Club of Amsterdam Journal, Febuary 2006, Issue 62

Release the power of cultural diversity in international business

Finn Drouet Majlergaard, founder and managing partner, Gugin International Business Development

Release the power of cultural diversity in international business
A special Summit for the Future on Risk Report

How come that companies, who have been doing business internationally for decades suddenly fail? And how come that companies who wouldn’t have had a chance 25 years ago suddenly become a global success?

This paper deals with the links between cultural awareness, corporate strategy and performance. It is based on my 15 years of experience in international business management, academic research in this field and experiences from our company Gugin, who helps corporations in Europe, US and Asia improving their international businesses.

But lets look at why it has become so important to take different cultures into consideration.

Globalisation

Cultural awareness has become important due to increased globalisation. The global political structures have changed. We do have a United Nations that almost all countries respect and honour and the post war division of the world has changed after the collapse of the Soviet Union. New countries have been born and we have a more diverged political picture. We create political/economical relations in new ways e.g. the ASEM (Asia-Europe Meeting) process, which is a direct result of these changes. By 1992 East Asia accounted for 24 percent of global production. By comparison, the EU accounted for 35 percent and North America for 28% of global production. According to World Bank figures from 1991 – 1993 growth of real Gross Domestic Product (GDP) in East Asia averaged 8.7 percent. On the basis of growth rates recorded during 1978 – 1991, many economists including those from the World Bank projected that East Asia’s GDP would overtake that of North America and EU in 2010.

Economically we are emerging as well. Europe is turning towards larger entities with common currency, one Central Bank and merges and close collaborations between stock exchanges. ASEAN is another good example however different. But since its foundation in 1967 a lot has changed. Evolving relations between the EEC/EU and ASEAN have lead to a lot of initiatives, such as joint ventures in the exploration of AEAN resources, the possibility of EEC participation in ASEAN manufacturing activities and the mobilisation of capital for financing ASEAN projects.

Technologically the Internet has made it possible for companies to market themselves virtually everywhere and enabled the companies to establish inexpensive global infrastructures. And when you need to go abroad it is less expensive than ever before, so we travel much more than 20 years ago.

So from both a political, economical and technological point of view we are encouraged to discover cultures we have only little knowledge about. For the adventurer it is good news but for international corporations it might as well be bad news.

We have been working with two types of companies: Those who want to expand their international business in either Asia or Europe and those who have tried and faced a lot of challenges they didn’t predict or could even imagine. We like the first group very much, because we can help them become successful before they make any serious mistakes, however it is more interesting to look closer at the last group – those who tried and didn’t have their expectations met.

You can read the full report: click here

Summit for the Future 2006 on Risk May 3-5 Interdisciplinary Stream: Cross-Cultural Competence The cohabitation of peoples through commerce and collaboration in a global marketplace exposes us to the cultural component of risk as well as the relativity of need. One person’s desire for sustainability is opposed by another one’s desire for material growth. The management of risk across cultural boundaries needs to link different views of the future, of the good gamble, the just reward, the allocation of responsibility, the distribution of hazard and equitable access to opportunity. How does this structure our partnerships and alliances? What competencies are required to make this work? Finn Drouet Majlergaard, Founder & Managing Partner, Gugin Cross-cultural competence – a key success factor in a globalised world In a world of rapid change, the success factors for companies will inevitably change as well. The “American way” of thinking is no longer universal. Strong Asian economies require holistic thinking and new ways of organising our corporations. As goods and services become commoditised local norms and values become more important. Being close to local cultures with diversified organisational structures and systems might be the key to success in the future – but are we ready to change? Tom Lambert, Founder, Global Chairman, International Centre for Consulting Excellence [ ICfCE] Advisory Board, Club of Amsterdam Never the Twain? Many countries have traditionally sent some of their best and brightest young people to the USA and Europe to complete their management education. Shackled by curricula largely designed to meet local needs these graduates have returned with models, tools and techniques that can be close to impossible to apply within the culture. The ICfCE is operating Think Tanks designed to combine the best of Eastern and Western understanding in a way that is sensitive to local cultures and needs. Understanding of a culture demands knowledge of a country’s history, religion, philosophy, belief systems and present needs that can only come from being a national of that country – or does it?

