7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page i 21 Leaders for the 21st Century b How Innovative Leaders Manage in the Digital Age FONS TROMPENAARS CHARLES HAMPDEN-TURNER McGraw-Hill New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto abc McGraw-Hill Copyright © 2002 by The McGraw-Hill Companies All rights reserved Manufactured in the United States of America Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher 0-07-138131-7 The material in this eBook also appears in the print version of this title: 0-07-136294-0 All trademarks are trademarks of their respective owners Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the 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and personal use; any other use of the work is strictly prohibited Your right to use the work may be terminated if you fail to comply with these terms THE WORK IS PROVIDED “AS IS” McGRAW-HILL AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE McGraw-Hill and its licensors not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom McGraw-Hill has no responsibility for the content of any information accessed through the work Under no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise DOI: 10.1036/0071381317 7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page iii Contents Foreword by Peter Woolliams Acknowledgments vii x Introduction to the Metatheory of Leadership Fons Trompenaars and Charles Hampden-Turner CHAPTER Transcultural Competence: Learning to Lead by Through-Through Thinking and Acting, Part I 13 Fons Trompenaars and Charles Hampden-Turner CHAPTER Transcultural Competence: Learning to Lead by Through-Through Thinking and Acting, Part II 45 Fons Trompenaars and Charles Hampden-Turner CHAPTER A New Vision of Capitalism: Richard Branson, Virgin 75 Charles Hampden-Turner, Naomi Stubbe-de Groot, and Fons Trompenaars CHAPTER Creating a Hyperculture: Martin Gillo, Advanced Micro Devices 101 Charles Hampden-Turner iii Copyright 2002 The McGraw-Hill Companies Click Here for Terms of Use 7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page iv iv Contents CHAPTER Remedy for a Turnaround: Philippe Bourguignon, Club Med 121 Fons Trompenaars and Charles Hampden-Turner CHAPTER Recapturing the True Mission: Christian Majgaard, LEGO 141 Dirk Devos and Charles Hampden-Turner CHAPTER The Balance between Market and Product: Anders Knutsen, Bang and Olufsen 159 Fons Trompenaars and Charles Hampden-Turner CHAPTER Private Enterprise, Public Service: Gérard Mestrallet, Suez Lyonnaise des Eaux 171 Fons Trompenaars, Peter Prud’homme, and Charles Hampden-Turner CHAPTER Leading One Life: Val Gooding, British United Provident Association 193 Charles Hampden-Turner CHAPTER 10 Pioneering the New Organization: Jim Morgan, Applied Materials 215 Fons Trompenaars, Peter Prud’homme, Jae Ho Park, and Charles Hampden-Turner CHAPTER 11 The Internet as an Environment for Business Ecosystems: Michael Dell, Dell Computers 239 Maarten Nijhoff Asser and Charles Hampden-Turner CHAPTER 12 Global Brand, Local Touch: Stan Shih, Acer Computers Peter Prud’homme 259 7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page v Contents CHAPTER 13 Weathering the Storm: Sergei Kiriyenko, Former Russian Prime Minister v 281 Allard Everts and Charles Hampden-Turner CHAPTER 14 Toward a New Spirit: Edgar Bronfman, Seagram’s 301 Fons Trompenaars, Todd Jick, and Charles Hampden-Turner CHAPTER 15 Change Within Continuity: Karel Vuursteen, Heineken 325 Dirk Devos and Charles Hampden-Turner CHAPTER 16 The Challenge of Renewal: Hugo Levecke, ABN AMRO 339 Dirk Devos and Charles Hampden-Turner CHAPTER 17 Keeping Close to the Customer: David Komansky, Merrill Lynch 351 Fons Trompenaars and Charles Hampden-Turner CHAPTER 18 Managing the Internationalization Process: Kees Storm, AEGON 369 Fons Trompenaars CHAPTER 19 Innovating the Corporate Dynasty: Rahmi M Koç, the Koç Group 379 Jo Spyckerelle and Charles Hampden-Turner CHAPTER 20 Leading through Transformation: Sir Mark Moody-Stuart, Royal Dutch Shell 393 Jo Spyckerelle and Charles Hampden-Turner 7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page vi vi Contents CHAPTER 21 Keeping the Family in Business or Keeping the Business in the Family: Stuart Beckwith, Tim Morris, and Gordon Billage 413 Peter Woolliams and Charles Hampden-Turner CHAPTER 22 Transcultural Competence through 21 Reconciliations 439 Fons Trompenaars and Peter Woolliams Short Biographies of the Contributors References Index 477 479 487 7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page vii Foreword A generation ago two world wars had so influenced our concept of leadership as to cast it in a military mode To “lead” was to know sooner than others and convince them that harsh realities had to be faced and sacrifices