Culture Clash?

Perhaps one of the biggest areas of misunderstanding among US businesses is what actually constitutes 'Europe'. As most Europeans are aware, despite the formation of the European Union as a political entity, Europe is anything but a harmonious and homogeneous whole.

Still a concept rather than federation, the appropriate way to think of Europe is as a collection of individual countries – each with a rich cultural heritage and traditions stretching back centuries. Admittedly, it is a difficult task.

Understanding the different cultural nuances across Europe that affect businesses is challenging enough for the Europeans that live there, let alone for Americans thousands of miles across the Atlantic.

"America is a big country. Texas is the size of France or Spain. So it is difficult for an American in one state, to know exactly what is going on in the rest of the US states," says Vitaglione. "So it should be no surprise that Americans appear to be less interested in comparatively small countries outside the US. After all, people in Europe are not that interested in what is going on in Minnesota, or Arkansas or San Diego. Neither are most Americans interested in the distinction between Norway and Spain, for example."

One result of the lack of interest in distinguishing between European nations is a tendency to simplify matters and attempt pan-European solutions to most business challenges. So a parent company in the US might hand down an edict to roll out a particular finance software package across Europe, or use it for all European revenues, without understanding that VAT rates differ from one country to another. A standardised single solution is often unworkable so necessary adjustments need to be taken into account.

"There are often different levels of government regulations and restrictions across Europe," says Vitaglione. "So, for example, the real estate rules are completely different across Europe, so the amount of time to complete transactions can vary. In some countries the rules are strict and there are many things that you cannot do. Other countries, however, are less restrictive."

In the same way, notes Vitaglione, there is a tendency for American companies, once they have found a business model that works in the US, to persist with that model in Europe. There are some examples where this has been successful but the majority of US companies have struggled operating a centralised business model in Europe.

Cultural diversity

Vitaglione also points to the issue of cultural diversity. European business schools tend to have a much higher proportion of international students on their MBA programmes than their US counterparts. So a US MBA student attending Harvard Business School, Wharton or Chicago Graduate School of Business, is likely to be studying alongside fewer international students than someone at London Business School or INSEAD in France.

"Diversity is very important for European business schools and reflected on the campuses and in the MBA cohorts much more so than in the US. In a global business this diversity in the class can provide you with more facets in terms of how to manage a project or run a business successfully. It may also mean that when US MBAs go onto senior management they will not see the value in being surrounded by a diverse set of people, while for a European CEO it is very important to be surrounded by people who have a diverse cultural background, people from different nationalities and with different points of view."

Besides the way Europe is perceived by many Americans, Vitaglione has observed a number of other differences between US and European corporate culture.

"At a top level the goals set by any shareholders are the same, the objectives are the same, but the way to achieve those objectives, the criteria, the management style, might be different," says Vitaglione.

Europeans working for a US corporation might notice a difference with the speed that things get done.

"With regards to the numbers, for example, Europeans have a tendency to try to provide more analysis and explanation on top of the raw numbers. Whereas the Americans care less about how you get there, how you hit the targets, so long as you do. And it must be cheap and quick," says Vitaglione.

"With Americans there is often pressure to want everything completed immediately – can you do it or not? If you can, then do it now. For Europeans, it is more protracted: 'Let's think about it, let's discuss it, and then let's try and reach some type of consensus that includes all the relevant people'."

So a European executive leading a project might consult the non-executive directors and ask consultants, and a project or decision that might take three months or six months will take much less time for an American project team. It is one extreme to another, notes Vitaglione, whereas somewhere in between the two would be better.

Work-life balance is another area where Vitaglione has experienced differences.

"It is my impression that Americans are comfortable working what might appear excessively long hours. And this is not just down to the job, but because your ultimate success will be judged according to how you perform at work. One saying that is very popular, for example, is 'you are what you earn' meaning that your earnings and your work are extremely important in terms of status," says Vitaglione.

"Most of the Europeans that I have known adopt a different attitude. However, the perception of balance is more important – balancing work, with good quality family time, if they have family, as well as other activities whether it is charitable work, sports, or other things."

A can-do attitude

Although Vitaglione believes in a better understanding between American and European executives, he has been hugely impressed by the US companies that he has worked for in Europe.

"What I particularly like with American companies is the openness, the energy, the enthusiasm, positivity and desire to move forward," he says. "In Europe if you want to run a project or start a company, you will have lots of people immediately explaining why this project will not work; why it is going to be difficult; why backing this project is almost impossible. Whereas in America, there is a can-do attitude."

Vitaglione also appreciates the meritocratic approach adopted by many American executives. Their primary concern is whether you can do the job and do it well, rather than where you come from, your family background, or which school you went to.

It is, says Vitaglione, worth making the effort to understand each other as the results can be very beneficial.

"Once you have convinced your American colleagues to listen to you and believe in your knowledge of Europe, when you reach this kind of harmony, with everybody respecting each other, taking the best of each culture but working together as a team, the benefits will speak for themselves."