UK: Cross Channel culture club.

UK: Cross Channel culture club. - The different ways the French and British approach business can be explained away in philosophy and education, but Euro-merger mania demands solutions that will bridge the gaps. Al Senter looks for answers.

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Last Updated: 31 Aug 2010

The different ways the French and British approach business can be explained away in philosophy and education, but Euro-merger mania demands solutions that will bridge the gaps. Al Senter looks for answers.

Gazing at the Atlantic waves crashing against the shore of St Helena in 1816, the exiled Napoleon was in pensive mood as he reflected on the troubled history of relations between France and Great Britain. 'How much evil (they) have inflicted on each other,' he sighed. 'How much good they might have done.'

Dr Johnson, as ever, was full of what he would regard as English common sense when he observed in 1780. 'A Frenchman must always be talking, whether he knows anything of the matter or not. An Englishman is content to say nothing when he has nothing to say.'

Doing their utmost to disprove these aphorisms are a number of French and British companies which have joined forces in recent years - notably GEC and Alcatel-Alstom, Lafarge and Redland, Carnaud and Metal Box, and Kingfisher, first with Darty, then with Castorama. The Scots, of course, have long paraded Gallic credentials with the Auld Alliance merger talks dating to 1296 between companies accustomed to periodic visitations from English competitors, but Anglo-French associations are of more recent vintage. And even if such mergers have not exactly turned boardrooms into latter-day Crecys and Agincourts, the ententes between the new partners have not always been cordiales either.

Inevitably the representatives of each country have brought considerable cultural baggage to the party. Collin Randlesone, senior lecturer in European management at Cranfield School of Management, cites two influential 17th Century figures still making their mark on contemporary French management culture: the philosopher Rene Descartes (1596-1650), and Jean-Baptiste Colbert (1619-1683), who was finance minister to King Louis XIV and the architect of dirigisme.

'Since the days of Colbert, the state in France has adopted a more or less dirigiste approach, rather than develop the kind of free market we have in Britain,' says Dr Randlesone. 'You still find a high percentage of French companies either totally or partially nationalised, and so you see this constant interplay between the state and the business community that is underpinned by the state education system. Top managers come not from the universities but from the Grandes Ecoles and will have worked both in the civil service and private sector in the course of their careers.

In this way the state's stranglehold on business is maintained. If profit isn't exactly a dirty word - the French prefer to talk of a surplus - it is certainly true that they reject what they see as Anglo-Saxon cowboy capitalism.'

Colin Gordon, international development director at Cranfield, points to the creation of the single market as the engine of Franco-British mergers.

But he stresses that changes in the structure of French business have contributed to the new climate. 'In France we have seen the unbundling of much of the complex cross-shareholding arrangements that followed the privatisation of sections of industry in 1987. Companies often ended up owning 10% of each other - everybody would have a seat on everybody else's board and there would seldom be any rocking of boats. Often the roles of chairman and managing director would be combined in the single figure of M le President directeur-generale, and many of those people believed they ruled by divine right.'

The search for capital, says Gordon, has led to a partial dismantling of this structure. 'They have turned to the pension funds, both here and in the US, and so have had to pay much greater attention to the question of shareholder value.'

But in spite of these changes, made in the context of globalisation, business is still conducted differently in France. In reaching a decision, Cartesian logic is applied - a lengthy process which can exasperate the kind of British sensibility that prefers to cut to the chase. Alstom chairman Pierre Bilger recently confided in a Sunday Times interview: 'What I found most irritating about our British colleagues was their great reluctance to go through what we French would consider a rational process of making a decision ... They insist on going straight to the point, whereas we like to have a systematic agenda.'

Meetings are the lifeblood - some might argue the opium - of most organisations. Here there is another clash of culture, according to Randlesone. 'Meetings in French business are held mainly to rubber-stamp what the boss has already decided, not to hold a debate in order to reach a decision.'

For Bilger's Alstom colleague Jim Cronin, this was the most striking contrast between the French and British elements of the merger. 'The French manager expects to go to a meeting and be told by his superiors the issues that are on the agenda and what must be done to tackle them. The British, on the other hand, expect to argue their case and, in the early days after the merger, British managers could not understand why their French counterparts were so mute during meetings. We failed to appreciate that our new colleagues were inured to the system in which all the necessary debate and decision-taking has already taken place ... between the chief executive and a coterie of colleagues.' Charles de Liedekerke, vice president of Lafarge, also found a contrasting philosophy of meetings when his company acquired Redland. 'Our British friends complain our meetings are too long and involve irrelevant participants, but the French wish to gather together as large a group as possible. We prefer to have a broad agenda, but in Britain meetings are much more focused.'

If France produced Colbert, the father of state control, Britain a century later was a playground for a generation of entrepreneurs powering the Industrial Revolution. When French and British companies come together, therefore, there can be a blend of what might be seen as the stakeholder and shareholder philosophies. For de Liedekerke, the pressures of satisfying shareholders had distracted top management of Redland. In his eyes, it is a phenomenon endemic to British management.

