for work and fulfilment. Also true that companies who prepare their management for international life have better chances of success than the ones who only rely on on-the-job experience.

1. The challenge of new management

After 15 years' experience in the field of cultural differences, we have acquired some convictions that direct our action in this field. Because of the economic crisis and internationalisation, never have cultural issues been so critical. As company headcount melts, managers now have to take on both greater and wider responsibilities. Greater because they have to do more with less, and wider because new matrix and world-wide organisations confront them daily with international realities.
Recruitment costs being what they are, management loyalty and efficiency have become critical success factors. All management and human resources management systems now have to adapt to this fact, and some companies have adapted better than others. From our point of view, this is how it's done.

Mergers and acquisitions: managing integration

It's no secret for anyone that post merger and acquisition performance more than often falls well below expectations. However carefully planned they are, 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, we took special care in communicating the reasons of our decision to both companies, as well as the mission of the newly formed company. It seemed to go down very well, and everyone was euphoric. We thought we were home and dry ! Yet, two years later, we are still suffering from the effects of this merger... "
Integrating two companies sets into motion a massive change process. Change is already difficult enough to implement in a single company, having to deal with passive - or active - resistance due to fear of the unknown, long ingrained habits, and the refusal to let go of the comfort and security generated by past successes. 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. In 1993, Business International published a study on the reasons for failure in international mergers and acquisitions : cultural issues were top of the list.

As in any change process, communication is essential. Everyone must know where the enlarged company is going so they can help get it there. Changes in structure, procedures and methods should be communicated at every stage of implementation. But this isn't enough. Consultation across the company is also essential : when planning things at high level, it is highly worth listening to what middle, junior and supervisory management have to say, as they are not only closest to the customer but also to the internal workings of the company. But this still isn't enough. Communication and consultation processes must also be adapted to the particular characteristics of corporate and international cultures. Doing an internal culture audit of each company at the pre-deal planning stage will give a realistic picture of what those characteristics are. This will highlight differences in attitudes as regards hierarchy and the exercise of power, time management, initiative, risk-taking, teamwork, problem solving.... Depending on the cultural background, these words can take on totally different meanings and produce radically different behaviours: where, for example, an American or British manager will expect direct feedback and suggestions from his collaborators, a Chinese or Indian manager will feel insulted and take it as an affront.
The difficulty with cultural differences is that they lead to misunderstandings rather than disagreements. And while disagreements can be identified and so dealt with, when it comes to misunderstandings, most people don't even realise they're happening, or worse, they misinterpret them as being perversely intentional or the result of such flaws as crass stupidity, lack of commitment, dishonesty...
How can, in these conditions, a new and efficient corporate culture emerge when such suspicion and mistrust settle in ?
This is why something must also be done to help individuals across the company deal with cultural issues. Hoping that people will come together around a task or project and learn to trust one another will not work if the company tries to ignore or minimise the effects of cultural differences. On the contrary, the company should take specific and early action to advertise and bring out in the open the importance of cultural aspects : training individuals to recognise cultural differences and to use those differences to create advantages for the organisation is an approach that will greatly facilitate, and speed up, the integration process. Founded on mutual respect and openness, this approach will also help build trust, true cement of a synergistic and successful organisation.
As if dealing with the torments of international mergers and acquisitions wasn't enough, companies also have to deal with the added delights of matrix organisation.

Matrix organisations: make it work

" We had a matrix organisation. So much so that every time an important decision had to be made, we would all collapse into nervous laughter. When Headquarters introduced a fifth entry into the matrix, the whole thing blew up! In the wreckage, only those who showed initiative survived... " How many imposed matrices have thus blown up, regardless of their intrinsic qualities, just because they were imposed without any scope for discussion or adaptation?
International companies are geographically and culturally dispersed. In some cases, the company's original zone has been economically outweighed. Powerful sub-groups have emerged, heavily influencing strategic decisions with their results. Using their difference as an advantage, they often deeply altered the internal balance of power. Managing from the centre is not as easy as it used to be. This evolution, a consequence of internationalisation, has in turn generated the structural evolutions we have been experiencing since the mid-eighties : creation of product lines, of divisions by activity, all international.
Brutally, the mono cultural, ethno centred logic that prevailed within the zones is shattered. Confused managers now have find their way through the complexities of three interacting and potentially conflicting cultural levels - national, corporate and functional. Suddenly management has to deal directly with distant, unknown and different counterparts who are also desperately trying to survive the torments of matrix organisation. The few words exchanged at a formal annual dinner are by no means enough to create good working relationships and action oriented team spirit.
Gradually, the way in which power was exercised changed from giving direct orders to engaging in permanent negotiation, where the different parties within the group have to seek mutual agreement and draw up internal contracts to satisfy everyone. Forcing the way doesn't stand a chance any more : the time has come for subtlety and " finesse ". Therefore, knowing the other person and understanding his/her culture, values and behaviours, becomes a considerable advantage.
The transverse, functional, horizontal, and international relationships which have developed in large groups around " group project teams " imply that multi cultural relations be well regulated. What used to be the lot of just a handful of international C.E.Os is now becoming the staple diet of an ever increasing number of managers.
An international group represents a huge market within itself (internal clients and suppliers) which must define its own laws and systems if it wants to operate efficiently.

