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    ECMLG'13: Culture and conflict in MNCs

    Conferences Performance Research Societal Wellbeing
    Selected views on the organisational culture of multinational corporiations

    Alena Safrova Drasilova (Masaryk University, Czech Republic) presented her research on conflict and culture in multinational corporations (MNCs). Drasilova surveyed people from 2509 branches of 335 MNCs, in an effort to understand the influence of headquarters culture on the culture of branches located  in the Czech Republic. The preliminary results indicated that MNCs headquartered in Europe displayed less conflict at the branch level than companies headquartered elsewhere.

    The discussion that followed the paper was extensive—clearly the paper stimulated the interest of the audience. One aspect of the discussion explored the notion of cultural alignment in a category Drasilova described as global (companies that identified themselves as not having a national head office—Bosch being German, or IKEA being Swedish, for example—but rather a pervasive culture in which the characteristics of the brand itself prevails over the location of the country—McDonalds, for example)

    It would be very interesting to understand if any linkages between culture/conflict and performance exist, particularly whether the presence or absence of conflict makes any difference. Drasilova said that no work had been undertaken yet, but that this is the next step in the research. I look forward to reading this next phase of work, because I suspect the approach she plans to take may well have parallels to my own work.
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    When "tongue-in-cheek" cuts close to the bone

    Governance Management Performance Readings Societal Wellbeing
    A somewhat satirical opinion piece, written by Joe Bennett, caught my eye this morning. As I read it, over my morning coffee, I smiled, for the opinion piece is very well written. But afterwards, as I sipped on my coffee again, I winced, for the images conjured in Bennett's mind and exposed through prose, cut a little closer to the bone than many who are au fait with boards and governance would care to admit.

    Most of the directors that I know, and boards that I am familiar with, work hard, as they seek to optimise business performance and build shareholder value. They read their board papers carefully and critically before meetings, prepare well and ask searching questions. They also spend time understanding the business of the business, so they can contribute meaningfully to strategic discussions, and make informed decisions about the strategic future of the business. In other words, they engage actively in the process of governance.

    However, some (perhaps the majority?) directors and boards still don't engage in this way. They adopt a more passive modus operandi of monitoring past performance. They spend little, if any, time considering strategic options and marking out the future of the business. In extreme cases, they behave as Bennett suggests. Sadly, the self-serving, fat cat imagery described by Bennett will remain part of the psyche—for as long as it continues to describe how some boards behave at least. I long for the day that such imagery becomes folklore, of the way things used to be, but no longer are.
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    The Fonterra crisis: a failure to learn from past lessons?

    Governance Management Performance Research Societal Wellbeing Strategy
    Fonterra, dairy industry giant and also New Zealand's largest company, has been in the news of late, for all the wrong reasons. Fonterra processes raw milk and exports 97% the resultant products for further processing and consumption in countries around the world.

    The cause of the recent events was a suspicious product test, which raised the possibility that the bacteria that can lead to botulism was present in a 38-tonne batch of whey product manufactured in early 2012. The whey product is used in the manufacture of infant milk formula, and botulism can be fatal. Understandably, the event became front page news, with flow-on ramifications in political, economic and tourism circles, very quickly. 

    At this point, I want to acknowledge that mistakes, unexpected events and crises happen. This is a fact of life. The test of one's mettle comes in the response.

    On the surface, it would appear that Fonterra has failed to manage the crisis well, despite an exemplar case being widely available. In 1982, packets of the then market-dominant Tylenol product were laced with cyanide. Seven people died from unknowingly consuming poisoned capsules. Johnson & Johnson's response to the crisis was exemplary. They immediately withdrew every box of Tylenol from sale, established a 1-800 helpline and actively sought media coverage. While Johnson & Johnson took a short-term hit, they emerged stronger than before. Compare that with delays in reporting the possibility of the problem to the authorities, and seemingly poorly briefed representatives at press briefings. And where was the Chairman?

    No doubt a review (or, more probably, several reviews) will be conducted to discover how the problem occurred; why it was not discovered earlier; what processing, communications, information sharing and other processes failed; and how the whole affair was managed. I hope that, in the process, someone thinks to look to other similar cases—like the Johnson and Johnson one—and to learn from them!
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    Reading: On train wrecks and determinism

    Readings Societal Wellbeing
    The recent spate of train, bus and plane crashes in Western Europe, Canada and the US has, understandably, precipitated a series of articles by reporters, journalists and others. Some have reported the facts, while others have sensationalised the events, provided a human view, or speculated the causes of these disasters.

    Amongst the articles I have seen, one stood out because it raised some interesting bigger questions—of jumping to conclusions in some deterministic sense; of shoddy reporting; and, dare I say it, of cultural prejudices. I commend the article to you—perhaps to stimulate your mind as you take time out to enjoy a coffee—because it highlights the power of the written word to influence the way we perceive reality.
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    The value of long service on Boards: redux

    Governance Management Performance Societal Wellbeing
    A couple of weeks ago, I posted some thoughts about long service on Boards. My conclusion then was that ten to twelve years was a reasonable upper limit on service, beyond which the value of one's contribution starts to fall away.

    While the context of that post was corporate boards, the value question also needs to be asked of elected local body officials—Mayors and Councillors—for they hold a governance mandate. I raise this because an article published in the Dominion Post today highlighted the issues of long service and the need for 'fresh blood' in the Wellington City Council. The average length of service is twelve years. One Councillor has spent 27 years on Council. While some of the longer-serving Councillors were quick to defend their long stints, I couldn't help but get the feeling that occupancy in the role and advocacy of single issues (not to mention fees earned), had become more important than performance and public good in a number of cases (click here and here for examples).

    This latest example reinforces the opinion I expressed two weeks ago. Performance and contribution should always prevail over longevity and status. I hope the candidates and voters bear this in mind in the run-up to the local body elections this October.
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    Project management: why can't we get it right?

    Management Performance Research Societal Wellbeing Time Management
    Many years ago, when I was just a few years out of university, I heard an alarming statistic: that most projects (70% or more) were delivered late, cost more and provided less than originally planned. Some were never completed at all. I recall discussing this with my then colleagues and associates, because it seemed like an important problem that needed to be solved. My colleagues said that new systems and processes were being developed, and that this would alleviate the problem. 

    Fast forward a generation... Many systems and processes have been introduced—including MS-Project, PMP, Prince2, PMO and others—but have the expected gains been achieved? Sadly, they have not. As a recently published KPMG report indicates, most projects are still late, cost more, provide less or fail outright. On this evidence, little has changed. Much time and effort has been spent developing and promoting new systems—and millions of dollars are still being wasted.

    So, what's gone wrong, and why haven't things improved? In my view, most project management systems and processes have failed to deliver any material gains, because they do not address the vagaries of the most crucial factor: people. A more holistic approach is required. Rather than spend more effort refining systems and introducing yet more processes, attention needs to turn to the people factors. The research literature is replete with information to guide a new generation of people-focussed effort. However, until someone takes up the challenge—to deal with the motivational, behavioural and other psycho-social factors—I suspect the wastage will continue.