How come that companies, who have been doing
business internationally for decades suddenly fail? And how come that
companies who wouldn't have had a chance 25 years ago suddenly become
a global success?
This paper deals with the links between cultural awareness, corporate
strategy and performance. It is based on my 15 years of experience in
international business management, academic research in this field and
experiences from our company Gugin, who helps corporations in Europe,
US and Asia improving their international businesses.
But lets look at why it has become so important to take different cultures
Cultural awareness has become important due to increased globalisation.
The global political structures have changed. We do have a United Nations
that almost all countries respect and honour and the post war division
of the world has changed after the collapse of the Soviet Union. New countries
have been born and we have a more diverged political picture. We create
political/economical relations in new ways e.g. the ASEM (Asia-Europe
Meeting) process, which is a direct result of these changes. By 1992 East
Asia accounted for 24 percent of global production. By comparison, the
EU accounted for 35 percent and North America for 28% of global production.
According to World Bank figures from 1991 - 1993 growth of real Gross
Domestic Product (GDP) in East Asia averaged 8.7 percent. On the basis
of growth rates recorded during 1978 - 1991, many economists including
those from the World Bank projected that East Asia's GDP would overtake
that of North America and EU in 2010.
Economically we are emerging as well. Europe is turning towards larger
entities with common currency, one Central Bank and merges and close collaborations
between stock exchanges. ASEAN is another good example however different.
But since its foundation in 1967 a lot has changed. Evolving relations
between the EEC/EU and ASEAN have lead to a lot of initiatives, such as
joint ventures in the exploration of AEAN resources, the possibility of
EEC participation in ASEAN manufacturing activities and the mobilisation
of capital for financing ASEAN projects.
Technologically the Internet has made it possible for companies to market
themselves virtually everywhere and enabled the companies to establish
inexpensive global infrastructures. And when you need to go abroad it
is less expensive than ever before, so we travel much more than 20 years
So from both a political, economical and technological point of view we
are encouraged to discover cultures we have only little knowledge about.
For the adventurer it is good news but for international corporations
it might as well be bad news.
We have been working with two types of companies: Those who want to expand
their international business in either Asia or Europe and those who have
tried and faced a lot of challenges they didn't predict or could even
imagine. We like the first group very much, because we can help them become
successful before they make any serious mistakes, however it is more interesting
to look closer at the last group - those who tried and didn't have their
You can download the full article as a *.pdf: click
Finn Drouet Majlergaard (41) is the founder and managing partner of Gugin
International Business Development operating globally with offices in
France and Denmark. He holds an MBA from Henley Management College and
is currently studying DBA at International School of Management. He has
worked internationally through his entire professional life with companies
like IBM, CSC, Arthur Andersen Business Consulting. He is a regular guest
professor at Bangkok University and Copenhagen Business School but he
spend most of his time helping companies around the world to succeed internationally.
He has an unorthodox way of thinking and he likes to provoke in order
to get his messages through. Finn will be speak at the
for the Future on Risk in the
"Cross Cultural Competence" session.
You can find more about
for the Future on Risk