The conditions for implementing a matrix

Three fundamental conditions are required to implement a matrix :

1) Clarifying the objective
First of all, it must be made clear what the objective and philosophy of the matrix are. Since a matrix is organised around trades, lines of products or world markets, the new dimensions of the matrix go right across the Group's traditional geographic structure. Poorly defined in terms of responsibility or decision making, they immediately trigger strong political reactions within national or regional structures, where they are seen as an unwelcome downstream control system. The political dimensions of the matrix must therefore be carefully worked through, and clearly communicated to the managers concerned.

2) Negotiating its implementation
In order to successfully introduce and implement a matrix, it is highly recommended that some of these systems not be imposed, but rather designed and negotiated in part by those who will be applying them. Also, should some organisation principles not be negotiable, then they should be implemented according to a calendar or modalities that best suit the particular cultural environment. Thus, countries who are used to simple and direct hierarchical lines of management, such as France or Germany, need a good deal more explaining and negotiating.

3) Accompanying change
This means accompanying the implementation process by preparing managers for their new international exposure. Cultural aspects, and what they imply, are at the very heart of this process. Giving orders, negotiating, communicating, controlling, delegating, deciding : these are the manager's daily lot. From one day to the next he/she suddenly finds him/herself having to do all these things with, and for, far away collaborators for whom these words may cover totally different realities and behaviours.

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2. A few clues and solutions

Faced with increasing complexity, management loses many of its traditional marks. Support action is needed, such as inter cultural management training which has now become part of the solutions adopted by international organisations. Of course, training alone is not sufficient. Methods must be improved, systems must be modified, otherwise the exercise, though interesting, remains sterile if the environment does not allow learning to be put into practice and tested on the job.
Here are a few avenues that managers, who want to promote international spirit within their troops, may wish explore:

International project coaching

An almost systematic consequence of matrix organisation is the appearance of transverse projects, gathering people from various cultures around one mission. Project management itself is, in our view, the best awareness raising exercise as regards cultural issues. It integrates nearly all management dimensions : goal setting, resource allocation, time management, role clarification, leadership, defining of procedures (or operating modes), result assessment.
" We launched into transverse projects with great enthusiasm " remembers the head of the paint division of a chemical group " but we were badly organised and unprepared. Efficiency dropped, conflicts appeared, and we never really managed to successfully complete any of these projects "
In international project management, the enemy is called " it's obvious ", "it goes without saying ", " it's self explanatory ", etc. Everything has to be explained, discussed, checked, understood, otherwise misunderstanding will creep in and highly jeopardise or even destroy the project. As already mentioned above, in times of hardship a multi cultural group tends to lose its fragile balance. Multi cultural project teams are, in our view, the most fertile ground for engaging in action training on cultural differences. A most efficient approach is to have a consultant accompany the team in its launching phase, after having introduced in the preliminary meetings the necessary elements of cross cultural management : this is particularly enriching since it is directly linked to experience and action. Moving away from theory, this approach both illustrates cultural issues and allows on the spot negotiating of solutions.

