Speed, globalisation, acceleration: all forces that are contributing to shaping modern business. The hectic pace of life risks putting paid to more than just a few companies (as is effectively the case) and is challenging management methods, planning, the very identity of companies and the production culture they were founded and developed on. Neologisms reflect these developments: augmented business, for example, refers to companies that use the web as their hunting ground, markets that used to have physical boundaries and are now basically limitless.

Alongside production and manufacturing activities, the aspects of business concerned with communications, information networks and the responsibilities involved in these arenas are now becoming increasingly important.

Exploring these companies, and understanding their methods, means not only looking at the present economy but also potential future developments. This is what Gian Paolo Bonani (from the Department of Social Communications and Research at the Sapienza University in Rome) does in his book “Augmented Business. Chaos and Responsibility in Business Communications in the Social Era”, which was written with university students in mind but is also a valuable aid for others, including companies, wishing to gain insight into the current scenario.

According to Bonani the economic activities of companies and organisations in general, are growing, accelerating, and intensifying, making productive and social objectives more structured and complex, with greater responsibilities at stake. What’s more, the author believes that companies using the web to expand their range of action and commercial and cultural influence, are operating in an economic arena where the consumer population has changed radically over the last 20 years.

Bonani analyses, studies, explains and illustrates this complex, intricate topic. He also examines the errors and misconceptions that arise, creating what is essentially a guide to this increasingly dense jungle.

L’impresa aumentata. Caos e responsabilità della comunicazione d’impresa nell’età social

G. Paolo Bonani

Franco Angeli, 2013

Companies, above all family companies, are part of a community. Indeed one of the distinctive characteristics of the family firm and its culture appears to be attention to local, “personal”, lasting connections with the local area. Not in terms of the workforce, but the origins of the company and its management approach. These aspects come to shape production, which responds in a distinctive manner to external forces: recession, the markets, production costs, competition.

All of this is highlighted by Leandro D’Aurizio (Banca d’Italia) and Livio Romano (Istituto Universitario Europeo), in an insightful study just published by Banca d’Italia, “Le imprese familiari nella Grande Recessione”, that analyses the behaviour of multi-plant family firms in the period known as the “Great Recession”, from 2007 to 2009.

In particular the study, which drew on data from a survey of companies conducted by Banca d’Italia (Invind), looks at the adjustment of staffing levels in Italian family firms following the recession.

The results speak for themselves: “During the recession”, the two economists explain, “Multi-plant family firms focussed on maintaining staffing levels at their head office rather than outlying premises. In particular, within-firm changes in staffing levels actually led to a slight increase in the number of employees in the head office, compared to a decrease in non-family firms”.

The authors explain that this is probably due to the practical application of the concept of “social recognisability”, based on the psychological and emotional bond between the company owner and the community.

This factor, which is evident enough to be measured statistically, represents tangible evidence of the corporate culture that continues to be firmly embedded in Italy, above and beyond the recession and temporary problems.

Le imprese familiari nella Grande Recessione (Family firms and the Great Recession: out of sight, out of mind?) 

Leandro D’Aurizio and Livio Romano 

Discussion topic n. 905, April 2013

New paths are beaten out between “local” and “global”: “glocal”, a hybrid, known for some time, of global and local, used to describe business activities firmly rooted in the area of origin yet with a strong focus on international markets. Recently we have had a new phenomenon – relocalisation, i.e. the return of industrial activities to the areas of origin after the successful season of delocalisation. Industry is returning to Europe, and above all to the US. There in fact, in the past three years, the manufacturing industry has created approximately 500,000 new jobs. The economic policies of President Obama have sustained the revival or the strengthening of the car industry (and the entire automotive sector) and several other areas.

Going against the flow in other words. Factories can and must be revived in countries with a longstanding industrial tradition and high cost of labour. The manufacturing industry in fact makes a solid and durable contribution both to the GDP and to widespread economic and social equilibrium (an industrial structure which innervates large areas is like a network of roots which keep the land compact and solid, avoiding landslides, fissures and avalanches). New skills, knowledge and culture develop around the manufacturing industry which are the driving force for widespread wealth which can be constantly renewed (provided naturally investments are made in training and research, human capital and the spread of technology).

