Análisis categorial y textual a partir de teorías implícitas que sustentan la práctica

We argue here that the historical and cultural background of French firms exerts an important influence upon the ways in which they internationalise. This section discusses the traits which appear to characterise the ways in which French companies evolve towards an international model.

As part of the general evolution towards worldwide product lines, all firms

have strengthened the role of the Centre. Yet, a characteristic feature of this

evolution is that it is has taken place within a mindset of controlling foreign operations and imposing a French approach rather than devolving responsibilities. This trait is most manifested in Peugeot, Saint Gobain and Total, where managements retained key decision-making power and managed through a core of French expatriate managers. Whilst Vivendi Water did not impose its approach from the outset, as it first adapted to the UK market by decentralising strategic decision-making, it has nonetheless retained control by subsequently placing expatriates in key positions.

This has led some firms to impose their group methods inappropriately. In Peugeot and Saint Gobain, for example, the tight control from the parent has at times led to tensions with the local teams as companies lacked sensitivity to the specificities of the local market (cf. also Chapter 5). This need for imposing group methods is partly linked to French companies’ single vision, centered upon their firm. As French firms have long been closed upon themselves, not only from an external point of view where they have long lived in a quasi state of autarky, but also internally, with French managements being imbued in the same culture and having spent their career within

Globalisation of corporate structures

the same group, this has contributed to creating an inward-looking vision among its management.

This points to the potentially contradictory logic of relying on expatriate managers. Whilst on the one hand they can facilitate the implementation of group policies, on the other hand, they can restrict the local company’s thinking. The expatriate can facilitate the integration of the operating company into the parent. On the other hand, he can impose group methods ill-adapted to local circumstances, for he lacks sufficient distance from the parent ways of operating, to be able to strike a balance between the need for integration and the need to adapt to the local situation.

Nonetheless, this trait itself is lessening as companies evolve towards a global model and are beginning to devolve responsibilities to foreign operations, reflected in the establishment of centres of competence outside France in some cases. This is indicative of a growing awareness by French managements that a global corporation cannot be managed from the Centre and an increasing legitimisation of a diversity of perspectives. Together, this constitutes a sign of maturity as French companies proceed towards globalisation.

A further characteristic trait that emerges is the weight of managers in French companies’ mode of functioning. Our evidence has shown French multinationals’ strong tendency to operate through expatriate managers, with comprehensive powers and responsibilities. It is through managers that foreign operations are controlled, that group culture is created and know-how transmitted. Even when firms relied on manuals and procedures to transmitting their policies, expatriate managers were used to transmit the reporting for example in Saint Gobain. We also came across cases where expatriate managers even occupied functions of operational control, rather than highly strategic positions.

Underlying French firms’ mode of management is thus the presence of a strong, informal and implicit culture amongst French managements, based on trust,

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which has developed through expatriate managers, their internal labour markets and job-for-life policies. This type of culture, which has developed naturally, contrasts with the Anglo-Saxon type of corporate culture which the organisation purposively creates so that the organisation as a whole conforms, and which is explicit and formalised7. The key advantage of the presence of this strong culture is that it allows for effective communications amongst management. However, lack of transparency results from companies’ informal mode of management, as power being in the hands of a few, means that responsibilities are not clearly defined. As they are strongly identifying with their group culture and operate in closed networks, French managements have had little need for integrating British management as stated by this British manager:

G lobulisation of’corporati* structures

‘That is difficult, in the lack of discipline of French business atmosphere, they tend to have informal meetings that occur, people just congregate in a corridor or an office, and talk about something and make a decision amongst the people that are there. Whereas the English would put up some agenda and would summon people to a meeting and that group of people would be considered to be the right group to make a specific decision. There will be no minutes, the only way you will actually know that it happened is to have been there or subsequently talk to somebody who was there. That’s why it is actually very important to spend a lot of time in France at Head Office, because the only way you actually find out what is going on is to be there’.

