A Corporate Culture Crisis

Let me tell you a story. Remember this one?

Once upon a time, specifically May, 1998, Daimler-Benz and Chrysler Corporation announced the first megamerger of two large international companies, creating the fifth-largest maker of automobiles in the world. Floated high on expectations, stock prices rose to US$108.00 a share.

Unfortunately, reports of cultural clashes between the two companies soon surfaced. Although English was the chosen business language, American executives felt marginalized when the Germans spoke together after meetings. The Germans, familiar with more formal business protocol, were uncomfortable with Americans calling them by their first names. German executives had lunch with the workers; American executives ate separately.

Disagreements in conducting international business resulted in differences over how to compensate expatriates. For the Germans, international assignments were a prerequisite to advancement and merited nothing extraordinary. For the Americans, being sent overseas was uncommon and deserved lavish reward. Top managers at Daimler had international experience; few of those at Chrysler even had a passport.

Cultural practices were in conflict even at the highest levels. American engineers responded to consumers and crafted automobiles based on market demands. The Germans focused on technical quality and decided for consumers what their cars would look like.

It was a cultural mismatch from the start. Just two years after the merger, stocks were selling for as low as US$26.00. By 2007, the merger was dissolved.

Not all cross-cultural misunderstandings results in corporate crisis. They do, however, lead to strained relationships, negative stereotyping, and seemingly insurmountable communication barriers – all undesirables in your business.

That’s why your perceptions about other cultures need to be accurate and nonjudgmental. In today’s globalized economy, you might just hire a German engineer to work for your company. Maybe you’re teaming with an American marketing consultant on a new strategy for a Taiwanese manufacturer. Or maybe your company is sending you to Johannesburg for two years.

If you can maximize your synergies and appreciate your differences, your cross-cultural business relationships will be fair and mutually beneficial.