Western Europe: What Not to Do When Going to Europe

WESTERN EUROPE

For reasons of both profit and prestige, U.S. companies find Western Europe increasingly attractive as a place to do business. Since 1958 their investment in European ventures has more than doubled, from $4.6 billion to an estimated $9.6 billion last year—and it is still rising fast. Obviously, the ocean crossing has been largely successful, or American firms would not be so anxious to make the trip. But too often, both Europeans and Americans in Europe agree, U.S. businessmen step onto Europe on the wrong foot, making costly blunders that are usually avoidable.

Some mistakes, of course, stem only from the inevitable irritations of clashing cultures. It may be an American's abrasive first-name greeting or a sledgehammer sales pitch to a more reserved European manager. It may be the way some businessmen and their families live abroad, spending money ostentatiously, not bothering to learn the language and clustering in American communities. Or it could be Yankee cockiness. "Americans tend to overestimate their abilities," says a German executive for a U.S. subsidiary. "Consciously or unconsciously, they tend to ignore the different mentality of Europeans and force the American way of thinking on people under their authority."

The most serious mistake that U.S. businessmen fall into is their habit of regarding Western Europe as a 51st state, forgetting that a product or business technique that goes over big in Memphis will not necessarily succeed in Munich. The Common Market notwithstanding, Western Europe is still composed of individual nations and sections that have widely different tastes and buying idiosyncrasies. Says Belgium's Marcel de Meirleir, a plant-location expert: "Americans just don't understand that, for instance, Rotterdam and Antwerp are commercially not just two different cities—they're different worlds."

So are the U.S. and Europe, and the American businessman who wants his company to make a smooth transition between the two should remember a few basic but frequently ignored cautions about investment in Europe:

> Don't rush in. Though prosperous and expanding, Europe is no pushover market. Most Europeans feel that American firms do not sufficiently study their potential market, location and labor force beforehand. Too often they send over flying squads of vice presidents without serious preparation to make a crash decision in a matter of days. With time for only a ledger-eye view, they often wind up either buying nothing or buying unwisely. When the Monsanto Co. recently decided to set up a plant in a Luxembourg town, it discovered too late that the town has acute shortages of both water and labor—but the plant is under construction.

> Don't be top-heavy with U.S. brass. Local lawyers and accountants should be hired to run interference in dealing with the tangle of tax laws and bureaucratic red tape. In Rome, for example, only an Italian could have a feel for the legendary way of doing business known as arrangiarsi—roughly, arranging things to one's best advantage.