Further, because French firms rely upon trusted managers, one does not find a well-developed culture of performance management in the Anglo-Saxon sense where, senior managers are given significant autonomy and are evaluated mainly on the basis of their financial performance. If targets are not met, managers are given a set time scale within which to put the operations back to profitability or else face being

sanctioned. In our sample of companies, when financial results of an operation

deteriorate the group takes necessary action, but rarely are sanctions taken against

executives. Managers are fully trusted by the Centre and as they monopolise

responsibilities, their authority is not questioned within their group.

7 Peters et al. (1982) have for example cited the case of Disney, which through its recruitment procedures, its apprenticeship programme, its numerous formalised and detailed rules, informal socialisation mechanisms, strong performance management system, as well as mission statements, inculcated Disney values.

Globalisation of corporate structures

The analysis of how French firms adapt themselves to the demands of the global environment reveals a limited ability to integrate international methods in their structures. This was apparent in Peugeot, Saint Gobain, Schneider and Total which faced difficulties reforming their cumbersome structures. French companies, having emerged from a stable institutional context, have not been used to reacting quickly. Alcatel for instance was forced to create a flexible culture through a corporate ‘hi- speed’ transformation programme to try and instill change in the behaviour of its employees, and gain in agility. French firms’ reluctance to undergo fundamental change was also evident in their tendency to duplicate their structures abroad. As already noted, except from Vivendi Water, which did not hesitate to create new structures in order to be close to the UK market, we saw that Peugeot, Saint Gobain and Total implemented their group methods unilaterally in foreign operations, sometimes without sufficiently taking into account the specificities of the local environment.

Our findings show that it is often under outside pressures that French firms engage in the change process, such as a crisis situation or under the influence of a dynamic company leader or a powerful new acquisition. Thus, Alcatel was surprised by the changes in the telecommunications market in the mid-1990s, and it was the shock of a financial crisis, together with a change in leader that forced it to undertake a radical corporate restructuring. In the same way, after resisting globalisation for over a decade, Peugeot begun changing its strategy under a new leadership. In other

cases, the acquisition of a major pole has forced firms to initiate change. In

Schneider, the acquisition of a major American firm, Square D, has challenged the status quo that existed between the different companies that Schneider acquired, which up until then fiercely sought to maintain their independence, and forced greater cooperation amongst each other. In group Total, it is managers who were brought in from outside who were behind the introduction of the organisational reform, whereas hitherto the group had remained inward-looking. Those external factors acted as catalysts, provoking change within the firm.

Globalisation of corporate structures

One sees, in addition to a reluctance to undertake fundamental change, a partial vision amongst French managements of how to integrate certain kind of international management methods. This is demonstrated in the case of Total, in the

way the decentralisation exercise was approached. Whilst management rightly

pointed to the need for evolving its structures in order to face changing international markets, the exercise was implemented in a piecemeal fashion, reflecting a partial understanding of the philosophy behind the practice of decentralisation. Management attempted to follow consultants’ Anglo-Saxon methods and to decentralise overnight without first adapting its structures and the behaviour of employees, who had

operated in a highly centralised fashion for decades. The exercise, being

incompatible with the group’s existing structures was eventually counterproductive. Similarly, we have come across companies that, in their search for more rigour, have radically shifted their approach and adopted highly structured financial control systems. As this manager points out, a too radical shift could go against the grain of the existing system and be detrimental:

‘One should not fall into the other extreme, one can have very good reporting and nonetheless lose sense of the business’.

These traits are not immutable however. Our findings point to a clear

tendency towards a global model of organisation in French firms’ strategies and structures. All have gained an increasingly global vision of their business. This in turn denotes an increasing market-responsiveness amongst previously insulated French companies, and a growing awareness and openness to the outside world, in a now global and competitive environment. French firms are also seeking to gain a more structured, rigorous, transparent and performance-oriented mode of management. However this takes place painfully, and goes against the grain of their established ways of operating. In some extreme cases, there is incremental change and a strong continuity in firms’ modes of functioning as exemplified in the case of Schneider, which faced difficulties clarifying its corporate structures.

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