Saturday, September 29, 2012

Plane crashes linked to a cultural dimension?

Can cultural issues cause planes to crash? Malcolm Gladwell — the wild-haired pop intellectual of “Tipping Point” fame — says yes, and dedicates a whole chapter to the subject in “Outliers: The Story of Success,” the book he  published in 2008.

In an interview with Fortune Magazine , Gladwell, a British-Canadian journalist, bestselling author and speaker, said:

‘Korean Air had more plane crashes than almost any other airline in the world for a period at the end of the 1990s. When we think of airline crashes, we think, Oh, they must have had old planes. They must have had badly trained pilots. No. What they were struggling with was a cultural legacy, that Korean culture is hierarchical. You are obliged to be deferential toward your elders and superiors in a way that would be unimaginable in the US’
‘But Boeing and Airbus design modern, complex airplanes to be flown by two equals. That works beautifully in low-power-distance cultures [like the U.S., where hierarchies aren't as relevant]. But in cultures that have high power distance, it's very difficult.'

Gladwell explores two plane crashes—one Colombian (Avianca Flight 52) and another, South Korean (Korean Air Flight 801)—and how the culture of the pilots perhaps contributed to each disaster. He focuses on how well the pilots communicated with each other and with air traffic control. Poor communication in these examples, he argues, has to do with something called a culture’s Power Distance Index (P.D.I.)—the term and concept come from psychologist Geert Hofstede—which is a measurement of “how much a particular culture values and respects authority,” as Gladwell defines it. Countries with a high P.D.I. generally value being more deferential towards authority, and thus not contradicting a superior (the U.S. has a low P.D.I. of 40). Gladwell argues that since both Colombia (67) and South Korea (61) rank towards the top of the P.D.I. list, the subordinate members of their cockpit crews were unable or unwilling to speak up as assertively as they should have about safety concerns.
What’s your take on this? The next time you take a flight, are you going to check on the nationality of the pilots before flying? Is the airline owned and managed by a hierarchical culture such as Thai, Chinese or Mexican?

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Monday, September 3, 2012

Going for gold in emerging markets

Winning the $30 trillion decathlon: Going for gold in emerging markets
McKinsey Quarterly, August 2012

By 2025, annual consumption in emerging economies will rise to $30 trillion, nearly half the global total. Yet today, the developed world’s largest companies get only 17 percent of their revenues from these new markets. Despite advantages in scale, technology, and access to capital, multinationals risk missing out on the century’s defining growth opportunity. McKinsey has identified 10 key capabilities that companies must develop to seize this opportunity.

Amongst them, ……………….. the urgent need to develop, recruit and retain local talent by portraying themselves as the ‘employer of choice’. Firms like L’Oreal, Motorola and Nestle have been successful at branding themselves as desirable employers.

They must also learn to build and manage effective relationships with key local stakeholders in government, civil society, and the local media to harness their support for market access, merger and acquisition activity and reputation enhancement.  

Not to mention the fact that understanding the cultural characteristics of the emerging market consumer will have significant implications for brand and marketing strategies.
Read the whole article

Watch this video:
McKinsey experts highlight a number of business disciplines where global companies need to raise their game in order to compete effectively, ranging from brand building, innovation, sales and distribution to the development of local leadership.

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