Management European Style [and Executive Commentary]Author(s): Ronald Calori, Bruno Dufour, Robert N. McDowell, Eric J. VanettiSource: The Academy of Management Executive (1993-2005), Vol. 9, No. 3 (Aug., 1995), pp. 61-73Published by: Academy of ManagementStable URL: http://www.jstor.org/stable/4165273 .Accessed: 25/04/2011 18:43

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? Academy of Management Executive, 1995 Vol. 9 No. 3

Management European style

Roland Calori and Bruno Dufour

Executive Overview Do Europeans manage differently from the Japanese or North Americans? These authors think so, and they back up that claim after extensive interviews with fifty-two top executives from some of western Europe's major "blue chip" firms. Clearly, the answer to this question is of prime interest to Europeans in search of identity, but it is also useful to U.S. and Japanese managers seeking to develop their European operations. See what you think.

.......................

In My View

. . . is there a European management culture?

When thinking about management in Europe, the image of diversity dominates. Managing in Palermo, London, Frankfurt or Helsinki are different realities. But are there some common management philosophies and practices which form a genuine European management style? To answer this question, we must first gain a better understanding of how European executives view the overall terrain:'

Umberto Agnelli, Vice Chairman of Fiat: "At first it is hard to think of a European model of management. Europe is being built, business systems and cultures are still different. The management techniques are similar, and many of them come from the USA, but the way they are applied is different from one country to another, because of different business environments."

Floris Maljers, former Chairman of the Board of Unilever: ". . . is there a European management culture? And I put a big question mark behind it ... You could also defend the thesis that there is an Anglo-Saxon and a continental management culture, because the British in many respects have management habits which are more related to the Americans than those on the continent. They are in a sort of in-between position."

Baron Daniel lanssen, Chairman of the Executive Committee of Solvay: "The British, like the Americans, are more oriented towards short-term and quick financial profits than the Germans, or even the other nationalities on the continent."

Sir Anthony Pilkington, Chairman of Pilkington: . . . junk bonds could never have started in Germany, it is just impossible to imagine the Germans with junk bonds. The U.K. market and the U.S. market have more of a trading nature than Europe, which has more of an investing nature.... In Germany, in Sweden, in Denmark, and even in France, there are a lot of checks and balances against management freedom of actions, there are supervisors' reports, there are workers' representatives on the board and there is much more government intervention."

Pehr Gyllenhammar, former Executive Chairman of Volvo: "To some extent the small countries are influenced by German practices, Belgium may be also

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The smaller countries have been more sensitive to outside influences ...

influenced by French practices, the Dutch also are influenced by British practices. These small countries are melting pots. The smaller countries have been more sensitive to outside influences and they integrated these influences; because of the pressures against them, because of the small base they have for recruiting, and because they were forced to go outside looking for markets."

Pilkington: "The best examples of European companies are Shell and Unilever. These two are operating in joint Anglo-Dutch ownership for, I don't know, fifty years, more perhaps, and I suppose they are the nearest to what you might call a European company."

Walter Schusser, Vice President of Human Resources of Siemens: "Of course if we only look at Europe from within there are differences between countries in the way firms are managed, but if we look at Europe as a whole from outside, comparing it with Japan and the U.S., then it looks different and relatively homogeneous."

The European Style In spite of differences across Europe, and to some extent thanks to diversity, European firms also share some common management philosophies and practices. European top managers think beyond the simplistic dichotomy diversity or unity. Our analysis of the spontaneous answers from the top managers we interviewed revealed a consensus with regard to four common characteristics of management in Europe.

1. A Greater Orientation Towards People Compared to their U.S. or Japanese counterparts, European executives believe they share a common inclination towards the fulfillment of people.

