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News > International
Europe's new-style CEOs
January 28, 1999: 6:34 p.m. ET

As shareholder pressure rises, chief executives increase their savvy
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DAVOS, Switzerland (CNNfn) - In Europe, old-style management is out. Amid renewed competition in the global marketplace, the continent's latest generation of business leaders are busy remaking themselves, with a new stress on communication and motivation.
     "The difference between a good and a poor company is people. So you need to have motivated people. And if you want to motivate people you have to explain what you want to do," said Claude Bebear, chairman and CEO of Axa.
     Bebear's attitude is typical of Europe's new breed of CEO's, which are increasingly responding to employee demands for more openness.

    
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     "If you're the top of a big organization, in practice you don't run anything. What you're doing is encouraging people to encourage other people to run their businesses," Clive Thompson, chief executive of Rentokil Initial, said.
     But just as employees are demanding more attention from the CEOs, so are shareholders. Investors now insist European companies pay more attention to the bottom line and the stock price.
     Sweden's Investor is a portfolio of stakes in blue-chip companies such as Ericsson, Saab and Astra, controlled by the powerful Wallenberg family.
     "Historically, it's been a holding company very close to the family. But as time has progressed of course the company is becoming a more public industrial holding company which has a very clear focus of trying to achieve shareholder value over the long term," said Marcus Wallenberg, executive vice president of Investor.
     But European Monetary Union and the strengthening of the single European market are making that even harder.

    
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     "Any company that's being evaluated on a regional or global basis has to deliver shareholder value, but in order to continue doing that means, it means meeting the competition and the competition is going to get much more fierce, particularly within the European region," said Maury Peiperl, assistant professor of organizational behavior at London Business School.
     And that means the CEO is no longer a long-serving company man but someone with a very international background. She or he has typically worked in four countries, served four companies in three industries and speaks 2.8 languages.
     But as more and more companies straddle national, linguistic and cultural boundaries, some CEO's are taking those skills a step further.
     They're starting to behave more like politicians and some observers say that's exactly what the modern world's changing power structure demands.
     "European CEOs have to act much more as business politicians ... in the vacuum left over by a world where we have less and less boundaries, less and less power of national governments." said Klaus Schwab, president of the World Economic Forum.
     Along with more influence in the public sphere has come more to say behind the scenes. The CEO no longer just speaks for a management board that makes collective decisions.
     "I think that I can listen to the arguments of my colleagues and of other management in this company, but then I make the decision," Manfred Schneider, chief executive at Bayer, said. Back to top

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