When differing cultures clash

This is the implication of a new book, Working With Americans, by Allyson Stewart-Allen and Lanie Denslow.

The authors, both Americans based in Europe, argue that there are significant cultural differences to be overcome when reconciling US and different European cultures, starting with personal space and ending with dress sense.

The book identifies numerous traits that help identify people from across the Atlantic. Americans are said to be task-focused, punctual, informal and prone to eating lunch very quickly. They like sending memos and having meetings. They dislike public disagreement. And they are liable to associate fashionable attire with cleanliness.

This last point means that US companies prefer business clothing to be neat with little ornamentation, even when dress-down applies. This is not normally a problem in Europe. However, by virtue of the other features listed, US executives may find themselves at loggerheads with the Italians, French, Spanish and Germans. These Europeans are variously late, like kissing, take hours over lunch and place a strong emphasis on formality.

Experts in resolving culture clashes in investment banks, where US culture often predominates, confirm that cultural differences can impede the smooth functioning of global teams.

Richard Lewis, author of the book When Cultures Collide, says: 'There is no such thing as an international person. National psychology and characteristics frequently interfere.' As a cross-cultural business trainer, Lewis has worked with several financial services organisations, including Deutsche Bank, Goldman Sachs, Bank of Tokyo Mitsubishi and Sumitomo Bank.

Lewis says cultural variations have been accentuated by the shift to 'virtual' teams. It is only when team members meet face to face that Americans get used to the French penchant for philosophising or Germans appreciate their US colleagues' tendency to couch business matters in humorous rather than serious terms.

That difficulties exist is confirmed by Elisabeth Marx, who specialises in intercultural issues at the search firm Norman Broadbent. Marx has worked with numerous investment banks. Last year she helped resolve a dispute between senior corporate financiers at Citigroup.

Transatlantic differences meant that Citigroup bankers based in New York saw colleagues in their London team as bureaucratic. In turn, the London bankers complained that the Americans were 'shooting from the hip'.

Marx says the dispute proves that national differences can override attempts to bind people together through a homogeneous company culture. 'A lot of businesses use a model of American culture. This doesn't always work. If Americans and British can clash in a US bank, it is easy to see the potential for problems between less similar nationalities.'

Nevertheless, most banks say the US model of meritocracy and shared values works well. For example, at the London office of the French bank BNP Paribas, staff refer to the UK chief executive, Pascale Boris, by his first name, a practice unthinkable in status-conscious France.

Jens Tons of Candover private equity, a former head of M&A for Citicorp in Germany and Austria, says, however, that continental Europeans can become confused by the lack of formality in US firms.

'In a German company, the way you address someone is indicative of your position it takes a long time before you can use a person's first name. It's completely different in American firms. You meet the chairman once and from then on you can shake him by the hand and call him Bob.'

But the potential for misunderstanding may be diminishing. Research at leading European business schools showed that students of different nationalities are quite similar.

The research by Paul Gooderham and Odd Nordhaug, both Norwegian academics, looked at attitudes to hierarchies, acceptance of risk and whether people preferred the 'masculine' values of assertiveness and competitiveness, or the 'feminine' values of relationships and the quality of life.

A similar study of IBM employees in the 1970s revealed numerous differences. Austrians, for example, proved very masculine Swedes were more feminine. But among today's European business school students, gender differences count for more than national foibles, the new study shows. Italian women now have more in common with Swedish women than with Italian men.

Graduate recruiters believe students are becoming more homogenous. Rebecca Neale, head of graduate recruitment at Morgan Stanley, says: 'The world is a much smaller place. A lot of the analysts we recruit are multicultural. They've travelled widely, been to the same places on holiday and are familiar with each other's schools.'

The same cannot be said for all age groups. Lewis recently gave a lecture to senior US and German executives on Deutsche Bank's real estate team in Frankfurt. He says it was obvious who was German and who was American. The US executives were more prepared to think big and take risks than their German counterparts.