Fish cant see water how national culture can make or break your corporate strategy

“International organizations often boast of their experience and ability to deal and cope with sometimes very different national administrative cultures e.g how to get civil servants from Sicily and Scandinavia to work together smoothly and effectively Richard Lewis’s books should be standard reading in the European Union’s institutions, as they have been for years in the World Bank Different cultural backgrounds enrich and enhance creativity in pooling intellectual resources but only if the members of the team understand and take into account the underlying cultural differences I will gladly recommend this new book to my colleagues in Brussels Richard’s penetrative cultural insights combine with Kai Hammerich’s in-depth understanding of corporate leadership to produce a valuable tool for executives in this era of globalization.” Eero Vuohula, former official of EFTA and Director at the European Commission’s Directorate of External Affairs “Organizational culture is too often an afterthought for businesses Whilst many organizations believe they are global, they not recognize how their heritage has defined their current culture This book provides a well thought out methodology and pragmatic insights in organizational culture, to enable business outcomes This is really important for leaders working in an international environment and Human Resources professionals who see culture as the glue for organizational effectiveness.” Hugo Bague, Group Executive Organisational Resources, Rio Tinto “In essence the value of this book is in the successful linking of theory and reality: while insightful on several levels, it is factual, illustrative, and   . .  utterly practical for various audiences Fish Can’t See Water is not just an interesting read, but, most importantly, a useful guide for navigating the intricacies of the current, ever-changing (yet surprisingly the same), business world.” Dr Iouri Bairatchnyi, Former Director, Cross Cultural Programmes, World Bank, Washington DC ffirs01.indd i 7/4/2013 11:44:06 AM FISH CAN’T SEE WATER HOW NATIONAL CULTURE CAN MAKE OR BREAK YOUR CORPORATE STRATEGY KAI HAMMERICH AND RICHARD D LEWIS ffirs02.indd iii 7/4/2013 11:44:08 AM This edition first published 2013 © 2013 John Wiley & Sons, Ltd Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher Wiley publishes in a variety of print and electronic formats and by print-on-demand Some material included with standard print versions of this book may not be included in e-books or in print-on-demand If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley com For more information about Wiley products, visit www.wiley.com Designations used by companies to distinguish their products are often claimed as trademarks All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners The publisher is not associated with any product or vendor mentioned in this book Limit of Liability/Disclaimer of Warranty: While the publisher and authors have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose It is sold on the understanding that the publisher is not engaged in rendering professional services and neither the publisher nor the authors shall be liable for damages arising herefrom If professional advice or other expert assistance is required, the services of a competent professional should be sought Library of Congress Cataloging-in-Publication Data Hammerich, Kai, 1960– Fish can’t see water : how national culture can make or break your corporate strategy / Kai Hammerich and Richard D Lewis pages cm Includes bibliographical references and index ISBN 978-1-118-60856-2 (cloth) Corporate culture—Cross-cultural studies Organizational behavior—Cross-cultural studies National characteristics Strategic planning I Lewis, Richard D II Title HD58.7.H343 2013 658.4'012–dc23 2013013592 A catalogue record for this book is available from the British Library ISBN 978-1-118-60856-2 (hardback) ISBN 978-1-118-60853-1 (ebk) ISBN 978-1-118-60854-8 (ebk) ISBN 978-1-118-60855-5 (ebk) Cover design: Dan Jubb Front cover image: iStockPhoto/bora ucak Back cover image: iStockPhoto/Mirosław Kijewski Set in 11/14.5 pt Palatino Std by Toppan Best-set Premedia Limited, Hong Kong Printed in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY ffirs03.indd iv 7/4/2013 4:54:12 PM CONTENTS Preface xiii Acknowledgements xv Introduction What is “culture”? The water that we couldn’t see when analyzing culture The long-term view: corporate lifecycles and corporate culture The innovation phase 10 The geographic expansion 10 Product-line expansion 11 Efficiency and scale focus 11 Consolidation 12 Interruptions of the lifecycle – when the crisis hit 13 “Global” companies 15 Summary 17 A brief chapter overview 19 Part I Developing the Cultural Dynamic Model® 23 Corporate Culture, Strategy and Business Results 25 What is corporate culture? 26 The three levels of culture 26 How leaders embed their values, beliefs and assumptions early on 28 Reinforced by the daily work practices in the mature organization 28 The six dimensions of corporate culture 29 Corporate culture and strategy: the cultural dynamic model® 30 Results come from work that gets done: “the work practices” 31 Work practices influenced by  .  