Fons Trompenaars,

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• Fons Trompenaars,
• Micaela dos Ramos
• 29 March, 2007

The Cultural Aspects of Integration Creating the
best of more worlds
Trompenaars Hampden-Turner Culture for Business
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Culture integration and development

• To ensure the behavioural transition of the
  operational processes
• To create a process of constructive dialogue to
  take advantage of cultural diversity
• To focus the mindset of the leadership to align
  the organisational direction
• To anchor and implement the reconciling processes
• To create the new personality of NewCo

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Our approach supports a structured integration
process
Pre-MA
Strategy clarification
Post-MA 100 days
MA long term integration
Strategic level
Operational level
Cultural Due Diligence
Managing for Quick Results
Implementation
Build the Rationale
Recognize
Respect
Reconcile
Realize Root
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The context what binds us and what keeps
us together?
Envisioned Future
Core Ideology

• Envisioned Future
• A 10-to-30-year BHAG

Building on Collins Porras, 1994
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Strategy of managing cultural integration
Take over
Being Overtaken
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Why is Culture Integration important?

• Research shows that 9 out of 10 of mergers fail
  due to not taking care of cultural issues
• Integrating and redefining the culture and
  Corporate Values of any NEWCO is essential for
  the Integration Process
• Reconciling the differences builds a common
  platform/language for the future
• The Culture and Corporate Values development
  process will mobilise energy, motivation and
  commitment from all staff in times of integration
  and times of change
• Creating a future oriented Corporate Identity
  supporting the strategic rationale and the market
  position

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This approach leads to concrete and measurable
actions
Realize and Root Implement Reconciling Actions
Impact
Reconcile Resolve Cultural Differences
Respect Appreciate Cultural Differences
Recognize Increase Awareness
Trompenaars Hampden-Turner Culture for Business
Time
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Approaching Dilemmas Navigating Strategic
Tensions
To create wealth is to combine values that are
not easily joined therefore scarce... therefore
profitable.
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Creating the Sustainable MA
(global or standardized) products versus to local
tastes, particular markets
mean and lean versus investing for sustainability
to develop our people versus to become more cost
conscious

• Corporate Efficiency and Effectiveness

satisfy our customers at all costs versus
shareholder value
Satisfaction of the Client
Leverage intellectual capital versus innovative
projects
reputation in wider community versus serve our
customers wants
Employee Development and Learning
Customer is always right versus anticipate
customers needs
Contributions to Society
Reward our people for their mastery versus Reward
our shareholders for their faith in us
Cash flow and working capital utilization versus
We need to serve long-term sustainability
Shareholder Returns and Financial Performance
equal opportunities versus positive discrimination
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Tensions derive from differences over value
systems, goals and competition for resources
Giving rise to TEN possible Golden Dilemmas
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Most important dilemmas NewCO
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What is Culture?
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A model of culture
Explicit Culture
Implicit Culture
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When Cultures Collide..
ON THE OTHER HAND
ON THE ONE HAND
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01/ The Car AccidentWhat happens to your friend?
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01/ What Right has Your Friend?

• A. My friend has a definite right as a friend to
  expect me to testify to the lower figure.
• B. He has some right as a friend to expect me to
  testify to the lower figure.
• C. He has no right as a friend to expect me to
  testify to the lower figure.

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01/ Dilemma Integrity

• The top 2 of your corporate values are
• Integrity
• We respect the cultures of others
• Please discuss in the context of these values
  what your answer would be

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Universalism versus Particularism Individualism
versus Communitarianism Neutral versus
AffectiveSpecific versus DiffuseAchievement
versus AscriptionSequential versus
SynchronicInternal versus External Control

01
02
03
04
05
06
07
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01/ Rules vs Friendship

• Consistency
• Systems, standards rules
• Uniform procedures
• Demand clarity

• Flexibility
• Pragmatic
• Make exceptions
• It depends
• At ease with ambiguity

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01/ UniversalismFriend has no/some right and
would not help

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01/ Dilemma Globalism and Localism
Global Standards (Critical Mass)
Cultural Diversity (Differing solutions)
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Globalism and Localism
Transnational Centers of Excellence (10,10)
Global Standards (1,10)
Cultural Diversity (10,1)
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The Dilemma between Universalism and Particularism
On the one hand
On the other hand
We should strive for standard pan European
products and services to benefit from a common
universal identity
We should maintain (and extend) products and
services that meet the needs and tastes of local
markets and existing customers
Most important
Dilemma identified as the most important for
future success
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Example dilemmas as described by participants
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The Dilemma between Universalism and Particularism
Pan European
Pan European
Multi-local
Multi-local
Mainly Italy
Mainly Germany and Austria
current ideal
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The Dilemma between Universalism and Particularism

• The diversity of scores is explained by the
  different dilemmas that are clustered under this
  broad category of pan-European versus multi-local
• Scores for specific dilemmas are highly
  consistent
• Example Need for integrating local IT systems.

current ideal
European
Multi-local
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The Dilemma between Universalism and Particularism

