Eurasia Newsletter

bringing the minds of Asia, Canada and Europe together

Month: May, 2014

Cementing an alliance

A while ago Bloomberg ran a story about the upcoming merger of cement giants Lafarge and Holcim under the headline “Lafarge-Holcim Success Hinges on Bosses Bridging Culture Gap“. It was not apparent right away what kind of culture was being talked about. But it turned out that the story was not focussed on national cultures or even corporate cultures, but actually leadership styles. Lafarge’s Bruno Lafont and Holcim’s Wolfgang Reitzle are going to divide up the power between them: Reitzle will be chairman and Lafont will be CEO of the new juggernaut, assuming the merger is approved by all the regulators involved. Lafont is supposed to be a man who likes to be in charge and keeps his cards close to his chest, whereas Reitzle is more a delegator. “Lafarge is all about command and control,” the article quoted one industry analyst. “Holcim is about delegating to the regions.”

Yet should we not being talking about other kinds of culture too? Today high-profile mergers and acquisitions are usually international, and involve power bases in two or more countries. Obviously national culture is important here. Lafarge is a French company and Lafont is a Frenchman, while Holcim is a German-Swiss company and Reitzle is a German.

Another industry commentator, Christian Stadler, picked up on this aspect in a recent article on Swissinfo. He noted that the division of the new corporation’s HQ functions between Paris and Zurich may have pleased the governments involved, but that it was likely to lead to “turf wars”. Warning of the destructive potential of a “clash of cultures”, he recalled that “when Daimler and Chrysler merged, the Germans were used to setting a target and working towards it, while the Americans made adjustments along the way. From the German perspective, the impression was that Chrysler never stuck to a plan, while from an American perspective the impression was that Daimler stuck to a plan even when it no longer made sense.”

National culture interplays with corporate culture, which includes leadership styles. As was pointed out long ago by Edgar Schein, companies seem to develop a culture of their own, analogous to national cultures. Obviously it is not as all-pervasive and unconscious as a national culture, but it does have the same features: perceptions and assumptions (the way a group of people see the world), values and norms (what is valued and how people are expected to behave in that group), and artefacts (not only what the company makes but what sort of structures it has – from buildings to organization charts). Employees all conform to the culture, even though a lot of it may be implicit, not explicit.

Again, corporate culture, while it interacts with national culture (all French companies have a French way of doing things), also has lot to do with what might be called industry culture. Cement manufacturers are bound to have a certain amount in common, just because they make the same product for the same kind of customers.

In the case of this Lafarge-Holcim merger, it would be an intriguing study to sort out what is going on a different levels. My guess is that national culture, although a background phenomenon to the feverish excitement of M&A, will be the biggest challenge – because national culture is just about eternal, whereas corporate culture lives only as long as the corporation does, and as for CEOs, well, they come and go.

Japanese calligraphy

Last weekend I was at the opening of Sanae Sakamoto’s latest exhibition of calligraphy works at Bad Schönbrunn in Zug, central Switzerland. It was quite an occasion. The Japanese ambassador and lots of Japanese residents were there, as well as Swiss admirers. The artist did a live performance of calligraphy to open the exhibition, so we actually saw works being created, in that spirit of spontaneity which is so characteristic of the arts in Japan.

The Lassalle house at Bad Schönbrunn is a Jesuit retreat house which now functions as a centre for spirituality and dialogue. It is named after Hugo Lassalle, a Swiss Jesuit who went to Japan as a missionary but learned the culture of Zen himself from the Japanese. He lived there during the last war and actually survived the atom bomb. Today the centre carries on his work, bringing together Zen and Catholic spirituality. There is a whole Zen scene established here with meditation courses and retreats; also calligraphy and brush-painting in the Japanese style, for Sanae Sakamoto also teaches here. She has a loyal following. In her courses, as in her own work as an artist, she emphasises the Zen and Tao background of the activity. It is indeed impossible to understand what she is doing without that background.

It is a welcome development for the calligraphic art of the East to be made known to the West. This is a difficult undertaking, to be sure, because the very notion of writing differs between the West and the Far East, and of course the difference between the languages is a considerable barrier to overcome. Also, the spiritual and aesthetic traditions on which Far-Eastern calligraphy is based are very different from ours in the West. Yet, looking at it, we can see that here is an art form that we need in the West, something we have not had, a gap in our culture or civilisation of which we are only now becoming aware. When that kind of awareness happens, we know that, truly, the minds of Asia and Europe are being brought together.

 

 

Wasted words?

One of the problems of life in modern society is being heard if you have something to say. Under a dictatorship, the situation is clear: you are not allowed to speak your mind. If you want to, you have to do it secretly, in some kind of underground setting. In the democratic West, there is free speech. But often enough this turns out to be an illusion: you can say what you like, but nobody is listening.

George Steiner wrote how the Soviet regime persecuted poets and writers who questioned or satirized it, and they had to circulate their writings by samizdat. The regime, he notes, was actually paying them a compliment. It took them seriously. “What Western regime flinches at a poem?” he asked rhetorically.

More recently, the Internet has been providing great opportunities for people to speak their minds and discuss things with others. Governments in some countries still don’t like this, of course. Yet in the Western World, the new technology often just reinforces the old lesson that you may speak but you will not be heard – where it counts.

Navneet Alang wrote a piece last year about this in the Toronto Globe and Mail. Looking at the comments section in online editions of newspapers, he was struck by the tendency of the commentators to be excessive, inflammatory and offensive. He thought it came from a feeling of impotence and powerlessness. There is the option to comment on what you read, but deep down you know it will have no effect.

The unpleasant and cringe-worthy comments one sees in these online forums, Alang says, need not be a reflection of what their anonymous author is really like. “Instead, they may actually be a very understandable human response to the fact that the comment box is a strange, frustrating kind of double bind: a chance to speak your mind, but a reminder that no one is listening.”

He called for solutions “providing ways for everyday people to stop feeling so disenfranchised.” I do not know what these solutions might be. But it is already something, I think, if we can identify the problem.

Loss of faith in the almighty dollar?

Myret Zaki is the co-editor of the business magazine Bilan in Geneva. She is a bold and original thinker about the future of the world’s economies. She has said in a recent book[1] that the end of the dollar is coming, meaning that the US dollar will cease to be the world’s reserve currency. This is because the US is so indebted that its economy will experience a crash sooner or later.

She sees American economic policy as one of state intervention in the financial markets to preserve the status quo. The Americans are doing everything they can to put off the inevitable. But the rest of the world is gradually losing faith, she thinks.

She sees the Euro crisis of 2008 as having been a diversionary manoeuvre. The Americans did not want to see the Euro become a stronger haven for capital than the dollar. So their financial industry attacked the Euro. Financial speculators are in a position to drive small nations out of the capital markets. This is what happened with Ireland and Greece. But this was parlayed into a “Euro crisis”. In the long term, however, the Euro remains strong, a currency with a future, and the rest of the world is beginning to see it this way.

Myret Zaki sees China as being the ally of Europe in this respect, as it is in China’s interests for the Euro to be healthy and to challenge the dollar’s continued supremacy.

 

 

[1] Myret Zaki, La fin du dollar, Editions Favre, 2011