Succession Planning

The Making of a French Manager

by Jean-Louis Barsoux and Peter Löscher
From the Magazine (July–August 1991)

While the eyes of the world have been focused on Japan’s economic
success story, France too has been showing a level of progress that
makes it essential for the global executive to understand how French
managers are molded. Consider this:
In 1989, France made one-third of all acquisitions in Western
Europe, adding more in 1990. And in 1991, France has surpassed
Japan and the United Kingdom in acquiring U.S. companies.

Nuclear power provides just under half of France’s power needs,

with enough left over to make France the European Economic
Community’s largest energy exporter. And energy-intensive French
industries enjoy a competitive advantage since the country’s
electricity prices are 48% below U.K. rates and 54% less than
Germany’s.

The French TGV, holder of the world speed record for trains, was
chosen by British Rail and the Belgian rail board to link London and
Brussels via the Channel Tunnel.
 Many French companies are world leaders. Michelin is the largest
tire maker, L’Oréal the largest cosmetics company, L’Air Liquide the
leader in industrial gases. Alcatel, formed in 1986 when the French
Cie. Générale d’Electricité bought ITT’s equipment operations, is
the world’s second largest telecommunications-equipment
supplier. Packaging, tires, cement, steel, and hotels are other
industries French companies lead. The French retailer, Carrefour,
originated the hyper-market—a large department store that
includes a supermarket. And analysts consider Peugeot, S.A. (PSA),
owner of Peugeot and Citroën, to have one of the strongest
positions in Europe in terms of market and costs.

To understand the style of management responsible for these

successes, we went to France to study how its managers think about
management—how their views of the management task are formed
and their skills developed. We interviewed and observed senior
executives, company spokespeople, and typical managers at a range of
large and midsize companies, including Accor, Carrefour, Saint-
Gobain, L’Oréal, Thomson, L’Air Liquide, Renault, Michelin, and PSA.
We quickly determined that the development of French managers did
not take place in formal company training programs but began long
before employment; therefore we also visited the schools that are said
to be the real training ground for managers.
Management in France, we learned, is considered a “state of mind”
rather than a set of techniques. According to executives like Michel
Lafforgue, directeur général technique at L’Oréal, the successful
development of executives depends on creating a distinctive shared
identity, a sense of belonging to the French managerial class.
France has come closer than any other nation to turning management
into a separate profession, with its own entry requirements and
regulations. Managerial status in France is not part of a graded
continuum, but rather a quantum leap, involving a change of legal
status (for example, in terms of pension entitlement) as well as subtle
changes in outlook and self-perception.
Cadre, the French word for manager, is borrowed from the armed
forces. The term originally was used to designate the ensemble of
commissioned and non-commissioned officers—which, incidentally,
has given management a distinctly male aura. Cadre status can be
attained through educational credentials or through loyalty to a
particular company. Those fortunate enough to graduate from one of
the leading grandes écoles (highly selective universities) can look
forward to immediate cadre status on entering professional life.
Someone with, say, only two years of higher education will likely have
to wait five to ten years to become a cadre. And for those without
qualifications, their only real chance is to prove themselves over
several years with a single employer. One Renault cadre who made it
“the hard way” bemoaned the quasi-automatic handing out of cadre
status to grandes écoles graduates: “Soon they will be naming them
cadre upon admission to the grandes écoles.”
Even though companies do not all use the same criteria for admitting
people to this elite group, membership alone tacitly binds those
inside. The title bestows on a French executive the same sort of social
prestige as a lawyer, architect, or doctor. After all, it was the cadres
who were seen as the prime architects and beneficiaries of France’s
postwar economic recovery. To French executives, being named cadre
is akin to passing an intelligence test. It proves, for all to see, their
ability to think logically and analyze systematically. And this is what
sets managers apart from the rest of an organization’s personnel.
