The Challenges of Cross Cultural Business between Italy and America

BY FRANCA FOLIGATTI

Understanding the Cultural ID

• In cross cultural business it’s key to have an understanding of the two country’s identities.

• The identity of the country defines its assets and its leadership.

• Differences have value, but create challenges.

Italian and American Cultures

• America and Italy are a case of “opposites attracting” each other.

• America thinks globally. Italy tends to be more focused on thinking locally.

• America has been about changing through innovation, Italy is about conserving through innovation.

• Like Fred and Ginger, they have so much passion for each other… and much to learn from each other.

The American Culture

• Because it is a nation that was built by immigrants, America is more open than most countries to other cultures and products.

• The country has a can-do attitude, based on a culture (almost a religion) of strategic thinking and planning.

• It has been more a culture of innovation, efficiency, standardization and consumption rather than tradition. No Italian would have invented McDonald’s.

Leadership of America

• “Yes, I can” attitude. Their economic, social and political system is based on individual initiative and self-realization.

• “Yes, we can” - communities, whether corporate or social, come out of this impulse, leading to strategic thinking and planning.

• Marketing is the most dominant force in human culture according to Geoffrey Miller. It’s not an accident that North America invented the methodology of marketing, starting in the 1920’s.

Marketing a Key Component of American Culture

• Why are Americans so marketing oriented?

• Through marketing, potential clients discovered products and services that appeal to their desires and resolve their problems.

• The delivery will arrive at the right time in the right place with the right price.

• With the right message the product will be anticipated and understood.

• The client’s first order is an investment. An effective marketing strategy will generate reorders and build business.

Branding is a fundamental part of Marketing• Branding is an old english word that meant burning

stick = branding iron.

• It was used to mark animals, criminals and slaves with a unique mark. Eventually, it was used to mark wine and other commodities.

• Branding in modern times is about presentation. It makes what you offer easily identifiable, recognizable, associated with a group and allows a sense of ownership.

• Branding in today’s market prepares the ground for good communication, performance and sales.

The Role of the Media in America

The Media plays a very important role in marketing; it conveys the necessary information about what the next product is and the experience that you want to have.

Social Media and Traditional Media

How much do Americans know about Italy?

• Culture and History: Tuscany, Venice, Vito Corleone, Mussolini, Berlusconi, Socialist and Welfare, Political Instability.

• Cinema: Fellini- La Dolce Vita. Movie stars of the 50s, like Sophia Lauren and Gina Lollobrigida.

• Great monuments and artists: The Colosseum, Vatican, Michelangelo, Da Vinci.

• Italian food: Pasta, Espresso, Super Tuscans Wine, Parmiggiano, Bruschetta.

• Fashion: Armani, Versace, Zegna and others.

• Sport Cars: Ferrari, Maserati.

How America looks at Italy

• America looks to Italy for quality and lifestyle.

• Americans long to know how to obtain the effortless style that Italians seem to receive as a birthright.

Why America loves Italy

Italian lifestyle and leadership is based on:

• Persistence and richness of local traditions.

• The feeling that history is all around you.

• Artisanal mentality, pride and passion for making top-quality products.

• Hand Made “Fatto a mano”.

• Italians know how to enjoy life with “L’arte di vivere”.

 "Made in Italy" is a Brand

• ‘Made in Italy’ – is a well established brand in North America.

• In the investment goods sector, it means precision, functional and great quality of design.

• In the consumer goods sector it means artisan quality and design.

• Today’s challenge: “Made in Italy” has a blurred image. All that is ‘made in Italy’ is no longer entirely manufactured in Italy. But it still has a strong brand perception.

Media Professionals Perspectives about Italian Lifestyle & Leadership

Geoffrey P. Sauders, President GSPR Public Relations, said:

“Care, respect, and appreciation for natural ingredients, whether cashmere, cotton, or cheese, is what sets the sense of Italian style apart.  Living in an environment  with over 2,000 years of history, art and culture, the underlying pride in being a part of this legacy and culture, and the passion to preserve it, is paramount to the Italians and that reflects in their personal style. But Italy is not just a living museum, it is a center of vibrant creativity.”

What is “Made In Italy” in the minds of American Luxury Connoisseurs

Laurie Kahle and William Kissel, contributing editors of The Robb Report:

“Italian style is unique and strongly identifiable, from cuisine to fashion to art. Italian codes are always recognizable and are interwoven throughout the culture”.

Gary Walther, a veteran luxury lifestyle magazine editor:

"Think about the phrase 'made in.' Made in America is almost an anachronism. Made in China means 'low-cost.' Made in India often implies 'outsourced.' Made in England doesn't have the cachet it once did. But 'made in Italy' still carries the connotation of craft, care, and quality. That's why Italian luxury products command a premium."

The Hallmarks of Italian Style

• Quality—both in materials and execution, whether it’s fresh ingredients or fine cashmere knitted on a 36-gauge machine into a supple sweater.

• Quality is directly related to attention to detail.

• Craftsmanship—which is highly valued in Italy. Italians are great critics, with an innate ability to evaluate the finer points that determine quality, whether they are reviewing a meal or a garment.