had to be made Winston Churchill, Charles de Gaulle, and Dwight D Eisenhower led; the rest of us followed There was an inevitable feeling of uncertainty about those times We were right, and the enemy was wrong We all knew what had to be done even if the doing was hard and dangerous Our leaders had been the first to proclaim this necessity How different are the circumstances now! Today it is much easier to get things done Gone are the blood, toil, tears, and sweat Kosovo is bombed from a safe height However, we are now much less sure about what ought to be done We see people trying to lead but question whether we should follow Why go in this direction and not that one? Studies of leadership have attempted to duck the issue of what should be done by grounding themselves in what the leader was trying to do, not in the critiquing of values The test became performance: Does this or that leader accomplish what he or she set out to do? In 1983 Warren Bennis, a well-known writer on leadership, traveled across the United States, proclaiming four universal traits of leadership: vii Copyright 2002 The McGraw-Hill Companies Click Here for Terms of Use 7961_Trompenaars_fm.w.qxd viii 10/23/01 8:54 AM Page viii Foreword • Management of attention (the leader draws you to him or her and makes you want to join the cause) • Management of trust (leaders can be trusted because they are consistent—even if you disagree with their views) • Management of self (leaders know their own skills and deploy them effectively) • Management of meaning (leaders are great communicators) This kind of prescription is largely value free and regards leadership as a skill or technique Hersey and Blanchard (1983) propose a “situational leadership” model Styles of leadership are appropriate to different paradigms The trick is to identify the paradigm and adjust your style to the attitudinal and knowledge stance of the followers This kind of prescription is largely reactive and unidirectional In The Future of Leadership, White and associates (1996) assert five key skills of a leader, gleaned from their observations: • • • • • Continually learning things that are hard to learn Maximizing energy as a master of uncertainty Capturing an issue’s essence to achieve by resonant simplicity Balancing the long term and the short term in a multiple focus Applying an inner sense or gut feeling in the absence of decision support data Many other authors and researchers have faced this struggle, and many prescriptions and explanations have been published However, those explanations lack a coherent underlying rationale or fundamental principle that predicts effective leadership behaviors These models tend to seek the same end but differ in approach as they try to encapsulate the existing body of knowledge about what makes an effective leader Because of their methodology, these are only prescriptive lists There is no underlying rationale or unifying theme that defines the holistic experience Such approaches create considerable confusion for today’s world transcultural manager Because most management theory comes from the United States and other English-speaking countries, there is a real danger of ethnocentrism We not know, for example, how the lists cited here fare outside the United States or how diverse might be the conceptions of leadership elsewhere Do different cultures necessitate 7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page ix Foreword ix different styles? Can we reasonably expect other cultures to follow a lead from outside those cultures? The approach to leadership in this book is completely different It developed from the convergence of two separate strands of thinking, one from each of the principal authors The earlier research by Fons Trompenaars, developed since the early 1990s, was based on getting people to consider where they were coming from in terms of norms, values, and attitudes This approach helped identify and model the source not only of national cultural differences but also of corporate culture and how to deal with diversity in a local workforce It helped managers structure their experiences and provided new insights for them and their organizations into the real source of problems in managing across cultures or dealing with diversity The second strand was the work of Charles Hampden-Turner, who developed a methodology for reconciling seemingly opposed values In his research, constructs such as universalism (adherence to rules) and particularism (each case is an exception) are not separate notions but different, reconcilable points on a sliding scale Universal rules are tested against a variety of exceptions and re-formed to take account of them The result of combining the two strands of research is that differences are