Club of Amsterdam blog

Club of Amsterdam blog

January 04: How now wit! Whither wander you?
January 04: Review: The Future of Software Architecture
January 02: the future of Futurist Tools
December 02: Summit for the Future 2006 on Risk

News about the future of Cross-Cultural Competence

Less than 1% of the world’s languages are used on the Internet  Initiative B@bel uses Information and Communication Technologies (ICTs) to support linguistic and cultural diversity, and to protect and preserve languages in danger of disappearance. It promotes multilingualism on the Internet in order to make access to its contents and services more equitable for users worldwide. Today, more than 90% of content on the Internet exists in only 12 languages, so many users of the 6 000 languages in the world are overlooked by this important communication medium. The “Initiative” puts emphasis on the need of completing all the steps to ensure the presence of a language in the digital world. Synergy and cooperation with other institutions and initiatives is capital to achieve longer term results regarding multilingualism in the cyberspace.

Cultural Intelligence

In an increasingly diverse business environment, managers must be able to navigate the thicket of habits, gestures, and assumptions that define their coworkers’ differences. Foreign cultures are everywhere – in other countries, certainly, but also in corporations, vocations, and regions. Interacting with individuals within them demands perceptiveness and adaptability. And the people who have those traits in abundance aren’t necessarily the ones who enjoy the greatest social success in familiar settings. Cultural intelligence, or CQ, is the ability to make sense of unfamiliar contexts and then blend in. It has three components – cognitive, physical, and emotional/motivational. Although it shares many of the properties of emotional intelligence, CQ goes one step further by equipping a person to distinguish behaviors produced by the culture in question from behaviors that are peculiar to particular individuals and those found in all human beings. In their surveys of 2,000 managers in 60 countries, the authors found that most managers are not equally strong in all three of these areas of CQ. The authors have devised tools that show how to identify one’s strengths and developed training techniques to help people overcome weaknesses. They conclude that anyone reasonably alert, motivated, and poised can attain an acceptable level of CQ

News about the future

Sweden plans to be independent of oil in 2020
by Mona Sahlin, Minister for Sustainable Development, Sweden

Along with high oil prices and climate change, an increasing number of countries are recognising the problem with fossil fuels. Sweden has the chance to be an international model and a successful actor in export markets for alternative solutions. But this requires conscious investments – not a reactionary policy that obstructs the transition to alternative energy sources and investments in the environment of the future. Breaking dependence on oil brings many opportunities for strengthened competitiveness, technological development and progress. The aim is to break dependence on fossil fuels by 2020. By then no home will need oil for heating. By then no motorist will be obliged to use petrol as the sole option available. By then there will always be better alternatives to oil.

Imagining the Google Future

by Business 2.0

Interviews with dozens of experts help us plot four scenarios illustrating where Google’s geniuses may be leading the company – and, perhaps, all of us.Scenario 1 (Circa 2025): Google Is The Media
Google TV, Google Mobile and the rise of e-paper create the perfect storm.

Scenario 2 (Circa 2015): Google is the Internet
Free wi-fi, a faster version of the Web, the Gbrowser, and the cube transform the technology landscape and our language.

Scenario 3 (Circa 2020): Google is Dead
The once-mighty search engine falls prey to privacy intrusion, optimizers and Microsoft.

Scenario 4 (Circa 2105): Google is God
Human consciousness gets stored, upgraded and networked

Next Event: Wednesday, March 1st, 16:30-19:15

the future of Electronic Identity
its impact and benefits for the individual and business

Wednesday, March 1st, 2006
Registration: 16:00-16:30, Conference: 16:30-19:15
Where: Syntens, De Ruyterkade 5, 1013 AA Amsterdam [Building of the Chamber of Commerce]

WithJan Willem Broekema, Programme Manager, Open Source Software programme OSOSS, National Co-ordinator Open Standards:ID by Law – Is the European Directive valid in 10 years?

