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Case Study Firm: Credit Lyonnais Industry: Banking Countries: France, World-wide International HRM Issue: The internationalization

of a bank & the cultural conflicts involved

1) Introduction This study of Credit Lyonnais, one of the world's largest banks with offices in over 60 countries, examines the organisation and human resource management strategies thought necessary to survive the rapid market changes in international banking. Credit Lyonnais provides a particularly good example of a large bank which is determined to succeed through growth in services offered in existing markets and through extending into new markets. Credit Lyonnais has offices on all continents, and in the countries where it has operations, it applies one of two growth strategies: i) organic growth (increasing the activity of its branches and subsidiaries, or opening new branches) ii) acquisitions / mergers (involving either take-overs or purchase of minority interests in local banks). Credit Lyonnais now has 610 offices outside Europe and these are either subsidiaries (where the HRM has a majority shareholding) or associated companies (where the HRM has a minority shareholding). The Credit Lyonnais Group has grown very rapidly over the past few years and will continue to grow with planned expansions on all Continents and in all areas of business. Realizing at an early stage of its expansion that its service and market strategies required an equally strong human resource strategy Credit Lyonnais set out to implementing HRM policies to achieve its business goals.

2) An International Corporation The Credit Lyonnais Group has grown very rapidly over the past decade principally by the acquisition of foreign banks throughout Europe and in other markets around the world. To benefit from its acquisitions many Credit Lyonnais managers believe they must now integrate their banking network in terms of common services and client management.
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One of the key challenges that face Credit Lyonnais is to fully internationalise its HRM policies and become a true multi-cultural, globalised, organisation. This task is made harder as many senior managers think that the bank is already international simply because it has a tradition of foreign operations and that it has doubled its size through the acquisition of foreign banks. Such thoughts obscure the fact that Credit Lyonnais is still dominated by French culture and French ways of doing businesses despite the fact that the bank now employs far more people outside of France than within.

3) French Context To have a good understanding of the cultural environment of this HRM there is a need to consider the culture of France, particularly its political & economic history and the style of management and organisation often associated with French companies. In France the State plays a key role in the economy and in society: the State regulates economic development through economic planning over a five-year period. State ownership of services and industries is still high compared to most other EU Member States and as one of the last large nationalised banks to be privatised, Credit Lyonnais is still strongly influenced by government. With a savings rate of 12.2% of disposable income, France traditionally represents a good market for banks although de-regulation of the banking industry and the privatisation of some State owned banks during the 1980s meant that banking profits rapidly declined. However, from a HRM perspective, the French government, which always plays a primary role in defining the basic terms of the relationship between employers and employees, insisted on the maintenance of workers` standard of living through wage indexing (linking wage increases to the rate of inflation), increased social insurance provision and through dissuading banks from making staff redundant. Although trade union membership in France is low (only about 10% of the working population are members), unions are powerful and strongly influence the government. Unions in France, as elsewhere, negotiate collective agreements but, unlike in many other countries such as the UK, these agreements, once negotiated with the employer body in the relevant industry, then legally apply to all employees in the industry. Terms and conditions of employment in the banking industry are generous because of these forces, which are: a government supportive of workers, and union negotiated collective agreements. However, today the banking sector is faced with new needs and the collective agreements are considered by many bank managers as a block to competitiveness.
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PART ONE: FRENCH HRM at Credit Lyonnais

4) The Nature of Management in France Short-comings in French management generally are noted: the elitist management education system has been criticised by some for not providing the right calibre of flexible, international managers, capable of responding quickly enough to shorter product / service life cycles. In fact the managerial class, cadre, is officially recognised by tradition and law. This managerial status gives managers special pensions and social insurance and also representation privileges on HRM's Board of Directors. This management system rigidly links hierarchical status with graduation from the 'right' universities, the grandes ecoles, and ensures that business leaders are among some of the best educated in the world. However, the down-side to this French approach of only appointing managers who have been to these superior universities is that the system suppresses the aspirations of supervisory and lower-grade personnel who find it difficult to be promoted into managerial positions. In spite of increased overseas investment, French management often lacks the international vision and experience of their counterparts in Germany, the Netherlands, the UK and the USA. As in some other Latin countries and Japan, there exists a steep educational pyramid in France with the grandes ecoles at the top. These grandes ecoles select an elite corps of students through very difficult entrance examinations. The exams test for analytical and reasoning capacity rather than interpersonal skills or professional aptitude. The diploma of a grande ecole is sometimes considered an 'entrance ticket' into the fast-track of a public or privately owned company. In effect the task of the grande ecoles is to select Frances future business leaders. The grande ecole provide over 50% of the top managers in French companies. Thus in France, an individuals self-education or entrepreneurial attitudes are less likely to contribute to success than his or her diploma and capacity to develop social / political relationships. Because they are destined to rise rapidly up the career hierarchy, grande ecole graduates often rotate very quickly through a wide variety of company positions gaining scope, sometimes at the expense of depth.

