IT StrategyRaj Sheelvant’s blog on harnessing Information Technology to create and sustain competitive advantage for the businesses

Ethnocentric Corporate Culture

In my last blog titled, Infosys’s Globalization Strategy, I talked about the need for Infosys, to create a globally diverse top management, to overcome Indian ‘ethnocentric corporate culture’. Diverse multinational, multiethnic top executive will be able to create a polycentric corporate culture and only then Infosys will be able to reap maximum benefit from its globalization strategy. It’s not just Infosys that faces this problem. In Financial Times article dated June 24 and titled ‘Siemens ‘too white, German and male’’ the Siemens CEO Peter Loscher warns about the immediate need for ‘global diversity’ of its managers or the company might risk losing its competitiveness.

“The management board are all white males. Our top 600 managers are predominantly white German males. We are too one-dimensional,” Peter Loscher said in an interview with Financial Times. His comments underline a crucial issue for many German companies, who have benefited enormously from globalization but still have nearly uniformly home-grown management and supervisory boards according to the article.

Since Siemens is a large German company with conglomerate diversification strategy, future growth is mainly dependent rising affluence in Asia and Latin America. As long as its management is ‘one dimensional’, it becomes very natural to view its global operations, sales and management with the ‘German’ colored lens. This distorted view can lead to missed growth opportunity.  I am happy to note that the CEO of Siemens sees ‘ethnocentric corporate culture’ as a main stumbling block in their globalization strategy.

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Wednesday, June 25th, 2008 at 4:01 pm and is filed under Human Resource, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.