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  1. 1. FISH CAN’T SEE WATER Nexus of Nation-State Traits and Corporate Culture By: Brandon Rizkallah
  2. 2. Introduction and Background Info ◦ Leadership: Autocratic, Democratic, Collective, Individual, Meritocratic, Unearned, Desired, Imposed ◦ General Rule: Conform to values, traditions, ethos of country (assimilation) ◦ Issue at hand: Celebrated traits of one nation- state can be perceived as negative traits by others ◦ What policies and aspects should be kept in a merger of corporations from countries with very different cultural values and ethos? Which should be discarded? Which should be slightly modified?
  3. 3. USA Nation-State Traits ◦ Confidence in American Dream (TR Great White Fleet) ◦ Bias for Action (Speed) (Pre-Emptive Strikes) ◦ Bottom-Line Focus, Masculinity (Monroe Doctrine) ◦ The US Investor: Confident, Bold, Resolute, expand “American Dream” like Founding Fathers ◦ Frontier Spirit- Westward expansion, in business today: monopolies, 5 big banks 45% of assets (CNBC, April, 2015) ◦ US executive: Acts quickly and urgently (Book ties this to 49ers and Gold Rush) or Homestead Act ◦ Steadfastness to US values can be detrimental in global market
  4. 4. Pros/Cons of US Nation-State Traits ◦ 1) Confidence- Beneficial post WWII (Marshall Plan), Detrimental: Today w/Germany, Japan rising from ashes, now hegemons w/alternative business models ◦ American Exceptionalism: Problematic, US delegation in Japan too quick to discuss profit splits (Relationships take primacy for Japanese) ◦ 2) Speed/Action Bias- Does not coincide w/Confucian virtue of patience in Japanese, Chinese, Vietnamese business models ◦ Action in US politics: Korean War, Vietnam War, Iraq, allies slow to follow ◦ Toppling dictator successful in Iraq ◦ Issue: Geopolitical vacuum after, warring factions, power struggle, Maliki propped up by Iran, weakening of Iraqi Army after
  5. 5. Continued ◦ 3) Masculinity- PROS: persistent growth, steady profits, prolific mergers/acquisitions, aggressive marketing/advertising CON: emerging markets force US to sacrifice short-term growth and focus on long-term growth ◦ Domestic example: housing bubble, predatory lending, mortgage crisis, bailouts ◦ Key for USA- Pivot to Asia, South America, etc. where US mores are not in accordance with a more Collectivist/less Individualistic business model
  6. 6. Masculine/Feminine Business Countries ◦ Masculine: USA ◦ Feminine: Netherlands, Denmark, Sweden ◦ Masculine Traits- Wealth, Material Progress, Growth, Products, Profits, Results, Boldness, Facts, Logic, Duties, Quick Decisions, Speed, Competition, Individual Career, Personal Honor, Success, Leading Others, Commanding ◦ Feminine Traits- Non-Material Benefits, Social Progress, Development, Relations, Reputation, Solutions, Subtlety, Feelings, Intuition, Rights, Right Decisions, Timeliness, Co-operation, Collective Comfort, Sense of Proportion, Quality of Life, Nurturing Others, Rendering Services
  7. 7. Sweden Nation-State Traits ◦ Ideal Welfare State (World’s #1) ◦ Major emphasis on human rights ◦ “Feminine” ◦ Panoply of rights, privileges, benefits from cradle to grave ◦ Strict labor laws, restrictions- Virtually impossible to fire ◦ Human Rights- Stringent anti-management regulations, Swedish managers do not hold as much power ◦ Consensus is key- Consensual staff agreement for major decisions including lower management and custodians ◦ Slow decision-making process- MEETINGS
  8. 8. Pros/Cons of Sweden Nation-State Traits ◦ 1) Ideal Welfare State- CON: Ageing workforce, coddled pensions, high desire for leisure (6 week vacations) Result: Prevent Sweden from gaining hegemonic status in ultra- competitive global economy ◦ 2) Human Rights Primacy- CON: Smaller companies struggle w/year long maternity and paternity leave ◦ 3) Feminine Traits- Are very important however must adopt some of the masculine (US) business traits (growth, profits, duties, speed, quick decisions, competition, material success) ◦ Swedish Conclusion- As US must and is becoming more feminine in business composition (cooperation, proportion sense, nurturement), Swedes must adopt masculinity traits, particularly, Individualism, or get left behind
  9. 9. France Nation-State Traits ◦ France-centered self-esteem ◦ French are not Europeans, they are French ◦ Strong on theories, ideas, process ◦ Sense of intellectual superiority (Jean Paul Sartre, Alexis de Tocqueville, Jean-Jacques Rousseau) ◦ Duty to civilize the rest of us, safeguard French culture ◦ Spend more money on offices of Alliance Françoise globally than British and Germans spend combined on British Council and Goethe Institute ◦ Do not advocate Anglo-American commercialism ◦ Reputation supersedes profits in French business model ◦ Government will and has bailed out exemplary companies like Renault, Citroen. ◦ Emphasize philosophy, theory so much so that facts sometimes ignored