5) Bureaucracy & Hierarchy in France The traditional French model of organisation has been described as a combination of bureaucratic and aristocratic behaviour. Organisations generally have many hierarchical levels which, of
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necessity, restrict managers at each level to a narrow range of responsibilities and areas of action (that is, a narrow span of control - few employees to manage). Managers (and non-managerial workers) aggressively guard their areas of responsibility from encroachment. French organisations have been characterised as societies of castes, where each group tries to preserve its trade or profession and its independence. Even though this implies that organisational structures and hierarchical relationships are likely to remain relatively rigid, formalised work rules are frequently vague or absent (strong work rules do exist but these are informal).

6) Attitudes to Work in France French workers influence organisational and managerial styles through their attitudes toward work and family life. Perhaps because of their Catholic heritage, French employees have traditionally considered work a simple necessity, rather than a focus for personal and collective fulfilment. During the 1970s the role of human resource managers consisted principally of negotiating the transfer of HRM profits to employees by way of improved remuneration, benefits and working conditions. Employees generally had little concern for the future well-being of the company. During the 1980s, however, this separation between individual's standard of living and the organisations long-term ability to generate profits began to erode. Human Resource managers refocused on making employees aware of the linkage between their individual living standards and future job security and the firm's future. This linkage appears now to be well established as France enters the new century and companies actively discuss the social contract and how individuals should contribute fully to their firm.

7) Employment in Banking in France Highly regulated, protected markets, such as that of the French banking industry before the 1990s, result in overstaffed, over-bureaucratic organisations. Because the services of the banking industry (savings accounts, personal cheque accounts, business accounts, life assurance, mortgages etc.) are remarkably undifferentiated and almost instantaneously copied by competitors, the quality and effectiveness of a bank's employees is probably the most critical factor to its success. Banks cannot build distinctive quality into their service design and then turn on an automated assembly line. Quality must be delivered by people who, as experience has taught us, can be inconsistent, uncooperative, unmotivated, and sometimes work actively against the changes required for a firm to
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become dynamic, profitable organisation. During the past decade banks throughout EU have seen regulatory, national, and

international trade barriers fall; the EU's Second Banking Directive came into force about ten years ago allowing European banks to freely move into any other EU state and to also offer a broader range of financial services. This de-regulation has encouraged many bank directors to expand the services offered by their companies into other, more lucrative, services and sectors such as insurance operations and underwriting corporate debt, to mention just two. Indeed one of the dominant competitive strategies of the largest European banks in the late 1980s was to develop a wide range of products offered in all the major European markets. This strategy, called the 'universal bank', usually involves the merger of banks both domestically and internationally with other banks and with other financial service providers (with insurance firms for example). This diversification of banks' activities is creating a number of significant HRM challenges.

8) New HRM Challenges One result of these changes, involving more 'products' being offered in more national markets, has been that the skills and attitudes of the banks' staff have failed to keep up. Bankers have often been characterised as conservative, reserved individuals who are very attentive to detail. As banks move increasingly into other 'product' lines, such as life insurance sales, some of their employees must emulate the enthusiastic personality profile of a salesperson. This transformation is particularly important as banks are finding that new services are providing higher margins and, therefore, an increasingly greater share of their turnover. The banking industry has also, of course, become much more competitive. Having the opportunity to expand into other markets and countries is a double-edged sword in that banks from other countries can expand into your market! This need for bank staff to become more competitively aware represents a real culture change especially for the French. Both 'back office' computing technology and automatic cash machine technology combined with the growth of 24 hour telephone and internet banking has, in most parts of Europe, resulted in both significant job losses and, at the same time, the creation of newer, but lower skilled, jobs in telephone call centres. Such decreases in staff numbers and de-skilling of staff have been
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particularly difficult to achieve in France given the government's support for job security. A further change affecting employment numbers and types in traditional banks such as Credit Lyonnais, has been the emergence of non-banking competitors offering traditional banking services such as some of the large French retail store groups which offer customers personal cheque accounts and credit cards. French banks have, however, responded to these sorts of challenges by improved training for bank staff particularly in the area of customer relations and marketing and selling. Improving service quality cannot, however, happen through training alone: bank employees need to fundamentally change their attitudes toward the banks clients. As in all service oriented businesses, the development and maintenance of strong interpersonal relation-ships is critical to the long-term success of the bank.