Management as an Intellectual Activity
French managers see their work as an intellectual challenge, requiring
the remorseless application of individual brainpower. They do not
share the Anglo-Saxon view of management as an interpersonally
demanding exercise, where plans have to be constantly “sold” upward
and downward using personal skills. The bias is for intellect rather
than for action. People who run big enterprises must above all else be
clever—that is, they must be able to grasp complex issues, analyze
problems, manipulate ideas, and evaluate solutions. A revealing
witticism contains this rejoinder, supposedly from one senior French
civil servant to another: “That’s fine in practice, but it’ll never work in
theory.”
The emphasis on cleverness shows up even in executive recruiting
advertisements. They hardly mention the drive or initiative looked for
in Anglo-Saxon recruits; rather they call for more cerebral qualities—
an analytical mind, independence, intellectual rigor, an ability to
synthesize information. Communication or interpersonal skills are
tacked on at the end, if they appear at all.
Recent French industrial achievements have occurred largely in fields
requiring a coordinated, technologically and scientifically creative,
and research-driven approach—rather than, say, marketing dash,
financial wizardry, or manufacturing organization. Take for example
vitrification, a technique of sealing nuclear waste in glass. The British
invented the process, but the French now dominate the field. Other
examples are the Ariane satellite launches and the Minitel Viewdata
System. Emphasis on research distinguishes L’Oréal, whose former
chairman, Charles Zviak, rose through the research ranks as a
specialist in dermatology. Research virtuosity is the reason Citroën
supplies Rolls-Royce with the components for braking and assisted
steering systems. Indeed, PSA’s stunning turnaround in the 1980s
involved cutting costs through a variety of technology-based
achievements. It used information systems and developed common
parts, subassemblies, and body components between the Peugeot and
Citroën divisions.
French managers excel in their capacity for quantitative thought and
expression and in the numerate dimension of strategy formulation.
Michel Bonny, head of publicity for Michelin U.K., noted British
managers’ discomfort at putting figures to proposals, whereas “in
France, we won’t make a decision unless we have confidence in the
numbers.” Even in low-tech sectors such as retailing, we found more
qualification consciousness, higher numeracy, and a greater
familiarity with management best-sellers (including U.S. ones) than
in corresponding British companies.
French managers like to communicate in writing, even for informal
interactions. In response to our quite undemanding questions, French
managers wanted to write things down, to list options. Jean-Louis
Reynal, plant manager at Citroën, explained that “it wouldn’t be too
much of an exaggeration to say that until they are written, until they
are entrusted to the blackboard, the notepad, or the flip chart, ideas
have no reality for the French manager. You could even say that
writing is an indispensable aid to ‘being’ for us.” This propensity
reinforces a formality that permeates French relationships.
The French manager’s role is to lead the dissection and synthesis of
problems, the presentation and appraisal of arguments. Intellectual
ability does not preclude practicality, but practicality may be
undervalued or at least underdeveloped. To say that French
management is dominated by engineers means something
qualitatively different from saying that German management is
dominated by engineers. A manager with the materials and packaging
group Saint-Gobain explained that “to be an engineer in France
doesn’t mean you can fix a machine. It implies something about social
standing, about outlook, about professional self-esteem and national
pride.”
But intellect can impede communication in French companies. One of
the most striking manifestations is the way that obsession with
grammatical rectitude is allowed to interrupt interaction. French
managers we observed hated to read or hear their language used
incorrectly, especially by fellow citizens. On several occasions, we saw
highly educated executives attempting to reaffirm their right to lead
by pointing out grammatical errors committed by subordinates. An
executive at Accor corrected a missed subjunctive; one at Carrefour
pointed out a mistaken preposition. We also watched an internal
meeting at L’Oréal brought virtually to a standstill by repeated
definitional nit-picking about the terms used.
While intellectual ability serves French executives well when it comes
to planning, conceptualization, research, and system design,
management involves more than these activities. For one thing,
sometimes problems are not well defined. One plant manager at
L’Oréal worried about this. “It has become something of a cliché that
French managers can solve any problem—assuming they can detect
the problem in the first place.” Spotting problems has less to do with
IQ than with talking to people, asking the right questions, listening to
the answers, and sometimes improvising solutions. But French
managers are trained to distrust makeshift or intuitive solutions. An
archetypal product of the French system, PSA chief executive, Jacques
Calvet, confessed in a recent periodical, “I have a fault from which I
suffer greatly. I am too logical, not sufficiently directed by intuition.”
