What are they?
You know those difficult meetings when you attempt what you think is a terrific joke and are met only by silent stares and the sound of tumbleweed blowing across the floor? The chances are, it wasn't that the joke was really bad, but that you have failed to tune in to the prevailing culture in the room. Culture matters. 'It eats strategy for breakfast,' as the gurus say. Misunderstand culture and you are heading for trouble. This is a big reason why cross-border mergers so often go wrong. The numbers may look good, but the cultures clash.
Where did they come from?
When business was more nationally based, culture clashes were less of an issue. Sure, you had to learn how to do deals with foreigners. But you didn't have to hire any or manage them. As trade grew more international, business people came into contact with more nationalities and cultures. This added a level of complexity. For decades, doing business abroad remained an expat affair. You dropped executives into a foreign country and hoped they would cope. But today, globalisation means making multinational corporations truly multinational. It means managing a diverse team of many different people, while sustaining a coherent culture.
Where are they going?
The recent episode at Olympus in Japan, when the British chief executive Michael Woodford was fired after questioning procedures (and fee arrangements for advisers), bears this out. The bust-up cost the company its chairman, Tsuyoshi Kikukawa, too - but not before he had denounced his outgoing CEO for acting disgracefully. This was a culture clash par excellence. As the American essayist Ralph Waldo Emerson said: 'Culture is one thing and varnish is another.' You cannot cover up the differences with a lick of paint.
Gradient: Steep and perilous.