Andre Leysen, Chairman of the Supervisory Board of Agfa Gevaert: "We consider that people are an integral part of the firm. Of course, we work for profit, but also for people. On the other hand, in the U.S., profit dominates everything, and people are considered as a resource that you can take or leave. This is a major difference. Now you could say that the European philosophy is close to the Japanese. I do not think so. There is a fundamental difference between the two, Europe is an individualist society whereas the Japanese society is based on the collective. Fernand Braudel argued that it comes from the different agricultural systems. The oriental system is based on the culture of rice which requires teams of people, whereas our system is based on the culture of cereals which can be achieved by individuals."

In European firms, outsiders are tolerated and conformity is less accentuated. The Japanese executives we interviewed seem to value the individual freedom given to European managers:

Hiroshi Wakabayashi, Chief Executive of Itoshu (UK): "In Japan the managers are selected among the thousands of people who have been recruited and trained for a long time. They are trained according to the needs of the firm, and training shapes people's minds towards homogeneity. This system does not respect the personality of the individual. On the other hand, in Europe, managers are hired and in-house training is less developed, they take managers as they are, with their personality. As a consequence, Japanese managers may lack originality. This is not true for Japanese entrepreneurs, but it is true of managers in general. Whereas in Europe, even management in big firms is more personalized."

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..-P . in Europe, even management in big firms is more personalized.

American managers coming to Europe have the impression that the system is chaotic.

The attention given to the individual leads to a greater emphasis on informal coordination.

Hans L. Merkle, Managing Partner of the Bosch Group: "We do adapt functions to the individuals and it is the right way to do it. First we define functions according to the needs of the company, but we always adapt the definition of functions and tasks to the skills of the people, we do not stick to the schemas."

Roland Berra, Head of Corporate Executive Resources of Hoffmann-La Roche: "In comparison with our competitors in the U.S. and in Japan, our group has much fewer written rules. It is sometimes a cultural shock for the managers we transfer between continents. The American managers coming to Europe have the impression that the system is chaotic. The Europeans going to the States find written responses and procedures on practically any issue."

Caring for people relates to particular attitudes towards employment. Before firing people, European firms take extensive precautions.

Jacopo Vittorelli, former Deputy Chairman of Pirelli: "If you have to close a plant in Italy, in France, in Spain or in Germany, you have to discuss the possibility with the State, the local communities, with the trade unions, everybody feels entitled to intervene ... Even the Church!"

Jose-Alberto Blanco Losada, Deputy General Director for Strategic Planning of T6l6fonica de Espana: "European culture has always been more humanistic ... For instance, sanctions are often dissimulated, we take great care of people, we always try to avoid shedding blood as we say here."

Bertrand Collomb, Chairman and CEO of Lafarge-Coppee: "I know that in Spain a few years ago there were companies that took the attitude, 'I have a factory that is doing nothing, but I have 150 men there, so I won't close it.' That was also the attitude taken by French companies 30 years ago, but no longer. Faced with that situation today, I would close my factory. However I would try to do it in the most humane, intelligent way possible. If I thought there would only be a 'black hole' for six months, I would not close the plant."

People orientation may be rooted in the humanistic tradition of Europe, and, as far as continental Europe is concerned it may be sustained by the "Social Market Economy" concept, combining profit and social responsibility.

Schusser: "For important issues, the Chancellor invites to a meeting the heads of the most important firms, let us say Daimler Benz, Siemens, Thyssen, Hoechst, BASF, etc ... the Presidents of the BDA [the body of employers], the Presidents of the BDI [the German Association of Industries], the heads of the most important labour unions: DGB, IG Metall, etc. They manage by concertation, they manage by round table."

2. A Higher Level of Internal Negotiation European managers spend a lot of time negotiating inside the firm, between

different levels of management, between management and workers, with trade

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. . . the principle of negotiation is common to all these countries.

unions, and between headquarters and subsidiaries. As a consequence, they have developed particular skills in negotiation.

In U.S. firms, decision making seems to be in the hands of the boss, top-down, quicker than in Europe, and the values of the companies are the values of the top management team. In Japan, decision making follows a consensual process, the boss has power but uses it in a delicate way. Some ideas come from the shop floor, but when decisions are made at the top, everyone agrees. In Europe, top management has power but they have to consult, to discuss, to negotiate, to convince far more than their U.S. and Japanese counterparts.