progressively reconciled Managers work to accomplish this or that objective; effective leaders deal with the dilemmas of seemingly opposed objectives that they continually seek to reconcile As is discussed throughout the body of this book, the contributing authors have collected primary evidence to support this proposition through questionnaires, workshops, simulations, and interviews Furthermore, it is confirmed that these behaviors correlate with bottom-line business results The 21 leaders described in this book were approached deductively The authors started with a proposition centered on the reconciliation of dilemmas and set out to demonstrate these concepts with evidence gathered from high-performing leaders Thus, unlike other approaches that result from postrationalizing observations into an ad hoc theory, they had the advantage of a conceptual framework when they approached and interviewed the target list of leaders The overall aim of this book is to render leadership practice tangible by showing how 21 world-class leaders reconcile the dilemmas that face their companies Peter Woolliams, PhD Professor of International Business Anglia Business School, United Kingdom This page intentionally left blank 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 487 Index ABN AMRO Lease Holding (AALH) (Hugo Levecke), 40, 339–349, 453–455 Acer Computers (Stan Shih), 34, 56, 67, 259–279, 444–445 Achievement versus ascription, 20, 22, 52–58, 442, 460–463 Gordon Billage/Clifford-Thames, Ltd., 463 Val Gooding/BUPA, 194, 210–213, 461–462 Stan Shih/Acer Computers, 56, 262, 263, 273–274 Advanced Micro Devices (AMD) (Martin Gillo), 33, 61, 101–120, 469–470 AEGON (Kees Storm), 369–378, 459 Altos, 265 American Airlines, 60, 456 Analog Devices, 68 Anheuser-Busch, 57, 331 Apple Computer, 240 Applied Materials ( James Morgan), 27, 31, 33–34, 215–238, 445–446 Ascription (see Achievement versus ascription) Assessment: three-hundred-sixty-degree feedback, 310, 473–474 in values-based management, 322 Australia, 23 Bang and Olufsen (Anders Knutsen), 48, 61, 159–170, 455 Barbican Healthcare, 207 Beckwith, Stuart (BCIF), 417–418, 460 Best work environment, specificity versus diffusion, 42, 43 Biedenkopf, Kurt, 104–105 Billage, Gordon (Clifford-Thames Holdings, Ltd.), 433–437, 463 Blitz, Gerard, 122–123 Borges, Jorge Luis, 23 Bourguignon, Philippe (Club Med), 27, 39–40, 121–139 rationalization dilemma, 135–139 reevaluation of prices dilemma, 135 refocusing dilemma, 128–131, 452–453 restoration dilemma, 132–135 Brandenberger, Adam M., 35 Branding: global versus local, 329–333 haggling versus benign, 89–92, 99 power, 132–135 reputational, 89–92 Branson, Richard (Virgin), 27, 33, 48, 56, 75–99 antagonist versus underdog, 95–98, 99, 449–450 haggling versus benign branding, 89–92, 99 irony and humor of, 77–79 487 Copyright 2002 The McGraw-Hill Companies Click Here for Terms of Use 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 488 488 Index Branson, Richard (Virgin) (Cont.): large business versus entrepreneurship, 92–94, 99 making money versus changing economic system, 80–84, 98 personality and, 76 search for moral enterprise, 76–77 shareholder gains versus employee and customer gains, 84–85, 98 specific aims versus diffuse contexts, 86–89, 98–99 Bribes, 15–19 British Airways (BA), 77, 78, 79, 81, 96, 97, 193, 194, 195, 198, 199, 449–450, 456 British Petroleum (BP), 406 Bronfman, Edgar (Seagram’s), 40, 56, 301–324 confluence of top down with bottom up, 308–310 hard reengineering versus soft values, 304–305, 315, 316–317 “succeeding” versus violating values, 313–318 top town versus bottom up culture, 305–310 values maintenance, 319–320 values training, 311–312 Buisman, Jurn, 282 BUPA (Val Gooding), 33, 40, 48–49, 193–213, 461–462 Burr, Don, 60 Calgon, 173 Carlzon, Jan, 193, 195, 456 Carnegie, Andrew, 52 Carrefour, 130, 341, 343 Cathay Pacific, 456 Charles Schwab, 351, 352–353, 356, 358, 360–362 China, 23, 387 Client-server structure, 269–271 Clifford-Thames (Holdings), Ltd., 433–437, 463 Club Med (Philippe Bourguignon), 27, 39–40, 121–139, 452–454 Co-opetition, 35, 113–114, 271, 448 Coca-Cola, 81, 96, 133, 330, 446, 449–450 Codetermination, 374–375 Coevolution, 114–115 Collaborative competition (co-opetition), 35, 113–114, 271, 448 Communication, Royal Dutch Shell Group, 397–401 Conceptual transformation, concept of, 27 Confucianism, 263 Continuous improvement, 434 Control: undercontrol versus overcontrol, 427–428, 430–432 (See also Internal versus external control) Crafting strategy, 62 Csikszentmihalyi, Mihaly, 40–41, 103, 116–117 Cultural diversity, Royal Dutch Shell Group, 409–411 Cultural relativism, 19 Cultural symbiosis, 112 Culture: top down versus bottom up, 308–310 values and, 302 Dearlove, Des, 90, 93, 97 Decentralization: AEGON, 370–371, 375–376 centralization versus, 4–10 Heineken, 331 Royal Dutch Shell Group, 401–404 Dell, Michael (Dell Computers), 239–257 broad spectrum of customers versus personalized relationships, 243–245 emergence of business ecosystems, 240–241 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 489 Index face-to-face selling versus Internet selling, 247–250 internal versus external control, 61, 250–252 specificity versus diffusion, 40, 244–245, 456–458 virtual integration of product and process, 252–254 Dell Computers, 40, 239–257, 456–458 Deming, W Edwards, 39, 114, 225 Democracy: capitalism versus, 365–367 effectiveness versus, 386–389 Differences: recognizing and reconciling, 17–28 (See also Transcultural competence) Dilemma reconciliation theory, 21, 471–475 (See also Transcultural competence) Disney, 76 Drucker, Peter, 260 Dunlap, Alf, 59 E-commerce: Applied Materials, 223 BUPA, 209 Dell Computer, 241–257 Merrill Lynch, 351–368 Suez Lyonnaise des Eaux, 184–186 Education: of entrepreneurs, 437–438 and finding new directions, 391–392 private sector versus publicly funded, 367–368 values, 311–312, 322 Electrabel, 190 Emergent strategy, 346 Emery, Fred, 199–200 Emotional expression/inhibition (see Neutral versus affective) Entrepreneurship: Stuart Beckwith/BCIF, 417–418, 460 Gordon Billage/Clifford-Thames (Holdings), Ltd., 433–437, 463 489 Richard Branson/Virgin, 77–79, 92–94, 99 education for, 437–438 Hugo Levecke/ABM AMRO, 347–349 Tim Morris/MMP Business Management, Ltd., 424–433, 464–465 Environmental issues: Royal Dutch Shell Group, 394–401 Suez Lyonnaise des Eaux, 179–183 Etzioni, Amitai, 113 Euro-Disney, 122, 127, 133, 135–136, 137 European Union (EU), 387, 389–390 Exception finding (see Universalism versus particularism) Exxon, 406 Family ownership: family-business sociotypes, 418–424 public ownership versus, 380–383 stakeholder value and, 328–329, 380–383 succession and, 379–383, 423–424, 460–462 (See also Small to medium-sized enterprise) Flow experience, 40–41, 115–117 Flow states, 103 Focus groups, 308–309 Foote, Royale, 57 Ford, Henry, 431–432 Ford Motor Company, 255 Foucault, Michel, 24 Founder: personality of, 76, 77–79 (See also Entrepreneurship; Small to medium-sized enterprise) Free trade, effectiveness versus, 386–389 G-Tech, 82 General Electric (GE), 313, 339–340 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 490 490 Index Generalizability dilemma, 470–475 Gerber, Martin, 116–117 Gifts, 15–19 Gillo, Martin (Advanced Micro Devices), 33, 56, 61, 66, 102–120 beyond individualism and communitarianism, 110–114 beyond reason and pragmatism, 108–110 creation of hyperculture, 106–108 learning from errors and correction, 114–115 skill versus challenge, 115–117 sponsoring the empowered team, 117–119, 469–470 Globalization: Acer Computers and, 264–265, 266–268, 277–279 Applied Materials and, 219, 230–233 BUPA and, 194, 208–210 Heineken and, 325–338 (See also Transcultural competence) Gooding, Val (BUPA), 33, 40, 48–49, 193–213 for-profit versus nonprofit status, 194, 210–213, 461–462 free universal provision versus freemarket allocation, 194, 201–205, 207, 208, 209 health insurance versus health care, 194–198 medical crises versus wellness as preventive medicine, 194, 205–208 national services versus globalization, 194, 208–210 quality of business systems versus staff morale, 194, 198–201 Greenpeace, 395–397, 466 Group interest (see Individualism versus communitarianism) Growth, shareholder interests versus, 328–329 Hamel, Gary, 344 Handy, Charles, 76–77 Hawthorne Effect, 55 Hawthorne Experiment, 55 Heineken (Karel Vuursteen), 325–338 Hyperculture, 106–108 IBM, 265 Immortality business, 423–424, 460–462 Independent business, 420 Individualism versus communitarianism, 20, 22, 31–36, 442, 447–451 Richard Branson/Virgin, 95–98, 99, 449–450 Michael Dell/Dell Computers, 247–250 Martin Gillo/Advanced Micro Devices, 110–114 Christian Majgaard/LEGO, 150–152, 448–449 Gerard Mestrallet/Suez Lyonnaise de Eaux, 176–178, 450–451 Stan Shih/Acer Computers, 34, 261, 263, 266, 268–269 Karel Vuursteen/Heineken, 336–338 Intel, 32, 240 Intercultural Communications Institute, 31 Internal versus external control, 20, 22, 59–64, 163–164, 442, 463–467 Michael Dell/Dell Computers, 61, 250–252 Sergei Kiriyenko/NORSI Oil, 61–62, 288–291, 466–467 Anders Knutsen/Bang and Olufson, 61, 159–162, 163–164, 165, 166–167 Mark Moody-Stuart/Royal Dutch Shell Group, 394–397, 465–466 Tim Morris/MMP Business Management, 427–428, 430–432, 464 Stan Shih/Acer Computers, 262, 264, 277–279 Internationalization (AEGON), 369–378 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 491 Index Interviews, 57 ISO standards, 434 Jackson, Tim, 90, 97 Japan, 23 Johnson & Johnson, 320–321, 336 Just-in-time ( JIT), 65, 66, 67 