9) Remaining HRM Problems Credit Lyonnais in the 1990s had essentially two types of human resource problems: 1) having too many of the same type of employees with the wrong skills (people with traditional banking skills but not the new, customer friendly, marketing and selling skills). Many employees not only had the wrong skills but also the wrong attitudes being reluctant to use computers, associating computers with secretarial work, and being unfriendly with customers, regarding friendliness as inappropriate in their profession. With regard to managers, Credit Lyonnais had managers who were under-educated generalists in an increasingly specialized industry. Managers were also unwilling to let go of decision making and, therefore, newer, younger, staff felt that they were constantly being controlled and had no autonomy and discretion. 2) having too few of the type of employees needed: customer friendly, highly computer literate, multi-lingual and sales orientated people. Banking firms are reacting to the intensified competition and lower or negative profit margins by demanding more co-operation from their employees requiring them to be flexible and responsive to changing customer needs. These demands are difficult for older bank staff to accept as they had become accustomed to high salaried, stable and secure jobs and as these staff have a strong union, banks managements are still struggling to implement change.
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10) New banking Business Strategies Success in the new banking environment is essentially based on four strategies: i) Growth through acquisitions with the goal of dominating niche markets across a range of countries such as personal banking and investment for high income / wealth clients, or specialist small business banking. ii) Becoming a universal bank, that offers all types of financial services in the home country and in a range of foreign countries. iii) Defending domestic markets by creating or enhancing personal client relationships. iv) Selling more services and / or new products such as financial advice or insurance.

