American companies have improved in recent decades but many still do not understand how differing cultures in different countries operate and how these cultural differences affect how companies do business.

For example, at the time of the dotcom bust, a client observed a falloff in demand. This was universally the case everywhere except in France, where the factories were producing as much product as ever. What was happening in France post-dotcom bust was that the government did not want to have strikes driven by workers' fear for their jobs. Therefore the government became the primary buyer of the goods our client could not produce profitably. The government stored these goods in a warehouse in the Loire Valley. By so doing, they kept the workers employed.

In essence, the government was buying unsaleable goods, which amounted to a transfer payment, which allowed the government to escape the eventuality of major strikes and economic dysfunction. In the U.S., we're not used to that type of government intervention. In France, it is much more common. 

The fact that businesses do not operate in the same cultural contexts continues to be news to many U.S. executives.

A generation ago, when one spoke of the automobile industry it tended to be a U.S.-centric conversation. One thought of the classic oligopoly consisting of GM, Ford, and Chrysler. Today the auto industry is much more diverse, with a number of players, while other industries, such as the telecommunications or computing spaces, are moving toward classic, global oligopolies. 

Whomever is the dominant player in an oligopoly will tend to dictate the means by which the entire segment is managed. Any company that tries to compete in an industry that has become an oligopoly needs to understand how the industry is controlled by the dominant players.

The degree of respect that intellectual property (IP) enjoys varies markedly around the world. A recent study revealed that filing a patent in the U.S. entails a three- to four-year lead time before another player becomes aware of a patent and either leapfrogs it or otherwise makes use of the technology without the owner's permission. Globally, respect for the three main categories of intellectual property, patents, trademarks and copyrights, is at a new low. The global market is simply too large for most companies to police on their own.

For economic reasons, protecting IP is essential to doing business. It is a large commitment to develop new technologies or new processes and to commercialize them successfully. The filing for a patent and oversight of this property is an additional, non-trivial expense. The developer of the IP must recoup this investment while a company that infringes on a given piece of IP does not. Unless an infringing party is identified and sanctioned for the theft they have every motivation to keep infringing and to keep benefiting from another company's ingenuity. 

In most cases, there is some type of distribution chain between a manufacturer and an end-user. It is necessary for the manufacturer to understand how a distributor presents the manufacturer to its customers. If a company sells goods through a variety of distributors they need to know which distributor may be promoting a competitor over them.

Distributors can favor a competitor in a number of ways, including lower pricing, better delivery lead times, or simply promoting a competitive offering as the better product. Companies that are doing business overseas, in particular, are now challenged to understand the operation of all of the links in their value chain. There is a trend toward bypassing these middle men completely by dealing directly with end-use customers. In some industries such direct links are becoming critical. 

A competitor of one of our clients had outsourced manufacturing of a major product line. This was a relationship that spanned years. The manufacturer handling the outsourcing was a joint venture between an American and a Japanese company. Unfortunately, the American and Japanese firms had a falling out and decided to liquidate the joint venture. In the divorce, each company appropriated to itself what it did best.  Since it was manufacturing much the same product as before the falling out, the Japanese company decided to place its American former partner's name on the products. Then it became well-known globally overnight. All of a sudden, the American company was left with no source of supply for a major product. Moreover, there was a now a new competitor in the market to worry about.

Such changes can now happen quickly, and in a global marketplace, where a new competitor can crop up in a different country, with a different legal structure and business environment, it can prove very difficult to recover from a sudden shift that is to the detriment of your company.