Cultural questions tax global execs

2007

Nearly a quarter of executives in the world's largest companies believe that difficulties building a common global culture and adapting to local ways of doing business mean that their organisations are poorly equipped to succeed as global enterprises.

An annual survey by Accenture of more than 900 C-suite executives in the United States, Italy, France, the United Kingdom, Germany, Spain, Canada, Japan and China has found that worries about their organisation's ability to maintain a common corporate culture around the world now outweighing even geopolitical issues as their chief concern.

When asked to identify the greatest challenges to building global enterprises, half (49 per cent) selected the "ability to maintain a common corporate culture," followed by "understand local customs and ways of doing business," selected by 44 per cent.

Four out of 10 (41 per cent) selected the ability to "service remote clients/customers effectively" as a major challenge, and more than a third (36 per cent) selected "the impact of the global economy."

Only a quarter said that they felt the impact of different geopolitical issues was a major challenge.

And despite the fact that the majority of respondents said that their employees, suppliers and customers are more global now than they were five years ago, almost a quarter (22 per cent) felt that their organisations are poorly equipped to succeed as global enterprises.

This sentiment was particularly marked in China and Japan, where almost half (48 per cent) and a third of executives respectively believe that their organisations faces difficulties in adapting to the global market.

Another area of concern across executives from all the countries surveyed was developing leaders with the aptitude and skills to adapt to rapid change and new learning.

Overall, barely more than half (55 per cent) of executives surveyed said they believe that their organisations are able to do this, a figure which fell to just 45 per cent in Japan.

"To succeed in today's global environment, companies must create a strong and diverse leadership team with knowledge spanning disparate markets," said Mark Foster, Accenture's group chief executive-Business Consulting & Integrated Markets.

"The critical challenge for management is to ensure that companies maintain their core values and corporate identity across many countries, especially as industry becomes more knowledge-based and increasingly, work is handled by virtual teams.

"They also must build organisations that abandon the traditional geography-based operating models, which often fail to recognize dramatic differences in market needs and the resulting management challenges," he added.

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