31 ftoc.indd v 7/4/2013 11:44:12 AM vi CONTENTS The water people don’t see: the national influencers 41 The three levels of culture 44 The time lag of culture and cultural agility as a competitive advantage 45 Chapter summary 47 The Lewis Model – Setting the Scene 49 Linear-active cultures 57 Multi-active cultures 58 Reactive cultures 60 Getting things done 64 Nation-State Traits and how they affect Corporate Cultures in Seven Countries 69 The United States 70 Key nation-state traits 70 Historical background 70 Expression of nation-state traits within corporate culture 71 Potential advantages/disadvantages of US nation-state traits 73 Summary 76 Sweden 77 Key nation-state traits 77 Historical background 77 Expression of nation-state traits within corporate culture 78 Potential advantages/disadvantages of Swedish national traits 79 Summary 80 France 80 Key nation-state traits 80 Historical background 81 Expression of nation-state traits within corporate culture 81 Potential advantages/disadvantages of French national traits 82 Summary 83 Japan 84 Key nation-state traits 84 Historical background 84 Expression of nation-state traits within corporate culture 85 ftoc.indd vi 7/4/2013 11:44:12 AM CONTENTS vii Potential advantages/disadvantages of Japanese national traits 86 Summary 90 Italy 90 Key nation-state traits 90 Historical background 90 Expression of nation-state traits within corporate culture 91 Potential advantages/disadvantages of Italian national traits 94 Summary 94 Germany 95 Key nation-state traits 95 Historical background 95 Expression of nation-state traits within corporate culture 95 Potential advantages/disadvantages of German national traits 96 Summary 98 Great Britain 98 Key nation-state traits 98 Historical background 98 Expression of nation-state traits within corporate culture 99 Potential advantages/disadvantages of British national traits 100 Summary 102 The Cultural Dynamic Model® and the Austin Motors Case 105 Introduction 105 The static cultural dynamic model® – bringing it all together 106 The embedded values and beliefs from the business realities and the national culture 106 Work practices 108 Organizational structure and hierarchy (formal and informal) 108 Decision-making processes 110 Organizational skills and capabilities 110 Workflow processes 112 The performance management, reward and compensation systems 112 Work practice across borders 113 Decoding observed behaviours and vision statements 114 Mission and vision statements 116 Identifying the values, assumptions and beliefs underpinning the “cultural universe” 117 ftoc.indd vii 7/4/2013 11:44:12 AM viii CONTENTS A cultural dynamic and the full cultural dynamic model® 119 Case study: Austin Motors 121 A brief 70-year history of Austin Motors 121 The work practices 126 Artefacts, rituals and communicated values 127 Observed behaviour at Austin 128 The results 128 One enabling cultural dynamic – “the bias-for-action” 129 The potentially derailing short-term wing-it cultural dynamic 130 Conclusion 131 Chapter closing 132 Part II Cases: The Lifecycle of a Company from Innovation to Consolidation 133 The Embryonic Period 135 Values embedded during the early years: Apple, Microsoft and Dell 136 Apple 136 Microsoft 137 Dell 138 Traits that enable success over the business cycles 140 The embryonic period 141 Case study: Nokia 144 The Finnish culture 144 The embryonic period of the new Nokia 1.0 145 The work practices at Nokia 1.0 147 Nokia 2.0 149 Nokia 3.0 152 Case study: KONE – agility and humility 154 Case study: Walmart – an American business tackling foreign markets 155 Walmart in China 158 Walmart in South Korea 159 Walmart cultural adjustments 159 Chapter close – preview the growth period 160 ftoc.indd viii 7/4/2013 11:44:12 AM CONTENTS The Growth Period ix 161 The product line expansion stage 162 Description of this phase 162 National traits that tend to enable or derail during the innovation phase 164 The scale and efficiency phase 164 National traits that tend to enable or derail during the scale and efficiency phase 165 Case study: Sony versus Samsung Electronics 166 Sony 166 Samsung Electronics 172 Conclusion on Sony versus Samsung Electronics 180 Chapter close 184 The Maturity Period 185 The consolidation phase 187 Description of the consolidation phase 187 National traits that tend to enable or derail during the maturity period 188 Case study: Toyota 190 The founder and Toyota’s embedded corporate values 191 The Toyota Way and work practices at Toyota 191 The Toyota Way as a source of sustainable differentiation 193 Toyota in America 195 The crisis and conclusion 197 Case study: FLSmidth 198 The Danish national culture 199 A brief history and the values the founder embedded 200 The next 70 years – disaster strikes – and a new strategy is outlined 201 A new footprint challenges the culture and the work practices 202 The “small country” dilemma facing FLSmidth as it moves from 1.0 to 2.0 203 The three cultural strategies options facing FLSmidth 203 Epilogue on FLSmidth 205 ftoc.indd ix 7/4/2013 11:44:12 AM x CONTENTS Case study: P&G 205 A brief history of P&G 206 A few central embedded values 206 Key lessons from the eight cases 210 Part III The Model in Action (Lessons for Boards, Managers and Investors) 213 Whither the West 215 Whither the West 215 Appearance and reality 218 Golden rules for dealing with reactive cultures 220 Speech is to promote harmony 220 Good listening is important 220 Never interrupt 221 Never confront 221 Never disagree openly 221 Never cause anyone to lose face 222 Suggestions, especially criticism, must be indirect 223 Be ambiguous, so as to leave options open 223 Prioritize diplomacy over truth 224 10 Follow the rules but interpret them flexibly 224 11 Utilize networks 225 12 Don’t rush or pressure Asians Do things at appropriate times 225 13 Observe fixed power distances and hierarchy 227 14 Work hard at building trust 228 Golden rules for dealing with multi-active cultures 228 Speech is for opinions 233 Let