Berra: "There is a need for independence, authority is questioned. The decisions coming from the top are criticized. People start to involve themselves only after a lot of discussion, dialogue and information."

Historically, European managers were forced to negotiate because of the strength of the labor unions, in order to avoid or to manage labor conflicts which take a lot of management time. The context of "class struggle" may have played a role in the past, but its influence has faded away. After the second world war, the Allies forced the Germans to introduce a system of co-determination in the board of directors in the steel industry. This system stimulated communication and dialogue.

Leysen: "The Aufsichtsrat ('Conseil de Surveillance' or 'Supervisory Board') is composed of 50% workers' representatives and 50% representatives of the shareholders. Decisions cannot be blocked because the President, always named among the representatives of the shareholders, has a casting vote. This is important, parity would be disastrous. Before the Council meets, the representatives of the shareholders meet and prepare decisions, the representatives of the workers meet and prepare decisions, and the President checks if there is an agreement or not. Most of the time, there is harmony in the Council, but negotiations have taken place before. On both sides people work hard. The workers have internal structures and are very well informed about the company. They circulate information from the top down and from the bottom up. They defend their interest but they can understand better the difficulties of the company and the collective interest."

Some managers mentioned that the system of co-determination was established in order to put an end to the "Fuhrer" principle in German cartels, and cynics argue that it was done to limit the development of German industry. However, co-determination has proved to be efficient, and several northern European countries adopted similar systems, while others such as the U.K. did not. The combined influences made dialogue between management and the workers a natural component of decision making. In France and in Italy, there is more confrontation, in Germany more consensus and social engineering, in Scandinavia it is based on the naturally egalitarian view of the society, in Great Britain it may come from the sense of guilt which the ruling classes felt after the war, but the principle of negotiation is common to all these countries.

In many European companies and countries, the principle of negotiation has been enlarged.

Gyllenhammar: "It is not so much the dialogue with the union leaders, it is a dialogue with particular people representing the employees. Not all of them

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. . . it takes more time to get things done in Europe than in America or Japan.

are union leaders. They are employees of the company. I invited employees to sit on our board and we were the first major company in Sweden to do so. That was my invitation, not a law, the law came afterwards in the mid-1970s. We did this in 1971 because I believed that the employees should be part of the decision making; at the top and at the bottom and all the way through."

Ernest Van Mourik Broekman, Coordinator of Human Resources and Organization of Shell: "When I think of my time in Holland, when I used to be responsible for dealing with the staff council, it was an interesting combination of a group of people who were all committed to the health of the company but who were also representing their particular interest groups. I always had the feeling then that it was a very real wish to be properly informed on what really was going on and what the objectives of the company were and how employees could play a role in achieving these objectives. It was a combination of bargaining and of a need for information to get involved."

The European educational system may also contribute to the need for dialogue and negotiation in order to convince people and obtain their involvement. Schools maintain the tradition of dialectics and debate to come up with rational answers, and develop a sense of individual responsibility. As a result, it takes more time to get things done in Europe than in America or Japan.

3. Greater Skill at Managing International Diversity European managers have an ability to recognize diversity. They respect and appreciate international diversity, and have developed a particular skill in managing it.

Willem H.J. Guitink, Corporate Director of Management Training and Education of Philips: "European business leaders are better equipped to deal with cultural diversity, geographical diversity, than most American managers. I don't think that that would necessarily hold for the Japanese."

Andre Breukels, Personnel Director of Hewlett Packard American Division: "I think European managers have a high degree of adaptability and flexibility. Let us take an example. I have worked a lot with Finnish managers. It is remarkable how Finnish managers adapt to the European market, for the simple reason that their home market is too small. Look at the Dutch, you know Unilever, Shell, Philips. Historically they have worked across boundaries for decades."

On average, European firms accept the risk of intercultural management, they respect the host country, they are less imperialistic than the Americans and the Japanese who may still have a tendency to export their models.

