Term Paper on "European Business"

Term Paper 6 pages (2122 words) Sources: 1+

[EXCERPT] . . . .

reality of the concept "Euromanager." Do such people, as "Euromanagers" exist? Explain the characteristics of European managers in contrast to U.S. And Japanese managers.

The concept of the Euromanager highlights what many managerial professionals have known for a long time, namely that culture impacts managerial style. In other words, 'management' is not a singular country that exists in isolation from its national context. Rather, management staff members are affected by their country of origin, both as individuals and the national origins of their organization. "Unfortunately, the apparent similarities between countries of the European Union and North America" often mask significant cultural differences in managerial approaches. "Business people from either side may be lured into a false sense of familiarity when they cross the Atlantic Ocean."(Laroche, 2004) but taking these cultural differences into consideration can significantly increase and improve the probability of success of one's professional endeavors.

Euromanagers often have more of a respect for the history of the nation and the organization they may be dealing with, and thus of the significant social and cultural differences that still exist in the world today between management and labor. "For most North Americans, events that took place more than three to five years ago are considered irrelevant to the current situation, and background information on a project is usually limited to the latest developments. By contrast, many Europeans go back much further in time and often start the description of their company or project at the conception stage, no matter how long ago that event took place." (Laroche, 2004) This may be also true of Japanese or Asian managers -- but even then, the greater homogeneity and isolation of Japan, for example, may result in less understanding of the cultural pluralism of different organizations and different regional standards. But the eking out of the European Economic Union's standards between different countries has made all European managers supremely mindful cultural distinctions and historical peculiarities that affect all businesses today.

Also in the European Union, while English is generally accepted as the international language of business, the ability to speak English, at least not fluent English "is not ubiquitous," thus more careful communication may be necessary. (Laroche, 2004) Cultural tolerance and linguistic plurality, and respect for historical and social differences are all critical to the identity of the newly flexible Euromanager. So is respect for the environment. Both the U.S.A., and Canada, "were built on the assumption that land, energy and resources" were always available. If there was not enough available, the ethic was to simply "go somewhere else...and you will find it. In North America, energy, land and resources are considered available in virtually unlimited supply; the only commodity that is continuously in short supply is time." (Laroche, 2004)

In Japan and the Asiatic countries, poverty and necessity, or the desire for industrial growth to compete with the West has often subsumed environmental needs and demands to the pace of industrial production and research and development. but, "by contrast, space, energy and resources are all in visibly limited supply in Europe. The need to conserve them is always present in European minds," particularly those who have experienced the environmental as well as the political damage of World War II and its aftermath. (Laroche, 2004)

In the United States, the consumer, not the needs of the environment or government regulations are king. This also results in very significant business practice differences between the European Union and North American approach of management. Euromanagers must take into consideration government and environmental regulations regarding the size of cars and equipment and even the use of paper, as well as the need to conserve space. This consideration, as gas prices skyrocket all over the world, may prove to be an advantage for the new Euromanager approach.

Question

What does the Parmalat scandal suggest concerning issues of corporate ethics and corporate transparency in family-owned Italian businesses? Does this case have wider implications throughout European business? How does the Parmalat scandal compare with ethical scandals in the U.S.

The Italian Parmalat scandal caused many outside observers to throw up their hands and exclaim that only in Italy could milk become a site of corruption, family feuds, and scandals! However, the Parmalat scandal was actually worldwide in its implications, although also considerably more crude in its machinations than the Enron debacle. "It has been dubbed Europe's Enron thanks to the swiftness of its fall from grace and its use of dubious offshore vehicles, but as investigators delve deeper into Parmalat, it appears that the similarities between the mess at the bankrupt Italian dairy group and the implosion of the Texas energy trader may be fewer than first thought," wrote the Economist after the scandal broke. (the Economist Global Agenda, 2004)

The main similarity between the two scandals may be in the way that both scandals have highlighted the national problems regarding regulation of financing and accounting. The Economist noted that while "the financial gymnastics at Enron were truly sophisticated, with an army of legal and financial advisers employed to build clever but devious structures that kept the company just inside the law, in Parmalat's case, prosecutors appeared "to have found that the longstanding fraud was breathtakingly crude, which raises a whole new set of unpleasant questions about the firm's accountants, bankers and regulators, not to mention the people running it...Perhaps the most extreme example of the scam's crudity is the now-infamous letter, purportedly from Bank of America, confirming that Parmalat had close to €4 billion ($5 billion[dollars]) parked in the Cayman Islands. This turns out to have been faked, apparently with the aid of nothing more sophisticated than a photocopier and fax machine (for that authentic grainy look)." Also, even more worrying, "Italian fund managers complaining as long ago as last March about a lack of transparency in the company's accounts," but the Italian government did nothing to investigate (the Economist Global Agenda, 2004)

It now becomes clear that the Parmalat company falsified its accounts for years, without any real investigative attempts on the part of the Italian government, and €800m was embezzled from the company by its leaders. This has highlighted defective Italian regulatory concerns, of great concern to the newly united European Economic Community. "Quite apart from the fate of Parmalat, its employees and creditors, the scandal has sparked a debate about Italian financial regulation. One of the first outcomes was an emergency law bringing in American-style bankruptcy protection. This has ensured that the company will survive over the next few months. While the European Commission will take a look at this law, it is unlikely to cause competition worries because it does not involve state aid, and most observers view it as helpful to viable businesses with short-term liquidity problems." (the Economist Global Agenda, 2004)

However, as with Enron, questions are flying about what the auditors were doing while such a massive fraud was being perpetrated under their noses and about the banks that advised the company. However, although Deloitte & Touche had been the group auditor since 1999, Italian rules forced a rotation of auditors making it more difficult for auditors to keep a careful eye on corporate inner workings -- yet another rule that may be in need of supervision and correction by the government. Greater openness in business, and more scrupulous regulation of 'private' business dealings of long-standing companies (as opposed to the new wealth of Enron) were all highlighted in the scandal.

Question

Select any country in Europe. Discuss how consumer life-styles are evolving at the present time. How do the life-styles in this country relate to those in other parts of Europe? Is there such a thing as a "Euro-Consumer?"

Ah, the Euro-Consumer -- flush with cash, traveling all over the world to take advantage of the exchange rate between the Euro and other major currencies, including the dollar -- and packing his or her lunch? At least in the Scandinavian nation of Norway. New York Times columnist Bruce Bawer noted in 2005, after moving to Norway, "After I moved here six years ago, I quickly noticed that Norwegians live more frugally than Americans do. They hang on to old appliances and furniture that we would throw out. And they drive around in wrecks...one image in particular sticks in my mind. In a Norwegian language class, my teacher illustrated the meaning of the word matpakke - "packed lunch" - by reaching into her backpack and pulling out a hero sandwich wrapped in wax paper. It was her lunch. She held it up for all to see." (Bawer, 2005)

This native New Yorker was aghast to see what other Norwegians might see as a continuation or at least a reminder of the frugal legacy of the World War II austerity generation. Although, Bawer notes, "It is not simply a matter of tradition, or a preference for a basic, nonmaterialistic life. Dining out is just too pricey in a country where teachers, for example, make about $50,000 a year before taxes. Even the… READ MORE

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