them talk at length and then reply fully 233 Be prepared to discuss several things at once 234 Be prepared for several people talking at once 234 Display feelings and emotion 235 Interrupt when you like 235 Truth is flexible and situational 235 Be diplomatic rather than direct 236 ftoc.indd x 7/4/2013 11:44:12 AM CONTENTS Socialize enthusiastically, be gregarious 236 10 Think aloud 236 11 Complete human transactions 237 12 Seek and give favours with key people 237 13 Overt body language and tactility are acceptable 14 Reputation is as important as profit 238 15 Accept unpunctuality 238 16 Remain relationship oriented 238 The Crisis xi 238 241 Strategy v competition: being “outplayed” 243 The Prussian Army and Field Marshall Von Moltke 243 The effect of national traits 246 Problems in execution 247 Examples – Sony and GM 247 The effect of national traits on poor execution 247 Disruption 248 Technology disruption 248 The effect of national traits on technology disruption 250 Process disruption 250 The effect of national traits on process disruption 251 Success – the success crisis 251 Success makes blind – the success trap 252 Success has no memory 252 The share price trap 253 The burning platform 254 Time – if you don’t move forwards you move backwards 255 Change of leadership 256 Navigating a transformation point 256 Differing cultural performances in times of crisis 257 Poor strategy facing competition 257 Poor execution 258 Disruption 259 Success 259 Time 260 Change of leadership 260 ftoc.indd xi 7/4/2013 11:44:12 AM 282 bapp.indd 282 APPENDIX Country Enablers Derailers Comments Canada Great diversity Proximity to US market Internationally popular Laid back Vast land area and mineral wealth Lack aggression in business Failed to integrate French Canadians Favourable future, based on resources and popularity Access to Atlantic, Pacific and Arctic China Work ethic Huge labour force Low wages Their turn to develop One party decides Pragmatism Emerging middle class Rural people move to cities Wages are rising Public will demand more comforts (e.g car) Lack of entrepreneurship Insular language problems Military spending Overheating economy Rural poverty Poor infrastructure will give future social problems Communism unlikely to survive next 20 years Exports-led economy needs changing to domestic-led Hong Kong Can morph rapidly when required Eliminate red tape Work ethic Uneasy situation within PRC Best example of culture adapting to change in business strategy India Big labour force Great improvisers (Jugaad) IT strength Future overpopulation Lack process Disorganized Endemic corruption Poor infrastructure Japan Fukushima disaster Poor linguists Face protection, revealed collusion Age-based hierarchy honour between government Risk averse in Ultra-courtesy and big industry personal matters The company is sacred Toyota arguably Long-term Long-termism world’s best car perspective producer but would hampers quick not admit mistakes action when needed in time (face) “Salaryman” – lacks Reflexive obedience, spontaneity unable to solve Slow reaction to systemic crisis over global changes 20 years 7/4/2013 11:43:33 AM APPENDIX Country Enablers Derailers Comments Korea Nationalism Pull together Work ethic Confucian hierarchy Excessive patriotism Insular Lack diversity Too rigid Aim to “beat the Japanese” has been largely achieved Rising wages threaten competitiveness Mexico Favourable demographics Proximity to US market Tourist receipts Drug problems Often exploited by USA Unemployment Violence common Frequent culture clashes with USA Russia Patriotism Collective spirit Vast natural resources Physical toughness Well educated esp engineering Overcollective under communism Great distances hamper unity Uneven work tempo Inclination to apathy State is too bureaucratic and corrupt Populace dissatisfied politically Adverse demographics (declining) Singapore Overregulation Work ethic Creeping red tape Controlled economy Discipline Favourable geographic location Good relations with Beijing Turkey Work ethic Low wages Good demographics Stable political arrangement between army and Islamists Failed to solve Kurdish question Uncertainty about relations with EU Currently enjoying impressive growth (c 7% – 2012) USA Confidence (the American Dream) Bias for action (speed) Bottom-line focus Masculinity Ignoring other cultures Waste – extravagance Lack patience (unlike Asians) Weak at building relationships Success has bred arrogance Global dominance now being challenged Never underestimate US resilience 283 Second only to Hong Kong in terms of adaptability EUROPE Belgium Sound economy based Often bitter rivalry on diligence and between Flemish ability to compromise and Walloons Future of unified state uncertain (Continued) bapp.indd 283 7/4/2013 11:43:33 AM 284 APPENDIX Country Enablers Derailers Denmark Intelligent planning of small-but-good economy Belief in the strength of the communal Danish Model Creative Agile Many SMEs Belief in the Danish Few big companies Model Lack of scale in a rapidly globalizing world Pragmatic, yet sometimes not open Finland Agility Innovation Rural values Decline of agility post Nokia’s prolonged success engendered 2005 (Nokia) arrogance Lack of emotional Go-it-alone dangers engagement Go-it-alone inclination France France-centred, self-esteem Strong on theory, ideas, process Sense of intellectual superiority Ideas often trump pragmatism France-centred focus on French language Difficult to fire failures Germany Factual planning and process Ordnung Work ethic Focus on exports Precision engineering Financially sound Hierarchical Resilient, like USA bureaucracy Location