Brian Goldthorp, Director of Personnel of Trafalgar House Engineering Division: "We have gone through quite a number of acquisitions since 1980. We bought some major operating companies in France, in Holland, in Spain, and most recently in Germany, Austria and Sweden. What we have done with those companies is to make sure that we operate them as companies specifically fitting the rules and the culture of the country in which they live. For instance, we have been very careful that the board's structure reflects both the legal requirements, the culture of the countries in which they operate and what we consider to be good business practice there. We have

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. . . differences among the U.S., Japan, and Europe are diminishing ...

been very keen to see that the top management of the company reflects the nationality of the country in which they operate. So if we have a company in France, we would require that the top management has a strong French top team. Now I do not mean to say that all the jobs would be occupied by French nationals, but we would have a strong, distinctive requirement for French management. In Holland, Dutch management, etc."

European companies have a tendency to put nationals at the head of foreign subsidiaries and a small number of non-locals for international flavor, reciprocal learning and the minimum of coherence with the corporate culture. On the other hand, the Japanese have a tendency to reproduce Japanese management, they also try to reproduce their corporate culture. In general, the U.S. companies try to reproduce their corporate culture by authority of the top management and by procedures.

Schusser: "There are a lot of Japanese companies in Germany which do not have any works council, and they don't care much about creating one. Some American companies were heavily criticized in the 1970s because they exported their U.S. policies abroad. In our company, and I think that it is true for most European firms, when taking part in foreign countries where we are established, we always felt and behaved in line with and integrated with national customs. In other words, we want to be in France as a French firm, in Brazil as a Brazilian firm.... However, the attitude of American firms may have changed a bit in this direction during the last ten years."

The European tendency to adapt to foreign management practices and markets leads to more decentralization of foreign operations. For instance, the oil industry is not purely global (in the sense of standardized products and services), it has a world scope, but one has to adapt to local markets and local political contexts.

Van Mourik Broekman: "We have always tended to give the local operating companies a high degree of autonomy. And that autonomy was not only reflected in the formal levels of financial decisions, but also reflected in the way that particular markets were and are being approached, retailing strategies, strategies for lubricants, product positioning. Our tradition may be decentralized. I would say that the Americans followed a much more centralized approach. With them it was control not only in terms of costs and expenditure and salary development and the like, but also in terms of marketing. They used much more of a centralized approach towards their European subsidiaries."

Decentralization does not mean that corporate culture is weak. The corporate culture should be strong enough but also allow variants. Decentralization may lead to the acceptance of multi-localization of strategic functions like research and development. This is typical of some European firms involved in the pharmaceutical industry-having R & D centers in the U.S.A., in the U.K., in Japan, complementing the home base R & D. In this respect, some foreign operations become competence centers for the whole group. Such strategies lead to a form of partnership between the headquarters and the units, more than domination of the headquarters over the units. Of course, there are exceptions, and this characteristic of European management should be viewed as common but not universal.

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It seems that the differences among the U.S., Japan, and Europe are diminishing, with the U.S. and Japanese multinationals tending towards more decentralization of their international operations. This trend could mean that the European ability to manage international diversity is a strength. On the other hand, some of the managers in our study argued that the Europeans are not as good at integrating.

Guitink: "My view is that the Europeans are better equipped to deal with diversity, but this may also lead to weakness. That is, the Americans and the Japanese are much better focused than we are. So we may have drowned ourselves into the heart of diversity."

Jean-Louis Beffa, Chairman and CEO of Saint Gobain: "Nowadays, we go towards more integration. You can see that from the evolution of our organization. For instance, in some businesses we recently changed the organization from the simple coordination of four countries, to an organization with a European sales director for the business. During the last few years, the business dimension has become more important than the geographic dimension in our organization."