Kanter, Rosabeth Moss, 236 King, Lord, 79, 81, 97 Kiriyenko, Sergei, 27–28, 61–62, 281–300 and change at center, not periphery, 298–299 at NORSI Oil Company, 61, 283–291 at Social and Commercial Bank Garantiya, 291–297 Knutsen, Anders (Bang and Olufsen), 159–170 Break-Point program, 161, 162–163, 165, 166, 167, 168 internal versus external control, 61, 159–162, 163–164, 165, 166–167 neutral versus affective, 48, 162–163, 164–165, 167–168, 455 universalism versus particularism, 164–165, 169–170 Koç, Rahmi M (Koç Group), 56–57, 379–392 democracy and free trade versus catching up, 386–389 family succession, 379–383 global competition versus local loyalties, 383–384, 446–447 local success versus new directions, 391–392 marginal state versus conflicting loyalties, 389–391 private versus public sector, 385–386 Koç Group (KG), 56–57, 379–392 Koestler, Arthur, 78 Kohn, Alfie, 38 491 Komansky, David (Merrill Lynch), 351–368 capitalism versus democracy, 365–367 e-commerce challenge and, 352–357 individuality versus power of global community, 358–360 influence of London versus regions, 364–365 low-cost data and transactions versus personal relationships, 357–358 private sector versus publicly funded education sector, 367–368 profit-maximization versus clientmentoring, 360–364, 458–459 Kristiansen, Kjeld Kirk, 143, 144, 158 Kuk, Su Yo, 437 Kydd, James, 96 Land, Edward, 431–432 Landi, Starn, 437 Leadership: dilemmas of, 2–3, 21, 471–475 local versus transnational, 347–349 managers versus leaders, 1–2 values reconciliation in, 3–10 (See also Transcultural competence) Lebanon, 389 Lee, Young I., 221 LEGO (Christian Majgaard), 27, 48, 66–67, 141–158, 448–449 Levecke, Hugo (ABN AMRO), 40, 339–349 and changes at ABN AMRO, 340–342 local entrepreneurship versus transnational leadership, 347–349 managing operation versus leading transition, 343–344, 453–455 tradition versus exploration, 346–347 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 492 492 Index Levecke, Hugo (ABN AMRO) (Cont.): working on known issues versus discovering new issues, 344–346 Lifestyle business, 421–422 Likes versus dislikes, 425, 429–430 Livelihood business, 419–420, 461 McDonald’s, 67, 76, 137–138, 274, 446 McGregor, Douglas, 57 Majgaard, Christian (LEGO), 27, 48, 66–67, 141–158 distance from/relationship with core business, 147–148, 149–150, 153–154 diversity versus harmony among team members, 147, 149, 151–152, 448–449 ideal versus real, 145–147, 149, 150–151 innovation versus integration of innovators, 148–149, 150, 155–156 LEGO Fitness Programme, 142–143, 145 originating ideas/seizing opportunity, 148, 150, 154–155 Market pull versus technology push, 63–64, 163–164, 463–464 Mass customization, 242–243, 245–247 Mayden, Dan, 215, 217, 231 Mayo, Elton, 55 Melville, Herman, 32 Mentor-learner relationship, 273–274 Merrill Lynch (David Komansky), 351–378, 458–459 Mestrallet, Gérard (Suez Lyonnaise des Eaux), 171–191 differentiated versus integrated service, 183–186 globalism versus multinationalism, 186–190 search for complementarity, 174–176 shareholder gains versus poor and environment, 179–183 socially responsible privatization, 176–178, 450–451 MGM, 81 Michelin, 76 Mintzberg, Henry, 60, 62, 346 MMP Business Management, Ltd., 424–433, 464–465 Modeling, values-based management and, 308, 322 Monod, Jérome, 171, 172, 173, 176, 178, 179, 182, 190 Moody-Stuart, Mark (Royal Dutch Shell Group), 393–411 excessive decentralization versus need for global action, 401–404 internal versus external orientations and Brent Spar, 394–397, 465–466 multicultural meritocracy, 409–411 shareholders versus stakeholders, 406–409 trust me, tell me, show me approach, 404–406 truth and communicability in Nigeria, 397–401 Moore, James F., 239 More, Thomas, 47 Morgan, James C (Applied Materials), 27, 33–34, 215–238 errors and corrections, 224–225, 445–446 excellent technologies and effective production outcomes, 228–230 growing bigger and remaining small, 234–236 leaping up and diving down, 236–238 local fit and global reach, 230–233 participation with satisfied customers, 225–228 stable continuity and flexible change, 233–234 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 493 Index Morris, Tim (MMP Business Management, Ltd.), 424–433, 464–465 Motorola, 26–27, 35–36, 68, 321 Nalco Chemical, 173, 189 Nalebuff, Barry J., 35 Networked knowledge, 249 Neutral versus affective, 20, 45–51, 442, 451–455 Philippe Bourguignon/Club Med, 128–131, 452–454 Val Gooding/BUPA, 198–201 Anders Knutsen/Bang and Olufson, 48, 162–163, 164–165, 167–168, 455 Hugo Levecke/ABN AMRO, 343–344, 453–455 Christian Majgaard/LEGO, 157–158 Stan Shih/Acer Computers, 261, 263, 271–273 Nigeria, 397–401, 409 Nixon, Richard, 49 Nongovernmental organizations (NGOs), Royal Dutch Shell Group and, 404–405, 407 