  10. 10. Pros/Cons of French Nation-State Traits ◦ 1) France-Centered Self-Esteem- Believe they are Europe’s representatives, CON: Desire for civilization and colonization is an inhibitor in 21st century post-colonial era ◦ Must shift and recognize moral, political equality with EU partners (Germany, UK, etc.) ◦ 2) Strong on theories, ideas, process- Pragmatic Germans, Dutch, Fins disregard theory if facts refute, CON: French do not, sometimes fail to see obvious truths ◦ French theory inflexibility- Impediment in global market
  11. 11. Continued ◦ 3) Intellectual Superiority- French hegemons of 16th, 17th, 18th century (Enlightenment) CON: No longer case today, must adapt and evolve to accommodate major global players ◦ French Conclusion- Sense of nostalgia, China, Brazil, India, Russia have passed France economically, might settle for 3rd, 4th biggest economy in Europe ◦ ISSUE: Reluctance to learn, use English, potential drawback for efficient French business ventures abroad
  12. 12. Japan Nation-State Traits ◦ Face Protection, Honor ◦ Ultra-courtesy ◦ Poor Linguists ◦ Age-based Hierarchy ◦ Company (Kaisha) is sacred ◦ Long termism ◦ Japanese: Different, inimitable from all others even Asian countries, historical foundations: 250 year (self-imposed) isolation until 1853 ◦ Proud of individualism, unparalleled standards of honesty, loyalty, humility, stoicism, bravery ◦ Japanese business tenets perhaps most representative of nation-state traits (Businesses: Torchbearers of Japan) ◦ Unmatched fidelity to corporate hierarchy; older men must be promoted in accordance w/wage schedules and seniority ◦ Japanese executive promotions generally conducted solely on seniority
  13. 13. Pros/Cons of Japanese Nation-State ◦ 1) Linguistic Issues- Problems w/business in regional economies (India, Malaysia, Singapore, Hong Kong) virtually bilingual ◦ Japanese very intelligent, issue is must learn 2,000-3,000 letters as kids which takes years, taking away time devoted to learning English ◦ Much pride in aesthetics of Japanese calligraphy, cuisine, etc. ◦ Japanese business managers: Generally possess impressive English skills, however they are minority ◦ 2) Ultra-Courtesy- Super polite, can inhibit efficacious business w/foreigners who do not emphasize this trait as much (Think back to US business delegation) ◦ 3) Age-Based Hierarchy- CON: Industrial stagnation, China has surpassed in GDP, under utilization of young talent
  14. 14. Continued ◦ Collusion between banks and gov. preserving hierarchy prevents meritocracy ◦ 4) Company (Kaisha) is sacred- CON: Spend more time w/work family than own. ◦ Devotion, Allegiance (Long hours, overtime w/o pay, etc.) ◦ 5) Long-Term Profits- Chief Japanese goal is market share not immediate profits ◦ New tech. by India, Russia, Brazil, Indonesia have made Japanese long-term contracts model obsolete. ◦ Japanese Conclusion: Enabling Japanese business philosophy is outdated and not pragmatic in current global economy, slowly evolving, must evolve faster
  15. 15. Italy Nation-State Traits ◦ Humanitarianism ◦ Flexibility ◦ Idealism ◦ Historical Context: Communist party came close to gaining power after Mussolini ◦ Today: Left wing is very influential in Italian politics ◦ Corruption: Former PM Berlusconi had media monopoly, scandals w/beauty queens ◦ It is said that 3 mafia black markets account for 10% of Italian GDP ◦ Economic Underachievement: “Sick man of Europe,” common to have fake doctor’s note in South Italy ◦ Futile Reform Attempts: Berlusconi tried to raise retirement age, institute austerity package linking compensation to productivity ◦ Result: 1 million Italians went on strike ◦ Powerful Labor Unions: “No American Standards,” “We are not machines” ◦ Low public approval when FIAT invested $1 billion in new factory (Open 24/7/6 days a week, 3 shifts, 280,000 cars per year)
  16. 16. Pros/Cons of Italian Traits ◦ 1) Humanitarianism- PROS: Good customer relations, close relationships CONS: Overprotection of failing businesses (Prolonging inevitable), lack of control over illegal/unethical business practices, pardoning laziness ◦ 2) Flexibility- PROS: Great in perceptive negotiating, adapting to capricious markets CON: Can lead to acceptance of crime, corruption (Naples’ Camorra mafia dates back to 16th century) ◦ 3) Idealism- PRO: Great in setting corporate goals CONS: Failure to be realists leads to misappropriation of funds, unbalanced budgets, abandoned construction projects ◦ Italian Conclusion- Need metamorphosis, become more pragmatic and less idealistic like the East Asian markets
  17. 17. German Nation-State Traits ◦ Factual Planning and Process ◦ Ordnung ◦ Work Ethic ◦ Focus on Exports ◦ Hierarchical Bureaucracy ◦ German Stance- They are the most authentic, forthright, reliable business partners ◦ German Precedence- Data, Law, Property, Rank ◦ Work Traits- Cleanliness, Punctuality, Neatness, Fidelity, Loyalty, Honor ◦ German Hierarchy- Experience is foremost ◦ Ordnung- Order inherent in all life aspects and in the mind