Dennis van Ham, Consultant, Information Risk Management, KPMG:
Electronic identity: are you (proven) in control?
Marcel van Beek, Program Manager, Passenger Process, Amsterdam Airport Schiphol:
The new self service airport and the role of electronic identity

and our Moderator Homme Heida, Promedia, Member of the Club of Amsterdam Round Table

Millennium Ecosystem Assessment

Millennium Ecosystem Assessment

The Millennium Ecosystem Assessment (MA) is an international work program designed to meet the needs of decision makers and the public for scientific information concerning the consequences of ecosystem change for human well-being and options for responding to those changes. The MA was launched by U.N. Secretary- General Kofi Annan in June 2001 and was completed in March 2005. It will help to meet assessment needs of the Convention on Biological Diversity, Convention to Combat Desertification, the Ramsar Convention on Wetlands, and the Convention on Migratory Species, as well as needs of other users in the private sector and civil society. If the MA proves to be useful to its stakeholders, it is anticipated that such integrated assessments will be repeated every 5– 10 years and that ecosystem assessments will be regularly conducted at national or sub-national scales.

The four “foundation” reports of the Millennium Ecosystem Assessment were released on January 19, 2006. These 500-800 page reports are the products of the four MA working groups and examine Current State and Trends; Scenarios; Policy Responses; and Multi-Scale Assessments. A summary report, containing the Summaries for Decision-makers of the four technical assessment volumes, was also released. The reports contain the detailed scientific assessment (including literature citations) on which the MA synthesis reports are based.

Key Messages:

• Everyone in the world depends on nature and ecosystem services to provide the conditions for a decent, healthy, and secure life.
• Humans have made unprecedented changes to ecosystems in recent decades to meet growing demands for food, fresh water, fiber, and energy.
• These changes have helped to improve the lives of billions, but at the same time they weakened nature’s ability to deliver other key services such as purification of air and water, protection from disasters, and the provision of medicines.
• Among the outstanding problems identified by this assessment are the dire state of many of the world’s fish stocks; the intense vulnerability of the 2 billion people living in dry regions to the loss of ecosystem services, including water supply; and the growing threat to ecosystems from climate change and nutrient pollution.
• Human activities have taken the planet to the edge of a massive wave of species extinctions, further threatening our own well-being.
• The loss of services derived from ecosystems is a significant barrier to the achievement of the Millennium Development Goals to reduce poverty, hunger, and disease.
• The pressures on ecosystems will increase globally in coming decades unless human attitudes and actions change.
• Measures to conserve natural resources are more likely to succeed if local communities are given ownership of them, share the benefits, and are involved in decisions.
• Even today’s technology and knowledge can reduce considerably the human impact on ecosystems. They are unlikely to be deployed fully, however, until ecosystem services cease to be perceived as free and limitless, and their full value is taken into account.
• Better protection of natural assets will require coordinated efforts across all sections of governments, businesses, and international institutions. The productivity of ecosystems depends on policy choices on investment, trade, subsidy, taxation, and regulation, among others.

[…] Options for the Future

Possible Scenarios
The Millennium Ecosystem Assessment devised four scenarios to investigate the likely direction of change to natural systems and human well-being over the next 50 years – depending on the priorities adopted by human societies.

They were not intended as predictions but rather as “plausible futures” reflecting different approaches to international cooperation and to the care of natural systems.

Certain trends relevant to the pressures on natural systems emerge from all scenarios. For example, the global population is projected to rise to 8–10 billion by the middle of the century, with the biggest growth concentrated among poor urban populations of the Middle East, sub-Saharan Africa, and South Asia.

The conversion of land to agricultural uses continues to be the main factor influencing change in biological diversity, but in some regions other factors become increasingly important in coming decades – the buildup of nitrogen in rivers and coastal waters, for example, rises sharply in developing countries, especially in Asia, with serious consequences for human health, fisheries, and habitats such as coral reefs.

Under the four scenarios, climate change also has a bigger influence on the services provided by natural systems – heightening the risk of species extinctions, for example, increasing the incidence of both drought and floods, and making hydroelectric power less reliable.