Negotiation training

Whether commercial, political, internal or external, negotiation has become the key word of international business. Negotiating an alliance with a competitor on a new line of products, negotiating a partnership on an important international project, negotiating with clients or suppliers... Negotiation is happening everywhere, all the time. However, from experience we can say that negotiation is a notion that seldom holds the same meaning within different cultural groups. Is negotiating defending a position and sticking to it? (a traditional French view); is it looking for an agreement, even if sometimes detrimental to content (a more British attitude); or is it getting to know one another and aiming for harmony in execution (Japan). In any case, it is certain that two groups who negotiate without agreeing on the finality of what is bringing them together have very little chance of reaching a satisfactory agreement.
The comparative studies we have carried out on negotiators' " national " profiles show how wide the gaps are. Negotiating outside one's " cultural territory " needs a preparation that companies are including more and more in their training programmes. To traditional sales and negotiation techniques have been added inter cultural data which help anticipate the opposing party's reactions and avoid been caught in the usual traps..
The ability to negotiate, which we like to think means being able to consider the " other's " point of view towards a constructive outcome, is, in our opinion, a fundamental skill to succeed in an international environment.

Improving communication

What is true for negotiation is also true for communication, whether direct or through media. Because of internationalisation, companies now have to answer calls for tender everywhere on the planet. Presenting a project and a proposal on the other side of the world, before an audience of local leaders for political decision, of international sponsors for financing, and of international consulting firms for technical evaluation, has nothing to do with answering national calls for tender where cultural connivance between client and supplier makes things much easier. Presenting an international offer is a complete communication exercise where price and the elegance of the technical solution are not sufficient. Different people need to be convinced differently. It is not a matter of using the arguments we think are good, but rather of using the ones they are prepared to listen to. And this cannot be improvised. Many groups now spend a good deal of time putting their presentation teams through working sessions led by intercultural communication specialists and " natives " of the country concerned. Media communication also needs to be adapted. " On one of our projects, we had to make an alliance with a Japanese engineering firm. As we hadn't yet met, one of us thought it would be a good idea to exchange, by fax, our presentation brochures. We were totally astonished to discover that they presented their mission as " ...contributing to the well-being and development of humanity ". Convincing our President that such ideas could be expressed in Japan without being members of a sect was quite a feat! ".
These types of errors now occur less frequently as large multi national groups have learnt to test and adapt their communication. Unfortunately, this is far from being true for some large national companies who nevertheless operate significantly at an international level.
International managers all agree that the effects of cultural differences are the most penalising factor in international business. Becoming aware of cultural differences and preparing for them means being able to anticipate these effects.

Inter cultural management training

Many international organisations are already including specific inter cultural modules in their training plans. Business schools have also come to understand the importance of cultural issues and include specific courses on the subject. It is interesting to note that these courses are greatly appreciated by the students.
Even though this approach is good, it remains insufficient. Many of these courses are too general and do not come up to the expectations of managers who want answers to their particular needs. Therefore, courses must be " made to measure ", their design based on audits which reveal the true situation and the real problems faced by management.

Recruitment and mobility

Probably the best way to " shake " mentalities is to recruit people from other cultures. But integration must be provided for, otherwise the foreigner will remain a foreigner forever - that is when he doesn't simply quit the company. " Because the English market is more mature than our French market, our boss had the bright idea to recruit an Englishman as head of our Sales Department. Well, in a Franco-French group such as ours, the effect was deplorable, and the adventure only lasted six months! ". Moreover, making management mobile encourages international exposure. This isn't without risk (we all know about the traumas of expatriation) and calls for a strong support system. Evaluation, support and career advancement systems must make allowances for very diverse aspirations. Spotting the required skills and assessing them becomes a necessity for whoever wants to implement a system which will be accepted by culturally diverse managers.
Human resource teams who work on these issues must therefore be multi- cultural, otherwise the system runs the risk of reflecting a particular cultural bias, that of the HR team itself.

Maintaining balance

We are convinced that the taking into account of cultural factors is key to achieving successful internationalisation. From blindly imposing our ways in the pioneer phase, to learning from trial and error in its aftermath, we now must continue building on these findings in order to restore or maintain an efficient, homogenous and serene company environment.
Acceptability of methods and practices at a world level, and the progressive forming of truly international company cultures are the challenges that groups who want to survive and win wherever they are will have to take up. Specific corporate culture still remains the communication platform of these new multi-national towers of Babel.
However, the manager of a multi-national computer firm was telling us during the eighties, when his company was at the height of its glory : " I'm Italian. But when I go with my Swedish colleague to sell systems to the Italian Administration, I feel much closer to him than to the civil servants of my own country. That being said, back in our company, I do feel better with Italians! "...A balance to be maintained...

Some inter cultural management tools