Question:
You have been awarded for the best 2000 European published research on leadership and corporate governance - "Making cross-cultural research relevant to European corporate integration". Do you believe that the integrating systems of employee management in Europe that have different cultural bases are possible?

Prof. Michael Segalla:
That is a tough question because it comes without a context. If you create an entirely new organisation in a country you can essentially hire the values you want. So a French company could go anywhere in the world and, using standard psychological and assessment tests, hire only people whose values are close to those of French managers. Some of the Japanese car companies did this in the USA when they opened assemble plants there.

But if you acquire a foreign company with hundreds or thousands of employees you will have a much more difficult time. It could take several years to develop the attitudes and values you wanted your employees to use when making decisions. It depends how aggressive you want to be and how much you are willing to risk in terms of business unit's financial value.

Question:
You have established the European Managerial Decision-Making Project. Could you tell what are its goals, main tasks and contributors?

M. S.:
The goal of European Managerial Decision-Making Project is to look for evidence that cultural values influence managerial decisions regarding real organisational problems. It main tasks were to identify common managerial problems related to the integration of pan-European organisations and to identify differences in decision-making criteria. The project is sponsored by Fondation HEC, a non-profit research and educational foundation associated with Groupe HEC. Additional support came from the European Financial Marketing Association (EFMA), the Community of European Schools of Management (CEMS), and individual researchers, research institutes, and universities participating in the project. These include: Professor Marja FLORY and Dr. Gabriele JACOBS-Belschak, Erasmus Universiteit - Rotterdam (Netherlands), Professor Alfonso SAUQUET, ESADE - Barcelona (Spain), Mr. Rod Scarth, London School of Economics, (United Kingdom), Dr. Professor Lorenz FISCHER, UniversitΣt zu K÷ln (Germany), Dr. Professor Karl SANDNER and Dr. Christiane M▄LLER, WirtschaftuniversitΣt - Wien (Austria), Professor Carlo TURATI, Universita Luigi Bocconi - Milan (Italy), and Mr. Pierre LEMAITRE, CFPB - La Defense (France). The ASEAN-EC Management Centre also offered support for the project.

Question:
Your team has conducted a six-country study of over 900 managers working in 70 companies in the European financial sector. Why the financial sector and what countries has been chosen for the project purposes?

M. S.:
Data was collected during 1995 and 1997 from over 1000 managers from 70 European banks. The banks were a representative sample of the industry in each of the six countries (Austria, England, France, Germany, Italy, and Spain) and included small, medium, and large banking organisations. In the case of the large or international banks the manager samples were drawn from the local branch banking division. The banking sector was selected because it represents a relatively protected industry little influenced at the organisational level by long-standing international employee exchange systems. We believe that most managers in local branch banking organisations are less likely to have come into contact with "foreign" expectation set(s) therefore representing more closely a "pure cultural type" of manager. Analysis of the demographic data indicates that 54% of the sample indicated that they could only work in their mother tongue. The range across the countries was 92% to 35%. Only 4% of the sample had ever worked in a foreign location for more than two years. More than 92% of the sample had worked their entire careers for the same employer.

Question:
Do you think that understanding cultural values and logic can substantially facilitate managers make decisions?

M. S.:
Absolutely, because so many companies are making costly mistakes right now. For example, a few years ago a Dutch retailer of specialty consumer products acquired a French chain selling the same products. Part of its profit projections were based on its experience in Holland of transforming employees into aggressive salespeople rather than employees who simply kept the merchandise clean and well organised. The firm accomplished this transformation in their local market through training and commission-based compensation policies. In France however the employees resisted this change in role. They were also unhappy with a commission-based compensation system because they believed it would disrupt the team spirit of the small groups of employees in each store. It simply clashed with their expectations about their role as employees. The resistance was very surprising for the foreign retailer since its Dutch employees adapted well to the market imperative of becoming more client-oriented. In the end the retailer decided to fire the employees least willing to adapt which further depressed profits due to the high social costs of such dismissals and the loss of productivity due to hiring and training new employees. When they missed their profit targets at the end of the first year they criticised their bankers for not having provided a thorough evaluation of the deal. Embarrassed, the bankers provided more lenient terms to their customer. This may give new meaning to the process of due diligence during the development of merger and acquisition financing.

Question:
Cross-cultural studies have been conducted during the 1980s mainly by Hofstede and recently by Trompenaars. Please tell us what is different in your study?