The scenarios diverge when it comes to the overall state of natural services, with the most serious declines occurring in “futures” where conservation takes low priority and where governments tend to favor their own national or regional security over global cooperation. In the scenarios where natural assets see improvements across entire categories, however, the world has taken action on a scale well beyond anything under way at present – for instance, investments in cleaner technology, proactive conservation policies, education, and measures to reduce the gap between rich and poor.

Seeking a better way
An important part of this assessment is to report on possible solutions to the stresses building up in the planet’s natural infrastructure. Rather than a vain attempt to find a single panacea for all problems, this has been a methodical look at the kind of actions that have been found to work and at some of the underlying barriers that need to be removed before those stresses can be reduced.

Three important messages emerge from this exploration. First, protection of nature’s services is unlikely to be a priority so long as they are perceived to be free and limitless by those using them – effective policies will be those that require natural costs to be taken into account for all economic decisions.

Second, local communities are far more likely to act in ways that conserve natural resources if they have real influence in the decisions on how resources are used – and if they end up with a fairer share of the benefits.

Finally, natural assets will receive far better protection if their importance is recognized in the central decision-making of governments and businesses, rather than leaving policies associated with ecosystems to relatively weak environment departments.

[…]

Summit for the Future blog

Summit for the Future blog
http://summitforthefuture.blogspot.com

February 07: Release the power of cultural diversity in international business
January 13: Discovering the 21st Century Leadership
January 05: Asian Leadership in Trade and Associated Risks
December 04: Strategic Leadership: Achieving Your Preferred Future
December 04: Finding Spiritual Courage
December 04: Thinkers 50
December 04: Risk: The Human Adventure
December 04: Summit for the Future 2006 on Risk

Recommended Book

Microsoft’s Vision for an Identity Metasystem

 Microsoft’s Vision for an Identity Metasystem
by Microsoft

The Identity Metasystem is an interoperable architecture for digital identity that assumes people will have several digital identities based on multiple underlying technologies, implementations, and providers. Using this approach, customers will be able to continue to use their existing identity infrastructure investments, choose the identity technology that works best for them, and more easily migrate from old technologies to new technologies without sacrificing interoperability with others. This paper introduces the principles behind this approach in “The Laws of Identity”; it presents an open and interoperable architecture for building the metasystem, and it describes Microsoft’s plans to participate in the identity metasystem.
[…]

Benefits of the Identity Metasystem

Microsoft recognizes that the identity metasystem will only gain widespread adoption if participants filling all roles in the metasystem stand to benefit from their participation. Fortunately, this is the case. Key benefits of the identity metasystem include:

• Greater user control and flexibility. Users decide how much information they disclose, to whom, and under what circumstances, thereby enabling them to better protect their privacy. Strong two-way authentication of identity providers and relying parties helps address phishing and other fraud. Identities and accompanying personal information can be securely stored and managed in a variety of ways, including via the online identity provider service of the user’s choice, or on the user’s PC, or in other devices such as secure USB keychain storage devices, smartcards, PDAs, and mobile phones
• Safer, more comprehensible user experience. The identity metasystem enables a predictable, uniform user experience across multiple identity systems. It extends to and integrates the human user, thereby helping to secure the machine-human channel.
• Increases the reach of existing identity systems. The identity metasystem does not compete with or replace the identity systems it connects, but rather preserves and builds upon customers’ investments in their existing identity solutions. It affords the opportunity to use existing identities, such as corporate-issued identities and identities issued by online businesses, in new contexts where they could not have been previously employed.
• Fosters identity system innovation. The identity metasystem should make it easier for newly developed identity technologies and systems to quickly gain widespread use and adoption. Claims transformers can allow new systems to participate even when most participants don’t understand their native claims formats and protocols.
• Enables adaptation in the face of attacks. New technologies are needed to stay ahead of criminals who attack existing identity technologies. The metasystem enables new identity technologies to be quickly deployed and utilized within it, as they are needed.
• Creates new market opportunities. The identity metasystem enables interoperable, independent implementations of all metasystem components, meaning that the market opportunities are only limited by innovators’ imaginations. Some parties will choose to go into the identity provider business. Others will provide certification services for identities. Some will implement server software. Others will implement client software. Device manufacturers and mobile telephone players can host identities on their platforms. New business opportunities are created for identity brokers, where trusted intermediaries transform claims from one system to another. New business opportunities abound.