Robert Horton, former Chairman and CEO of British Petroleum: "Excessive differentiation and decentralization in the past has been a terrible mistake. We now run our European division from Brussels. We have one office and we run the whole of Europe from there. Now it has been a hell of a fight and you know Paris did not like it, and Hamburg did not like it, and Vienna did not like it, and I have to tell you London did not like it either. I mean, I run the corporation worldwide from London, but the operations for continental Europe are now run from Brussels. But of course, the savings are enormous. Instead of having twelve head offices, you just have one. Instead of having twelve research centers, you have one."

When they aim at integrating across borders, European firms try to do it through people more than through structures and procedures. Integration through people takes several forms: the ability to speak several languages, the international rotation of managers, international training programs where the corporate culture is spread and strengthened, and reciprocal learning.

Frangois Cornelis, CEO of Petrofina: "The integration through people has a double objective. The first is to homogenize the corporate culture at the European level. The second is to develop people in giving them the opportunity to learn, to work in a different environment and to enrich their personality. The key factor in personal development is to give people the opportunity to confront different social and cultural environments: and this also works as part of integration. Differentiation is preserving some social and cultural specificities of the subsidiaries, on top of the shared values and the common identity."

4. Managers Capable of Managing Between Extremes Management philosophies and practices in the United States and Japan are often characterized as two extremes on several dimensions, such as the short-term profit orientation of the U.S. with the long-term growth orientation of the Japanese. Given the relative diversity of management philosophies, structures and practices in Europe, the European territory may be particularly favorable to personal development by confrontation with different environments.

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If there is a European style of management, it is half-way between the U.S. and the Japanese models of management.

The result of such confrontation may be a more balanced management style between these extreme management models. If there is a European style of management, it is half-way between the U.S. and the Japanese models of management.

This common European characteristic emerges in three dimensions of management: the relationships between the individual and the firm, time orientation-short term vs. long term-and the balance between individualism and collectivism in the workplace. The relationship between the individual and the firm appears in the loyalty to the company and in the relative importance of in-house training.

Pilkington: "The Americans are far less loyal, less wedded to their company, they have a much more individualistic view of their career; management changes very easily. You can hire and fire. Chief executives move with no problem between competitive companies. They see themselves as assets, if you like, which are fully marketable. In Japan, it is the absolute opposite; well as we all know, they don't rehearse, they jog for life, great company loyalty. And Europe is somewhere in between, perhaps more pragmatic."

However, the attitudes in Europe are spread between the Germans on one hand, with lower staff turnover, and the British on the other hand with higher staff turnover. This attitude is partly related to the loyalty to a branch of activity, "at Siemens the managers know something about electronics," "everyone to his trade" or "shoemaker stick to your tools" (as the Germans say).

Linked to loyalty to the company, the relative importance of in-house training or "apprentissage" in the firm discriminates among the three systems.

Van Mourik Broekman: "In the first place, our company recruits and develops with the purpose of a full career. We recruit extensively in Europe at universities, and bring people to training programmes and job development programmes until they can be considered to be full professionals in their particular disciplines. The general characteristic is that a strong identification with the company is being pursued, so that people feel that there is a common interest building up between the objectives of the company and their personal aims. And on the whole, people feel that a full career in our company is worthwhile, rather than using it just as a stepping stone towards something else. In-depth professional excellence is extremely important in our industry."

The time orientation of firms and managers can be estimated considering the time scales allotted to strategic decision making and investments and the stability in relationships between suppliers and clients.

Justus Mische, Member of the Board in charge of Personnel of Hoechst: "Europe, at least the big international firms in Europe, have a philosophy between the Japanese, long term, and the United States, short term."

This characteristic may be true on average but the dispersion of practices should also be noticed: more short termism in the U.K., long-term orientation in Germany and in France.

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.. . learning from the best practice in Europe and worldwide still remains the main challenge for the future.

The Japanese are growth oriented, sometimes at the expense of short-term profitability, the shareholders are "insiders" and the strategies of firms contribute to the long-term power of "Japan Inc." U.S. companies are pushed to short-term profits by tougher competition and by their shareholders who control top management. In Europe, there is a relatively high loyalty of the shareholders which explains the balanced position.