• The diversity of scores is explained by the
  different dilemmas that are clustered under this
  broad category of pan-European versus multi-local
• But some participants (especially from Italy)
  would want to retain local identity and services
  and not be diluted in a bland European model
• (but this does not reconcile with opportunities
  of the European Local Oreganization)

current ideal
European
Multi-local
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01/ Universalism versus Particularism
Rules System
Exceptions Relationships
Positive Connotation
Flexibility
Consistency
Negative Connotation
Bureaucracy
Corruption

• Issues between the two in business
• the meaning of a contract
• objective systems role of Headquarters
• Negotiating process doing business

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Corporate Culture
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Corporate Culture
Incubator
Guided missile
Egalitarian
Person oriented
Task oriented
Hierarchical
Family
Eiffel tower
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Corporate Culture
Incubator
Guided missile
Egalitarian
STRATEGY MBO PAY FOR PERFORMANCE
ORGANIZED CHAOS MBP LEARNING
Person oriented
Task oriented
STRUCTURE MBJD EXPERTISE
NETWORK MBS PROMOTION/ POWER
Hierarchical
Family
Eiffel tower
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1. Management style
2 Power orientation
 
 
3 Source of cohesion
4. Principle of control
5. Guiding star or watchword
6. Definition of excellence
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Current versus Ideal Corporate Culture Database
average
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Current and Ideal Corporate Culture

• Which tensions and dilemmas are there between
  dominant current corporate cultures?
• Which tensions and dilemmas are there between
  current and ideal corporate culture?

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Legacy organisations compared
Linde
BOC
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Current and Ideal Corporate Culture
Individual performance

• Which tensions and dilemmas are there between
  dominant current corporate cultures?
• Which tensions and dilemmas are there between
  current and ideal corporate culture?

Group performance
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Universalism versus Particularism Individualism
versus Communitarianism Neutral versus
AffectiveSpecific versus DiffuseAchievement
versus AscriptionSequential versus
SynchronicInternal versus External Control

01
02
03
04
05
06
07
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02/ Individualism versus Communitarianism
a) One said It is obvious that if one has as
much freedom as possible and the maximum
opportunity to develop oneself, the quality of
ones life would improve as a result.
b) Another said If the individual is
continuously taking care of his or her fellows
then the quality of life for us all will improve,
even if it obstructs individual freedom and
individual development.
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02/ IndividualismPercentage opting for
Individual Freedom

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02/ Dilemma Reconciliation The Individual and
the Team
Case StudyIndividual Performance versus Team
Spirit
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02/ Dilemma Reconciliation The Individual and
the Team

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02/ Dilemma Reconciliation The Individual and
the Team
Individual Motivation
Team Motivation
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02/ Co-Opetition The Individual and the Team
Individual Motivation
Team Motivation
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02/ Co-Opetition The Individual and the Team
Individual Motivation

Team Motivation
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02/ Co-Opetition The Individual and the Team
Individual Motivation
Reward Teams for Individual Creativity AND
Reward Individuals for Team Work
Team Motivation
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02/ Main Challenges

• 1. Mass-Customization
• 2. Co-Opetition
• 3. It is Cool to be Emotional
• 4. Moments of Truth
• 5. Servant Leader
• 6. Just In Time Synchronizing Sequences
• 7. Pushing through the Pull

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Dilemma Theory Resolving Strategic Issues
DILEMMA
(from the Greek meaning)
TWO-PROPOSITIONS IN (APPARENT) CONFLICT
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Either - Or
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And - And
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Through - Through
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Integrate central with decentral
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Vicious and Virtuous Circles
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Reconciling Cultural Differences
Dynamic process of solving dilemmas in six
steps 1. Identify dilemma 2. Chart dilemma 3.
Stretch dilemma 4. Define epithets 5. Reconcile
dilemma 6. Define action points
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Our approach partnering with you
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Our approach supports a structured integration
process
Pre-MA
Strategy clarification
Post-MA 100 days
MA long term integration
Strategic level
Operational level
Cultural Due Diligence
Managing for Quick Results
Implementation
Build the Rationale
Recognize
Respect
Reconcile
Realize Root
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Sustaining the change in cultureHow will our
recommendations support the culture change in the
long term?

• By highlighting and linking the most pressing
  business issues to the desired culture(s).
• By introducing a common language within NewCo to
  define and recognize cultural dimensions
• By translating issues into concrete actions and
  behaviours through our reconciliation approach
• By involving from the very beginning of the
  project a substantial group of NewCo managers and
  staff, in order to create critical mass and
  momentum.

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Next Steps

• What next?
• Further develop the business case through
  dilemmas
• Implement the value-driven organization
• Communicate, communicate....communicate!
• Develop leaders (align personal and group values)
  through meaningful conversations
• Monitor continuous evaluation
• Good luck

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INN0VATION
INCLUSION
LEADERSHIP
DIVERSITY
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Example Record Speed of InnovationCombining
Best of US - German Strengths
German Thoroughness Seeking Perfection
Systematic Experimentation Strengthens
strengths!
American Risk Taking

• Innovation Speed 3x Moores Law
• Second Dresden Factory opened 2005
• Third Dresden investment of 2.5 billion
  announced in May 2006

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Thank you !

• To download this presentation
• Go to www.thtconsulting.com
• Password Methodos2007

Trompenaars Hampden-TurnerCulture for Business