Fish Can’t See Water: How National Culture Can Make or Break Your Corporate Strategy

Fish Can’t See Water: How National Culture Can Make or Break Your Corporate Strategy Hardcover

by Kai Hammerich  (Author) , Richard D. Lewis (Author)

How national culture impacts organizational culture—and business success

Fish Can't See Water

Using extensive case studies of successful global corporations, this book explores the impact of national culture on the corporate strategy and its execution, and through this ultimately business success—or failure. It does not argue that different cultures lead to different business results, but that all cultures impact organizations in ways both positive and negative, depending on the business cycle, the particular business, and the particular strategies being pursued. Depending on all of these factors, cultural dynamics can either enable or derail performance. But recognizing those cultural factors is difficult for business leaders; like everyone else, they too can be blind to the culture of which they are a part. The book offers managers and leaders eight recommendations for recognizing those cultural factors that negatively impact performance, as well as those that can be harnessed to encourage superior performance. With real case studies from companies in Asia, Europe, and the United States, this book offers a truly global approach to organizational culture. Offers a fresh approach to the effects of national culture on organizational culture that is applicable to any country in any region

Based on case studies of such companies as Toyota, Samsung, General Motors, Nokia, Walmart, Kone and British Leyland

It describes the origins and nature of the most common corporate crisis and how culture impacts the response to such a crisis

Ideal for managers, business leaders, and board members, as well as business school students

A welcome response to the flat-Earth fad that argues we’re all alike, this book offers a nuanced and practical view of cultural differentiators and how they can enable or derail business performance.Editorial Reviews

Review

The Economist, Oct. 2013. “In focusing on culture they are clearly onto something important. Fish Can’t See Water” is full of interesting insights into modern business. There are signs that Western firms are taking cultural sensitivity more seriously. However, emerging-market multinationals still lag behind, particularly in China, … Messrs Hammerich and Lewis need to take their message about fish and water East as well as West”
Jyllandsposten, Oct, 2013. (*****/6)

“The authors have written an outstanding book on corporate culture, and the difficulties the board and leadership may have in ‘seeing’ its own culture and to transform it to succeed globally.

The book is well written and discusses the subject of national culture in-depth.  However, it is not for everyone. It is targeted at senior executives and board directors in international business – and students of culture with an interest in Edgard Schein and Geert Hofstede, and how their theories are advanced in this book.” (Translated from Danish)

‘With case studies from Asia, Europe and the US, the book offers a thorough insight into how even the smallest of cultural traits can affect businesses immensely.’ (GulfBusiness.com, September 2013)

From the Back Cover

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.

 

Corporate strategy: Why culture should be cool

Oct 12th 2013 |From the print edition

Fish Can’t See Water: How National Cultures Can Make or Break Your Corporate Strategy. By Kai Hammerich and Richard Lewis. Wiley; 297 pages; $40 and £19.99. Buy from Amazon.comAmazon.co.uk

IN THE 1990s Walmart decided to advance into German territory. It was the biggest retailer in the world, with 3,800 stores in America alone and a huge pile of cash to spend. And Germany’s retail sector was in a lamentable state. The Arkansas giant bought two German chains—Wertkauf (with 21 stores) and Interspar (with 74)—and immediately began Americanising them. There were greeters at the door to wish shoppers a good day and strict instructions to smile at customers.

The result was a disaster. The have-a-nice-day stuff went down like a lead Zeppelin with employees and shoppers alike. And Walmart compounded its mistakes by putting an American expat in charge of the German operations (he insisted on everybody speaking English). The company lost $150m a year and soon decided to sell out to a German rival, Metro.

Coping with cultural differences is becoming a valued skill. The advance of globalisation, particularly the rise of powerful emerging countries such as Brazil and China, means that companies have to deal with business and consumers from a wider range of backgrounds. And the shift from a manufacturing to a service-based economy means that companies have to manage complicated ideas rather than relatively simple production processes. Western managers must understand consumers in São Paulo and Beijing. They also need to know how to tap into knowledge centres halfway across the world.

Yet many companies are bad at understanding culture. No serious business would dream of spending hundreds of millions buying a subsidiary without doing a thorough audit of its books. But Walmart advanced into the German market without bothering to make even the most rudimentary inquiries about German culture.

In “Fish Can’t See Water” Kai Hammerich, a Danish headhunter, and Richard Lewis, a British linguist, try to teach company directors to see the water that they are swimming in. They not only argue that “the biggest obstacle to successful globalisation is the inability of most companies to understand the world view and aspirations of partners and competitors.”

But they also try to bring casual cultural observation into the world of management theory. They argue that world civilisation can be divided into three global archetypes: linear-active, multi-active and reactive. Linear-active culture stresses timekeeping and getting-to-the-point and dominates in North America and northern Europe. Multi-active stresses emotion and sociability and dominates in southern Europe and Latin America. Reactive stresses “face” and harmony and dominates in Asia. But different countries stand in different positions on these various continuums: India is halfway between reactive and multi-active and Canada halfway between linear-active and reactive.

It is easy to poke fun at trying to capture human civilisation in a three-pointed diagram and producing a guide to business strategy from it. Cultures are hard to pin down: China is very different from what it was a decade ago. And businesses frequently defy national stereotypes: Brazil’s Inbev proved to be sufficiently action- oriented and analytical to take over America’s Budweiser. Messrs Hammerich and Lewis try to have it both ways by arguing, for example, that one reason for Steve Jobs’s success was his “un-American” obsession with design. They also overestimate the originality of their insight. The East India Company was able to dominate an entire continent with a few hundred company men because it adapted to local customs, even to the point of co-opting local words such as “nabob” and “loot”.

But in focusing on culture they are clearly onto something important. You only have to watch Brazilians and Germans playing football to realise that there are profound cultural differences between different groups. “Fish Can’t See Water” is full of interesting insights into modern business. The authors examine the life cycle of companies to demonstrate that cultures have a variety of comparative advantages at different stages of development. The individualistic English are good at starting companies but bad at keeping them going: Austin Motors could not compete with the more methodical Americans and Japanese. The collectivist Japanese are good at running mature companies when they have hit on a successful formula but bad at dealing with disruptive innovation. Sony was a master-innovator in the analogue age but failed to adjust to the digital age. American culture is peculiar in being so well adapted to creating start-ups but also to running mature companies.

The authors go on to argue that companies can sometimes turn more ethno- centric as they become more successful. They might send their managers to spend time abroad. They might appoint a few foreigners to the board. But they become more proudly nationalistic as they put on a multicultural veneer. And they turn into stereotypes if they hit a rough patch. Look at the way that Toyota responded to safety-problems with its car brakes by going into a collective huddle or how Lehman Brothers tried to cope with its meltdown by expressing loud-mouthed defiance.

There are signs that Western firms are taking cultural sensitivity more seriously. For example, country managers are making a comeback after a long period of centralisation. Walmart now has a policy of emphasising local cultures. Stores in China sell fish in tanks rather than on slabs, and stores in Latino-dominated bits of the United States are called Supermercados de Walmart. However, emerging-market multinationals still lag behind, particularly in China, where they tend to be run by local managers who have little if any experience of working abroad and think that if they keep costs low culture will take care of itself. Messrs Hammerich and Lewis need to take their message about fish and water East as well as West.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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