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Fish Can't See Water. How National Culture Can Make or Break Your Corporate Strategy

  • ID: 2486924
  • Book
  • August 2013
  • 312 Pages
  • John Wiley and Sons Ltd
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The message of this book is simple: national culture, through its influence on corporate culture, has a powerful but often–invisible impact on the success of global companies. What s more, the very same national traits that accelerate growth at one stage of the corporate life cycle may derail that growth at a different stage or when an inevitable crisis hits.

How did Samsung Electronics become the world s largest consumer electronics company in less than 20 years, unseating dominant Sony Corporation in the process? What pivotal role did the national heritage of both companies play in this? How did Toyota create a sustainable competitive advantage for almost 25 years, by adapting a global business philosophy deeply rooted in Japanese culture? How did the Finnish roots of Nokia and the American roots of GM first help both companies, only later to derail their success?

In a global world where most processes and products can and will be copied, culture matters more than ever, and as this book shows, can be a source of sustainable competitive advantage! As they say: Culture eats Strategy for lunch!   Through case examples that include: Toyota, Austin Motor Company (later British Leyland), Samsung, Sony, Nokia, and P&G, Hammerich and Lewis provide a new conceptual framework and 10 vital tools for analyzing corporate culture and diagnosing the dynamics that drive  the success of global companies.

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Preface xiii

Acknowledgements xv

Introduction 1

What is culture ? 4

The water that we couldn t see when analyzing culture 6

The long–term view: corporate lifecycles and corporate culture 9

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

1 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 infl uenced by . . . 31

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

2 The Lewis Model Setting the Scene 49

Linear–active cultures 57

Multi–active cultures 58

Reactive cultures 60

Getting things done 64

3 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

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

4 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

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

5 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

6 The Growth Period 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

7 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

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

8 Whither the West 215

Whither the West 215

Appearance and reality 218

Golden rules for dealing with reactive cultures 220

1. Speech is to promote harmony 220

2. Good listening is important 220

3. Never interrupt 221

4. Never confront 221

5. Never disagree openly 221

6. Never cause anyone to lose face 222

7. Suggestions, especially criticism, must be indirect 223

8. Be ambiguous, so as to leave options open 223

9. 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

1. Speech is for opinions 233

2. Let them talk at length and then reply fully 233

3. Be prepared to discuss several things at once 234

4. Be prepared for several people talking at once 234

5. Display feelings and emotion 235

6. Interrupt when you like 235

7. Truth is flexible and situational 235

8. Be diplomatic rather than direct 236

9. 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 238

14. Reputation is as important as profit 238

15. Accept unpunctuality 238

16. Remain relationship oriented 238

9 The Crisis 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

Navigating transformation 261

Meeting crises 262

Chapter closing 263

10 Enhancing Corporate Performance in a Multicultural World 265

Seeing the water that surrounds you 266

The national lifecycle fingerprint 266

Examples of 17 national traits that both enable and derail 269

Two recommendations to investors 269

1. Watch out for the tell–tale signs of a derailing cultural dynamic and promote diversity in the board 269

2. Analyze the cultural implications carefully when merging two organizations 271

Two recommendations to boards 272

1. Conduct a full strategy and cultural dynamics audit at least every five years 272

2. Promote diversity at the board and in the executive team 273

Four recommendations to management 273

1. Carefully balance diversity with day–to–day performance and make the organization culturally aware 273

2. Establish a recurrent methodology for making culture discussion more data driven and establish a cross–functional task force to systematically monitor culture 274

3. Ensure there is a clear strategy for embedding key elements of the corporate culture globally 275

4. Align the talent and leadership agenda with the cultural imperatives 276

Implications for countries 277

Chapter and book conclusion 278

Appendix 281

References and Websites 287

Index 289

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Kai Hammerich
Richard D. Lewis
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