Help for Norwegian Businesses in Foreign Countries

Cultural differences, misunderstood leadership and different strategic interests create problems for Norwegian businesses in foreign countries. Currently, a new cooperation between the NHH-group and a few select Norwegian companies, shall give new knowledge to companies starting up abroad.

11.10.2007 - Kristin Risvand Mo

Director of International Relations at AFF, Atle Jordahl, shall help companies to succeed abroad.

"To succeed in foreign countries, a flow of knowledge between a parent company and a daughter company is the key factor," said Director of International Relations at AFF, Atle Jordahl, and Professor Paul Gooderham of Norges Handelshøyskole (NHH).
"But we know that geographical and cultural distance can create problems and that dissimilar strategic interests can plant the seed from which conflict will grow."

Norwegian commerce has experienced a significant internationalization over the past few years. Today, approximately 60 percent of the workforce in Norway's 30 largest companies work abroad.

"Mergers that have a clear strategy to build culture and strong relationships rarely occur. However, we have noticed an increased demand for leadership tools that can be used internationally," said Jordahl.

Underestimating the Organization
When mergers and acquisitions in foreign countries fail, research shows that the cause is often that the organizational and leadership challenges are underestimated. In response, the NHH-group (NHH, AFF and SNF) has taken the initiative to create a massive research project to gain new knowledge on how one develops human resources in Norwegian and International companies.

"We shall look for practical methods and techniques which can help companies to succeed in foreign countries," said Jordahl.

"These could be new leadership evaluations tools, varying payment methods and alternative meeting places and forms of networking."

The project combines research with practical knowledge.

AFF has a long history of leadership development in Norwegian companies, and commercial partners, such as Statoil, Yara, Veidekke and Rieber contribute with their practical experience.

The total cost is approximately 12.2 million Norwegian kroner, and Norway's Research Council is contributing 5.6 million Norwegian kroner.

Professor Paul Gooderham shall research on cultural differences and leadership challenges.

Must Create Trust
The most important factor needed to ensure the transfer of knowledge in organizations is social capital.

"Social capital is about trust, a common understanding and strong networks throughout the organization. We know that social capital is important, but we know less about how we can adapt to develop social capital in an international context," said Gooderham.

Rieber and Søn has a significant part of their business abroad.

"As a competent company, it is important for us to have knowledge about which methods will ensure the best possible transfer of knowledge. We operate in national cultures where people think differently," said CEO Morten Vike.

"We have both networking groups and common evaluation systems in Rieber. Through this research cooperation we have an opportunity to document which methods give the best results. In the end, this is about the company reaching its goals."

Innovative
"This is the first project in Norway that gives answers on how to create social capital. It is only when we know something about how we develop trust, equal goals and meeting places that we actually can help Norwegian companies," said Gooderham.


--------------------
Facts:

The research group's work consists of two projects: Tools and Techniques for Global Leadership Development in Norwegian MNE's has received funding from Norway's Research Council program Brukerstyrt innovasjonsarena (user-driven research based innovation). It will continue for three years and has a total cost of 8.8 million Norwegian kroner with partial funding from AFF and four business partners. In addition, there is Global Leadership Characteristics, Competencies and Developmental Strategies, funded by Statoil with a cost of 3.4 million Norwegian kroner.


Translated by Nancy Cavanaugh