Leadership and Organization
The design of French organizations reflects and reinforces the
cerebral manager. France has a long tradition of centralization, of
hierarchical rigidity, and of individual respect for authority. French
company law resembles the country’s constitution in conferring
power on a single person. At the helm of French companies is the
président-directeur-général (PDG), who decides, executes, and controls
company policy. The PDG is what British and U.S. companies would
regard as chairman of the board and chief executive rolled into one,
or the German vorstandsvorsit-zender (chairman of the executive
committee) plus operating executive. The PDG is not answerable to
anyone. Votes are rare; if a proposal is put to vote, it is tantamount to
a vote of no confidence in the PDG. Indeed, the head of a small,
publicly held company boasted to us that “I can do what I please with
the exception of selling off the company.”
There is a clear connection between the intellectual manager and
organizational centralization. Senior executives in France believe they
owe their high position to their intelligence and cunning. It therefore
follows that they should make all the critical decisions and that they
should be told everything so they can check other people’s decisions.
When Bernard Attali became PDG of Air France, he told his
assembled directors, “I want to be at all times informed of every
notable event in your different sectors of activity.”
Consider the case of PSA. Jacques Calvet was brought into the car
group of Peugeot to effect a turnaround in the midst of a major
financial crisis. Through a draconian program of restructuring and
job cuts, he engineered a spectacular financial and industrial recovery
that brought healthy profits and strong sales gains, especially in
Germany and the United Kingdom. Today he is moving ever closer to
his stated aim of turning PSA into Europe’s biggest selling car group.
To do this, Calvet is trying to “decentralize”—for example, promoting
the company’s younger executives and delegating certain decisions to
them. Still, he is criticized by some PSA managers for retaining too
many decisions, even to the extent of wanting the last say on the color
of the new models’ door trims.
Large French organizations are not only hierarchical but also
compartmentalized. Vertical differentiation is often quite literal; at
L’Air Liquide, the chief executive is on the top floor of the building,
and the typing pool is in the basement. Educational and intellectual
credentials serve as finely tuned hierarchical discriminators. L’Air
Liquide’s public relations manager does not occupy the office
adjoining the PDG’s, as might be the case in a British company. That
office is reserved for someone farther up the hierarchy with more
education-backed luster. As the PR manager himself put it: “Protocol
dictates that the general must be surrounded by his general staff—
even if his most valuable ally is actually the radio operator.”
Les Grandes Écoles
The heads of the typical French company were molded by a system
that confirmed their intellectual superiority early in life. “French
organizations are run by the nation’s star pupils,” Roger Fauroux,
former head of the Ecole Nationale d’Administration, the elite civil-
service college, told us. And those star pupils come most often from
among the graduates of ENA and the other grandes écoles.
French school children who aspire to management careers are
encouraged in high school to renounce vocational preferences in
favor of disciplines such as mathematics and physical sciences. Bruno
de Fongalland, a Carrefour store director, calls this “mathematical
Darwinism—the survival of the most numerate.” On completing high
school, French students can, if they wish, gain immediate access to a
university. But the more ambitious will go to special preparatory
schools for two years of intense coaching before taking the entrance
exam to one of the grandes écoles. As in Japan, mathematics are
compulsory in France for entrance to higher education. And the
French go through a rigorous preparation for entrance exams that is
not unlike the Japanese “examination hell.”
About 170 grandes écoles dispense education specifically geared to
technical, administrative, and business needs in the civil service,
state, and private industry. Engineering schools are especially
preponderant, both in number—they account for about two-thirds of
the 23,000 graduating annually from the schools—and in terms of
historical influence. Their curriculum involves science and
engineering of a fairly theoretical kind, along with English,
management, and philosophy. These schools tend to foster an esprit
de corps and have a disciplinary ethos that contrasts starkly to the
laissez-faire character of France’s sprawling universities.