Beffa: "Of course I take care of the price per share, but not only that, in the sense that I have the support of some powerful and stable shareholders. They have agreed on our long-term strategy, actually they supported us when the price went down."

European companies also seem to balance individualism and the collective. The Japanese clearly have a strong collective orientation. The difference between Europe and the U.S. is less clear. Southern Europe and the U.K. are close to the U.S. on this dimension. On the other hand northern Europe, in particular Germany, combines individualism and team spirit.

Helmut 0. Maucher, Chairman of the Board and CEO of Nestle: "This is the concept of 'Employee Involvement' and 'Management Commitment.' We can learn to modify our individualism. The sense of the collective will never be as strong as in Japan; there it is natural. In Europe, we try to involve people, to find a balance between private life and commitment to the firm."

Managing between extremes may be the result of reciprocal learning among European companies, countries and cultures. The small countries-The Netherlands, Belgium, Luxembourg, and Switzerland-which best illustrate the concept of European management have demonstrated such an ability to learn.

What's Ahead? The four ingredients described up to this point are consistent with each other. Managing international diversity and managing between extremes result from the diversity of the European context. The orientation towards people and internal negotiation result from the common history and culture in which economic and social policies, laws and educational systems are embedded. Such characteristics are valued by top managers and they seem to fit with the European context, yet they have not proved to be the most successful worldwide.

Some weaknesses mentioned earlier have to be corrected before one can talk of a European model: individualism which may impede teamwork, and the lack of integration in order to balance the tendency to differentiate. From our perspective, learning from the best practice in Europe and worldwide still remains the main challenge for the future.

Janssen: "The three models, the Anglo-Saxon, the German, and the Latin could be reconciled. I think the long-term evolution shows that the gaps are narrowing. There are two conditions for this homogenization to take place: first that the unification of the European market is achieved, second that the media are less controlled by national governments. Anyway there will remain some specificities, in particular the management of human resources."

Leysen: "There will be some harmonization; slowly, there will be an osmosis between systems-the French won't change, the Germans won't change, but they will adapt good practices from their neighbours."

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Beffa: "We should integrate the German preoccupation for ecology, their ability in implementing solutions. They are the best in achieving three year plans! Integrate the British pragmatism and preserve our French skills in designing projects."

Viscount Etienne Davignon, Chairman of Societe G6nerale de Belgique: "In the Netherlands, in Belgium, you have had foreigners at the top of firms since the twelfth century; but see the Germans, now they have foreigners in some top management teams. See Volkswagen-that is new for Germany, you will see it more and more."

John D. de Leeuw, Director Corporate Human Resources of Philips: "Because of the global nature of the multinational business and . .. of key issues in general, differences are gradually narrowing down ... You still have differences because you don't change a culture, you don't change the whole system in ten years."

Breukels: "Our European division brought something to our operations and divisions in Japan and in the U.S.A.... Well, simple things sometimes, for instance variable working hours. People can decide when they start. This was experimented in Stuttgart in the early 1960s and this was transplanted across the world and now today one of the company's values is variable working hours."

Kageo Nakano, Managing Director of N7T Europe: "In Japan we must learn the positive aspects of European firms such as the respect of the personality of the individuals, the adaptation of strategies to particular regions ... maybe also a bit of individualism."

As a result the U.S. and Japanese extremes may slowly converge towards more balanced structures and practices, in line with the European tendency to manage between extremes. European top managers believe that they still have to learn or re-invent from the best practices worldwide. Confronted with a 10% rate of unemployment, Europe should learn entrepreneurship from the U.S. Confronted with deep rooted individualism or excessive segmentation, European firms should re-invent people involvement and multifunctional cross-border integration to catch up with the Japanese. Finally, in the long term, reciprocal learning worldwide may well blur geographically-based models. As Robert Horton puts it: "The real difference will be between the best companies (wherever they come from), between the best management practices and mediocre management practices. Management in the world and in Europe will be homogeneous at its best."