  18. 18. Pros/Cons of German Nation-State ◦ 1) Factual Planning and Process-PROS: Meticulous planning= accurate budgets, no need for improvisation CONS: Detrimental when unforeseen events arise ◦ After Berlin Wall fell, there were exchange problems between both currencies, inaccurate cost projections of East German construction projects, failure to allocate funds to sanitize contaminated East German factories ◦ Over planning and being too rigid led to inability to adapt quickly (Think QB Audible) ◦ 2) Ordnung- Has been very beneficial to German economy, may need to be amended especially w/millions of asylum seekers, Gastarbeiters, and to suit other cultural strategies ◦ 3) Focus on Exports- Cornerstone of German prosperity ◦ Issue on horizon could be fierce competition from lower-wage export minded economies (Indonesia, Vietnam) ◦ Germany will probably continue to focus efforts in other areas like automobiles, luxury products, and other non mass-produced goods
  19. 19. Continued ◦ 4) Hierarchical Bureaucracy- CON: Too much red-tape, excess rules leads to stagnation and inability for necessary quick structural adjustments ◦ Cannot change a German company’s composition/culture quickly ◦ Many regulations must first be met, weakness in times of crisis where strategy must change quickly ◦ German Conclusion- Must abandon some past successful processes that do not intertwine with global market practices and ethos ◦ Risk losing young Germans to USA, Finland, Canada, Australia (Climb ladder faster)
  20. 20. Great Britain Nation State Traits ◦ Individualism and Inventiveness ◦ Engineering Strengths ◦ Class System ◦ Insularity (Not interested so much in other cultures) ◦ No blueprint for a British company ◦ Pride in liberalism, individualism, freedom of choice ◦ Most SMEs (Small/Medium Enterprises) per capita in world ◦ SME Criteria- Under 250 workers, assets under 12.5 mil. pounds (UK Dep. Of Business, Innovation, and Skills) ◦ UK annual goal: 25% of gov. spending to SMEs ◦ UK Business Traits- Registration and business set-up takes just a few days ◦ No norms/standards from government except in taxation and social welfare (Embrace individuality and nonconformity)
  21. 21. Great Britain Pros and Cons ◦ 1) Individualism and Inventiveness- PRO: Innovation, more cars produced in the UK per capita than anywhere else ◦ Many by non UK manufacturers (Toyota, Nissan, Mercedes, GM, etc.) ◦ 2) Engineering Strengths- Industrial Revolution pioneers, dominated 19th century ship, vehicle, weaponry, civil engineering (bridges, etc.) production ◦ UK major players today- BAE Systems, Rolls Royce, Bentley, Jaguar/Land Rover, etc. ◦ CON: Today UK engineers are not as prevalent, young British are focusing more on degrees in financial services (major manufacturing losses to Germany, Japan, US, China, Korea) ◦ 3) Class System- Still somewhat inherent today, status sometimes determined by family name ◦ However, slow transition to meritocracy w/large middle class Painting Courtesy of: Hendrik van Minderhout
  22. 22. Continued ◦ 4) Insularity- CON: Language barrier when doing business w/Spain, Italy, France ◦ No major effort at adapting and understanding other European cultures ◦ Share many traits w/Japan , also island, and have good business relationship (modesty, manners, royal families, geography, historical ceremonies, clubs) ◦ British Conclusion- So fortunate that English is lingua franca which equalizes cultural insularity ◦ Must study foreign cultures to establish more global business relationships and regain global influence as in British Empire pinnacle ◦ KEY: More Cosmopolitan, branch away from strict adherence to old British values
  23. 23. Closing Remarks ◦ 6/7 countries examined (except UK), nation-state values pervasive in corporate culture and injected in business models ◦ This is fine, BUT must address the derailing elements (the nation-state values not conducive to success in a 21st century global economy) ◦ Sweden-Democracy and Human Rights-centered ◦ Japan, Germany- Hierarchy and Discipline ◦ France, Italy- Social values over material values ◦ USA- American Dream legacy in business and economy ◦ UK- Business culture least influenced by national values ◦ Countries like this can generally adapt quickest to suit volatility and changing markets ◦ Author’s Conclusion- Corporate success in global economy ultimately not determined by governments, but by executives ◦ Must employ insightful and adaptive tactics and strategies to accommodate ever-changing markets, regimes, and cultures
  24. 24. Discussion ◦ 1) Is there an American founding principle that you believe is most conducive to corporate success in a global market? ◦ 2) Which nation-state trait/traits of another country do you think American business leaders should make a concerted effort to adopt? ◦ 3) Is there an ideology, value, or prevailing sentiment prominent in the global market that you think poses a major challenge to US economic development? ◦ 4) If you were a business leader or head of state at a major summit or forum, what issue would you emphasize as the biggest inhibitor to market globalization? ◦ 5) Is there a country not viewed as a current global economic hegemon that you think will become one? ◦ 6) If so, which corporate and nation-state traits do you think will facilitate this rise? Painting Courtesy of: Andy Thomas