at heart of EU Holidays getting longer Exports-lead challenged by Korea, China, Japan Italy Humanitarianism Flexibility Idealism Southern inefficiency Mafia Weak government Indebtedness Split state Stubbornness Overdirectness Historically international Solid economy and finance Netherlands Individualism Pragmatism Good linguists Global outlook Norway bapp.indd 284 Thrift Prudent exploitation of oil, etc Comments Poor English language skills Loss of Englishspeaking markets Too cautious in global Even Norwegians impatient with “oil conditions reserve fund” Content with status quo Too reliant on its natural resources 7/4/2013 11:43:33 AM APPENDIX Country Enablers Derailers Comments Poland Hard workers Unified nationally Obsession with survival Ultra-defensive Frequent scepticism Delicate relations with two neighbours (Russia and Germany) Often underestimated Spain Drive Originality Pride in past Poor language skills Strong links to S Neglect other cultures America High indebtedness (2013) Sweden Some exploit benefits, Ideal welfare state but neglect duties Obsession with human of system rights Complacency Femininity Consensus system Once consensus is causes slow reached, most will decision-making align Switzerland Diversity Discipline Language skills Quality UK bapp.indd 285 Individualism and inventiveness Engineering strengths Creativity in design and the arts Stable institutions Strong currency 285 Technology lead being eroded by Korea, Japan, etc Attempt to rebalance the economy (less state, more private enterprise) Seasonal labour force Temporary immigrants – some friction Manufacturing base Weak on process mostly lost (cars, Overtraditional textiles, coalmining, Slow to change shipbuilding) Educational standards Overemphasis on declining financial services Class system Insularity 7/4/2013 11:43:33 AM Fish can’t See Water: How National Culture can Make or Break Your Corporate Strategy By Kai Hammerich and Richard D Lewis © 2013 John Wiley & Sons, Ltd REFERENCES AND WEBSITES Adizes, I (1999) Managing Corporate Lifecycles Adizes Institute Bungay, S (2011) The Art of Action, Nicholas Brealey BusinessWeek, March 2010, quote from IBS Center for Management Research Case on Toyota, BSTR/385 Chang, S.-J (2010) Samsung vs Sony, Wiley Christensen, C (1997) The Innovator ’s Dilemma, HBS Press Church, R (1994) The Rise and Decline of the British Motor Industry, Economic History Society Collins, J (1995) Built to Last: Successful Habits of Visionary Companies, Harper Business Essentials Collins, J (2009) How the Mighty Fall, Random House De Mente, B.L (2004) Korean Business Etiquette, Tuttle Denison, D., Hooijberg, R., Lane, N and Lief, C (2012) Leading Culture Change in Global Organizations, Jossey-Bass Drachmann, P (1932) FLSmidth & Co., 1922–1932 Egmont H Petersens Hof-Bogtrykkeri Friedman, T (2005) The World is Flat, Farrar, Straus & Giroux Hakkarainen, A (2011) Behind the Screen, eBook, Amazon Hino, S (2006) Inside the Mind of Toyota, Productivity Press Hofstede, G (1980) Culture’s Consequences, Sage Hofstede, G., Hofstede, J and Minkov, M (2010) Cultures and Organizations, 3rd Edition, McGraw-Hill Hoover, B and Hammerich, K (2009) Building the “A” Team in America, White paper, Russell Reynolds Associates Jones, G (2005) Renewing Unilever; Transformation and Tradition, Oxford University Press Kosonen, M and Doz, Y (2008) Fast Strategy, Wharton School Publishing Kotter, J and Heskett, J (1992) Corporate Culture and Performance, Free Press Lewis, R.D (2003/2007) The Cultural Imperative, Nicholas Brealey Lewis, R.D (2005) Finland, Cultural Lone Wolf, Intercultural Press, Nicholas Brealey Lewis, R.D (2006) When Cultures Collide, 3rd Edition, Nicholas Brealey Liker, J.K and Hoseus, M (2008) Toyota Culture, the Heart and Soul of the Toyota Way, McGraw Hill Michel, T (2010) Samsung Electronics, Wiley Morita, A (1984) Made in Japan, Dutton bref.indd 287 7/12/2013 10:18:24 AM 288 REFERENCES AND WEBSITES Pagel, M (2012) Wired for Culture, Allan Lane Peters, T and Waterman, R.H (1982) In Search of Excellence, HarperCollins Porter, M (1980) Competitive Strategy, Free Press Riisager, K (1922) FLSmidth & Co., 1882–1922 (40 years), Trykt i Langkjaers Bogtrykkeri Ad Schein, E.H (2004) Organizational Culture and Leadership, Jossey Bass Schisgall, O (1981) Eyes on Tomorrow, Doubleday Fergusson Sharratt, B (2000) Men and Motors of ‘The Austin’, Haynes Sull, D (2005) Why Good Companies Go Bad and How Great Managers Remake Them, Harvard Business School Press Which?, October 2010 Websites http://denning.law.ox.ac.uk/news/events_files/USCEOsPaidMore_2012_05_21_(2).pdf http://en.wikipedia.org/wiki/British_Motor_Corporation http://en.wikipedia.org/wiki/History_of_Ford_Motor_Company http://en.wikipedia.org/wiki/Hubris http://en.wikipedia.org/wiki/Lee_Kun-hee http://en.wikipedia.org/wiki/Leyland_Motors http://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalization http://en.wikipedia.org/wiki/Myers-Briggs_Type_Indicator http://qvmgroup.com/invest/2012/03/31/worlds-30-largest-public-companiesby-market-cap/ http://seekingalpha.com/article/259736-china-surpasses-japan-in-percentage-of-worldmarket-cap/ http://www.bbc.co.uk/news/business-17865117 http://www.bbc.co.uk/news/technology-16832990 http://www.businessweek.com/stories/2003-07-06/p-and-g-new-and-improved http://www.helium.com/items/1086171-how-do-key-success-indicators-or-kpi-work http://www.mobilenewscwp.co.uk/2011/05/nokia-market-share-slips-to-lowestin-14-years/ http://www.prweb.com/releases/2006/02/prweb342169.htm http://www.samsung.com/uk/aboutsamsung/management/boardofdirectors.html; http://www.samsung.com/us/aboutsamsung/management/usexecutiveteam.html