Endnotes The authors would like to acknowledge the support of the European Round Table of Industrialists, and the contribution of Pr. Jean-Paul Valla and Pr. Philippe De Woot.

1 Our study was initiated in 1992 by the working group on education of the European Round Table and the French-based Lyon Graduate School of Business. The European Round Table of Industrialists is composed of Chairmen and Chief Executives of major European companies who serve in a personal capacity in what can be truly described as an

industrialists' think tank. Their objective is to help the Commission of the European Community construct industrial strategies that will strengthen Europe's economy. Fifty-two top executives, including presidents and CEOs (27), and Vice Presidents (25) in 41 international and multinational companies established in Europe were interviewed for up to 2 hours. Essentially, we asked them to tell us in what ways, if any, European management styles differed from those of Japan or the U.S. The firms, which originated from 14 European countries and from the U.S. and Japan,

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included: Agfa Gevaert, Amorim, Austrian Industries, British Petroleum, BSN, Coca Cola (International division), Fiat, Ford of Europe, Fuji Bank, Furukawa Europe, Hewlett Packard Europe, Hoechst, Hoffmann-La Roche, Itoh Europe, Lafarge Coppee, Lyonnaise des Eaux-Dumez, McDonalds, Mitsui, Mothercare, NEC, Nestle, Nokia, N.T.T. Europe, Petrofina, Philips, Pilkington, Pirelli, Profilo, Robert Bosch, Royal Dutch Shell, Saint-Gobain,

Schneider, Siemens, Soci6t6 G6n6rale de Belgique, Solvay, Telefonica, Texaco, Titan Cement, Trafalgar House, Unilever and Volvo. Two books give more extensive presentations of the results of the study: H. Bloom, R. Calori and P. de Woot, Euromanagement: A New Style for the Global Market (London: Kogan Page, 1994), and R. Calori and P. de Woot (eds.), A European Management Model, Beyond Diversity (London: Prentice Hall, 1994).

About the Authors Roland Calori is professor of business policy at the Groupe Ecole Superieure de Commerce de Lyon and a business consultant in strategic management. He is the co-author of several books, including The Business of Europe, Managing Change (Sage, 1991), and A European Management Model, Beyond Diversity (Prentice Hall, 1994). He has published articles in Strategic Management Journal, Organization Studies and Long Range Planning, and he is a member of the editorial board of the British Journal of Management and of Organization Studies. He has coordinated the European Round Table-Groupe ESC Lyon study on which this article is based.

Bruno Dufour is Director General of the Groupe Ecole Superieure de Commerce de Lyon. He is also Managing Director (and co-founder) of Francital-Ixeco (a textile group). He has written several articles on the evolution of higher management education. He is a fellow of the Creative Education Foundation (USA), and a member of the board of several academic councils, including the EFMD (European Foundation for Management Development) and the AACSB (American Assembly of Collegiate Schools of Business) International Affairs Committee.

Executive Commentary

Robert N. McDowell, Coopers & Lybrand

My experience working in an international professional services firm supports the authors' contention that there is an emerging European management style. I would like to comment on each of the four sets of common characteristics from this experience.

Greater people orientation. This is more the case in continental Europe than in the United Kingdom. Furthermore, it differs slightly by country. As business becomes increasingly focused on knowledge work and the value of intellectual capital, a stronger and genuine orientation toward people will indeed create a competitive advantage for those who possess it. I think it will come more naturally to businesses in European countries than to those in the United States or Japan.

Higher skill levels in negotiation. This skill is a positive and necessary accommodation to the various cultures and countries that make up the European continent. The resulting slower pace of decision making can be a real frustration for U.S. managers accustomed to a faster pace that is both more authoritative and less inclusive. Yet, as self-determination becomes a stronger and more pervasive reality throughout the world, skills in negotiating and reconciling differences will become even more critical to stability and prosperity. In addition, the importance of shared values in organizational success requires an ability to foster a more inclusive approach to managing as a way of generating commitment to organizational goals.

