Semaine Europenne de

SUPELEC
Globalization and
multicultural management


March 8th 2006
Welcome in the global
economy

Salient features &
a key success factor
By Erwan HENRY
Short resum
I have played on the glogal
economy stage since 20 years.
Staff and line jobs world wide in
the metallic industry.
Hands on in North America, Brazil,
China, Europe, Japan, South Africa
etc...
The global economy is a
dangerous place
The global economy is a
land of opportunities
Road map for the global
economy
1) Globalization basics
2) International strategies
3) A key factor of success
1) What is globalization ?
Brief history
A new ball game



Globalization
Brief history
Colonial era
Spheres of influence
Raw material and selective
manufacturing



Globalization
Brief history
New players enter the game
Asian dragons, China, Mexico, Brazil
The field gets larger
Rules do change
Low wages vs technology
WTO
Globalization
brief history
Acceleration
More players are joining
India, Russia, Ukraine, Vietnam
Raw material and energy
challenges


Globalization
a new ball game
Larger field
More players
Faster game


Globalization
a new ball game
The cake grows but the slices get
smaller


Consequences of
Globalization
International strategy is the outlet
2) International strategies
Why ?
What is it ?

Why international
strategies ?
No safe haven
Marketing segmentations
Economies of scale (R&D,
manufacturing..)
What are the international
strategies ?
Export
Direct sales
Local production
Multinational

Export strategy 1
Basic marketing
Export manager(s)
Local agents
Export strategy 2
Agents or distributors ?
Risk vs growth
Conflicts
Limits

Direct sales
Sophisticated marketing
Local base with local people
Control and growth

Local production 1
Heavy capital expenditure or
Take over of a local producer
Full operation with P&L
Management issues
Local production 2
Product development
Control vs autonomy
Conflicts

Multinational 1
The planet is our market
Multicultural management team
Operations and control
Multinational 2
Corporate vs divisions
Conflicts
Conclusion on
international strategies
Management issues get more and
more complex as the strategy
unfolds from export to genuinely
multinational
Acceleration in time makes this
even tougher
3) Factors of success
What to achieve ?
How ?
What to achieve ?
See better & move faster
Fast track from Marketing
to Engineering and
then to Manufacturing
Cost competitiveness + innovation

ON A INTL OR GLOBAL BASIS
A key factor of success
Is multicultural interaction:
Multicultural management
Multicultural projects
Multicultural team building
Etc

Multicultural management
Key dimension
Which business culture ?
Communication vs language

Key dimension
Margin of error vs profit margin
Time, authority, profit may
greatly vary
Success is the ability to interact

Which business culture ?

Anglo saxon, US, German
Latin
Asian
Post Communist
Anglo saxon, US
Formal, written policies, clear rules
Action first, fast rather than best
Method rather than talent
Latin

Lots of talking, strong emphasis
on personal relations,trust, feeling
Debates aiming at finding out best
options even if it slows down the
decision makin process
Room for imagination, creativity,
development..
Asian
Formal, unwritten and unclear
rules,
Consensus first, avoid face loosing
at any cost,
Strong need of community
belonging,
Often messy
Post communist
Autocratic management,
Production and cash flow focused,
Few room for imagination and
development,
Business cultures
Reality is often a mix with a
country special
China = mix of Asian and Post
Communist
Brazil can be a mix of Asian and
Latin

Communication vs
language
Find the right angle
The right angle
Japan: choose your own rules
Korea: challenge lovers
China: team work and firmness
USA: motivate and be demanding
The right angle
Italy: provide guide lines
Spain: oil the gears
Post Communist: heal, go step by
step
Brazil: watch out as first
impression is too good
The right angle
England: be wary of conservatism
Germany: be professional
Russia: find harmony
France: people oppose first but
can be extremely effective when
harmony is found
Food, humor and www

Food plays a key role
Humor is often doomed
Internet and teleconference will
never replace meeting real people
Final word
Multicultural management is a key
factor of success of a global
development strategy.
Europeans have a strong
advantage.

Thank you
All questions are welcome