Corporate recruiters prefer the products of the grandes écoles to
graduates of ordinary universities, for the schools’ seal of approval
endorses the individual’s capacity for rapid learning and intellectual
virtuosity. IBM-France, for instance, is not unusual in having a
department titled Relations Grandes Ecoles. According to Pierre
Stein, personnel manager in one of Mars’ French subsidiaries, “In
France, few bluechip companies go in for anything as untargeted as
‘graduate recruitment.’ ”
The grandes écoles are generally viewed as institutions characteristic
of the Napoleonic regime (though some of them preceded it).
Napoleon, concerned about the efficiency of the state machine, found
the grandes écoles well suited to endow the country with trained
administrators. Students were selected by the most exacting
intellectual criteria and subjected to strict discipline that was often
based on the military pattern.
The military influence is clear today in the foremost grande école,
Ecole Polytechnique. Established in 1794 as a military college to train
engineers for the armed forces, it still resembles a residential officer
cadet school, with an active general at its head. Its pupils, the “X” (so
nicknamed for the school’s emblem, crossed cannons), go on parade
four times a year in full-dress uniform, complete with bicorne—a
military curled hat. The school falls under the jurisdiction of the
Ministry of Defense, not Education.
Although not all the grandes écoles have kept their military ties, most
of the schools still retain a strong male tradition. Some have begun
admitting women only in the last 20 years, and even in those schools,
access for women remains limited. This could explain the paucity of
women in the higher echelons of French business.
The reputation of the grandes écoles rests heavily on their rigorous
admission procedures, with mathematics skills as a critical entry
determinant. Some recruiters admit that in new hires, they are
primarily purchasing the entrance exam. To executives such as Pierre
Salbaing, vice president of the supervisory board at L’Air Liquide, the
added value in the end product does not come from the teaching
imparted in the schools but from the rigor of the schools’ selection
process. Because competence in mathematics is deemed a faithful
indicator of the ability to synthesize ideas and to engage in abstract
reasoning, employers are confident that the company can develop
specific expertise.
The depth and intensity of grande école training equips future
managers with the mettle to cope with pressure and to work long
hours. He or she develops a lengthy span of concentration and tested
work methods. And, secure from an early age that they are heading
into leadership positions, these students assume the values and poise
of would-be leaders.
They also acquire invaluable old school ties. The grandes écoles
provide alumni with a ready-made and influential network of
contacts. To a greater extent than many nations, France pools its
elites early—immediately after high school—which fosters the
solidarity born of a common educational experience. These networks
can dominate French companies. At PSA, graduates of one grande
école, Arts et Métiers, dominate—with 461 alumni out of 5,000
employees, according to a recent count. Although distinctive
competence may play a part, it is certainly not the entire reason; Arts
et Métiers reputedly has the most efficient network of all the schools.
And solidarity among grandes écoles alumni can even transcend
corporate allegiances. One Peugeot production manager confessed to
having illicitly allowed into the plant a fellow graduate, who worked
at a rival company, to show him how to solve a recurrent production
problem.
Having colonized France’s corporate boardrooms and ministerial
salons from the start, products of the grandes écoles have tended to
recruit their own as successors. Graduates from “mere” universities
have tremendous difficulty rising to top management positions. A
1990 1’Expansion survey of 100 chief executives in France reveals 28
Polytechnique and 8 ENA graduates—just two of the grandes écoles.
Elitism has its limitations, however. Companies like Carrefour, the
leading French retailer, have few grandes écoles alumni. Some French
say this is because retailing lacks the intellectual challenge found in
other industries. And the dearth of alumni, in turn, means the
company has trouble recruiting new grandes écoles graduates. One
Carrefour senior manager said that grandes écoles graduates do not
want to join a company not already abundant with fellow graduates,
for fear they might be working for managers with less education.