European managers have greater skills in managing international diversity. I have always believed that one of the true strengths of America is that its people

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represent the diversity of the world. Those companies that learn to value and respect that diversity will truly enjoy an advantage in the global economy. As I observe the new generation of my partners in Europe, many have already succeeded in appreciating and creating advantage from the different perspectives they bring in solving business problems of their multinational clients. For a number of years, virtually all of their training and development has had a multicultural focus. Though all of the barriers and historical preconceptions have not disappeared, they have clearly been diminished as a result.

Managers capable of managing between extremes. I do think this is a characteristic of European management style. I suspect that the best European companies have learned this approach through a willingness to adopt the best practices of other countries and cultures. For the most part, I have experienced a real interest, even eagerness on the part of my European counterparts to look outside themselves for best practices. Though it is certainly not universal, they seem less likely to adopt the attitude that if it wasn't invented here, it can't be that good. The result has been a better balance in their management of people, of strategy, and of financial results.

Robert N. McDowell is Managing Director of Human Resources and a Principal with Coopers & Lybrand in New York City. He is also a member of the AME Executive Advisory Panel.

Eric J. Vanetti, Xerox

Calori and Dufour's premise of the existence of a general European management style which is different from the one generally practiced in North America or Japan is a plausible one. In fact, it's easy to support the probability that simple geographic or linguistic boundaries that separate the U.S. from other parts of the world could produce different types of management behavior. However, one might expect that most of the differences are due to the more profound social and cultural differences outlined by the authors.

My personal experience is consistent with what is reported in the article. For example, European managers are described as having a greater orientation toward people than their American or Japanese counterparts. To some extent, this may be due to recent downsizing initiatives at Xerox and other companies; it's difficult to generate a belief on the part of the "surviving" employees that their organizations are concerned about the well-being of people or that non-conforming, risk-taking behavior will not only be tolerated but encouraged and accepted.

The authors also discuss differences in decision-making practices that result in higher levels of intemal negotiation in European firms. The characterization of decision making in American firms as primarily top down and heavily influenced by senior management is accurate from a historical or traditional perspective. However, I believe we are seeing a fundamental shift in many U.S. firms toward a more empowering work environment that is characterized by greater employee involvement and bottom-up decision making at the point of customer contact. This shift is being fueled by the belief that an employee supporting a given customer knows how to satisfy that customer's requirements

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better than anyone else, and that clock speed is a critical enabler of competitive advantage.

As suggested by the authors, if prevailing management styles do differ around the globe, the ability to capitalize on this variability could be important for the long-term success of firms with international operations. However, it is also intriguing to consider the alternative notion that these cross-cultural differences are not as great as we like to believe they are. After all, it's a natural human tendency, some might argue, to want to believe that we bring something to the party that is different and more valuable than those around us may bring. Such a belief positively influences our feelings of self-worth and enhances our overall psychological well-being.

There is much truth to this belief, especially when viewed at an individual level of analysis in terms of the specific characteristics, values or attitudes of one person that are readily distinguishable from those of another person. However, in the context of the general population these differences are less apparent. In other words, compared to the entire population, any one individual will be viewed as more similar to others than different. The same notion can be applied to organizations. For example, many of today's companies focus on differentiating themselves from their competition to ensure they deliver value-added products and services to customers, and establish and maintain a position as the customer's vendor of choice. Companies strive to be different from one another. They search for ways to stand out from the competition in the customer's eye. It seems paradoxical that if we truly are as unique as we prefer to believe, we would encounter such difficulty differentiating ourselves from other organizations in order to achieve the advantage we seek.

Maybe the irony here is that in our struggle to be different, we fail to capitalize on the strengths inherent in our similarities, including a common purpose of achieving our business objectives while satisfying shareholders. Is it possible that capitalizing on these similarities through cooperative, partnering behavior might yield greater results than obtained by our constant striving for individualism? As the song goes, "It's a small world after all."

Eric J. Vanetti, Ph.D., has been with Xerox Corporation for six years and is currently Manager of Human Resources. He is a member of AME's Executive Advisory Panel.

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