ECONOMY

Inadequate corporate culture holds back Greek enterprises

The management mentality in most Greek enterprises seems to be in the phase in which European and US firms were in during the 1960s and 1970s; it is a phase dominated by analyses, programs, budgets, job descriptions, organizational structure, regulations and systems. «Essentially, it is a management model of the past which cannot meet the challenges of present and future. This mentality must change, for the minds of executives to be buttressed with the concepts, roles and leadership practices necessary for people to be managed and advance into the future,» says Dimitris Bourantas, professor of management and director of the Executive MBA program of the Athens University of Economics (AUE), who has also worked as adviser to a large number of Greek and multinational companies. The Achilles’ heel of Greek enterprises is the lack of corporate culture, according to Bourantas. «Corporate culture bestows a unique competitive advantage, one that cannot be copied by competitors. It determines the identity, decisions and behavioral patterns and its development and management is the basic role of business leadership,» he says. «It has been proved through research studies and many examples of well-known firms that corporate culture is perhaps the only factor that has enabled successful enterprises to eclipse others; witness Microsoft vs IBM, General Electric vs Westinghouse, and Wal-Mart vs K-Mart,» Bourantas adds. «I have been involved in many well-known enterprises trying to meet the new challenges by changing strategies, structures, systems and processes. Despite the changes, they would remain the same, for what had to change did not: their identity and quality. Corporate culture is the most essential element for the transformation of an organization, involving an overall view of itself, of its environment and its integration with it. As long as corporate culture, or mentality, remains the same, any changes will fail in the medium or long term; the survival or success of the enterprise will last for as long as the environment allows it.» Strategic goals «The future of Greek enterprises will depend on whether they modernize their corporate culture,» says Bourantas. He explains there is no appropriate culture for all businesses and that each one must adapt it to its strategic goals, the nature of its activities, its size, the characteristics of its environment and the technology of its sector. On the basis of research carried out at AUE and his personal experiences, Bourantas defines a number of general guidelines along which the corporate culture – «at least, of most Greek enterprises» – must evolve. One guideline draws on the thought of Fritz Roethlisberger: «Most people believe that the future is the goal and the present the means. In reality, the present is the goal and the future the means.» The interpretation of this is that «what I do today» is determined by a desired «future-vision» in which I believe and must make it happen by leading developments. It also means that short-term gains are the result of long-term success and, in particular, that managers think and act in hopes of creating a better enterprise, a better organization for a better world. The second guideline draws on the wisdom of management consultant Peter Drucker: «Enterprises must be prepared to abandon at any time all they have been doing to date.» Bourantas cites General Electric as an example of an enterprise which incorporated this view as an element of its corporate culture. «Greek enterprises are quite conservative and strongly tied to an initially successful idea which lasts as long as the environment favors it. However, remaining competitive and successful requires the continuous creation of new entrepreneurial ideas and innovations, acceptance of uncertainty, the mentality of living through continuous crises, immediate response to changes, flexibility, speed, experimentation, continuous learning and change,» he says. Bourantas further notes that most Greek enterprises emphasize their internal environments. «They are inward-looking in relation to the world market and international partnerships. They are also inward-looking in the sense that the ‘families’ of owners-shareholders put an emphasis on retaining a controlling interest and are averse to using professional executive staff to whom they would have to cede substantial authority for exercising management.» Among the general guidelines, there is a prominent place for the transition «from control of behavior to control of results and to self-discipline,» given that Greek enterprises are oriented to a control of the behavior of employees through hierarchy, regulations and procedures. «This certainly constrains the initiative, morale, trust, commitment, responsibility and mobilization of employees,» says Bourantas, arguing that this mentality must be replaced by the culture of self-discipline and that «we must make the transition from the control and rewarding of behavior to the measurement and rewarding of results.» He also notes that Greek enterprises are prone either to not comparing themselves with others at all or comparing their practices with «national models.» However, in a globalized environment, «continuous success belongs only to those that continuously think how they can be the best globally.» Finally, Greek enterprises are known for their formal or informal concentration of authority at the top and their vertical structures. «These create inflexibility, lack of speedy responses, lack of communication between departments and non-utilization of the potential of their staff and workers. Such structures must be replaced by civilized and frugal processes,» concludes Bourantas. The foreign minister’s edge over his rivals has forced them into an informal front aimed at reigning him in. Culture Minister Evangelos Venizelos, PASOK secretary Costas Laliotis, Public Works Minister Vasso Papandreou, Development Minister Akis Tsochadzopoulos and Defense Minister Yiannos Papantoniou never miss a chance of hitting out at their competitor. George Papandreou will be facing trench warfare. Senior PASOK officials are also forming alliances for the post-Simitis era: One worth watching is Tsochadzopoulos and the premier’s acolyte Nikos Christodoulakis. Much depends on the party’s organizational meeting in June, which will have to decide whether the PASOK president will still be elected by the congress or by all party members, which Papandreou rightly believes would favor him.