International insights: Fluor Daniel reveals strategies for global success.

INTERNATIONAL INSIGHTS

FLUOR DANIEL REVEALS STRATEGIES FOR GLOBAL SUCCESS

There are many different points of view on developing corporate global strategies for the 1990's.

One company with a major presence in Southern California has, through its extensive experience in operating globally, come up with some basic concepts that can be applied to any firm in any industry that's looking to expand overseas.

Fluor Daniel Inc., Fluor Corporation's major subsidiary, is a worldwide engineering, construction and technical services company with more than 50 offices around the world. Organized to meet client needs, the company is structured into five business sectors; hydrocarbon, government, industrial, process and power. Services include feasibility studies, conceptual design, project management, engineering, construction, procurement, technical services, project financing, maintenance and plant operations.

The Irvine-based parent, Fluor Corporation, celebrated its 100th anniversary last year. In 1947, Fluor won its first major overseas assignment, an expansion of Aramco's facilities in Saudi Arabia. In 1990, Fluor Daniel announced another contract with this same client for a comprehensive oil and gas expansion program to be developed over the next five to nine years.

Overseas growth has made it necessary for the company to set up permanent Fluor offices outside the United States. Following the opening of the Saudi office in 1948, the company opened offices in Canada, Australia, London, the Netherlands, Japan, and China.

In 1977, Fluor made a significant acquisition. It purchased South Carolina-based Daniel International, then ranked among the nation's top four contractors. In 1985, Fluor Corporation and Daniel International joined, forming a new company, Fluor Daniel, Inc.

Fluor Daniel has performed work for clients on six continents in over 80 different countries. The company's longterm client list includes Pertamina, the national oil company of Indonesia. In 1976 Fluor Daniel built a new refinery for Pertamina in Cilicap, Indonesia. Seven years later the company completed a $1.2 billion expansion project at the site. Earlier this year, Fluor Daniel announced yet another refinery expansion contract, estimated to be in excess of $400 million for the Cilicap refinery.

Operating globally for more than 40 years, the company has learned five basic lessons:

Lesson One: When Fluor enters the international arena, it does so assuming that its offices will be permanent. When the downturn hit the engineering and construction industry in the 1980's, corporate decision makers had to ask themselves if it made sense to keep certain international offices open when they didn't have any projects to work on. Competitors were closing the doors to their offices; did they know something Fluor didn't?

After some hard soul searching, Fluor looked back on the years invested and decided that it couldn't afford not to keep their international offices open. Management believed a turnaround was coming and that if they shut down international offices only to reopen them later, it would take years to regain the firm's reputation -- if in fact it could be regained. And they knew that once the market rebounded, one of the major qualities that would set them apart from the competition would be their steadfast international presence.

Lesson two. As Fluor Daniel opens international offices, it has realized that sending Americans to staff them is a big mistake. To facilitate becoming part of the culture, whether in Malaysia or Saudi Arabia, the company's philosophy is very simple; clients want to work with people they know and understand.

Fluor Daniel hires local people to staff its international offices, and gives back to local international communities through charitable donations and volunteer work. It has never tried to try to change a culture, or pass judgement on a foreign style of doing business.

Lesson Three. The company believes its global strategy is enhanced by investing in its employees. When overseas operations increased, the tendency was to try and keep costs down by limiting travel only to a few senior level managers. Management soon realized, however, that to be truly global, the company must imbue a global state of mind in as many key people as possible, regardless of rank. So the company routinely sends personnel overseas to build relationships that will benefit their careers and the company's globalization efforts.

Lesson Four. Effective allocation of resources is essential. Fluor Daniel is concerned about adding value to another nation's economy. For example, if the company were going into China today, it would be foolish to send engineering and construction labor since the country has more than enough. It would be wise however, to bring what the Chinese need; project management, construction and process technology skills. The same is true for any industry and any country. You must know what you've got and what is needed.

Lesson Five. The ability to succeed globally is only as good as the ability to communicate. Fluor Daniel has a single global computer network which allows engineers to work on projects thousands of miles away. This capability allows the company to employ worldwide office locations to their best advantage. Low-cost engineering centers generate design documents in areas where such costs are very high.

And because the needs of the world change so quickly, the company has learned to stop trying to offer only certain services to certain market areas. For example, Fluor Daniel's London office provides a variety of services to all five of the company's business sectors, while it used to be limited to supplying only engineering services to its hydrocarbon clients. That was a limiting and obsolete concept. Now the company can offer clients all of its services from all of its operations centers worldwide.

Those lessons Fluor Daniel has learned in its 40 years of international business experience will continue to power the corporation's efforts in the future.