Other dysfunctional aspects of this intellectual obsession are
frequently discussed in France. Criticism of the management-
development system is part of a general concern about the selection
of an elite and the inevitable wastage that goes with it. But however
pertinent such criticisms, no one is willing to grasp the nettle. Those
with the power to do so—politicians, civil servants, industrialists—are
themselves products of the system. While they concede certain
weaknesses in the system, they are attached to the quality it produces
and the standing it bestows and are therefore its staunchest
defenders. Pascal Eyt-Dessus, a senior executive at L’Air Liquide,
declared flatly that “Ninety percent of the population want to abolish
the Ecole Polytechnique, but they all also want their sons to go there.”
Career Development
After graduation, the development of French managers continues
along these inegalitarian lines, a matter of sponsorship rather than
ability. Those apprenticed for general management are chosen for
their educational attainment, the standing of the grande école they
attended and how well they did on final exams. As in Japan, recruits’
initial salary differentials reflect this kind of “authenticated”
intellectual caliber.
These criteria allow the brightest prospects to be creamed off early.
Formal training is largely irrelevant, reserved primarily for the lower
echelons. Grandes écoles graduates instead enjoy an informal
apprenticeship system that gives fast trackers a secure setting in
which to acquire the necessary skills. General educational capital is
thereby converted into more orthodox career capital in the form of
broad experience. As one student of ENA explained: “The ideal thing
for a graduate is to be named head of planning, development, or
strategy—or else to be attached directly to the PDG as personal
assistant. Such positions guarantee both high visibility and privileged
access to the strategic problems of the group.”
At L’Air Liquide, for instance, brilliant young managers are given
strategic observation missions by the PDG himself. They are sent
abroad for six months with their own budget and access to a team to
assist them in observing medium-term market developments. Those
who distinguish themselves in this will then be assigned operational
responsibilities. As in Japanese companies, French companies like
L’Air Liquide and L’Oréal often reward rising stars by rotating them
through many different jobs.
An alternative route for science and engineering graduates is to start
off as specialists, particularly in R&D. Here they might be placed
under a mentor who would help them make contacts and oversee
their leap from specialist to general manager. While in the United
Kingdom and other countries a few ambitious science graduates make
a hard-fought transition from R&D to a line-management job, many
French science and engineering recruits use R&D as a springboard to
an illustrious career.
Managers don’t usually move up by going from company to company,
except at the very top. For example, Alain Gomez (Thomson
electronics group), Francis Mer (Usinor-Sacilor steel group), Jean
Gandois (Pechiney aluminum group) Raymond Lévy (Renault
automobile group), and Jacques Calvet (PSA) were all brought in from
outside in the 1980s to restructure companies. But for the most part,
companies grow their own timber. Career development in France
means being schooled in the thought, ways, and folklore of the
company.
Michelin’s approach to corporate acculturation, for example, begins
with recruitment policy. Says Jean-Pierre Vuillerme, Michelin’s head
of corporate communications, “We do not try to fill specific
vacancies. We look for people who want a lifelong career with us. So
the recruitment policy is biased toward young entrants who are
qualified, yet untainted by other corporate practices.” Michelin then
seeks to fit the job to the person rather than vice versa. Individuals
are given a free hand to accumulate what responsibilities they feel
capable of taking on. As one manager put it: “We are just like the
Michelin Man in the advertisements—we are allowed to inflate our
jobs to their natural limits.”
Rotation and training through special assignments is also
characteristic at Michelin, especially in international markets. A
French test driver will be brought to Japan and taught to speak
Japanese to work with Honda and other Japanese customers; a
Japanese manager will be sent to train in the United States and
Europe for a year before returning to Japan to direct regional
equipment sales; a Japanese manager will be moved to Detroit to
work with Michelin’s top Japanese customers on American market
needs.
While the strength of Michelin’s corporate culture is considered
unique even by French standards, its de facto commitment to lifelong
employment is shared by other French companies such as L’Oréal.
Large French companies resemble their Japanese equivalents in this
regard.
