The Unexamined Costs of Globalization
What is Your Organization Doing To Address Them?
In the current business economy there is little room for error. Dealing with other world cultures not only causes stress and frustration but can affect productivity in ways that result in unnecessary operating expenses. This places unprecedented demands on our ability to understand other ways of thinking, behaving and communicating.
Here's a few things to consider:
* Asian and European cross-border mergers and acquisitions have increased dramatically in recent years.
* Off-shoring is no longer done for purely cost-saving purposes. Duke University's Fuqua Business School forecasts that off-shoring of R&D will increase by around 65% and of engineering and product design by 80% in the next couple of years.
* According to a survey by KPMG, 83% of mergers and acquisitions produce no value for the shareholders. The report concluded that ‘linguistic and cultural divides may explain why deals between the USA and continental Europe were least likely to boost shareholder value.’
* In 2006 Wal-Mart pulled out of the German market, losing 1 Billion USD. Analysts said culture was behind the failure – German consumers simply did not like being greeted with a toothy grin as they entered the stores.
* A recent Hay Group report found that only 28% of executives felt they had done a good job of cultural due diligence before the deal – though 72% considered such an assessment of critical importance.
Don't be caught off guard. It's time to invest in developing your personal and organizational skills to make culture work for you rather than against you, and achieve rare competitive advantages - with lower operating expenses.
Cultural interaction is a business process that needs to be managed – it cannot be left to chance.
* Off-shoring is no longer done for purely cost-saving purposes. Duke University's Fuqua Business School forecasts that off-shoring of R&D will increase by around 65% and of engineering and product design by 80% in the next couple of years.
* According to a survey by KPMG, 83% of mergers and acquisitions produce no value for the shareholders. The report concluded that ‘linguistic and cultural divides may explain why deals between the USA and continental Europe were least likely to boost shareholder value.’
* In 2006 Wal-Mart pulled out of the German market, losing 1 Billion USD. Analysts said culture was behind the failure – German consumers simply did not like being greeted with a toothy grin as they entered the stores.
* A recent Hay Group report found that only 28% of executives felt they had done a good job of cultural due diligence before the deal – though 72% considered such an assessment of critical importance.
Don't be caught off guard. It's time to invest in developing your personal and organizational skills to make culture work for you rather than against you, and achieve rare competitive advantages - with lower operating expenses.
Cultural interaction is a business process that needs to be managed – it cannot be left to chance.
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