http://www.sony.net/SonyInfo/CorporateInfo/History/history.html http://www.telegraph.co.uk/expat/4190728/Frances-educational-elite.html http://www.toyota-global.com/company/vision_philosophy/toyota_production_ system/origin_of_the_toyota_production_system.html http://www.vanityfair.com/online/daily/2012/07/microsoft-downfall-emailssteve-ballmer http://www2.e.u-tokyo.ac.jp/∼sousei/WARDLEY3.pdf bref.indd 288 7/12/2013 10:18:25 AM Fish can’t See Water: How National Culture can Make or Break Your Corporate Strategy By Kai Hammerich and Richard D Lewis © 2013 John Wiley & Sons, Ltd INDEX ABB 254 absenteeism 219 accelerators 277 active inertia 269 actual values 116, 276 Adizes, Dr Ichak corporate lifecycle 10, 242 Aerospatiale 75 affinity networks 58 Agile 105–6 Agnelli 51 Alahuhta, Matti 146, 155 Ala-Pietilọ, Pekka 146 Aldi 208 Alliance Franỗaise 81 Amazon 19, 251, 257 ambiguity 223–4 American Chamber of Commerce in Japan (ACCJ) 74 American Dream 70, 71, 72, 73–4, 102, 217, 268 Andon Cord 112, 196 Angry Birds 145, 278 Annis, Barbara 276 AP Moeller Maersk 200 Apple 2, 9, 14, 36, 50, 116, 135, 136–7, 138, 139, 144, 180, 184, 247, 254, 256, 269 iPhone 36, 137, 152–3 iPod 137, 169 Argentina 262, 281 artefacts 27, 29, 31, 34, 43, 105, 107–8, 114, 127, 193, 198 Asda 156, 158, 159 Asea-Graham 154 Asian crisis (1997) 176–7 aspirational values 116, 276 Ataturk, Kemal 52 audit, cultural dynamics 272–3 Austin, Herbert 121–2, 126 bindex.indd 289 Austin Motor Company 3, 11, 36, 165, 256 see also Austin Motor Company case study Austin Motor Company case study 105, 121–32, 135 artefacts, rituals and communicated values 127 bias-for-action and problem-solving focus 129–30 history 121–6 business influencers 125 English national influencers 125 leadership 126 strategic imperatives in 1960 123–4 observed behaviour 128 results 128–9 short-term wing-it cultural dynamic 130–2 work practices 126–7 decision-making processes 126 organizational skills and capabilities 126–7 organizational structure 126 performance management, reward and compensation systems 127 workflow processes 127 Australia 51, 53, 69, 96, 221, 224, 262, 281 BAE 51 balanced scorecards 57 Baldauf, Sari 146 Balmer, Steve 137, 138, 208 Barnevik 78 behavioural preference methodologies 274 Belgium 283 benchmarking 58 Berlusconi, Sylvio 91, 93 best practice 57 Best Price 159 Bethlehem Steel 254 bias-for-action 140–1 Bill and Melinda Gates Foundation 40 BMC 122, 126, 128, 131 7/5/2013 1:52:53 PM 290 INDEX Boards, recommendations to 272–3 body language 60, 62, 229, 230, 238 Boeing 51 Bonaparte, Napoleon 243, 244, 246 Borroughs 248 BP 40, 155 brand and positioning 37–9 Branson, Richard 51, 99 Brazil 219, 222, 234–5, 236, 260, 261, 281 football in 1–2, 141 British Council 81 British Leyland (BL) 3, 121, 122–3, 129 Bull 254 burning platform 254–5 business formulae 58 business influencers 33, 34–41, 43, 106–7 business process re-engineering 57 business relationships 58 business strategy and execution dimension 32 business traits 25, 40, 135, 142, 164, 165 Camorra 91 Canada 53, 159, 282 career-pathing 58 Carlsberg Breweries 200 Carnegie 51 Carrefour 156, 208 Carstedt 51, 78 Caterpillar 254 CBS 168 CBS Sony Records 168 change management 57, 65 Chaplin, Charlie 32 China 4, 9, 75, 282 cultural isolation 217 economy 55–6, 89 governmental controls 103 growth in 215, 261 networks in 225 reforms in business culture 102 rules in 224 wage structure 216 Walmart in 158–9 Christensen, Clayton: Innovator’s Dilemma, The 32, 188, 248, 249 Chrysler 93, 156, 157, 259 Church, Roy: Rise and Decline of the British Motor Industry, The 132 Citroën 81 “clash of civilizations” 49 Clausewitz, Carl von: Vom Kriege (On War) 244 Cloud 106 Coca-Cola 15 collaborative software 58 collective cultures 54 collectivism v individualism 54 bindex.indd 290 Collins, Jim Built to Last 32 How the Mighty Fall 188, 251–2, 270 Columbia Pictures 168 Compaq 37 competition v strategy 243–6, 257–8 competitive dynamics and lifecycle of an industry 35–7 Computer-assisted Acquisition and Logistics Support (CALS) 58 concurrent re-engineering, 58 confrontation 221 Confucianism 52, 74, 88, 89, 159, 172, 173, 174, 216, 219, 227 Control Data 248 convergence/divergence of nation-state traits and corporate cultures 84 CORE principles 58 corporate crisis 241–63 causes 241–2 change of leadership 256, 260–1 cultural performances and 257–62 disruption 248–51, 259 technology 248–50 process 250–1 navigation of transformation 256–7, 261–2 problems in execution 247–8, 258–9 reactions to 262 resurgence and 242, 243 strategy v competition 243–6, 257–8 success 251–5, 259–60 burning platform 254–5 no memory 252–3 share price trap 253–4 success trap 252 time 255, 260 corporate culture 9–13, 33 definition 26–30, 50 corporate hubris 251, 259–60 corporate lifecycle (Adizes) 10, 242 corporate lifecycles 9–15 innovation phase 10 product-line expansion 11 causes of crises 13–15 geographic phase 10–11 efficiency and scale focus 11–12 consolidation 12–13 Corporate Purpose Breakdown 58 corporate social responsibility (CSR) 40, 116 corrective value 28, 116 critical thinking appraisals (CTA) 58 cross-functional task force 274–5 cultural agility 45–7 cultural black hole (CBH) 73 Cultural Dominance Model 57 7/5/2013 1:52:53 PM INDEX cultural dynamic 119–20 Cultural Dynamic Model 1, 25, 30–1, 43, 105–32, 266 business influences 106–7 cultural dynamic 119–20 “cultural universe” 117–19 embedded values and beliefs 106–8 mission statements 116–17 national influencers 106–7, 108, 118, 125 observed behaviours 114–16 vision statements 114–16, 116–17 work practices 107, 108–14 cultural fit 10, 38, 39, 111, 205, 