Lifelong employment requires corporate commitment to internal
promotion. Thus when a post comes up, L’Oréal makes every effort to
promote an insider rather than looking outside. Of course, a policy of
lifelong employment also means dealing with people whose relative
contribution to the company is diminishing. One former leader at
L’Oréal remarked: “Being grateful to those who have helped build the
company is simply a matter of fairness. But it is also in our interests
to stand by them; if we sacrifice the older managers, the younger ones
will have no faith in the company.” At many companies, ill-defined
posts are set aside to accommodate burnt-out managers. One senior
manager described them as voies de garage—railroad sidings used to
store box cars that are out of use. One Thomson executive even spoke
of whole departments that had been put out to pasture and whose
managers tacitly agreed to help younger managers on the way up.
Executives selected, acculturated, and advanced in this way have
presided over France’s postwar reconstruction and development. A
hallmark of that process has been the close relationship between
business and government.
Business and the State: The Japan of Europe?
French business is led by the best of society. What Japan achieves
through consensus and groupism, France achieves through elite
convergence. And the grandes écoles educational system ensures that
a high proportion of the best brains from each generation are pumped
into the civil service, business, and government.
Because French establishment is run by a core of like-minded people,
it can take concerted action. This action sometimes sets France apart,
as in the French withdrawal from NATO. Or consider the impending
single European market in 1992. For France, this is act two of an epic
production whose act one began in 1957 with the signing of the Rome
Treaty and the inception of the Common Market. It is clear from our
conversations with French managers, academics, and civil servants,
that France sees this as an important challenge, a vital lever for
restructuring the country’s industry and for internalizing operations.
Indeed, John du Monceau, directeur général of Accor, went as far as
to call EC ‘92 a “rendezvous with history.”
And for proof of French intentions, we need look no further than the
frenetic rate of takeovers initiated by French companies. Virtually
every merger or acquisition over the past five years has invoked the
need to reach a “critical size” to compete on a European scale; BSN,
Michelin, Rhône-Poulenc, and Hachette (a leading French publisher)
have been especially voracious. Moreover, the French government is
willing to pour money into corporate research to maintain a French
position in key industries. Recent subsidies to the state-owned
electronics companies Groupe Bull and Thomson dismayed the
European Commission.
French management is founded on the qualities its society most
reveres: the competitiveness and intellectual brilliance that is bred in
the grandes écoles. French management is therefore in tune with
society’s leading institutions—notably, government and education.
The education system serves as a feeder to both public and private
sectors. As we have shown, this system is not so much set up to
impart particular skills as to preselect an elite. Diplomas guarantee
careers, and the most outstanding guarantee the best careers.
Naturally, this common background eases subsequent dialogue
between government and industry—a mutual understanding further
reinforced by regular midcareer transfers from state service to
industry. Polytechnique and ENA were conceived to train engineers
and administrators for public service, but in modern times they have
supplied leaders for every occasion. Many of the chief executives of
France’s largest and most admired companies started their careers in
public service and moved to positions at or near the top in private
industry. The result is that France’s largest public and private groups
alike tend to be headed by products of the higher echelons of civil
service.
The appointment of ex-state officials as company heads is perhaps
understandable in the nationalized sector. What is less obvious is why
they occupy similar posts in private companies like PSA or even a
retail chain like Carrefour. The ubiquitous presence of senior state
officials in the private and state sectors makes the conventional
distinction between the two groups less relevant.
Consider the career of PSA’s Jacques Calvet. After graduating from
ENA, he took up various posts in the French administration. The
most notable was his position as head of the personal staff of former
President Valéry Giscard d’Estaing, while Giscard was finance
minister. Calvet moved to the business world when he was appointed
deputy managing director of the Banque Nationale de Paris (BNP) in
1974. By the time he joined the Peugeot group in 1982, he had risen to
chairman of BNP. In France, Calvet’s is considered a model career.
