Cultural Values and the CEO: Alluring Companions?

Abstract

One hundred fifty years ago, William Procter and James Gamble delivered their handmade candles and soap by wheelbarrow. Their emphasis even then on innovative marketing, competitive strategies, and uncompromised honesty are hallmarks of the multinational Procter & Gamble Company today. IBM's Tom Watson, Jr. believed in constructive rebellion, claiming, "You can make a wild duck tame, but you can't make a tame duck wild again." Today the wild duck is a symbol of IBM's unwavering respect for creative nonconformists that is, as long as they fly in the same direction. A founder of more recent vintage, Apple Computer's Steven Jobs is the quintessential rugged individualist whose fresh approach, willingness to take risks, and originality are evident in the company's name, as well as every product it makes. These descriptions illustrate how a founder's values permeate a corporation and affect its direction. When leadership changes, the new leader often carries on traditions while bringing along a new set of values that are also gradually integrated into the company's culture. An awareness of different companies' values can facilitate a firm in its business transactions and help stave off conflict. The abundance of such corporate raiders as T. Boone Pickens and Carl Icahn, and the impact raiders have had on Phillips Oil, TWA, CBS, Gulf Oil, and other companies' human resources, are clear evidence of a clash of values. The current emphasis on corporate culture both in academic journals and the popular press underscores the need for practicing managers to appreciate its influence. Yet little attention has been paid to the influence of national culture on corporations outside the United States. Viewing the world as "global village" requires that managers become more knowledgeable about international business yet many managers simply conduct international business as though they were dealing with fellow Americans. Culture shock, not to mention lost business, has often been the result. This article presents a framework for anticipating societal values that ultimately impact the behaviors of chief executive officers. Analyses of CEOs from five different cultures will illustrate how the framework can be used by managers involved in international business. Although biographies, stories, and legends about company founders are abundant, surprisingly little consideration has been given to the importance of the current CEO to the firm. What has been written usually focuses on CEO succession or demographic statistics. Clearly, other variables including personality characteristics, organizational design, environment, and business strategy influence CEO behavior, but it is our contention that value systems necessarily come first and may actually determine these other factors and govern their impact on the CEO. The potential for cultural differences among organizations is well known. The dominant values of a particular national culture are reflected in the constraints imposed on an organization by its environment (e.g., government, customers, and suppliers). In addition, the founders of an organization impose certain learned, cultural values on the organization from its beginning. Finally, organization members other than the founders behave in a manner consistent with the values of the "dominant elites" (the founders or current CEO). Culture and value systems are closely related. Individuals learn such values as respect for privacy or freedom of speech from their society. Although individuals differ in how they translate these values into action, in general we can begin to understand the behavior of CEOs by understanding the values their cultures hold dear.