France: French and American Management Cultures - Part 1
From ExecutivePlanet.com
As described by management consultant John Gaynard
By John Gaynard
November 13, 2000
It is becoming a fairly common occurrence to read newspaper articles about French companies making acquisitions in the U.S. Indeed two companies [Suez-Lyonnaise des Eaux and Vivendi] seem to be making something of a competition out of who can buy the biggest part of the North American water distribution market. Suez recently purchased Calgon Corp. and Nalgo Chemical Co. while Vivendi bought the California company U.S. Filter. Interestingly, however, until Rhone Poulenc Chimie acquired Union Carbide in 1987, French purchases of American companies were very rare. Since then more than 20 big French companies have made forays into the U.S. corporate scene. A book written recently by Guillaume Franck, who is a professor of international management at HEC, an influential French business school, takes a searching look at French acquisitions in the U.S. The book should be required reading for any French company wishing to buy into the U.S. or any American company wishing to buy into France. The book's title is Conquering the American Market, [Editions Odile Jacob].
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Conquering the American Market
The book is full of serious research. It is also rich with anecdotes: such as the one about the French “managers” sent to the U.S. by the parent company with high-level technical skills and non-existent people skills.
The American senior executives to whom they were assigned refused to put them into any job higher than line management, and they even hesitated about giving them that much responsibility over staff. Or what about the American managers who were offered plum roles in the French home office but who turned them down because the contracts proposed weren’t tightly written enough?
The French company executives, used to the constraints of very protective French labor laws, could not understand why the Americans wanted every “i” dotted and every “t” crossed until they were told that in the American market a worker has to look out for himself, and a solid contract with the company is the best way of doing that. A one-page outline is all that a French executive usually asks for, expects or is offered. Franck's book details many other experiences in addition to that of Rhone Poulenc.
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One of the successes is that of Accor, the hotel chain, although it initially got itself into a bad situation by putting its trust in the managers of the company it had bought out, Motel 6. It offered them a handsome benefits package, based on maintaining quarterly and yearly profits. Introducing a theme which runs throughout the book, Franck details how the American managers immediately stopped managing in the interests of the shareholder and set themselves the objective of rewarding themselves with the biggest possible bonuses. Capital investment came to a halt, preventive maintenance vanished, rooms were no longer refurbished, in fact in many cases they were no longer even swept or cleaned. When the only alternative in small-town America was a louse-ridden room in a room in a Motel 6, which had become known as a hang-out for drug-dealers, people began to prefer to sleep in their cars.
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