The idea of the state taking responsibility for training individuals to
assume leadership positions in business highlights the low threshold
between state and industry. In France, an accepted career path is to
enter public service, then use one’s privileged knowledge of its
workings to attain a second career in industry. The one-way,
midcareer transfer from public service to senior posts in commerce
and industry is eased by the social and educational proximity of the
two groups, and it helps to cement the government-business
relationship. Having themselves been on the receiving end of discreet
pressure, former civil servants are able to build and maintain bridges
between the company and the state. As François Delachaux, the head
of a French midsize engineering company, put it: “This does not mean
that the larger companies will necessarily win out, but nor will they
lose through not being heard.”
Company heads like PSA’s Calvet will always be able to call on former
public sector colleagues for assistance. And even without personal
contact, the likes of Calvet will be fully informed about how political
and government networks operate; they know how to lobby and
when and where to apply pressure. For example, after major losses at
his company in 1983, Calvet asked government approval to eliminate
7,400 jobs at a plant near Paris. The government wanted workweek
reductions instead. Calvet refused and eventually prevailed. Today
Calvet continues to call on the government for protection from
Japanese competition.
This kind of cooperation runs in both directions. Calvet readily links
PSA interests with national interests, telling one reporter in 1990,
“What was good for General Motors was good for the United States?
Well I consider that what is good for France is good for Peugeot. I
cannot see how the French car industry can fight for interests
contrary to French interests.” This reversal of the GM slogan reflects
the widespread desire among French industries to do right by the
country.
All this makes for a richer relationship between industry and
government from what exists in, for example, Britain or Germany.
One is reminded again of Japanese economic success, which was
founded on a complex interrelationship between a highly trained
industry-oriented bureaucracy and big business. Indeed,
“nationalized industry” has connotations in France that are different
from those in other countries. To be a French public-sector company
means to bask in the reflected glory of the French state—it is image
enhancing, not image demeaning. So one of the lessons we can draw
from France’s experience is that the state can be an impelling force in
industrial initiative, particularly with regard to nurturing strategic
technologies which may turn out to be the mainspring of economic
life ten years later (the Minitel Viewdata System already mentioned is
a good example of this).
But all is not smooth sailing for French industry. Elite convergence
does not preclude elite conflict. Consider the well-publicized struggle
for control of Moët-Hennessey Louis-Vuitton or the conflicts between
state-owned Unions des Assurance de Paris and private-sector
Compagnie de Suez over the running of the insurance company
Groupe Victoire.
And because of its distinctiveness, the French managerial model may
have problems in the new global environment. For example, L’Air
Liquide’s Pascal Eyt-Dessus speculated that grandes écoles graduates
have resisted moving outside of France because their credentials
abroad would not elicit automatic admiration, and they would have to
consort with those they considered intellectual inferiors.
The problems at Hachette when it bought Diamandis
Communications were a front-page feature of the Wall Street Journal.
The article singled out the propensity for Hachette executives, as
typical French managers, to immerse themselves in tiny details like
page designs and photo selection. Other French acquirers have hit
some bumps, especially in their U.S. acquisitions. There have been
profitability problems at Rhôone-Poulenc (acquirer of Rorer
pharmaceuticals), Usinor-Sacilor (which acquired J&L Specialty
Products), Thomson (buyer of General Electric’s consumer electronics
business), and Groupe Bull (that bought Honeywell Information
Systems and Zenith’s computer division).
The French model produces a mixture of strengths and weaknesses.
In particular, the emphasis on intellect serves research and strategy
formulation well but is perhaps less suited to flexible response in fast
paced industries where planning from the top can be cumbersome.
But whatever its perceived merits or shortcomings, the French model
is a coherent whole, with its own clear logic and rules providing
unambiguous signals that shape managerial action. And such
coherence gives French industry a focus and sense of purpose that the
rest of the world should not underestimate as a key to strong
economic performance.
ABusiness
version Review.
of this article appeared in the July–August 1991 issue of Harvard

Jean-Louis Barsoux is a term research professor

at IMD.

PL
Peter Löscher is the president and CEO of
Siemens AG.