11) New HRM Strategies within France There is widespread recognition throughout the European banking industry of the need for new human resource management strategies to enable the achievement of these for new business goals. At Credit Lyonnais changes in employment, the organisational structure, increased training, better performance appraisal, development of new remuneration systems, and attempts to modify employee attitudes are the HRM strategies that are now being used to change the culture of the organisation within France. 11.1) Reducing Employment The first HRM strategy targets excess employment but tries to reduce employment by avoiding compulsory redundancy: banks must try to avoid the deteriorating morale which typically arises from compulsory redundancies. Banks, in their new market environment, depend more than ever on the positive attitudes of staff in winning the loyalty of existing customers and persuading customers to purchase their new services. Banks around Europe are, therefore, trying to avoid compulsory redundancies by focusing instead on reducing or freezing new recruitment, on early retirement programmes, on re-training and redeployment (with protected salaries) to the new call centres and internet-banking centres, and on voluntary departures. The first method is problematic as the banks do actually need new, enthusiastic staff with the new computing, linguistic and customer centred skills which the existing staff often lacks.
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Over the past few years early retirement programmes aimed at the least competent workers have been widely used but sometimes the most competent employees took advantage of these programmes and went on to prosper in other organisations. 11.2) Promotions A move away from the traditional French hierarchical structure is necessary if banks are to attract and retain young well-trained managers. Turnover among this group can be high, especially in banks with top-heavy bureaucracies or, like Credit Lyonnais, 'nationals only' promotion policies. Such structures do not offer the rapid career development the best young managers expect. Therefore the reduction of highly centralized bureaucracies and the loosening of strict ethnocentric staffing and promotion policies are important priorities. The bank recognizes the need to abandon its traditional internal promotion policies and recruit at all levels directly from the external marketplace, especially from its non-French branches (discussed in more detail below), and to adopt performance appraisal systems designed to allow 'high potential' employees a shortcut to the top. 11.3) New HRM Director Credit Lyonnais' Board of Directors accepted during the period 1995-1999 that a bank's human resources are the most important asset and therefore HRM policy should be at the centre of its strategic plans. A new post, Director of World-Wide HRM, was created in 1998 and a former Director of Personnel at VW was appointed to this very senior post and given the target of radically changing every aspect of HRM to enable the bank to become a world leader in the C21. 11.4) De-centralisation - Increased Managerial Responsibility Credit Lyonnais has begun to re-design both its domestic and international structures away from the highly centralised historical structure of the bank towards a de-centralised structure with accountability and responsibility delegated to branches. The traditional centralised structure has, it is believed, hidden problems of variation in service quality (under-performing branches and regions, and the responsible managers, have not been easily identifiable). Reducing layers of hierarchy through de-centralisation not only makes good economic sense for recruiting high potential staff and for the career advancement of such managers, it helps the bank monitor its customer needs more directly. There is, of course, a downside arising from delayering for
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staff of average ability because there are, now, fewer opportunities for up-ward career progress. The days when loan applications took weeks to be approved must be left behind if customer service is to receive greater attention and de-centralisation and de-layering should help 'speed up' every aspect of the bank's operations. 11.5) Training Re-training is often the most viable strategy for dealing with the problem of people with out of date skills. If offers the advantage of keeping employees who are already familiar with the bank and it reduces employee hostility concerning staffing reductions. Re-training is focusing on giving staff new skills but, most importantly, on changing employee attitudes with the aims of: a) increase economic awareness especially of the new competitive environment of European banking. Such training is largely aimed at making staff aware of the new competitive challenges the Bank faces b) increasing marketing and selling skills c) increasing customer care skills, quality skills and language skills d) improving computing skills. In 1989 training costs were 4.4% of the bank's total world-wide salary bill while in 1999 the costs were 8.1% of salaries which is well above the French governments requirement that firms spend 1.9% of salary costs on employee training. Historically, French staff has enjoyed much more and much better quality staff development than foreign staff, and this has reinforced the dominance of French staff in all senior management jobs. It has now, however, been decided that access to advanced, French-based training, for high-ranking foreign staff should be expanded: talented managers must be educated whatever nation they are based in, and then be asked to move to wherever the bank needs them and wherever they can best develop their careers. 11.6) Appraisal and Reward Credit Lyonnais is also attempting to change its internal culture through developing performance appraisal systems and linking them to salary increases. It is recognised that the results of managerial appraisal in the different national branches must be made available to the head office HRM department in France so that managers who score particularly highly can be identified for further development and for promotion either to head office in France or to elsewhere in the international network where their talents can be used to greatest effect in furthering the competitive success of Credit Lyonnais.
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Credit Lyonnais is moving away from the traditional corporate reward system, which merely rewarded length of service (after each year of employment the employee received an automatic salary increase), towards a performance reward system. In the traditional approach each job was graded and a salary was allotted to the job regardless of the quality of individual job holder's performance. With the new Performance Related Pay system there are no automatic pay increases (even to cover inflation) and staff have to earn, through excellent performance, any pay increases (under-performing staff get no increase and as the cost of living inflation in France is 4% per year such employees' living standards therefore decline); on the other hand, excellent staff are able to earn a salary increase of up to 35% each year. It is believed that this new performance pay system is significantly modifying outdated employee attitudes and will cause underperforming employees to leave. This approach, however, will not be immediately adopted in some countries such as Germany where merit pay systems are avoided. There are problems with this differential treatment though, and already German Credit Lyonnais managers, who all continue to be on the old pay system, in talking to French, British and US managers, feel annoyed that any special efforts they make will go unrewarded and their German colleagues who under-perform continue to get the same pay increase anyway. 11.7) Recruitment of New Managers Credit Lyonnais is recruiting new managerial employees, with the new skills and attitudes, in an attempt to create an elite cadre of new style managers. This strategy is even being pursued alongside making some, old style managers redundant. Credit Lyonnais is linking this search for new blood with a strategy of increasing the number of cultural outsiders (that is, recruiting in managers from other organisations in France) who are given important roles at all levels of the banks hierarchy. In terms of general recruitment, the bank is trying to improve its age and pre-employment qualification base and new, non-managerial recruits increasingly have more academic 20 and one-third have degrees from a university. 11.8) Employee Involvement in Strategic Management
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training

than their predecessors. Currently most new recruits have remained in school until about the age of

