American Problems in International Business

 

The Seven Cultures of Capitalism compares the business cultures of the United States with Britain, Germany, Sweden, the Netherlands (Holland), France, and Japan.  Other countries, such as Singapore, Italy, and Australia are sometimes mentioned.  While not a new book, the content is still just the knowledge international businesspeople need today.

According to British author Charles Hampden-Turner and Dutch author Alfons Trompenaars, some of the biggest problems faced by Americans in International Business are:

1.)  The United States invents extremely well (whose creativity correlates with an inner-directed society), but sometimes isn’t able to follow through well with the subsequent phase of innovation (improving and changing the product in order to to better serve customer’s ideas of how to use it, something at which the Japanese excel).

2.)  American firms become extremely vulnerable at the point where they must serve a maturing market (just where Japanese industry strikes and makes massive inroads).

3.)  Inner-directed Americans sometimes encounter problems in world marketing because customers using the products often do not share the logic of the designers.

4.)  America’s inner-directedness prevents the U.S. from forming the cooperative structures necessary to compete internationally at the level of value-added chains, industries, or nations .  (Three examples given of when America was able to close ranks to fight a larger problem were the Great Depression, World War II, and after the launch of Sputnik.)   Other nations, especially Asian nations, are able to do this much more effectively.

Historically, large economic combinations have been viewed negatively in America’s experience.   The Sherman Antitrust Act and other antitrust policies came about because America views collusion as the inevitable consequence of joining together.  Turner and Trompenaars believe that Americans see cooperation between firms as collusion against consumers. and that their fears are not groundless.

–Lynne Diligent

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3 Responses to “American Problems in International Business”

  1. Jim Taggart Says:

    This is very interesting and relevant to today. The first point is intriguing, considering that there have been some recent business articles on reverse innovation. I wrote a post on it last year, which looked at an interview with GE’s Jeffrey Immelt (CEO). Historically, the U.S. has pushed its innovation at other countries, in particular developing ones. However, transnational companies like GE are starting to get with it and are not producing for local markets. One example used is MRI machines, whose costs and portability have plummeted. Indeed. reverse innovation can occur where products produced in faraway countries can be adapted for use in North America.

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  2. Lynne Diligent Says:

    Jim, thanks for your comment on GE. Even though the book is nearly 20 years old, I found it extremely relevant for today. The one thing I wondered, however, was how particular countries have developed or changed since the 1993 publication date. I’ll see if I can locate that article you mention on your blog. Is it there?

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  3. Lynne Diligent Says:

    Bruce Stewart says (through Facebook): In 1998 I had Charles Hampden-Turner come to the Gartner European Executive Programme meetings to address the members on this, and the pair’s other then-new work, “Mastering the Infinite Game”. We also mounted workshops asking (as cross-border mergers were underway in the EU) how to use these cultures to improve the whole by doing certain things in certain cultures. The Europeans loved the concepts; my American colleagues, unfortunately, didn’t see the point.

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