“Manufacturing is a source of knowledge”, maintains Luca Paolazzi, director of the Confindustria research centre, in a recent book, L’Europa e l’Italia nel secolo asiatico: integrazione e forza industriale a difesa di libertà e benessere, [“Europe and Italy in the century of Asia: industrial strength and integration in defence of freedom and well-being”] published by Luiss University Press. He explains that “most of basic and applied research is performed by manufacturing companies. Action itself, i.e. production, offers improvements and advances solutions in processes and products”. The factory as culture, and interweaving of social fabrics. The source of wealth (GDP) and also relations filled with solidarity and future (that good “social capital” which contributes to the new ISEW, the index of sustainable economic welfare).

In other words open and reopen factories, producing again in the USA, in Italy and the rest of Europe. Good local and supply chain relations, an intelligent supply chain. Sophisticated technologies for niche production, solid quality and high added value. In this arena Italy has many cards in hand to be played better than in the past. 

We need to look around and behind us to understand corporate culture in Italy today. Search in the past and present, talk to entrepreneurs. Investigate the decisions made, the roads taken, what has taken place and is taking place inside and outside factories and offices. A difficult yet fascinating task, not just academic but also tremendously practical and useful.

Aldo Bonomi has attempted this with success in his latest work Il capitalismo in-finito [“In-finite Capitalism”] coming out now. This is a packed and exciting journey which bases on some questions. What has changed, for example, compared to the triumphant years of the upwardly mobile small and medium-sized Italian corporate model? And what since hundreds, thousands of entrepreneurs in northeast Italy invested money, even though they knew they were running a risk, and launched into new challenges, driven by the aspiration to make a name on the market and earn their place in the sun?

The answer is “everything” and the demonstration by Bonomi moves from a voluminous series of data and interviews throughout industrial Italy: from post-Fordism Turin to the Veneto foothills with Padua and Vicenza, from Modena to the Adriatic areas of Pesaro and Urbino, from Florence to Syracuse.It should be pointed out that Bonomi has put together not just a research paper but a series of tales and stories of life which aid in understanding better what has been done, what is the corporate cultural model which has accompanied the growth of the Italian economy to date and, now, its stagnation and the many doubts about the future which afflict entrepreneurs, politicians and the general public.

A book and a journey which are reminiscent, in a certain sense, of other similar ventures such as those by Guido Piovene (Viaggio in Italia – “Italian Journey”) and by Giorgio Bocca (Miracolo all’italiana – “Italian Miracle”) which however narrated a country which seems centuries away from that of today.

Il capitalismo in-finito

Aldo Bonomi

Einaudi, 2013.

The birth, progress and development of firms also stem from the historical, institutional and social conditions of entrepreneurs. Or rather the particular nature of firms, their culture, style and potential for growth are apparently closely linked to the historical age during which they are set up. For a better understanding however the information and interpretations have to be organised in a logical sense. Guides are needed, such as the one prepared by Geoffrey Jones (from the General Management Unit of Harvard Business School) who in just over 70 pages tells of the development of the relationship between entrepreneurship, firms and development from 1850 to date.

The study integrates knowledge on the role of entrepreneurship and firms in the analyses of why Asia, Latin America and Africa have been so slow in catching up with the West after the industrial revolution and the advent of modern economic growth and of how today, instead, some areas of the world are growing much more than Europe and North America.

In order to guide the reader through over one hundred years of corporate and economic history Jones divides the whole into large phases: the creation of wealth and poverty in the age of the “first global economy” and up to the First World War, the upset caused by the Second World War and the evolution of the post-war years, the phase of the “second global economy” to date. All this narrated rather than stated, so as to build a story and not just an academic essay.

The conclusion according to Jones is that the explanations which concentrate on shortcomings by institutions, on the low tendency towards development of human capital, on geography and culture are important, but not sufficient for understanding the growth of firms and their way of facing up to reality. Today the social and cultural rooting of new technologies launches important entrepreneurial and cultural challenges which the various areas of the world tackle differently and with different results. As Jones says at a certain point, local and western managerial practices have often been combined for the production of hybrid corporate forms.