M. S.:
Trompenaars and especially Hofstede are leading researchers in cross-cultural research and are often cited by academics and practitioners. Their work stands as an enduring testament to their foresight and enthusiasm about the importance of understanding cultural differences in the workplace. Their work is aimed at identifying high concept principles rooted in psychology and sociology that apply broadly to a whole nation. They are really the precursors to a modern, business-oriented approach to the question of culture. We have essentially built our study to supplement their work. For example their questions are basically closed ended where the respondent has only a limited number of options to checkmark. Their questions can be interpreted in a variety of ways depending on the hidden cultural values and socio-economic situations of respondents. As a consequence they uncover little information directly applicable to what a company should do it developing it day-to-day policies concerning European integration.

Our study set out to fill in this gap by using detailed questions about common managerial problems and asking the respondents to explain in their own words what decision they would make. We then content analysed the responses and identified approximately forty criteria used to make managerial decisions for each of four problems.

Question:
What are the organisational problems most frequently cited by managers in your study?

M. S.:
We offered the problems so we can not answer this question directly. However the problems we offered, recruitment, promotion, compensation, and work force reductions were identified by us in an earlier study as the most problematic for pan European organisations.

We can offer you the dilemma most often cited by mangers. It is the trade-off between making decisions that directly benefit the firm and its clients and those that directly benefit the employees of the company. For example, the massive workforce reductions we see these days is not doubt immediately good for the company and its shareholders but not so good for the employees who lose their jobs.

Question:
Have your team designed any special cross-cultural tool to help solve above-mentioned problems?

M. S.:
Yes, our basic research instrument is this tool.

Question:
Could you outline the most important conclusions from your work and where can we read more about your findings? Do you intend to study a cross-cultural impact on decision-making in any other countries?

M. S.:
Our work is not yet finished. We are still analysing our data. But the early results are very promising. We have developed a methodology any firm can use to accurately measure the hidden cultures in their organisations. We have clearly illustrated the trade-offs managers must confront between the market pressures and group pressures within their organisations. I think also, that we have given a little hope to managers that cultural issues can be resolved with the proper tools. Our work has been published in the following journals and our papers will be available on the HEC website. After we have had a chance to analyse all the data we would like to extend the research to other industrial sectors and countries.

1. Segalla, M. 2001. How Understanding the Values and Expectations of Foreign Employees Creates a Better Company. European Management Journal. 19 (1): 27-31.
2. Segalla, M., C. Turati, & A. Sauquet. 2001. Symbolic vs. Functional Recruitment: Cultural Influences on Employee Recruitment Policy? European Management Journal. 19 (1): 32-43.
3. Segalla, M. D. Rouzies, & M. Flory. 2001. Culture and Career Advancement in Europe: Promoting Team Players vs. Fast Trackers. European Management Journal. 19 (1): 44-57.
4. Segalla, M., G. Jacobs, & C. Mⁿller. 2001. Cultural Influences on Employee Termination Decisions: The Choice between Firing the Good, the Average, or the Old. European Management Journal. 19 (1): 58-72.
5. Mⁿller, C., K. Sandner, & M. Segalla. 2000. Kritische HRM-Entscheidungen in ÷sterreichischen Banken - Ergebnisse einer internationalen Studie. Journal fⁿr Betriebswirtschaft, 50 (5): 240-251.
6. Segalla, M., L. Fischer, & K. Sandner. 2000. Making Cross-Cultural Research Relevant to European Corporate Integration: Can a New Approach to an Old Problem Help Your Company? European Management Journal. 18 (1): 38-51.
   This article won the BEST MANAGEMENT RESEARCH published in the year 2000 from AESC.
7. Segalla, M. & C-H. Besseyre des Horts. 1998. La divergence des pratiques de gestion des ressources humaines dans le secteur bancaire en Europe: rΘsultats d'une Θtude exploratoire. Revue Franτaise de Gestion. 17 (Janvier-FΘvrier): 18-29.

Thank you very much for the interview.

Professor Michael Segalla is administrative co-ordinator of the department of Management and Human Resources at the Group HEC, France.

Professor Michael Segalla is director of the European Managerial Decision-making Project. He and his co-authors were awarded the AESC best European published research on leadership and corporate governance prize in 2000 for their article, "Making Cross-Cultural Research Relevant to European Corporate Integration: Can a New Approach to an Old Problem Help Your Company?" European Management Journal. 18 (1): 38-51.

Professor Michael Segalla is author of many publications in well-recognised journals. He is also co-editor of the book European Cases of Organisational Behaviour and Change (1996).

Professor Michael Segalla is on the editorial board of the European Management Journal and is an occasionally reviewer for several academic journals including The Journal of Managerial Psychology and The Academy of Management Journal.