It could be argued that employee involvement in the higher level management of Credit Lyonnais is good compared to the low degree of ordinary employee involvement in strategic decision making in companies in the UK and USA. In accordance with the French law concerning the democratisation of the public sector, the Board of Directors of Credit Lyonnais is composed of 18 members: - six representatives of the French government - six individuals selected for their expertise, their knowledge of the different sectors of the banking business, or their position as representatives of consumers or users - six employee representatives who are elected by the entire staff. Major decisions concerning the company's economic, financial, social and technological policies are made only after deliberation and approval by this Board of Directors. However, it is now recognised that employee involvement in ordinary day to day, operational decision making has not been good and new systems are being planned. The traditionally steep French organizational hierarchy has meant that managers expect to subordinates, in turn, simply expect to be told what to do. One new system to improve employee involvement will involve weekly team meetings for all staff in which newly appointed team leaders will verbally brief staff using a weekly senior management briefing sheet as their guide. Team leaders will also gather employee opinion and communicate this 'up' the organizational hierarchy to their managers. Eventually, in this way, staff opinions and attitudes from branches around the world will be heard by the senior management in Paris. Unions in France and other countries such as the UK and Italy, where there are traditionally formal, union, channels of communication from employees to senior managers are, however, concerned, that these new direct 'down-up communication channels may simply mean that unions are by-passed and weakened. 'command and control' and

PART TWO: INTERNATIONAL HRM at Credit Lyonnais

12) From Ethnocentric to Geocentric HRM In general, each country has had responsibility for its specific human resource management practices
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and therefore very different rules and procedures for HRM are present across the company worldwide. However, the new HRM Director wants to change this diversity of practice and move towards a convergence in HRM. The new Director recognizes, however, that forcing foreign branches to converge of the French approach will not necessarily work and a ' third way neither French nor that of a specific foreign country, will have to evolve combining the best of HRM practice wherever it is found. The HRM Director is committed to finding 'best practice' within the company and within the banking industry world wide and adopting this as the 'third way' HRM policy for Credit Lyonnais. It is recognised, however, that in some national contexts some HRM policies and practices will need to continue to diverge from either this or the traditional French way of managing HR. The areas of employee communication, involvement and employee relations have been identified as areas where policy and practice may have to continue to be different (for example, getting the highly individualistic North Americans involved in management decision making will involve very different techniques than getting the highly collectivist Japanese involved). The overall aim of the HR Director is, therefore, to move from polycentric HRM (with a strong element of ethno-centricism applied to all Credit Lyonnais managers) directly to geo-centric HRM.

13) Current World-Wide Employment At the beginning of 2000 Credit Lyonnais' French Division had 2,460 offices and about 42,000 employees. The Credit Lyonnais Group had 72,500 salaried staff outside of France in 1999 which represented an increase of nearly 35% over six years. The breakdown of its global workforce is as follows: Europe: 54,300 America: 5,500: of which 800 are in North America and 4,700 in South America Asia: 1,100. Africa: nearly 3,000. Credit Lyonnais international experienced a short burst of rapid employment growth during the early 1970s and this period has left Credit Lyonnais with a staff that is too concentrated in the 40-to 50year age group, thus creating a strong bias in the age pyramid. The average age of the domestic workforce has steadily risen and stood in 1999, at 39 years of age. There is also a bias against female
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managers: 55% of the employees are women but they very seldom have managerial positions. This lack of equilibrium in age and gender has serious consequences for the development of careers. However, within the group as a whole the percentage of French employees has significantly decreased from 78% in the early 1980s to 57% now and this reflects that the HRM is becoming increasingly international and thus opportunities for non-French staff are improving.

14) Promotion to Head Quarters in France Only staff consistently receiving the highest level of merit bonuses (those qualifying for bonuses of 25% of salary and above) will be eligible for promotion and the traditional approach of promotion based on seniority, and being a French national, will end throughout the HRM. Promotion based on seniority, which has, historically, been the normal career route in the organisation is set to disappear and Credit Lyonnais' HR Director has noted that many older, long serving employees, will soon find themselves being managed by younger people, that is people who have the skills and attitudes for today's world of banking and who have the right approach to expand the banks business in the future. Head quarters staff in Paris have been overwhelmingly French (98% in 1990) and although talented foreign managers have been selected to head office roles they have tended to be appointed to France on temporary contracts and the bank has viewed their contribution as short term believing that when their specific project is complete they should return to the regional office or branch in the country they came from. Head quarters staffing has, thus, been entirely ethnocentric. Credit Lyonnais' new HR Director has, however, recognised the vital importance of getting the most able managers promoted into head office positions, regardless of their nationality and wishes to move swiftly to a situation where perhaps 50% of head office management consists of successful managers from the foreign regional and branch offices.

