Managing Corporate Values in Diverse National Cultures

The Challenge of Differences

Philippe d'Iribarne

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9781138281134
• eBook ISBN: 9781136466847
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

How should a Western company manage cross-culturally corporate values in its foreign subsidiaries? Do these values make sense everywhere and can they assumed to be universal or, on the contrary, are they culturally Western specific?

Philippe d'Iribarne provides answers to these timely and urgent questions, based on research carried out in the subsidiaries of a leading global company, Lafarge, in the contrasting cultural environments of China, the United States, France and Jordan. It appears that, in a large part of the world, people's expectations are similar; they expect from a good employer clear and decisive leadership, and fair and compassionate treatment, helping them to live a good life. But treating these expectations as the 'same' could be misleading. Western companies with a humanistic orientation are well positioned to fulfil them, provided they are willing, in each and every geography, to take into account the local vision of the right way to achieve a good life.

By following the example presented in this book, companies who care can deliver economic efficiency as well as progressive people management in the countries in which they operate.

1
France and the United States

Two sets for a single scene

Two reference versions of the Group’s Principles of Action, one French and one American, were written concurrently by the same authors.¹ They are strictly matched, sentence for sentence. They affirm the same values and, given the proximity of the two languages, often employ the same words (e.g. satisfaction, satisfaction; environment, environnement; etc.). A cursory reading might well give the impression that the resulting text transcends the diversity of cultures.

Yet, on closer examination, a good many differences appear. And these owe nothing to chance. The text does not simply make mention of values, it also deals with them in concrete terms and describes the relationships that the Group wishes to establish with its customers, its shareholders, and its employees. It does not just state that these relationships must be good, but also places them in a concrete setting and describes the behaviors that the Group as an entity wishes to comply with and those expected from its employees. Yet by entering into concrete realities, the text cannot sidestep the different understandings, on the one hand in France and on the other in the United States, of what makes for good relationships between a company and those involved in its actions. And these conceptions are linked to broader visions, American on one side and French on the other, of what living together means (Box 1.1).²

The conceptions involved are apparent in the choice of words and expressions used to describe the various relationships; thus we are not dealing with the same type of relationship if we affirm that we want (or even demand) someone to do something or if we say that we wish (or expect) them to do it. If we pay attention overall to the precise way in which the two versions describe the Group’s actions, as well as to the images used to convey these, we see that each version bears the imprint of a culture, the latter being understood as a way of living and working together in harmony. What is involved here are the different ways in which each version of the Principles sets the scene regarding the Group’s relationships with both the outside world and its employees.

The company as part of society

In the American vision, the role played by business organizations in society is twofold. A company is unequivocally an economic actor that strives for prosperity by satisfying the demands of its customers and shareholders as best it can. It is also part of a community to which it is accountable with regard to its moral stance and its actions at the service of the common good. This vision is often presented by French proponents of societal “modernization” as a model to be emulated. Yet, it has failed to gain much foothold in French thinking, whether in its overtly mercantile aspect or its community-related dimension, both of which arouse a great deal of reticence. It tends to be seen as the coupling of mercenary activity and enlistment into some moral order. A different vision prevails in France, in which one’s sense of duty is directly linked to one’s duty to oneself and to the rank one holds. These visions pull the two versions of the Principles in opposite directions. In the French version, the reticence towards both the mercantile vision of a company and the vision of integration into a community is often apparent. And, at the same time, we also find reference to the commitments that a business organization makes of its own free will to society.

The Group, its customers, and its shareholders

In both reference versions of the Principles, the Group emphasizes the importance it gives to its customers and its determination to ensure them satisfaction. Yet, the conception of relations between a company and its customers in each version is not the same.

To take two passages referring to these relations: “Provide the construction industry”/“offrir au secteur de la construction” (“Offer the construction industry”); “delivering the … products …”/“proposer les produits …” (“Proposing products …”). Linguistically, it would have been easy enough to write in French “fournir” (provide) rather than “offrir” in the first case, and “livrer” (deliver) rather than “proposer” in the second. But this would have profoundly modified the way in which the relations between the company and its customers are framed.

“Provide” and “delivering” set the stage for a commercial relationship between a payer (the customer) who places an order and a provider (the company) who supplies the product ordered. This representation describes a type of relationship that is fundamentally positive in the American view: a contractual relationship between autonomous individuals with converging interests. Conversely, the French equivalents “fournir” and “livrer,” which directly match the terms used in the American version, evoke for the French a mercantile activity of doubtful repute. “Offrir” and “proposer” imply another kind of relationship that is less self-interested and thus more honorable.

Box 1.1 Two conceptions of life in society

In the United States and France, we find two conceptions of society that are substantially different (d’Iribarne, 1989, 2006, 2008).

American society has been lastingly marked by the fear of seeing one’s fate governed by others. The term “encroach” (defined by Webster’s as “to trespass or intrude”) well reflects what is at stake. A response to this fear is provided by the importance of contractual relations in society. These relationships bind entities whose rights and obligations are defined with utmost precision by a commitment agreed to by both parties. If I am bound to someone else by contractual ties, they cannot impose anything on me given that they can only require of me what I have consented to in ratifying the contract binding us. Insofar as my consent was genuinely of my own free will, the fear of not having control over my own destiny is thus averted. In business organizations, a meticulous division of responsibilities leading to fixed individual objectives negotiated with one’s manager is one of the structuring elements of such contractual relationships. This is also the case for a company’s internal regulations, which define in minute detail a set of rights and responsibilities. This contractual approach dovetails with the conception of a local community, particularly a business organization, as a moral community. These two conceptions coexist harmoniously within a vision that considers society as being united around moral values, the observance of which testifies to an individual’s credibility and thus contributes to his or her success in the world.

