If it works in Peoria, will it in Brussels?

The Culture Wars
March 26, 1999

Which power will seize business supremacy in the coming decades? On the assumption behind this book's title, the struggle is essentially "cultural". For John Viney, therefore, although the success of US and Japanese business in Europe is conspicuous and Europe's high unemployment and difficulty in creating jobs induce pessimism, there are grounds for optimism. Thirty years ago, South Korea and Ghana had similar GNPs: since then Korea has surged ahead, despite recent setbacks.

But what is the basis for claiming that "the future will be different" and that Europe has the potential to overtake the US and Japan?

The context is the competition between what Kenichi Ohmae called the triad economies of the US, Europe and Japan in his 1985 Triad Power: The Coming Shape of Global Competition . Though Viney makes no direct reference to this work, Ohmae, a consultant and former head of McKinsey Japan, argued the need for major corporations to be present in all three areas as "insiders". This produced the concept of "glocalisation", expressed by Viney as "think global, act local".

Here lies Europe's potential advantage. Both the US and Japan are single entities with single corporate and managerial models, while Europe has variety. Few US top managers have overseas experience, while US leadership in the post-war world, the US creation of management science, business schools and such have encouraged a conformist, inward-looking attitude: if the numbers are right, what works in Peoria should work anywhere. Viney, however, overlooks the US's superpower status and the innovative drive of Silicon Valley and venture business.

US management, treated at length, is compared with Anglo-Saxon, Rhineland and continental forms of capitalism, where the state bureaucracy and industrial banking, derived from Friedrich List's "theory of the national economy" and the French Credit Mobilier bank model, play major roles.

There is less on Japan, whose rulers continue to fight for List's "national economy", never having been persuaded by Adam Smith and the free market, though happy to use open markets elsewhere. This, too, is more about power politics than just "culture". Sun Tzu's The Art of War is correctly quoted as the Japanese businessman's primer for business as war. There is a general Japanese belief that their management system is not exportable, though foreign blue-collar, if not white-collar and managerial employees have proved quite amenable. Japanese beliefs in their own "uniqueness" and the exclusiveness of their collectivist groups, even in Japan itself, suggest why Japanese corporations have difficulty in "acting locally". Japanese managers have talked for years about an undefined "internationalisation", and now "glocalisation" is on the agenda. But can they do it?

The author sees the Roman empire as an early pan-European system and discusses the role of Christianity but downplays the force of Roman power. Brussels has no Roman armies of occupation and is not a power centre like imperial Rome. The problem is political, not just cultural.

National culture and corporate culture are distinguished, though Management Today years ago questioned the latter as a concept. Under "National traits" outlines of EU member states are given, referring back to Richard Hill's Euro-Managers and Martians: The Business Culture of Europe's Trading Nations . [first name] Hofstede's survey on levels of "tolerance of ambiguity" and the degree of importance attached to superior-subordinate distances is used. Culture is not defined as such, on the assumption that people know what they mean by the term, even if it degenerates into stereotypes.

Incidentally, Islam is monotheistic, but is it right to classify it as a "western" religion? Differences in corporate governance in Europe are outlined. EU institutions are discussed, but again these are political issues beyond corporations involving politicians and interest groups in the member states competing for the goods of money, power and influence and the tangible rewards they bring. Thus member states regrettably have no common policy on Japanese inward investment and compete among themselves to attract it.

The author's point, however, is that Europe's lack of uniformity can be turned to advantage because managers should know that they must be adaptable and sensitive away from home. By contrast, Karl Otto Pohl, former Bundesbank president, worries in his introduction about the decline of entrepreneurial initiative in Europe, without which a renaissance will be impossible.

Primarily directed at an international business and management readership, the author ranges widely, citing writers including Francis Fukuyama, Paul Kennedy, science-fiction writer William Gibson and Jacques Derrida. Major issues of EU cooperation and competitiveness are dealt with.

Malcolm Trevor is visiting professor, College of Europe, Bruges, Belgium.

The Culture Wars: How American and Japanese Businesses Have Out-performed Europe's and Why the Future Will Be Different

Author - John Viney
ISBN - 1 900961 25 3
Publisher - Capstone
Price - £18.99
Pages - 8

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