211 cultural universe 43, 117–19, 128, 135, 136 embedded values in 118–19 culture definition 4–9 levels of 44–5 purpose Daewoo Electronics 176 daily practice 28–9 Daimler 156, 157, 259 Daimler-Chrysler 272 decision-making processes 46, 110 de-layering 57 de-levelling 58 Dell 135, 138–40, 253 Dell, Michael 138 Demant, William 268 Denison, Dan culture survey 274 Leading Culture Change in Global Organizations 254 Denmark 3, 11, 16, 18, 99, 163, 165, 284 national culture 199–200 national profile 266–8 derailing behaviour 117, 269–71, 277 Deupree, Richard 207 dialogue 62 Digital 248 digitalization 18 diplomacy v truth 224, 236 disruption 248–51, 259 disruptive innovation 39 distributed cross-organizational teams 58 diversity balancing with performance 273–4 in board and executive team 273 dogmatic culture 14, 30, 188, 208, 211, 246, 249 downsizing 57 Duke, Mike 158, 159 ICE 60, 61 East Asiatic Company 254 eBay 19, 251, 257 education systems 35, 110–11, 277–8 Elop, Stephen 153 bindex.indd 291 291 embedded values, beliefs and assumptions 28, 106–8 embryonic period 135–44, 160 see also KONE; Nokia and Walmart case studies emotions, display of 235 employee engagement survey methodologies 274 enabling behaviour 117 Enron 40 enterprise resource planning (ERP) 25, 113 entrepreneurism 277, 278 Esaki 167 espoused values 27, 34, 38, 207 execution problems 247–8, 258–9 external forces and trends 40–1 Exxon 40, 241, 255 Exxon Mobil 155 Facebook 9, 19, 257 Fanderl, Stephan 160 fashionable values 116 feedback loops 58 Fiat 90–1, 93 Finland 37, 41, 260, 278, 284 case study 153–5 culture 144–5 language 145 FLSmidth 12, 18, 47, 115, 184, 185, 186, 190 FLSmidth case study 198–205 cultural strategies options 203–5 hybrid global/local culture 204–5, 275 local culture domination 205, 275 national culture domination 204, 275 challenges to culture and work practices 202–3 culture changes 202–3 Danish national culture 199–200 disaster and new strategy 201–2 history and founder values 200–1 Jutland regional traits 199 move from 1.0 to 2.0 203, 204 prologue 205 “small country” dilemma 203 Ford Motor Company 3, 51, 100, 122, 128, 247 Ford, Henry 32, 50–1 Foss, Alexander 200 founders 50–1 France 284 advantages/disadvantages of nation-state traits 82–3 change of leadership in 260 education system 111 expression of nation-state traits within corporate culture 81 7/5/2013 1:52:53 PM 292 INDEX GDP 216 historical background 81 key nation-state traits 80 reputation in 238 success in 259 Friedman, Thomas: World is Flat, The 279 frontier spirit 71, 72 Fuji Elevator 154 Fukushima nuclear disaster 89 Fumimaro, Prince 167 G20 261 Gasperi, Alcide de 91 Gates, Bill 51, 137–8 GE 15, 241, 254, 255, 277 Genchi Genbutsu 192, 196 General Motors (GM) 3, 12, 100, 117, 119, 128, 55, 185, 187, 193, 247, 251, 252, 253, 254 Generally Accepted Accounting Principles (GAAP) 158 geographic expansion phase 142–4 Germany 95–8, 284 advantages/disadvantages of nation-state traits 96 change of leadership 260 exports 97 expression of nation-state traits within corporate culture 95–6 factual planning and process 96 football in 1–2, 141 hierarchical bureaucracy 97–8 historical background 95 Italians on 232–3 key nation-state traits 95 language 234 on Italians 230–1 Ordnung 95–6, 97, 246, 258–9 regional differences 51 Walmart in 156–7 work ethic 97 working practices 236 Gerstner, Lou 14, 252 GL&V 202 global companies 15–17 global realization process 58 global village 49, 64 globalization 64 Goethe Institut 81 Google 2, 9, 19, 30, 36, 37, 116, 135, 144, 152–3, 180, 184, 256, 257 Android 152 group think 38 growth period 161–6, 184 product-line expansion stage 162–4 scale and efficiency phase 164–6 see also Sony vs Samsung Electronics case study bindex.indd 292 Gyllenhammer 78 habits 13, 16, 44, 63, 90, 95, 107, 108 Hall 60 Hammerich, Kai 25, 26, 136–7, 163, 198–9, 207, 274, 276 Hansen, Lars Ole 163–4 Harriman 122 Havemeier & Sander 154 Hendry, Joy: Wrapping Culture 226 Herlin, Pekka 51, 154 Hewlett, Bill 26 Hewlett-Packard (HP) 25, 27, 37, 41, 163, 174, 248 Hirai, Kazuo 172 historical factors 50 Hitachi 88 Hofstede, Geert 4, 25, 29, 33, 52–3, 54, 60, 80 Honda 88 honeycomb patterns of organization 58 Honeywell 248 Hong Kong 55, 96, 221, 226, 282 horizontal keiretsu 193, 194 Huawei 9, 15 hubris, corporate 251, 259–60 Hughes, Howard 51 Hyundai 75, 259 IBM 14, 15, 50, 185, 248, 252, 254, 256 Ibuka, Masaru 10, 166–7, 170–1, 269 ICL Computers 254 Idei, Nobuyuki 168, 171–2 Immelt, Jeffrey 208 India 282 individualism index (Hofstede) 54 individualism versus collectivism 141 individualist cultures 54 information obesity 58 innovation phase 141–3 innovation rate in an industry 39 intellectual property (IP) 39–40 interruption 221, 234–5 Interspar 156 Italy 51, 284 nation-state traits 90–5 Jager, Durk 208–9 Jaguar Group 122 Japan 282 age-based hierarchy 88–9 expression of nation-state traits within corporate culture 84–6 face protection, honour 87–8 historical background 84–5 kaisha 89–90 key nation-state traits 84 language 86–7 long termism 90 national profile 266, 267, 268 7/5/2013 1:52:53 PM INDEX potential advantages/disadvantages of nation-state traits 86–90 ultra-courtesy 88 Jobs, Steve 14, 51, 116, 136–7, 254, 269 Johnson, Axel 51 Jugaad 66 just-in-time production (JIT) 31, 57–8, 65, 191, 193, 196 Kaizen 192, 193 Kallasvuo, Olli-Pekka 146, 151 Karstadt 156 Kaufhof 156 Keiretsu 90 key performance indicator (KPI) 46, 58, 113, 183, 189 Kia 259 Kim, Eric 176 K-mart 174 Kodak 13, 188, 253 Koizumi 261 Kolind, Lars 109 KONE 135, 154–5 Korea 111, 283 national culture 172–4 national traits at Samsung 117 Walmart in 159 Korhonen, Pertti 146 Krupp 51 