European cultures and management styles
Manfred Perlitz and Frank Seger
Department of International Management, University of Mannheim, Mannheim, Germany e-mail: firstname.lastname@example.org, email@example.com
Abstract After the establishment of the Common Market in Europe, manycompanies from abroad opted for a single European headquarters and searched for European managers. That leads to the question whether one can really speak of a common European management style. The article at hand examines this issue. To do this, the legal framework and Corporate Governance background of individual European countries are assessed. Furthermore, cultural differences in Europe areconsidered. Referring to studies of cultural dimensions in European countries, the authors propose ﬁve different cultural areas in Europe. This leads to a concluding discussion of management styles in these regions. Key words Culture · Management · Corporate governance · Europe · Leadership
1 Is there a European management? In the last decades, speciﬁc success models of management were often relatedto different countries. So, in the 80s the Japanese management was “en vogue,” and the whole world admired the lean production concept as it had been introduced in Japan. The Japanese management model was seen as the most successful way to reduce costs, especially in the area of production. This led to a change in the Western paradigm that higher quality always has to be related to higher costs,because the Japanese model showed that higher quality and cost reductions can go together. Following the collapse of the bubble economy in Japan, the American management model took over. After the breakdown of the “New Economy” and the scandals dealing with the “creative” ways to use the American accounting system, this model also is now more and more questioned. This is especially true for theshareholder value concepts that were seen as the success model for American companies. With the development of the European Union, a common market was created in Europe. This led to the creation of many European headquarters of nonEuropean companies. In the literature a European manager was required to be able to efﬁciently run the European business (Berger 1998). However, something like a Europeanmanagement model never existed after World War II. The German model of a social market economy and the Scandinavian welfare state concept were interesting models from the 50s to the 70s, but they were never seen
M. Perlitz and F. Seger
as a pan-European way to manage economies or companies. As far as management is concerned, Europe is not a monolithic bloc of countries. Its strength andweakness at the same time is its variety of management styles and cultures. European managers are still facing very different business environments, cultures, and corporate governance issues. Being successful in Europe therefore depends very much on the knowledge of these differences. Management styles that work in Germany may not work in France, Italy, or The Nordic countries. Managementcultures of the Middle and Eastern European countries and Russia are difﬁcult to identify, because there Western style management has been unheard of for a long time. The following article tries to describe both the differences and the similarities of European management styles. 2 Differences in European management 2.1 Legal origins and governance issues To understand why European management shows somany differences, one has ﬁrst to study the dissimilarities of the legal frameworks in Europe. There are four different legal backgrounds to distinguish from their origin: the civil laws of French, German, and Scandinavian origin and the common law approach of the Anglo-Saxon countries. Table 1 shows for the western European countries the legal origins of their companies’ acts. In addition, one...