JR BECHTLE & Co. | September 2020 | Publications

Turning “Us vs. Them” to “We” – Part 1
Thoughts on “globalization” as we experience it today –

“It’s easy being the manager not of a European subsidiary: It’s not just that headquarters has no understanding of our local market needs and requirements, but on top of that, they have the strangest requests and expectations. Why don’t they try to understand how my market works and just let me do my job?”

“It’s not easy being the manager of an international company with subsidiaries around the world: It’s not just that the local managers don’t understand the constraints I’m dealing with over here in balancing the needs and demands from all our global markets, but on top of that, they have the strangest requests and expectations. Why don’t they try to understand how global markets work, and just do their jobs?”

Sound familiar? Well, most of these differences aren’t related to a difference in cultures at all, but to the rather common divergent perspectives between a parent company and its subsidiary, or between headquarters and its divisions abroad – even if both are located in the same nation and run by people with the same cultural background. The cultural aspect, however, adds to these “natural” differences and finds expression in the frequently heard lament: “Those Europeans / Those Americans are …..” (add your own verbiage here!)

Awareness and understanding of these issues are key factors for being effective in the global marketplace, something which holds true for the headquarters of a global manufacturer, the local manager of one of its subsidiaries, and for the professional service provider and advisor trying to help both.

“The Rift”

This leads to the next subject, “The Rift”. No, this is not the title of a movie or a fiction novel, but rather a real-life issue for many of us in the world of European subsidiaries in North America. The “rift” is between two cultures and ways of doing business as it is reflected in relations (and tensions) between parent company and subsidiary, and it’s an issue we all deal with on a daily basis, knowingly or not.

This rift, which doesn’t necessarily imply conflict, finds expression in the search for a clear and smooth interface between local North American-based management and leadership at that company’s European headquarters. It is natural and inevitable that every company with sub-sidiaries in other nations will have to confront this issue and take its effects into consideration during strategic planning and other inter-company efforts, as well as in daily work.

Just What Is This “Rift”?

The “rift” is no more and no less than the “gray area” where fundamentally different systems of thinking and behaving come together – the boundary between separate sets of customs and structures which must somehow interact (and result in company profits). The link between a European headquarters and its subsidiary or client in the Americas is a typical example.

This area is not a specific block of situations or conditions, but rather a combination of many individual and ever-changing actions and reactions based on assumptions and interpretations of others’ behavior.

And What Does This Have To Do With Our Daily Business?

This rift between cultures affects daily work-lives by prompting seemingly simple and innocent questions like:

Should the leader of a foreign subsidiary be a “local”, or come from the cultural background of the parent company?

Can the local Board of Directors be made up of managers from the European parent company, or is it best to have North or South American-based business leaders there for general advice and to balance out misunderstandings and false assumptions?

Should employment conditions and contract for the General Manager be based on European or American business customs?

Should the European parent company expect second-tier managers of the subsidiary to stand up and to speak out about the local president’s shortcomings? If not, is he/she “loyal” or “soft”?

How many years does it take for a foreigner to become a “local” business executive? Is it even a question of time, or rather a question of how intense he/she is immersed into the local lifestyle and customs?

Is there really a significant difference between a European in America and an “Americanized” or “Canadianized” European? How can it be measured? Is it good? Is it important?

These are important questions which we’ll take up in part 2. In the meantime, feel contact us for more information about the services we provide in support of both parent company and local management in dealing with the issues treated here!

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