Entrepreneurs, Firms and Global Wealth Since 1850

Geoffrey Jones 

Harvard Business School – General Management Unit, Working Paper No. 13-076, 2013.

This year, the Pirelli Foundation has again opened its doors to third-grade children of the Giovanni Battista Pirelli elementary school, with a very special lesson for them.

After a brief introduction to the history and properties of rubber, the children learnt about the main stages involved in manufacturing a tyre. From theory to practice: armed with plasticine (strictly black!) and wooden sticks, the children let their imagination run wild, designing and creating a tread of their own… geometric patterns, shapes taken from the world of nature and even a few hearts. This led to the creation of the latest treads: ‘Fantasy’, ‘DNA’, ‘Rubbery Sky’, ‘Go!’ and many others.

The morning continued with a visit to the R&D laboratories. Shown around by laboratory colleagues, the children discovered the secrets involved in creating a tyre tread: from laser cutting to the delicate work of gouging and then on to the semi-anechoic chamber, where, in absolute silence, they put the performance of Pirelli tyres to the test.

This course is an integral part of the training programme provided by the Pirelli Foundation with the aim of introducing children to the world of the factory and work, and bringing even the youngest ones closer to the values of our company.

If you wish to find out more about our training programme for schools, please write to info@fondazionepirelli.org or call +39 02644270613.

Trudging along through the Great Crisis, when we hear the word “finance”, we think greed. We think ruthlessness. Of this mysterious, inscrutable world. Mountains of paper that produce money, but no jobs, no useful goods or services. Speculation. We think Michael Douglas’ Gordon Gekko in Wall Street (a film that proved to be all too prophetic). Or the cutthroat businessmen of Tom Wolfe’s The Bonfire of the Vanities (an insightful work read by many, but heeded by few). We think bankers, stock options and scandalously high bonuses. The worst side of capitalism. But there’s no place in the economy for such black and white judgements, and finance is certainly not the essence of evil. If we look with a critical eye at the various processes at work within the economy, what we can say is that finance should, as a response to the challenges of the Great Crisis, be returned to its roots as “business finance”, i.e. a set of theories, techniques, tools and decisions aimed at facilitating a better allocation of capital (both investments and earnings) in the direction of productivity. In other words, finance at the service of the real economy. This is an idea that can also be found in three good books that have just been published: Lezioni dalla crisi (Lessons from the crisis), by Giuliano Amato (both a politician and an academic of international importance) and Fabrizio Forquet, deputy editor-in-chief at Il Sole24Ore; The Price of Inequality, by Nobel laureate Joseph Stiglitz (the goal is “to shape the markets and take them towards greater equality in opportunities”); and, above all, L’ascesa della finanza internazionale (The rise of international finance), by Giuliano Berta, one of Italy’s greatest economic historians, who notes, “We need to change financial institutions. The key to reforming banks in the interests of social justice lies in democratizing them, in breaking through their elitist shells in order to better integrate them into society and into the real economy.” A serious, effective culture of enterprise means reflecting, right now, on how all of the mechanisms of production work and how best to coordinate them, and on the involvement of all of the various economic and social players. Banks and other financial organizations included, of course.

An expression, a smile, an idea, a project. The culture of a firm can also be understood from these things, apparently unrelated to the market, product, balance sheet and figures. If culture is, for example, the firm’s intrinsic guiding principles, spirit and approach towards the market and employees, its description also takes a direction which can be unusual and unexpected.

In this way the corporate concept instilled in a production organisation has in the past also been built up through the day care centres for employees’ children, the seaside and mountain holiday camps, savings banks, gift packs and the actual image of the factory. Today globalisation lays down the law yet for those firms for which culture is a keystone for growth it is in fact the same thing, only in broader terms.

