Management European style.

Publication: The Academy of Management Executive

Publication Date: 01-AUG-95

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COPYRIGHT 1995 Academy of Management

Do Europeans manage differently from the Japanese or North Americans? These authors think so, and they back up that claim after extensive interviews with fifty-two top executives from some of western Europe's major "blue chip" firms. Clearly, the answer to this question is of prime interest to Europeans in search of identity, but it is also useful to U.S. and Japanese managers seeking to develop their European operations. See what you think.

When thinking about management in Europe, the image of diversity dominates. Managing in Palermo, London, Frankfurt or Helsinki are different realities. But are there some common management philosophies and practices which form a genuine European management style? To answer this question, we must first gain a better understanding of how European executives view the overall terrain:(1)

Umberto Agnelli, Vice Chairman of Fiat: "At first it is hard to think of a European model of management. Europe is being built, business systems and cultures are still different. The management techniques are similar, and many of them come from the USA, but the way they are applied is different from one country to another, because of different business environments."

Floris Maljers, former Chairman of the Board of Unilever: "... is there a European management culture? And I put a big question mark behind it ... You could also defend the thesis that there is an Anglo-Saxon and a continental management culture, because the British in many respects have management habits which are more related to the Americans than those on the continent. They are in a sort of in-between position."

Baron Daniel Janssen, Chairman of the Executive Committee of Solvay: "The British, like the Americans, are more oriented towards short-term and quick financial profits than the Germans, or even the other nationalities on the continent."

Sir Anthony Pilkington. Chairman of Pilkington: "... junk bonds could never have started in Germany, it is just impossible to imagine the Germans with junk bonds. The U.K. market and the U.S. market have more of a trading nature than Europe, which has more of an investing nature.... In Germany, in Sweden, in Denmark, and even in France, there are a lot of checks and balances against management freedom of actions, there are supervisors' reports, there are workers' representatives on the board and there is much more government intervention."

Pehr Gyllenhammar, former Executive Chairman of Volvo: "To some extent the small countries are influenced by German practices, Belgium may be also influenced by French practices, the Dutch also are influenced by British practices. These small countries are melting pots. The smaller countries have been more sensitive to outside influences and they integrated these influences; because of the pressures against them, because of the small base they have for recruiting, and because they were forced to go outside looking for markets."

Pilkington: "The best examples of European companies are Shell and Unilever. These two are operating in joint Anglo-Dutch ownership for, I don't know, fifty years, more perhaps, and I suppose they are the nearest to what you might call a European company."

Walter Schusser, Vice President of Human Resources of Siemens: "Of course if we only look at Europe from within there are differences between countries in the way firms are managed, but if we look at Europe as a whole from outside, comparing it with Japan and the U.S., then it looks different and relatively homogeneous."

The European Style

In spite of differences across Europe, and to some extent thanks to diversity, European firms also share some common management philosophies and practices. European top managers think beyond the simplistic dichotomy diversity or unity. Our analysis of the spontaneous answers from the top managers we interviewed revealed a consensus with regard to four common characteristics of management in Europe.

1. A Greater Orientation Towards People Compared to their U.S. or Japanese counterparts, European executives believe they share a common inclination towards the fulfillment of people.

Andre Leysen, Chairman of the Supervisory Board of Agfa Gevaert: "We consider that people are an integral part of the firm. Of course, we work for profit, but also for people. On the other hand, in the U.S., profit dominates everything, and people are considered as a resource that you can take or leave. This is a major difference. Now you could say that the European philosophy is close to the Japanese. I do not think so. There is a fundamental difference between the two, Europe is an individualist society whereas the Japanese society is based on the collective. Fernand Braudel argued that it comes from the different agricultural systems. The oriental system is based on the culture of rice which requires teams of people, whereas our system is based on the culture of cereals which can be achieved by individuals."

In European firms, outsiders are tolerated and conformity is less accentuated. The Japanese executives we interviewed seem to value the individual freedom given to European managers:

Hiroshi Wakabayashi, Chief Executive of Itoshu (UK): "In Japan the managers are selected among the thousands of people who have been recruited and trained for a long time. They are trained according to the needs of the firm, and training shapes people's minds towards homogeneity. This system does not respect the personality of the individual. On the other hand, in Europe, managers are hired and in-house training is less developed, they take managers as they are, with their personality. As a consequence, Japanese managers may lack originality. This is not true for Japanese entrepreneurs, but it is true of managers in general. Whereas in Europe, even management in big firms is more personalized."

The attention given to the individual leads to a greater emphasis on informal coordination.

Hans L. Merkle, Managing Partner of the Bosch Group: "We do adapt functions to the individuals and it is the right way to do it. First we define functions according to the needs of the company, but we always...

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