NORSI Oil Company (Sergei Kiriyenko), 27–28, 61–62, 283–291, 466–467 North American Free Trade Agreement (NAFTA), 401–402 Norway, 403 Norwich Union (NU), 90 Novelty versus credibility, 425–426, 432–433 Ohno, Taichi, 66 Olufson, Svend, 160 Opal, Inc., 218, 230–231 Orbot Instruments, 218, 230–231 Parallel processing, 65 Pascale, Richard, 317–318 493 Pay for performance, 38 Peak experience, 41, 115–117 People Express, 60 Pepsi-Cola, 81, 96, 449–450 Performance management systems, values-based management and, 322–323 Personal fulfillment (see Individualism versus communitarianism) Personality: of founder, 76, 77–79 irony and humor in, 77–79 Philips, 463–464 Pope, Alexander, 1–2 Porter, Michael, 245–247, 452 Power branding, 132–135 Precise standards (see Specificity versus diffusion) Price, revaluation of prices, 135 Private sector, public sector versus, 367–368, 385–386 Privatization, socially responsible, 176–178, 450–454 Process innovation, 469 Process reengineering, 136 Product innovation, 469 Profitability: profit-maximizing model versus client-mentoring model, 360–364, 458–459 shareholders versus stakeholders and, 406–409 Provident associations, 210–213 Public ownership, family ownership versus, 380–383 Public sector: national health insurance versus free-market insurance, 194, 201–205, 207, 208, 209 private sector versus, 367–368, 385–386 Pygmalion effect, 57 Pyne, Joe, 245–247 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 494 494 Index Railtrack, 81–82 Reconciliation of values, 16, 441–470 achievement versus ascription, 57–58, 460–463 centralization versus decentralization, 3–10 individualism versus communitarianism, 37, 447–451 internal versus external control, 62–64, 463–467 neutral versus affective, 50–51, 451–455 sequential versus synchronous, 68–70, 467–470 specificity versus diffusion, 41–43, 455–459 universalism versus particularism, 28–31, 443–447 Recruitment, values-based management and, 322 Reengineering: process, 136 in values-based management, 304–305, 315, 316–317 Refeai, Hashem Al, 437 Regeneration, brand, 132–135 Rehman, Lee, 406 Reliability, 470–471 Reputational branding, 90 Respectful listening, 46 Rewards, values-based management and, 323 Roethlisberger, Fritz, 55 Royal Dutch Shell Group (Mark Moody-Stuart), 393–411 Rule making (see Universalism versus particularism) Russia, 36 Sanders, Jerry, 101–102, 104, 105, 469 Saro-Wiwa, Ken, 397–401 Scandinavian Airlines, 193, 195, 456 Scanlon, Joseph, 39 Schein, Edgar H., 302 Seagram’s (Edgar Bronfman), 40, 56, 301–324 Self-interest (see Individualism versus communitarianism) Semiautonomous teams, 117–119, 469–470 Sequential versus synchronous, 20, 64–70, 442, 467–470 Christian Majgaard/LEGO, 154–155 Stan Shih/Acer Computers, 67, 262, 263–264, 274–277 Karel Vuursteen/Heineken, 333–336, 468–469 Shaw, Bernard, 57 Shell Oil, 255 Shih, Stan (Acer Computers), 259–279 achievement versus ascription, 56, 262, 263, 273–274 individualism versus communitarianism, 34, 261, 263, 266, 268–269 internal versus external control, 262, 264, 277–279 neutral versus affective, 261, 263, 271–273 sequential versus synchronous, 67, 262, 263–264, 274–277 specificity versus diffusion, 261, 263, 269–271 universalism versus particularism, 261, 263, 264–265, 266–268, 444–445 Siemens, 104 Singapore, 387 Singapore Airlines, 87 Small to medium-sized enterprise (SME), 413–438 BCIF group, 417–418, 460 Clifford-Thames (Holdings), Ltd., 433–437, 463 MMP Business Management, Ltd., 424–433, 464–465 (See also Family ownership) 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 495 Index Smith, Adam, 80 Snowdon, Guy, 82, 95 Social and Commercial Bank Garantiya (Sergei Kiriyenko), 291–297 Social concern (see Individualism versus communitarianism) Soft processes (see Specificity versus diffusion) Somekh, Sasson, 217 Sophisticated stereotype: for achievement versus ascription, 52–53 concept of, 21–23 for individualism versus communitarianism, 31–32 for internal versus external control, 59 for neutral versus affective, 45–46 for sequential versus synchronous, 64–65 for specificity versus diffusion, 37–38 for universalism versus particularism, 21–23 South Korea, 387, 388 Specialization: and internationalization process, 372–373 transnational, 444 Specificity versus diffusion, 20, 22, 37–43, 442, 455–459 Richard Branson/Virgin, 86–89, 98–99 Michael Dell/Dell Computers, 40, 244–245, 456–458 Anders Knutsen/Bang and Olufsen, 162–163, 165 Christian Majgaard/LEGO, 155–156 Stan Shih/Acer Computers, 261, 263, 269–271 Kees Storm/AEGON, 373–374, 376–378, 459 495 Stakeholder value: at AEGON, 373–374, 376–378, 459 family ownership and, 328–329, 380–383 at Heineken, 328–329 at Koç Group, 380–383 at Royal Dutch Shell Group, 406–409 at Suez Lyonnaise des Eaux, 179–183 at Virgin, 84–85, 98 (See