Kutaragi, Ken 168 Kwon Oh Hyun 179–80 Lafley, A.G 209 languages 9, 85, 86–7, 88, 101, 145, 217, 220, 233, 279 Larsen, Poul 200, 201 leadership, change of 256, 260–1 Lean manufacturing 17, 31, 111, 120, 191, 193, 196, 205, 275 Lee Byung-chull 174, 175, 177–9 Lee Jae-yong 179–80 Lee Kun-hee 175, 179 LEGO 246 Lenovo Lever 15 leveraged buy-outs 58 Lewis, Richard D 8, 60, 154, 169, 170, 279 Cultural Imperative, The 76, 230–3 Finland , Cultural Lone Wolf 145 When Cultures Collide 1, 49, 157, 173, 226 Lewis Model 1, 8, 25, 49–67, 145, 266 linear-active cultures 57–8 multi-active cultures 58–60 reactive cultures 60–4 Leyland 122 LG 75, 259 bindex.indd 293 293 LG Electronics 176 Liker, Jeffrey and Michael Hoseus: Toyota Culture, The 193 linear-active cultures 55–6, 57–8, 219, 279 LinkedIn 257 listening 220–1 long term orientation 111, 112, 118, 119, 142, 166, 190, 207 Lord, Leonard 122, 126, 127, 128 losing face 222–3 Macintosh operating system 137 macroengineering, 58 Mafia 91 major improvement opportunities (MIO) 58 Malraux, André 81 management by objectives (MBO) 58 management, recommendations to 273–7 managing transition 57 Marchionne, Sergio 93 Margarine Unie 15 Marshall Aid 73 masculine–feminine dimension 52–4, 76, 141 matrix management 57 Matsushita, Konosuke 51, 89, 261 maturity period 185–90 consolidation phase 186, 187–90 See also FLSmidth; P&G and Toyota case studies McKinsey 113, 274 McNerney, James 208 Médecins Sans Frontières 17 memory 252–3 Mercedes-Benz 100 mergers and acquisitions (M&A) 12, 271–2 Metro 156, 158 Mexico 218, 283 M-form society 58 Michelin 259 Microsoft 2, 9, 19, 37, 135, 137–8, 153, 169, 180, 184, 256 Vista 138 Windows 138 Windows Mobile 153 Windows operating system 138, 149 mission statements 28, 116–17 Mitsubishi 88 Mitsubishi Bank 193 Mitsubishi Cars 193 Mitsubishi Heavy Industries 193 Mitsubishi Trading 193 Mitsui 193 monologue 62 Montgomery USA 154 Morita, Akio 10, 51, 86, 89, 89, 143, 166, 167, 169–70, 171, 181, 261, 269 7/5/2013 1:52:53 PM 294 INDEX Morris 121–2, 123 Motorola 149, 176 multi-active cultures 58–60, 219, 228–39 body language and tactility 238 complete human transactions 237 diplomacy 236 discussion of several things at once 234 display of emotions 235 flexible and situational truth 235–6 interruption 234–5 relationship oriented 238–9 reputation 238 seeking and giving favours with key people 237–8 several people talking at once 234–5 socializing 236 speech 233 thinking aloud 236–7 unpunctuality 238 mushroom management 58 Mussolini, Benito 91 Myers-Briggs Type Indicator (MBTI) 38 Nakasone 261 national influencers 33, 34, 41–3, 106–7, 108, 118, 125 national traits 25 nation-state traits 50 see also under individual countries nation-state-centric tradition 279 navigation of transformation 256–7, 261–2 NCR 248 N’drangheta 91 negative performance indicators 58 Netherlands 284 networks 225 neutral behaviour 117 Next 137 Nissan 88, 100 Nokia 11, 36–7, 41, 47, 144, 152–3, 160, 174, 176, 249, 252, 253, 259, 260, 269, 278 iPhone 36 Nokia case study 135, 144–53 “Burning Platform” memo 153 “Connecting People” campaign 146 “Customer Centric” perspective 150, 152 “Customer Remote” perspective 150, 152 Finnish culture 144–5 Nokia 1.0 145–7, 150 Nokia 2.0 135, 148, 149–52 Nokia 3.0 152–3 “we-are-the best” cultural dynamic 150, 151 “we-can-do-it” cultural dynamic 148, 150, 151 Work practices at Nokia 1.0 147–9 normative culture 30, 166, 207, 209, 210, 246, 252, 254, 269, 271 North Sea oil 75 bindex.indd 294 Norway 284 Novo Nordisk 268 Nuevo 146 Obama, Michelle 160 observed behaviours 114–16 observed corporate culture 114–16 Ogha 170, 171 Ollila, Jorma 51, 146, 147, 151 Olympus 268 open disagreement 221–2 Open Innovation 39 open/closed systems 30, 140, 144 OPERA approach 58 Oracle 248, 256 Ordnung 95–6, 97 organizational change 57 organizational culture see corporate culture Organizational Health Index 274 organizational skills and capabilities 110–11 organizational structure 46, 108–10 Oticon 109 Packard, Dave 26 Pagel, Mark: Wired for Culture parochial v dogmatic dimension 29 performance appraisals 57 performance management 112–13 Philips 109 platitudinous imperative 220 Poland 285 Polaroid 188, 254 polychromic people 60 popular values 116 Porter: Competitive Strategy 32 position 37–9 power as change model 58 power distance 141, 227 problems in execution 247–8, 258–9 process disruption 250–1 Procter & Gamble (P&G) 12, 15, 29, 30, 184, 185, 186, 190, 241, 250, 254, 256, 269, 277 P&G Way 27 Procter & Gamble case study 205–9 brief history 206 central embedded values 206–9 “Eyes on Tomorrow” 207 Facts Book 207 Procter, Cooper 207 professional culture 17, 34–5, 47, 143, 274 Prussian Army 18, 47, 243–6 psychometrics 38, 274 punctuality 238 Quality Always Comes First 196 quality circles 57, 65 Rasmussen, Jørgen Huno 201 Razr 149 7/5/2013 1:52:53 PM INDEX RCA 188 reactive communication style 62–3 reactive cultures 60–4, 219 ambiguity 223–4 confrontation 221 criticism 223 diplomacy v truth 224 interruption 221 listening 220–1 losing face 222–3 networks 225 open disagreement 221–2 power distances and hierarchy 227 rules 224–5 speech 220 timing negotiations 225–7 trust building 228 Red Cross 16 Reinforcement mechanisms 28 religion 52 Renault 15, 75, 81 reply-monologue 63 reputation 238 reward and compensation systems 46, 112–13 rightsizing 57 risk taking 36, 142, 165 Rockefeller 51 rolling quarterly forecasts 57 Rover 122 Rovio Entertainment 278 Russia 283 Saab 75 Sainsbury’s 156 Samsung Electronics 2, 10, 11–12, 117, 160, 161, 163, 165, 166, 172–84, 254, 256, 259, 268 founder and values 177–80 history and strategic imperatives 174 1997 crisis 176–7 