Book Review: Fish Can’t See Water: How National Cultures Can Make or Break Your Corporate Strategy

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Kai Hamerich and Richard Lewis recently published a book called Fish Can’t See Water: How National Cultures Can Make or Break Your Corporate Strategy. The Economist read the book and here’s what they think about it.

In Kai Hamerich and Richard Lewis’ book, Fish Can’t See Water: How National Cultures Can Make or Break Your Corporate Strategy, the advantages of cultural awareness for companies that operate on the international market are explained.  An article on the website of the Economist gives an in-depth review of the book.

:: According to the Economist, companies cannot simply walk into a foreign market without any understanding of the market’s culture and customs.

The newpaper gives the example of all-American company Walmart. Walmart made plans to conquer the German market. At that time, the Economist says, Walmart was the world’s biggest retailer and had enough monetary resources to advance to the then not-so-decent German retail market. Walmart bought the German retail chains Wertkauf and Interspar and Americanised these shops with elements such as greeters that were instructed to greet the customers with a broad smile.

According to the Economist, the German public was not impressed. Moreover, when Walmart hired an American expat to lead the German branch of the company, it all went further downhill and Walmart sold the stores. The Economist believes Walmart is a great example of how desparately cultural awareness is needed for businesses.

:: Read more about Walmart in Germany

As an increasing number of companies go global, companies now have to deal with far more cultures than they previously have. In addition, the Economist says, the current service-based economy requires more complicated ideas than the production processes that were needed in the manufacturing economy of the old days. Managers of western companies thus must not only know the Western consumer, but have to find out what appeals to the Asian or South-American market as well.

This has proven to be quite the challenge for companies, the Economist says, as companies are often unaware of cultural differences, as Walmart’s stint on the German market proves.

With their book, Hamerich and Lewis wish to inform managers about the markets, or “waters,” they and their companies are located in. According to the Danish headhunter and British linguist, the key to successful globalisation is a good grasp of the outlook on the world and ambitions of not only a company’s business partners, but those of its competitors as well.

The duo also tries to incorporate cultural observation into management theories. According to them, the Economist says, world civilisation has three archetypical cultures:

•    Linear-active culture, which focuses on timekeeping and likes to cut to the chase. This is the dominant culture in northern Europe and North America.
•    Multi-active culture, which focuses on emotion and sociability. This culture is common in southern Europe and Latin America.
•    Reactive culture, which focuses on what the authors call “face” and harmony. Reactive culture is dominant in Asia.

According to Hamerich and Lewis, these cultures are not strictly separate: the dominant culture in Canada, for example, can be described as a mix between reactive and linear-active.

The Economist believes cultures are difficult to describe, and that the writer’s idea that the world’s cultures can be divided in three groups from which a business strategy can then be deducted might sound hilarious to some people. Moreover, the Economist has more criticism on the book as it accuses the authors of overestimating the originality of their ideas.

However, the book review isn’t all negative; according to the newspaper, Hamerich and Lewis are on the right track as their book sheds a new light on modern business strategies. The two use the life cycles of businesses to make clear that different cultures are good at different stages of development. The Japanese, for example, know their way with grown companies that have found their success formula, while the British excel in starting new companies.

According to the writers, successful companies sometimes become increasingly more ethno-centric. This is achieved by sending managers abroad for a period of time, for example, or hiring people from other countries in high positions. However, companies have the tendency to combine multiculturalism with a nationalist streak and when they are facing difficult times, they often become stereotypes.

The Economist says Western companies gradually appear to pay more attention to cultural sensitivity.

After a long time in which centralisation was the magic word, country managers, for example, are again appearing, the newspaper says. Walmart also seems to have learned their lesson; the company now examines the market they wish to enter before actually entering it. Their stores in parts of America where the Latin community has a strong presence, are called supermercados de Walmart, for example. The Economist thinks Hammerich and Lewis’ book can be very beneficial to companies on the emerging markets, especially the Chinese one. Here, multinationals are ruled by local managers who have never left their country and think keeping costs low is the answer to everything. Thanks to Hammerich and Lewis, we know better now!

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