also Small to medium-sized enterprise) Status ascribed/earned (see Achievement versus ascription) Steffens, John, 353, 354–355 Storm, Kees (AEGON), 369–378 learning from decentralization, 370–371, 375–376 synergy of stakeholder value, 373–374, 376–378, 459 Suez Lyonnaise des Eaux (Gérard Mestrallet), 33, 171–191, 450–451 Synergy: cultural, 112 of stakeholder value, 373–374, 376–378, 459 Syngery, 4–5 Systematic experimentation, 108–110 Teamwork: empowered teams, 117–119, 469–470 transnational, 231–233 in values-based management, 315, 316 Technology push versus market pull, 63–64, 163–164, 463–464 Telematics, 209 Thatcher, Margaret, 76–77, 201 Theory Y, 57 Three-hundred-sixty-degree feedback, 310, 473–474 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 496 496 Index Through-through thinking, 14 Time as “dance”/“race” (see Sequential versus synchronous) Toyota Production System, 66 TQM (total quality management), 434 Tractebel, 186, 189, 190 Training (see Education) Transcultural competence, 13–73, 439–475 achievement versus ascription, 20, 22, 52–58, 442, 460–463 concept of, 14 defined, 439 dimensions of difference and, 19–20 individualism versus communitarianism, 20, 22, 31–36, 442, 447–451 internal versus external control, 20, 22, 59–64, 442, 463–467 neutral versus affective, 20, 45–51, 442, 451–455 recognition and, 440 reconciliation and, 16, 441–470 respect and, 440–441 sequential versus synchronous, 20, 64–70, 442, 467–470 specificity versus diffusion, 20, 22, 37–43, 442, 455–459 universalism versus particularism, 19, 21–31, 22, 441–442, 443–447 Transnational specialization, 444 Transnationalism: and internationalization process, 369–378 local versus transnational leadership, 347–349 Suez Lyonnaise des Eaux, 186–190 transnational teams, 231–233 Trigano, Gilbert, 122–123 Trist, Eric, 199–200 Turkey, 379–392 United Airlines, 60 Universalism versus particularism, 19, 21–31, 22, 441–442, 443–447 Knutsen Anders/Bang and Olufsen, 164–165, 169–170 Michael Dell/Dell Computers, 246–247 Rahmi Koç/Koç Group, 383–384, 446–447 Christian Majgaard/LEGO, 153–154 Jim Morgan/Applied Materials, 224–225, 445–446 Stan Shih/Acer Computers, 261, 263, 264–265, 266–268, 444–445 Validity, 470–471 Value creation, at AEGON, 373–374 Values-based management: Edgar Bronfman/Seagram’s, 301–324 cultural change and, 302–304, 315 cultural relativism and, 19 customer surveys in, 315–316 maintaining values, 319–320 James C Morgan/Applied Materials, 222–223 nature of values, 14–15 in recruitment and promotions, 322 reengineering in, 304–305, 315, 316–317 “succeeding” while violating values, 313–318 teamwork in, 315, 316 top down versus bottom up and, 305–310 as trend, 320–321 values in action, 321 values training in, 311–312 (See also Reconciliation of values) Vicious circle: described, 16 gifts and, 18 neutral versus affective, 50 universalism versus particularism, 26 Virgin (Richard Branson), 27, 33, 48, 75–99, 449–450 Virtual integration, 252–254 7961_Trompenaars_ind_w.qxd 10/23/01 9:24 AM Page 497 Index Virtuous circle: achievement versus ascription, 55 described, 16 gifts and, 17 individualism versus communitarianism, 34, 35 internal versus external control, 62 neutral versus affective, 49 sequential versus synchronous, 67 specificity versus diffusion, 41 universalism versus particularism, 25 Volkswagen, 334–335 Vuursteen, Karel (Heineken), 325–338 growth versus shareholder interests of Heineken family, 328–329 497 individualism versus communitarianism, 336–338 premium global product versus cheaper local product, 329–333 as professional CEO, 325–327 stability versus innovation, 333–336, 468–469 Wagner, Wolfgang, 111 Wang, David N K., 217 Welch, Jack, 313 Whitehorn, Will, 90–91 Whittington, Robert, 47 World Trade Organization (WTO), 387 This page intentionally left blank 7961_Trompenaars_aba_w.qxd 10/23/01 9:24 AM Page 499 About the Authors Fons Trompenaars, Ph.D., and Charles Hampden-Turner, DBA, are coauthors of Riding the Waves of Culture: Understanding Cultural Diversity in Global Business and Building Cross-Cultural Competence: How to Create Wealth from Conflicting Values Trompenaars is managing director of Trompenaars Hampden-Turner (THT) Intercultural Management Consulting, an international management and training consultancy and KPMG Network affiliate that lists Motorola, Mars, Shell, Bombardier, and Heineken among its clients Hampden-Turner is a management consultant with THT and author based at the University of Cambridge’s Judge Institute of Management Studies He has taught at Harvard University, Brandeis, and the University of Toronto, and is a past recipient of Guggenheim, Rockefeller, and Ford Foundation fellowships Find out more about THT at www.7d-culture.nl Copyright 2002 The McGraw-Hill Companies Click Here for Terms of Use This page intentionally left blank [...]