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 / Fourth Quarter 2002 / Issue 29(originally published by Booz & Company)


Best Business Books 2002: New Europe

As always, history is one of the best guides to the future. In The Living Company: Habits for Survival in a Turbulent Business Environment (Harvard Business School Press, 1997), former Royal Dutch/Shell Group of Companies executive Arie de Geus studied organizations that have endured for centuries and concluded they “combined sensitivity to their environment with a strong sense of identity.” This allowed them to engage with and adapt to local markets. Indeed, micromarketing — appealing to distinct subcultures and addressing segments of one — is the mantra of the modern marketer, which is certainly as true in Europe as it is in the U.S. (See “Arie de Geus: The Thought Leader Interview,” s+b, Second Quarter 2001.)

De Geus’s conclusions are confirmed by recent cautionary lessons. MTV initially launched an American-dominated European channel, only to lose share in Germany to VIVA, the local offer. Euro Disneyland was denounced by the French as a “cultural Chernobyl.” Despite its popularity with consumers, McDonald’s is reviled as the ugly face of globalization. Monsanto’s field trials of genetically engineered crops are still being challenged as a threat to the English countryside.

By combining sensitivity and identity, MTV and Euro Disneyland have recovered. MTV now has an effective blend of local and global; it’s unmistakably German, Italian, and British, as well as unmistakably MTV. Euro Disneyland was relaunched in 1994 as Disneyland Paris (and is now called Disneyland Resort Paris), with wine and better food available in the now-popular park.

Hugo Young’s This Blessed Plot captures the complex interaction of forces and personalities that shaped today’s political Europe. What is more important, he argues, is that the forces for integration are actually fading. At its start, European integration was “the product of external influences … Moscow driving Western Europe together for its security, Washington encouraging this process as a precondition of the Marshall Aid that rescued Europe’s economies.” Politicians, whose motives ranged from military stability to personal achievement, carried it forward. Local considerations were as important as the grand design. Among many, but not all, there was a genuine desire for cultural and social as well as political and economic integration. However, with the end of the Cold War, “Europe, with the fiery exception of EMU [European Monetary Union], looked as though it was cooling down to an atmosphere dominated by compromise and endless, boring, relatively uninflammatory pragmatism.” The grand design of the single market is being worked out in the details of regulation and harmonization, and the E.U. budget is mired in the politics of local agriculture. In short, modern Europe is becoming a single administration, not a single nation or a single market.

Global Influences 
The cultural changes — and the changes in the cultures of business — are much greater in the U.K. than on the Continent. Great Britain has always been ambivalent about Europe. From Churchill onward, its politicians have tried to straddle three worlds: the Continent, the Commonwealth, and the Atlantic alliance. As the City of London became the world’s top international financial center, it moved sharply away from the Continent and the Commonwealth. The English language and a history of global trading were important advantages, but the revolution was triggered by deregulation, free exchange, and limits on the power of unions, as well as improving communications and transportation. Walter Wriston, the former Citicorp chairman and CEO, is quoted in City State, “Money only goes where it is wanted, and only stays where it is well treated.” And it was treated better, sooner in London than anywhere else in Europe.

The City is changing Britain. At one level, it has made London one of the most global of cities. Roberts and Kynaston write, “The foreign ownership of much of the City has given rise to comparisons with the Wimbledon championship: a tournament hosted by Britain but dominated by foreign players.” At a deeper level, the commitment to market populism and the acceptance of its implications are changing the very fabric of the nation, they argue. “There have been social, cultural and even moral ramifications: upon welfare and social harmony; upon outlooks and horizons; and upon values and ambitions.” (It is this sort of insight that makes City State my book of the year for anyone seeking to understand the new Europe.)

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