15) Promotion and Movement between Foreign Branches: From Ethno to Geo-Centric Credit Lyonnais has, historically, been managed ethnocentrically with all important management jobs, wherever they occurred in the world, being taken by French expatriates. However, now, as the bank moves into the C21, there is increasing awareness of the need for global, geographic staffing, where the most appropriately qualified member of staff gets
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promoted regardless of their nationality.

16) The Dominance of French Expatriates in Regional Offices and Foreign Branches Historically Credit Lyonnais' organisational structure had been based on the requirements of managing a world-wide 'colonial' style organisation and therefore local bank directors had to be French nationals and were delegated large amounts of power (their status was comparable to that of Diplomats of the French state). The existence of 'territories', which were geographical in the case of branches abroad, directed by virtually autonomous local managers, led to the creation of 'feudal-like fiefdoms' which often resulted in internal competition ("one doesn't give a customer to somebody else even if the same company name is over the door!")^Efforts are being made to reduce this isolation by restructuring the organisation chart and increasing professional mobility. The Paris-based senior managers of Credit Lyonnais have thus relied heavily in the past on French expatriates to help facilitate or implement programmes which they have felt must be transferred to foreign units. Because of the important role played by French expatriates, most local employees believed until recently that certain positions in their home countries are, and always would be, reserved for French nationals. There are essentially four explanations for the traditional dominance of French expatriate managers: i) ii) iii) iv) French managers were familiar with internal workings of Credit Lyonnais its organisational culture. French managers have helped to preserve the supremacy of corporate interests over local or personal interests. As the bank is French owned it has been assumed that French managers, members of the family, should be given certain advantages in the course of their careers. The belief has been widespread among top managers in France that it is easier to solve the banks problems with expatriates of French nationality than with foreigners.

17) The Move to Global, Geocentric, Management Multi-national corporations must balance the need to be able to differentiate foreign subsidiaries while maintaining enough integration to provide the co-ordination and control necessary to financial success. Credit Lyonnais now realizes that this integration may be achieved more easily through the use of geographically mobile managers (not just French managers) and management development
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programmes involving managers from around the world. Such management development programmes can be used as a 'glue' to maintain a tightly integrated network of geographically dispersed and multi-ethnic branches and to develop a sense of corporate culture which might, for managers at least, over-ride national culture. No longer will French managers get any preferential access to promotion at head-quarters and when these vacancies occur they will be advertised throughout the world-wide network of Credit Lyonnais. Similarly, French managers will no longer have the 'pick' of the best jobs in foreign branches and Continental offices, these jobs will also be advertised throughout the world and selection panels will consist of at least four people, no more than two of whom will be French (ideally one will be from the country where the branch is based, e.g. a German manager if the branch is in Germany, and one from another country, e.g. in this case perhaps from the USA). Generally, the international movement of staff, especially managers and technical experts, has increased and although there has been a 13% increase in French expatriation, to some extent reinforcing the tradition of French dominance, there has also been a doubling of foreign expatriation (for example, an Italian manager working at a UK Credit Lyonnais branch) over the last four years. Increasingly too, highly competent local staff are winning promotion to head up Credit Lyonnais operations in their own countries or on their continent whereas ten years ago these top national and continental positions would only have been available to French staff.

18) Resistance from French Managers to Geo-centric Staffing French expatriates often found that expatriation could become a good career: about one-third of current expatriates have spent nearly all of their careers abroad, and will probably end them abroad. Being an expatriate provides financial and professional advantages and the French managers working in foreign locations are likely to resist Credit Lyonnais head office attempts to reduce the number of such postings. Financially, expatriates receive a salary supplement and generally better living conditions than they would have in France. Professionally, the work in the foreign branches is often more interesting and challenging than what they were doing in France and working abroad typically offers increased responsibilities and real autonomy in business and personnel management, reinforced by geographical distance from the Paris head office. Above all there is often a sense of adventure reminiscent of the colonial spirit of conquest. Top foreign postings are sometimes
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considered as personal empires which have led to a king like managerial style.