... differentiates the manager from the leader and the successful leader from the failing one The leader of the twenty-first century needs a new way of thinking, to which we refer here as through-through thinking It goes beyond either-or and even and-and thinking It synthesizes seemingly opposed values into coherence For more than a decade we have researched the cultures and values of managers in more than... courage saved the day; in patiently listening to many points of view, you could insist on the best of them; your trusting of a subordinate for a longer period caused your supervision to increase in significance; such was your loyalty to a colleague that she was able to confide the truth to you In all these cases the values continuum has been cleverly traversed to vindicate the values at both ends of the. .. international businesses and how they confront two common dilemmas of overseas operations: Competing strongly versus Making friends Following rules versus Finding exceptions Suppose one of our businesses is extremely successful and the other is on the edge of bankruptcy Can we explain their good and ill fortunes by the dilemmas they face? No, because the dilemmas are the same Can we explain it by the relative... Foucault, The Order of Things, Editions Gallimard, 1966 What Effective Leaders Know and Have Learned As we noted before, the secret of creating wealth lies not in the values of rule making and exception finding but between them, for these values are complementary How do you improve your rules except by noting each exception and revising the rules accordingly? However, this assumes that legislating better... of the life of people consists of managing things, and things are identified through a logic 7961_Trompenaars_intr.w.qxd 10/23/01 8:57 AM Page 4 4 21 LEADERS FOR THE 21st CENTURY as old as Aristotle, a logic of noncontradiction Two different things cannot occupy the same physical space at the same moment For example, we choose to buy this car or that one, choose to live in one house instead of another,... 7961_Trompenaars_intr.w.qxd 10/23/01 8:57 AM Page 3 Introduction to the Metatheor y of Leadership 3 who in turn provide the revenues you all seek? You are between such constituencies, and you must learn how to reconcile their claims In several earlier books the main authors researched and described how different nations and their management cultures approach dilemmas, choosing one horn of the dilemma in preference... together”) We illustrate this proposition in detail with the example of centralization-decentralization This is a particularly important dilemma for leaders On the one hand, they are responsible to shareholders for the combined profitability of the whole company, over which they exercise centralized control On the other hand, the many business units must have the decentralized autonomy to engage their... variations The environment is constantly changing, and such changes show up in some environments but not in others Unless business units can adapt swiftly to changing customer demands, the whole corporation will lose touch The reason the center cannot give detailed orders to the business units is that the complexity is too great No single leader can process so much information; moreover, the center is farther... customers than the local business unit is The answer has to be at the upper right of the figure: an inquiring system- and knowledge-generating corporation that gathers information from scores of business units and transforms it into a body of knowledge that is sharable with each unit so that each peripheral part has the wisdom of the whole centralized system As the saying goes, you 7961_Trompenaars_intr.w.qxd... the life of the mind is a series of dilemmas Freud saw the superego contending with the id, a struggle mediated by the ego C J Jung saw the collective unconscious contending with the libido in a conflict mediated by the psyche Otto Rank saw the death fear contending with the life fear Brain researchers have identified opposing characteristics of the left and right brain hemispheres generating conflicts ...7961_Trompenaars_fm.w.qxd 10/23/01 8:54 AM Page i 21 Leaders for the 21st Century b How Innovative Leaders Manage in the Digital Age FONS TROMPENAARS CHARLES HAMPDEN-TURNER McGraw-Hill New York Chicago San Francisco... from the failing one The leader of the twenty-first century needs a new way of thinking, to which we refer here as through-through thinking It goes beyond either-or and even and-and thinking It... a kind As Box 1-1 shows, the United States, Finland, Canada, Denmark, and the United Kingdom are all high in the desire for universal rule making In contrast, South Korea, China, Japan, Singapore,