Israel – US: Cross-Cultural Training

12 mistakes Israeli companies do when establishing a US operation:

Mistake # 1: Over-Globalize

  • Corporate Identity < Site Identity
  • Where is the real headquarter?
  • Who makes the Call?
  • Where are:
    Marketing
    Finance
    Human Resources

Mistake # 2: No Clear “Rules of the Game”

  • Who Acquired and who Got Acquired?
  • Reporting Lines
  • Communication Channels
  • Staff meetings
  • Delegation ≠ Abdication

Mistake # 3: Lack of External Corporate Identity

  • Company Logo
  • Company Colors
  • Company letterhead
  • Company Shirts, hats, mugs, etc

Mistake # 4: “Dragging” Termination

  • Create un-Certainty
  • Perceived as lack of confidence
  • If you don’t control the process–it controls you
  • Termination lists prior to actual take over

Mistake # 5: Maintain Current Business Goals

  • Feeling of “business as usual”
  • Missing the logic of the acquisition
  • Fears of hidden agenda
  • No integration

Mistake # 6: Ignoring the “Soft Stuff”

“Soft” issues = > “Hard” problems

Mistake # 7: Overemphasize Cultural Differences

Look for:

  • Competency issues
  • Control issues/site identity
  • Professional identity

Mistake # 8: Over-Respect Local Values

  • Awareness ≠ Acceptance
  • Business before culture

Mistake # 9: Globalize Compensation

  • Stock Options Matrix
  • Awards
  • Benefits

Stock Options: Standardization

U.S. Israel Poland
     Gross Cash $110,000 $75,000 $30,000
     Options Grant 10,000 10,000 10,000
     Exercise Price $0.50 $0.50 $0.50
     Sell Price $17.00 $17.00 $17.00
    Gross Profit $165,000 $165,000 $165,000
     Relative W . 150% 220% 550%

 

 

Stock Options: Equalization

  U.S. Israel Poland
    Gross Cash $110,000 $75,000 $30,000
    Options Grant 14,670 10,000 4,000
    Exercise Price $0.50 $0.50 $0.50
    Sell Price $17.00 $17.00 $17.00
    Gross Profit $242,000 $165,000 $66,000
    Relative W . 220% 220% 220%


Mistake # 10: Localize Hiring Policy

  • Prevent “Corporate Sapiens”
  • Prevent employees’ mobility

 

Mistake # 11: Confuse Statutory & Practice

  • Statutory benefits ≠ Market practice benefits
  • Employment Contract Vs. Employment Offer

Mistake # 12: Forget about Termination

  • Statutory benefits ≠ Market practice benefits

US – Israel: Apparent Similarity

  • Apparent Similarity – Surface Level
  • Deep rooted differences
  • It is easier to deal with a more “obvious dissimilarity”

Israel – The Melting Pot

  • 2,000 + 60 Years of Survival Mode (“Massada Myth”)
  • “Living Outside the System”
  • Self Selected Authority (“Choose Your Own Rabbi”, “We have all been at the Sinai Mou.”)
  • Learning Methods Based on a Conflict
  • Founding Fathers – Social Revolutionaries
  • Frontier Mentality
  • Integration by Conflict
  • The Kibbutz and the Army

US – The American Dream

  • The “Mayflower Myth” (1621)
  • “The Sky is the Limit” – “Tomorrow the Sun will Shine Again”
  • 400 years of history
  • Founding Fathers – WASP
  • Integration by Keeping Low “Common Denominator”
  • The Sheriff – the Person who supervises land
  • Frontier Mentality
  • Integration by Inclusion
  • Individual Freedom

 

Individualism

ISRAEL USA
·        Belonging to a Group ·        No Trespassing

  • Privacy
·        Freedom to Express Opinions ·        Private Property
·        Collective is the Center of Society ·        Private Interest
·        “I’ll Help You to Understand” ·        Individual Rights
·        Individual is the Center of Society
·        Live and Let Live

Responsibility

ISRAEL USA
·        Group and Personal ·        Personal
·        Welfare State System ·        Self-Reliance
·        Team Achievement ·        Individual Achievement
·        Collective Situation, We ·        Individual Success
·        More Status-Equality ·        Competition
·      Sharing Blame & Glory ·        Personal Accountability

Interpersonal Relations

ISRAEL USA
·        Diffuse ·        Contractual
·        Total Friendship ·        Compartmentalized Friendship
·        Friendship By Assignment Strong Obligations ·        Choose You are Friends
·        Sincerity ·        Politeness
·        Don’t take “No” For an Answer ·        Can Say “No” in a Friendly Way
·        Demanding Relationships ·        Non-Imposition
·        Admitting Weakness is OK ·        Avoid Showing Weakness

Interpersonal Relations (Cont)

ISRAEL USA
·        Openness/bluntness ·        Reluctance to Criticize
·        Directness ·        Sensitive to Criticism
·        Rudeness “Glorified” ·        Tact
·        Informal ·        Formal
·        Stranger/Acquaint. Gap ·        Respect/Trust Strangers
·        Meddling ·        Mind Your Own Business
·        Conflicts Solved by Arguments ·        Conflicts Solved by Litigation

Association With Group

ISRAEL USA
·        Primordial Belonging ·        Join By Choice
·        “Us And Them” ·        Vague Group Limits
·        Cement relationship -> corporate ·        Easiness to corporate (trust)
·      Belonging Despite Doubts ·        Can Leave Group At Any Time

Relation to Authority

ISRAEL USA
·        Low Power Distance ·        High Power Distance
·        Question Authority ·        Respect Authority
·        “Rules Are Created in Order to Change Them” ·        “Rules exist in order to obey them”
·        Equality of Status ·        Equality of Rights
·        Leadership By Role-Model ·        Leadership by Command
·        “Socialism” – No Status, Natural Authority ·        Hierarchical System Works Well

Employee Relations

ISRAEL USA
·        Loyalty to Company > Than Profession ·        Loyalty to Profession > Than Company
·        Familial ·        Contractual
·        Seeing the Whole Picture ·        Excellence In Your Job
·        Cooperation Based on Companionship ·        Cooperation Based on Contract

The Israeli Factor

Pros:

  • Creative
  • State of the art technology
  • Aggressive, “no prisoners”, “fight to the last bullet“
  • Winners

Cons:

  • Arrogant
  • Stubborn
  • Micro manager
  • Suspicious
  • “Cards close to the chest”

Israeli Expatriates in the US

Pros:

  • Knowledge transfer
  • Internal communication
  • Loyalty
  • Resourcefulness
  • “Spinning resistance”

Cons:

  • Cultural/language barriers
  • External communication
  • “Us and them”
  • Cost