'In British business culture many of the decisions seem to be driven by what the City expects, and it is certainly true that the UK community of financial analysts is much more powerful and better organised than on the Continent. Investors in France tend to take a longer term, more strategic view. They are happy to wait five years to see results. In the City of London, you have six months to prove yourself - or else.'

One of the most turbulent Franco-British mergers of recent years was the initially stormy marriage between Carnaud and Metalbox Packaging in 1989. Occupying a ringside seat, and occasionally slipping on the gloves himself, was Mike Kirkman, now group personnel director of BICC, the cables company, but for 18 dramatic months, director of organisation and management development for the newly formed CMB Packaging.

While the merger may have been launched with the best of intentions, things soon went awry. Company-wide bonding was the first goal. Together with nearly 30 colleagues, Kirkman set off across the deserts of Jordan to the ancient city of Petra with chief executive Jean-Marie Descarpenteries leading the expedition like some latterday Lawrence of Arabia. However outlandish this team-building exercise may have appeared to others, Kirkman praises the good intentions behind it.

'We got to know each other in unusual and exciting circumstances. But we were so carried away by the sheer enjoyment of the trip that we failed to look at the underlying differences in our mind-sets. And once the honeymoon was over, the British and French slipped into their opposite camps.'

Kirkman echoes thoughts first expressed by the Dutch cultural analyst Trompenaars in comparing British and French ways of taking decisions. 'Paradoxically, the British showed themselves to be "universalistic" - i.e. they would tend to be rigid, almost to the point, in French eyes, of bureaucratic obsession, in the implementation of what had been agreed. The French, on the other hand, were more "particularistic", showing more creativity in allowing for individual circumstances.'

Kirkman illustrates this culture gap in comparing how he and French colleagues regarded the question of how much aid should be offered to executives faced with the costs of moving. 'I argued we had devised a rule about the assistance we would make available, and since we had a rule we more or less stuck to it. My French opposite number, by contrast, preferred to consider the individual circumstances and make his own decision. We had two completely different ways of judging what was fair.'

British hackles were already rising when they heard what they imagined had been a merger, or une fusion, was being described in the press by French colleagues as une operation d'achat, or takeover. Relations deteriorated and in the words of one insider 'there was blood on the walls' with wholesale British departures.

Effective communication is naturally vital in every organisation and any child of Franco-British parents must ultimately decide which accent it will imitate. Given the notorious British reluctance to learn a foreign language and the universality of English, it was decided that Francophones at Alstom would concede linguistic pride of place. A few diehard French employees chose to sacrifice their jobs rather than their mother tongue but English was adopted to overwhelming agreement. The allocation of senior management posts proved to be more problematic, according to Alstom's Jim Cronin.

'With the exception of one of our nine divisions and of one of the deputies, we devised a system in which an MD would be French and the deputy British, or vice versa. We were in a new situation; we had no yardstick to guide us and thought this was the best way to go about things. After about a year, however, it became clear this system wasn't working. The French believed they could act like Napoleon and the British would be expected to fall into line. Soon there were no deputies left. Now we have a network of MDs, surrounded by functional directors, and it is ability, not nationality, that counts.'

Since GEC and Alcatel-Alstom had been both rivals and associates prior to the merger, it was anything but a blind date which led to the eventual union. 'Thanks to competing with and working alongside one another, a kind of industry camaraderie was already established,' Cronin says. 'There was a natural coming together.'

Bonding, argues Cronin, is best achieved 'by getting round the table and beating national idiosyncrasies to death. Put away the notion you are batting for Britain or for France. The spirit of togetherness will come, but only after an initial year of getting to know each other.'

Cranfield's Gordon argues that national differences often have been used 'as a convenient smokescreen' to disguise the true explanation for merger failures: a clash of company culture or of combustible personalities.

And he believes merger tempo will quicken with the change to a single currency, especially with American companies casting acquisitive eyes towards Europe.

HOLD THE JOKES AND TRY THE WINE

We may use humour in meetings to defuse tension but the French take business very seriously. Save the jokes for the pub. Remember, the French like to preserve a certain formality, so don't treat somebody you've just met as an old friend, and don't presume to call them by their first names.

Make a point of joining them for lunch. Forget the I'm-only-having-a-sandwich-at-my-desk routine. And during the meal, try to say something intelligent and complimentary about the French wine you're having, even if you usually buy supermarket Australian plonk every weekend.

If a Brit is trying to persuade a Frenchman about the strength of his case, he must give a clear and detailed analysis and follow a logical argument. The French should try to be more decisive, rather than sitting back and philosophising.

The French should remember that Brits enjoy socialising after work. They should try to bridge the traditional gap between work and home life and be ready to join their British colleagues for the occasional beer.

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