It is important and interesting to understand therefore what can happen in these cases. This is what makes reading and looking at Imprese Sociali Ferrero [“Ferrero Social Enterprise”] so enjoyable. This is a book of just over 300 pages, rich in photos and stories which tell how Ferrero, starting in Alba in Piedmont in 1946, managed to combine business and social responsibility through the creation of production units in India, Cameroon and South Africa.The collection of pictures and stories, edited by Caterina Ginzburg, is classified by people (men and women with various jobs in Ferrero plants), places (India, Cameroon and South Africa in fact) and products (cocoa, milk and sugar cane). A sequence of photos and stories of work, of lives lived, of joy and sorrow, of discoveries and conquests: a combination which makes up the unique picture of the social enterprise culture which Ferrero has built in time.

The book thus forms an emotional trilogy, an unexpected journey into places, milieus and homes which hide nothing but which in fact map out the idea of a company which bases its culture on profit and quality as well as on the local area and people. A single entity made up of several places permeated by the same idea about production.

Imprese Sociali Ferrero

Edited by Caterina Ginzburg

Skira, 2012

Corporate culture can eventually be taken on board by those involved in company operations to such an extent as to create an extremely strong identity and even coin a special name for those who work and effectively spend a large part of their active lives in that company. Totally non-authoritarian yet extremely pervasive, an identity which permeates the experience of individuals and characterises their existence. This is the case of the historic multinational Procter & Gamble, 170 years old and with over 130,000 employees in 80 countries, which has created a corporate culture that takes shape in the employees themselves, the “proctoids”, members in fact of a true corporate culture, unique of its kind and self-built over time.

For a better understanding Isabel Cristina Parra, from the EAFIT University in Colombia, has attempted to investigate among the work force of the multinational and has succeeded in confirming the existence of a homogeneous culture within the organisation analysed.

According to this research, initially theoretical and later empirical, in order to achieve production excellence P&G is organised into multi-function teams which offer an extended range of positions and career opportunities. This structure, Parra explains, has increased the level of diversity and arrived at the need to standardise conduct. Today’s corporate culture is the evolution of this organisation model which started out many years ago. Over the years Procter has realised that a common culture has to be created in order to maintain a good atmosphere. Furthermore the corporate values, principles and practices gained in strength as they started to pass from one employee to another, from one generation to another.

The conclusion of the work is clear: that each individual has a personal and unique cultural profile. In the same way a given group of people has a cultural profile which reflects the general cultural orientation of the people within that group. It can be said that there are dominant cultural laws at Procter & Gamble and an individual P&G profile.

Proctoids: Are they a Myth or Reality A Holistic Analysis of Procter & Gamble Corporate Culture

Isabel Cristina Parra

Revista de Negocios Internacionales. Vol. 2 Nº 2 Pp. 126 – 144

These are thrifty times and in prolonged periods of crisis we have to do more with less and reduce consumption of energy, materials and land, in other words avoid waste. Also, possibly, trying out a new and lower-key equilibrium. The appeal of less is more, as proclaimed by the brilliant English designer, Benjamin Hubert, a simultaneously ancient and new idea. In times gone by, in the extraordinary development of Europe from romanticism to the 20th century, this was in fact the rule of great artists ready to build a new aesthetic by revolutionising painting and writing, and of composers such as Anton Webern and Erik Satie, focused, in the piano sonatas, on a music which is crisp, linear, sparse and written without superfluity. The elegance of modernity.

A century later, seeking a way out from the over-indulgence of flamboyant opulence and unbridled consumerism (neglecting imbalances and debts), here we are again, ready to restate the need for the basic. An ethical choice, for a more sustainable world and an aesthetic choice, in perfect harmony.

Carlotta De Bevilacqua, leading entrepreneur in Italy’s excellent lighting industry and famous worldwide, insists that “doing away with something is a mark of intelligence, above all in terms of material, weight, bulk, hours of production, energy input and rejects” (CasAmica, 6 April). These are good intentions and also production strategies in the best companies, the most cultured and responsible ones. Not a “happy decline” (pretentious ideology) but instead the guarantee of an elegant and functional choice of the essential.

New design and product cultures, a radical change in the patterns of production and consumption, including for new-generation tyres obviously. Less rubber, lower weight, lower friction, lower consumption of car fuel, less costly and polluting mineral silica to be replaced by vegetal silica from rice waste. A very green and sustainable procedure for a “musical” tyre in Satie style.