• Design and Style is another Italian strong suit, The Italian aesthetic sensibility, and sense of proportion and beauty is very finely tuned. It’s Elegant.

The Gap and the Opportunity

For the international business manager, understanding intellectually the method of cross cultural business is the easy part. The hard part comes next – getting Italian and American Business people to understand one another.

American Italian Cross Cultural Challenges

• The Italian business person is an artisan and creator – he knows how to do things, to create, with art and imagination.

• The American business person – is primarily a marketer. He knows how to take a product and bring it to the public.

The Challenges

• The challenges of doing business with Italians are based on history and natural conditions that shapes fundamentals differences

• Religion: Italy is Catholic, America is mainly Protestant

• Natural conditions that shape economic systems: Scarcity of resource for Italy, abundance for America.

The American Perception of Italian Business

• Great quality is an Italian trademark

• Quality often takes precedence over efficiency

• Italian companies are mostly family run and have a strict hierarchy

• Italian companies compensate for the country’s lack of venture capital by turning to family members for financing

• Italian companies are not quick decision makers

What Expectations Need To Be Fulfilled In Order To Be Successful

• Price has to reflect quality, values and romance.

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• On-time delivery. Americans expect prompt service.

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• Have a story to tell. Be ready to convey your product’s identity.

Common Mistakes Italian Companies Make

• They don’t take the time to know US culture.

• They try to export without a comprehensive marketing plan and strategy.

• They don’t establish the infrastructure to fulfill orders and customer service.

• They neglect branding, and want to market before laying the groundwork through communication.

Is Italy too Italian?

• David Segal writer for the The New York Times in 2010 reports Italy's cultural characteristics in this way:

• Italy's ‘highly idiosyncratic’ business culture is largely defined… by deep-seated mistrust-not just of the government, but of anyone who isn't part of the immediate family.

• It is also characterized by a widespread aversion to risk and to growth that to American eyes looks almost quaint.

http://www.nytimes.com/2010/08/01/business/global/01italy.html?pagewanted=all

Perception of Italy’s Economy and Politics

Protectionist guilds and something approaching tenure policies, even for non-union workers, have led to a "sclerotic" job market, while "roughly one-quarter of Italy's G.D.P. is off the books,” a result perhaps of little habituation to national taxation and a low sense of national identity.

Family is at the center of the Italian way of life

Then comes the family issue...

Most Italians live less than a mile or two from their parents and stay there, often for financial benefits like cash and in-kind services like day care. It's an insularity that runs all the way up to the corporate suites.

This can explain the suspicion of Italians when it comes to extra-familial institutions, why many here care more about protecting what they have than enhancing their wealth.

Italian Entrepreneurship and the Global Game

The first goal of many entrepreneurs in Italy isn't growth, so much as keeping the business in the family.

For a company to really expand, it needs capital, but that means giving up some control.

Companies in Italy remain stubbornly small - all of which means Italy is a haven for artisans but is in a bad position to play the global domination game.

In Conclusion

• To overcome the challenges in cross cultural business is to meet on common ground.

• Create participation and strategy where there is room to lead and acknowledge both sides.

• It takes the creation of a team from both countries. It takes two to create a bridge to unite their two different mind sets.

Remember: America leaves a mark with Branding  

AMERICANS have a natural ability for Branding

• From concept to business plan, the work of getting your story out into the world has to be done in a way that is:

• Consistent

• Memorable

• Articulate

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• That is where branding comes into play, and how you can bring your brand to life, whether the brand is a product, a service or your profession.

Remember: Italy leaves a mark with style

ITALY has Style

• The word style is derived from the Latin word ‘stilum’.

• Originally the word indicated a bone with a point that one could use to write on wax or wood, much like one would carve initials into a soft surface.

• Having a style means knowing how to express oneself in way that leaves a mark; it’s recognizable and memorable.

Sense of Style and Elegance are Uniquely Italian

Style comes from elegance — literally:

The word elegance is derived from the Latin word ‘eligere’: to choose; to know how to make a choice.

So having a style means knowing how to express oneself in a way that leaves a mark making the most appropriate choices.

Style & Fashion• Style requires an understanding of elegance, that is the result of

the ability to choose, to arrange elements and ingredients to deliver a creation.

• Style is also a language that tells a story through design, food and fashion, and covers every aspect of a person’s life.

• John Fairchild said: "Style is an expression of individualism mixed with charisma. Fashion is something that comes after style”.

• Your creation will leave an elegant mark if you deliver a solution with grace, beauty and harmony. Whoever has style and visibility in the media sets the trends of fashion.

The ‘Italian Way’ is very much in Fashion

• In the US, especially in New York, the perception of Italians is very fashionable.

• Be clear about fashion, as Coco Chanel said: "Fashion is not something that exists in dresses only. Fashion is in the sky, in the street, fashion has to do with ideas, the way we live, what is happening."

Style & Marketing  

• Italian designers (Missoni, Versace, Armani, etc.) in Milan teamed up with Coke to design bottles for an Auction to support the earthquake stricken region of Abruzzo.

• Challenges are also opportunities to create new ways to do business

• The reality of today’s global market demands being open to change, and to be creative to survive

• It’s critical to embrace the diversity of cultural identity and learn from cross cultural encounters.

• It’s a critical choice