French society, by contrast, is characterized by a different apprehension: that of being forced to bow down, either through fear or self-interest, to someone with the power to harm or bestow favors on you, which is perceived as abject behavior both in one’s own and others’ eyes. It is humiliating to submit to individuals who for some reason or other (for example, their position as manager or customer) are in a position to confer on you some kind of advantage providing you abide by their demands. In companies, authority relationships and customer relationships tend to be organized, and verbally expressed, so as to keep this image of sub mission at bay. The reference to the notion of métier,³ to the skilled professional, to the grandeur of one’s métier, with its concomitant rights and duties, plays a decisive role here. But, while submission is humiliating, it is not the case when an individual freely gives allegiance to an entity (person, cause, institution or even a firm) whose greatness is recognized and with whom they join forces to brave the world.

Of course, this does not mean that the company offers or proposes its products in the sense of giving them away. It is clearly understood that the company is offering them in return for money. And yet, the terms “offer” and “propose” are not completely false. What is being offered is no ordinary product, but rather “les produits, systèmes et solutions les plus fiables, les plus innovants et les plus économiques” (“products, systems, and solutions that are the most reliable, innovative, and cost-effective”). The company does not simply deliver these products, as would be the case for an off-the-shelf product; it also designs them, brings them into existence and makes them available to potential users. And it is, in fact, true that their existence is in some way “offered.” The terms “offer” and “propose” shift attention away from the final and less noble phase of selling the products and onto their design phase—a phase that clearly involves the love of one’s art in all its gratuitous dimensions, which thus precludes any assimilation to a subservient activity.⁴

At the same time, where the Group is seemingly subject to its customers’ expectations in the American version, the French version presents it as having the power to determine its relationship with customers. This aspect is illustrated by the following comparisons: “Being a customer-driven organization”/“Orienter notre organisation vers le client” (“Direct our organization towards the customer”); “Being measured by our customer’s satisfaction and loyalty”/“Faire du niveau de satisfaction de nos clients et de leur fidélité la mesure de notre success” (“Make our customers’ satisfaction and loyalty the measure of our success”). In the American version, the customer is the engine and the company is “driven” by the customer’s wishes. Its value depends on how it is viewed and treated by its customers; the company can do no more than acknowledge that customer reactions serve as the yardstick to “measure” its worth. This view seems perfectly acceptable in a society where working for other people is taken for granted, where meeting their expectations is what matters and where it is up to the market, through fair competition, to decide what a company is worth.

From a French perspective, passively following customers or being at their beck and call seems to lack dignity. However, freely deciding to “direct” the company towards the customer through a somewhat sovereign approach that allows it to keep the initiative is compatible with a dignified relationship in which concern for customers means taking care of them. Likewise, it is perfectly honorable to freely decide that, since the company has an interest in what the customer feels, it will “make” this into a guiding principle for its actions.

The same contrast between the two versions appears regarding the relations with shareholders: “Delivering the value creation that our shareholders expect”/“Répondre aux attentes de création de valeur de nos actionnaires” (“Respond to our shareholders’ expectations of value creation”). In the American version, the company again positions itself unequivocally as a supplier fulfilling (“delivering”) an order. In the French version, however, the linkage has been framed differently. It is more a question of the company’s sensitivity to a request to which it will “respond,” which implies a much greater leeway for action and initiative than simply “delivering.” Engaging in a dialogue effectively implies a different type of relationship to that of executing an order. The fact that the company is to a large degree subordinated to its shareholders is thus veiled over.

This French sensitivity to a market dimension also emerges when the company speaks about itself. We have only to compare: “With a leader ship position in each of our business lines”/“Leaders sur chacun de nos métiers” (“Leaders in each of our métiers”) and “Developing … other businesses”/“en nous développant … dans d’autres activités” (“Developing ourselves … in other activities”). Unlike the word “business,” which raises the market aspect of company operations, the terms “métiers” and “activités” focus more on the industrial side, along with the skill and creative ability that this implies. The same opposition is also found when we compare: “our portfolio”/“nos activités” (“Our activities”). “Portfolio” carries a business connotation that is absent from the term “activités.”

French reticence towards belonging to a community

The French version of the Principles shows as much reticence to the image of belonging to a community as to a market-oriented and self-interested image. This reticence is apparent in the way relations with society overall are referred to. The Group positions itself as a wellspring of influence rather than as part of a whole to which it is subordinated.

We can thus compare: “Contributing to building a better world for our communities”/“Contribuer autour de nous à la construction d’un monde meilleur” (“Contributing around us to building a better world”). In the American version, the company is portrayed as belonging to an ensemble of communities (connected to the localities where the company operates) and constituting just one of several components within these communities. This membership implies that the company participates in the efforts made by each community to build a better world. In the French version, the notion of membership disappears. The company portrays itself as an autonomous actor surrounded by other and not necessarily interconnected actors revolving “autour” (around) it.

This distancing from the notion of community appears in another passage: “Acting as responsible members of our communities”/“Agir en tant que citoyen responsible” (“Acting as a responsible citizen”). The term “citizen” suggests the relatively abstract membership of a vast and purely political ensemble and is a far cry from the emotional ties that exist in a close-knit group, along with the accompanying social pressures, ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Foreword
• Acknowledgements
• Introduction
• 1 France and the United States: two sets for a single scene
• 2 China: between guanxi and celestial bureaucracy
• 3 Unity and tribalism in Jordan
• 4 Local forms of support in all their diversity: a comparative survey
• 5 Values materialize in harmony with individual cultures
• Conclusion
• Appendix: national cultures and management: an interpretative approach
• References
• Index