Can business cross the cultural divide?

Communication World, Oct-Nov, 1998 by Elizabeth Howard

In this new era of corporate power, it is the Americans who are perceived as callous colonizers. Our missionaries are Ronald McDonald, the affable, curly-headed clown, and Mickey Mouse, the gentlemanly attired mayor of the universe, offering an outstretched white-gloved palm and sporting a salesman's grin. Their disciples watch MTV, drink Coca Cola and consume hamburgers, without a care in the world, and appear oblivious to the culture around them.

Is the hubris, probably inherent in freewheeling capitalism, dangerous? Is it preventing us from learning from other cultures? Can different cultures work together effectively? How will we handle diversity issues on the global stage? Are we too absorbed in our own consumer/technology culture to take the time and effort to learn about others? Later, will we reap resentment, possibly the closing of markets and minds?

Retrospection is a useful exercise that should be undertaken more often as we struggle to understand the issues and develop solutions for the cultural, social and economic problems that have been created.

Robert McNamara served as the secretary of defense for both U.S. presidents Kennedy and Johnson and had a strong hand in shaping America's Vietnam policy in the 1960s and '70s. His memoir, "In Retrospect: The Tragedy and Lessons of Vietnam," is a look back at what went terribly wrong. He shares with readers a list of points. While his list considers geopolitical military problems, we have edited the essence of his list into 10 points as a useful guide for business.

1. Identify and form alliances with the competition.

In a global economy and in an era of "cold peace," the concept of adversary takes on new meaning. Successful ventures prosper by creating alliances, aligning themselves with industry leaders and innovators. The recent merger of the U.S. company Chrysler into the German company Daimler Benz has created a super firm valued at between U.S. $35 billion and $39 billion, the largest cross-border merger in history. The super firm will be neither a German company nor an American company. Both companies recognized that they could not grow internationally without a partner and a presence outside of North America and Europe.

The airline industry, formerly dominated by national carriers, also has undertaken an aggressive program of forming alliances. British Airways with American Airlines and United Airlines with Lufthansa Airlines are two examples.

In Europe, three of the largest aircraft and defense companies are in the process of a merger. British Aerospace, Daimler-Benz Aerospace of Germany and Aerospatiale of France will join to form one of the most powerful companies in Europe, designed to rival Boeing and Lockheed Martin.

And these mergers are not restricted to manufacturing companies. Five of Europe's leading commercial law firms, U.K.'s Linklaters, Belgium's De Bandt van Hecke & Lagae, Holland's De Brauw Blackstone Westbroek, Sweden's Lagerlof & Leman and Germany's Oppenhoff & Radler, have joined to create Europe's largest legal practice and the world's second largest law firm. By consolidating on an international level, these firms hope to capitalize on the upcoming European economic and monetary union, as well as compete more successfully against American law firms.

2. Create an internal team that is working together.

Loyalty, as defined by a gold watch at the end of a long career with one company, is over. However, there is loyalty of a new kind, one that centers on respect for the ethical behavior of the organization and allows individuals to feel good about the way employees are treated within a company. "Chainsaw Al" Dunlap, as he is affectionately nicknamed for axing thousands of employees, left in his wake angry and disgruntled ex-employees at Sunbeam. AT&T and other companies have downsized with much more grace, leaving employees with the dignity and self-esteem to go on and become entrepreneurs or start new careers. Now that Dunlap himself has been fired, perhaps he has a better understanding of the concept of working together.

3. Understand the role your company plays in its industry.

Businesses continue to consolidate to become more competitive. The merger of American Home Products and Monsanto will create a company with a market capitalization in excess of U.S. $96 billion, and the announced AT&T and TCI merger is valued at $48 billion. This activity plays a role in shrinking industries, putting pressure on the CEOs and the management of these companies to set the standard for what is right. When something goes terribly wrong with one of these super-companies we will all be affected in one way or another.

4. Understand your competitors where both threats and opportunities exist.

If market share is essential to maintaining competitiveness, it is important to understand who your competitors are. Does Barnes & Noble (with actual assets) face a threat from Amazon.corn (an Internet company without assets and a negative operating cycle) or the collective and national American Booksellers Association? Barnes & Noble has actual "foot traffic" and Amazon must spend to generate browsing and hits in cyberspace - a new concept. Which business will prevail? Clearly the one that develops and implements a successful new model. The stakes are high.