19) Moves to Geocentric Staffing Result in Cultural Problems Credit Lyonnais has now made serious progress towards solving problem of the representation of the non-French staff in the senior management of the organisation by promoting non-French employees to very high levels of the bank at its Paris head-quarters and by special programmes designed to identify and train high-potential managers from whichever country they come. There is also a requirement for staff of Credit Lyonnaise in different nations to co-operate more. The HIRM Director has noted that significant additional business could be secured for the bank if branches in different nations could integrate in terms of common services and management of their customers' accounts. As things are at the moment there is very little sense of international corporate unity and, for example, when the manager of an English branch of Credit Lyonnais tries to deal with the manager of a Russian branch on behalf of an English customer who is trading with a Russian HRM, the English manager gets no better treatment from her Russian counter-part than if she worked for a rival bank.

20) National Cultural Differences within the Credit Lyonnais Group It is recognised that national cultural differences persist between the nations in which Credit Lyonnaise operates and that the attempt to generate a common corporate culture throughout the Banks world-wide operations has yet to be successful. A further problem lies in the fact that the culture of Credit Lyonnais' head office reflects that of France itself: the company, like the country, is positioned on Hofstedes dimensions as follows: 1) 2) 3) 4) Individualism (1) - Collectivism (10): mid-way at about 5 Low Power-Distance (1) - High Power Distance (10): at the High Power Distance end at 8 Low Uncertainty Avoidance (1) - High Uncertainty Avoidance (10): at the High Uncertainty Avoidance end at 9 Masculinity (1) - Femininity (10): at the Masculine end at 3
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5)

Short Term Orientation (1) - Long Term Orientation (10): at the Long Term end at 8 (in contrast with French society as a whole which is rated as 4).

Credit Lyonnais has experienced particular problems in integrating managers from the countries listed below into international management teams at the Paris head-quarters.

Scores of Credit Lyonnais Managers from different countries Individualism Power Managers' countries UK US Japan Brazil Russia Algeria China I=1 C=10 2 1 9 8 7 2 10 Distance Low=1 High=10 2 1 9 8 8 8 8 Uncertainty Avoidance Low=1 High=10 1 2 8. 8 5 7 8 Masculinity Time Masc.=1 Fern.=10 9 10 2 3 5 1 3 Orientation Short=1 Long=10 1 1 8 3 2 7 10

20.1) Cultural Training Credit Lyonnais has over the last three years worked with leading French, UK, US and Japanese Business Schools to run cultural training programmes for managerial staff newly arrived for their senior jobs at the Paris head-quarters but there are still many problems in: a) integrating these foreign nationals with the local French staff b) getting the foreign national managers to work together. One of major challenges for Credit Lyonnais over the next decade is to ensure that talented managers from around the world are enabled to work effectively at the French head-quarters and to work with managers from nations in geographically adjacent parts of the world.

Questions: 1. Why is HRM important for a modern bank? In other words, why do banks in particular now need highly motivated, committed staff that is willing to contribute to the success of their firm?

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2.

a) What are the main changes in HRM that are happening at Credit Lyonnais within France (there are at least 12 you should be able to identify)? b) why are these changes happening?

3.

Why should Credit Lyonnais be concerned about internationalising its management (that is, reducing the number of French managers and increasing the number of foreign managers): a) b) c) d) at head office? among the foreign branches? What are the advantages of diversifying the nationalities of head-office management? What are the disadvantages that will have to be guarded against?

4.

a) How is it possible to 'Credit Lyonnais' foreigners (that is, how is it possible) to create an organisational culture that is more powerful than national culture? b) How is it possible to incorporate foreign ideas into Credit Lyonnais' culture without it losing its identity?

5.

a) Why might non-French managers, for example German, British and Russian managers, be interested in working in a foreign country? b) What kind of Human Resource Management policies (including social and financial aspects) will provide the necessary incentives to encourage geographical mobility among nonFrench managers?

6.

Choose one national group of managers from those identified in the table in Section 20 of the

Case Study (US, Japanese, Brazilian, Russian, Algerian, or Chinese) and identify the problems which managers of this nationality are likely to have when working: a) b) with French managers with managers from UK.

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