embryonic period 174–5 golden years 177 growth period 175–6 South Korean national culture 172–4 v Sony 180–4, 247, 250 Samsung Group 174, 176, 178, 180 SAP 9, 105–6 Schein, Edgar A 5, 25, 26 levels of 26–8 Sea-Jin Chang 183, 184 Samsung vs Sony 172, 178 Sears 174 secondary articulation 28 Seiyu 159 self-disparagement 64 shamrock pattern of organization 58 share price trap 253–4 bindex.indd 295 295 Sharratt, Barney: Men and Motors of ’The Austin’ 127 Shell 40, 241, 255, 260, 277 Shinsegae 159 Siemens 15, 51, 109, 241, 254 Singapore 283 Sisu 145, 147, 150 situational truth 235–6 Skype 19 small and medium enterprises (SMEs) 11, 99, 165 Smidth, Fredrik Læssøe 200 SMS (Short Messaging System) 145 socializing 236 Sony 10, 11, 47, 86, 88, 143, 160, 161, 162–3, 166, 176, 247, 249, 253, 256, 259, 268, 269 Betamax 168 Blu-ray 168 “Digital Dream Kid” vision 177 history 166–7 embryonic period 166–7 growth period 168 founders and values 169–72 v Samsung Electronics 180–4, 247, 250 Japanese national culture 166 Memory Stick Walkman 169 Network Walkman HD-1 169 Open MagicGate 169 Playstation 168, 182 Trinitron TV 168 Vaio Music Clip 169 Walkman 163, 168 Sony Pictures 180 Spaghetti Organization 109 Spain 285 stack ranking 138 Standard Oil 255 Standard Triumph 122 Starbucks 13 Statoil 114, 260 Stockmann 156 Stokes 122 strategy v competition 243–6, 257–8 Stringer, Howard 172 success 251–5, 259–60 “success has no memory” 150, 252–3 success trap 252 Sull, Don: Why Good Companies Go Bad and How Great Managers Remake Them 269 Sumitomo Group 193 Sun 248 Supercentres 159 Supermercados de Walmart 159 sustainability 40 Swarup, Vikas: Slumdog Millionaire 66 Sweden 77–80, 285 7/5/2013 1:52:53 PM 296 INDEX Switzerland 285 SWOT analyses 58 tactility 238 talent and leadership agenda 276–7 Tandem 248 Tata 15, 100 Team Flow Model 57 technology disruption 248–51 Tesco 44–5, 156 3M 39 Post-It notes 39 Tiffany’s 38 time lag of culture 45–7 timing of negotiations 225–7 Togliatti, Palmiro 91 Tokyo Declaration 175 Tomalin and Nicks 60, 61 Toshiba 88 Total 40 Total Quality Management 58 Totsuko 167 Toyoda, Akio 197 Toyoda, Kiichiro 41, 42, 89, 191 Toyoda, Sakichi 41, 191 Toyota 5–6, 11, 15, 31, 41, 88, 100, 112, 165, 184, 185, 186, 190, 193, 251, 268 Toyota case study 190–8, 266 in America 195–7 crisis and conclusion 197–8 founder and corporate values 191 Quality Always Comes First Principle 196 Toyota Camry standards 196 Toyota Way and work practices 191–2 continuous improvement 192 respect for people 192 as source of sustainable differentiation 193–7 Toyota Motor Corporation 41 Toyota Production System (TPS) 31, 41–2, 193, 195 Toyota Way 112, 191–2, 193–7 trapezium patterns of organization 58 tripartite categorization 51 Trompenaars 60 trust building 228 Trustmart 158 Turkey 283 Twitter 257 UK Lift Company 154 Unilever 15, 110, 260 United Kingdom 285 key nation-state traits 98 historical background 98–9 expression of nation-state traits within corporate culture 99–100 individualism and inventiveness 100 engineering strengths 100 class system 100–1 insularity 101–2 United Nations 16 United States 70–3, 283 bias for action (speed) 70, 74 bottom-line focus 74–5 confidence (American Dream) 70, 71, 72, 73–4, 102, 217, 268 expression of nation-state traits within corporate culture 71–3 historical background 70–1 key nation-state traits 70 masculinity 75 national profile 266, 267, 268–9 UNIVAC 248 Vanjoki, Anssi 146 vertical keiretsu 193, 195 virtual facilitations 58 vision statements 114–16, 116–17 Volvo 75 Von Moltke, General 18, 47, 200, 243–6 Guidance for Large Unit Commanders 245 VW 123, 124 Walmart 38, 155–60, 174, 208, 247 in China 158–9 in South Korea 159 cultural adjustments 158–9 Walmex 159 Walton, S Robson 159 Walton, Sam 159 Waterfall software 106 Web 2.0 9, 19, 36, 256–7 Welch, Jack 51, 176 Wennergren, Axel 51 Wertkauf 156 Western Electric 167 Westinghouse Europe 154 what-if analyses 58 Which? 44 Whitman, Meg 208 Woolworth Canada 159 work practices 31, 107, 108–14 workflow processes 112 World Trade Organization 261 Wozniak, Steve 136 Xerox 13 Yahoo 257 Yihaodian 160 Yin and Yang relationships 31 Yun Jong-yong 176, 177 Zenith 188 Index compiled by Annette Musker bindex.indd 296 7/5/2013 1:52:53 PM Cultural Types: The Lewis Model Hispanic America, Argentina, Mexico MULTIACTIVE Italy, Portugal Spain, Greece, Malta, Cyprus Linear-active, multi-active, reactive variations Brazil, Chile Sub-Saharan Africa Saudi Arabia Arab Countries Russia, Slovakia, Croatia France, Poland Hungary, Lithuania Belgium, Israel Key: blue = linear-active - cool, factual, decisive planners Australia, Denmark, Ireland India Indonesia, Malaysia, Philippines red = multi-active - warm, emotional, loquacious, impulsive Australia, Czech Republic, Netherlands, Norway, Slovenia yellow = reactive - courteous, amiable, accommodating, compromiser, good listener U.S.A Germany, Switzerland, Luxembourg Bulgaria, Turkey, Iran LINEARACTIVE Korea, Thailand China REACTIVE U.K Vietnam Sweden, Finland, Canada Singapore Taiwan, Japan Latvia Estonia Hong Kong Diagram 2.1: The Lewis model bins.indd 7/4/2013 11:43:36 AM .. .FISH CAN T SEE WATER HOW NATIONAL CULTURE CAN MAKE OR BREAK YOUR CORPORATE STRATEGY KAI HAMMERICH AND RICHARD D LEWIS ffirs02.indd iii... Congress Cataloging-in-Publication Data Hammerich, Kai, 1960– Fish can t see water : how national culture can make or break your corporate strategy / Kai Hammerich and Richard D Lewis pages cm Includes... Hammerich London, July 2013 flast.indd xv 7/4/2013 11:44:10 AM Fish can t See Water: How National Culture can Make or Break Your Corporate Strategy By Kai Hammerich and Richard D Lewis © 2013 John