A benefit we will all share as the identity metasystem becomes widely deployed is a safer, more trustworthy Internet. The metasystem will supply the widely adopted identity solution that the Net so desperately needs.

Participants in the identity metasystem can include anyone or anything that uses, participates in, or relies upon identities in any way, including, but not limited to existing identity systems, corporate identities, government identities, Liberty federations, operating systems, mobile devices, online services, and smartcards. Again, the possibilities are only limited by innovators’ imaginations.

[…]

Microsoft’s Implementation Plans

Microsoft plans to build software filling all roles within the identity metasystem (while encouraging others to also build software filling these roles, including on non-Windows platforms). Microsoft is implementing the following software components for participation in the metasystem:

• “InfoCard” identity selector: “InfoCard” is the code name for a WinFX component that provides the consistent user experience required by the identity metasystem. It is specifically hardened against tampering and spoofing to protect the end user’s digital identities and maintain end-user control. A visual “Information Card” in the client user interface represents each digital identity managed by “InfoCard”. The user selects identities represented by “InfoCards” to authenticate to participating services.
• “InfoCard” simple self-issued identity provider: “InfoCard” also includes a simple identity provider that enables individual PC users to create and utilize self-issued identities, enabling password-free strong authentication to relying parties. A self-issued identity is one where the user vouches for the information they are providing, much like users do today when registering with a Web site. We are implementing the simple self-issued identity provider to help bootstrap the identity metasystem; we believe self-issued identities will continue to be accepted for certain classes of services. Identities hosted in the simple self-issued identity provider will not include or store sensitive personal information, such as Social Security numbers (or other national ID numbers if these are developed) or credit card numbers. Self-issued identities are not intended to provide the full range of features that a managed identity provider can offer – the market is wide open for companies to provide managed identity solutions to consumers.
• Active Directory identity provider: This is a managed identity provider integrated with Active Directory. It includes a full set of policy controls to manage the use of Active Directory identities in the identity metasystem. Active Directory Federation Services, a new Active Directory feature shipping in Windows Server 2003 R2, is the first step to integrating identities in Active Directory with the identity metasystem.
• “Indigo”: The code-named “Indigo” Web services run time provides developers a way to rapidly build and deploy distributed applications, including relying party services in the identity metasystem.

The identity metasystem preserves and builds upon customers’ investments in their existing identity solutions, including Active Directory and other identity solutions. Microsoft’s implementation will be fully interoperable via WS-* protocols with other identity selector implementations, with other relying party implementations, and with other identity provider implementations.

Non-Microsoft applications will have the same ability to use “InfoCard” to manage their identities as Microsoft applications will. Non-Windows operating systems will be able to be full participants of the identity metasystem we are building in cooperation with the industry. Others can build an entire end-to-end implementation of the metasystem without any Microsoft software, payments to Microsoft, or usage of any Microsoft online identity service.

[…]

Innovation Trip

Innovation Trip

Innovation Trip in U.S.A. is a program arranged for GLOBAL leaders to help them spark innovation and creativity in their organizations, revolutionizing work culture and reducing attrition. Tour includes workshops and places to explore the US innovation and research industry inside out. Innovation Trip will help leaders effectively execute and tap high-end work.

Club of Amsterdam Agenda

NEW: Our Season Events are Wednesdays 16:30!
16:00-16:30 Registration 16:30-17:45 Part I: Presentations 17:45-18:15 Break: Drinks and evtl. live music 18:15-19:15 Part II: Discussion
Club of Amsterdam Season Events 2005/2006
.Mar 1	the future of Electronic Identity
.Mar 29	the future of Governance
.Apr 26	the future of Drugs & Pharma
.May 31	the future of Reputation Management
.Jun 28	the future of Journalism / Ethics in Journalism

Club of Amsterdam Open Business Club

Club of Amsterdam Open Business Club Are you interested in networking, sharing visions, ideas about your future, the future of your industry, society, discussing issues, which are relevant for yourself as well as for the ‘global’ community? The future starts now – join our online platform …