Integrating local values into your company’s corporate culture is crucial to strategic success in a global marketplace, writes Dave Hanna
As more and more companies expand their reach across today’s global marketplace, many of them are coming face to face with the differences between their corporate culture (“how we do things here”) and the national culture of their new locations (“how we expect you to do things here”). Some of these differences can be addressed with minor adjustments; others could be deal-breakers if not resolved.
Dutch professor and social psychologist Geert Hofstede has researched for decades the nature of national cultures, and his research has validated the cultural differences along six dimensions. The graph in the sidebox illustrates how Australia, China and France compare in these cultural dimensions. Indeed, some of the differences are significant. Add to the mix a company’s corporate culture as it seeks to do business in each of these three countries. Whether it might be IBM, Samsung, Commonwealth Bank, Procter & Gamble or Company X, each would have its own version of “the way to do things”.
When cultural clashes emerge from country/company differences, what should the business leaders do? National culture defenders might ask, “Why don’t you modify your business practices to fit in with our way of doing things?” Company culture defenders might ask, “Why don’t you try our very successful way of doing things?”
With all due respect to both viewpoints, these are the wrong questions to ask. The governing element in these discussions is not country or company, but marketplace. What do we need to do to be successful in the marketplace? Answering this question turns one’s attention from self to stakeholders’ needs and the work that needs to be done to fulfil their needs. This focuses the energy on issues such as:
- What do customers and other stakeholders in our market expect from our organisation? (Will their standard of living be raised? Will their cultural expectations be violated?)
- What is our strategy to be successful in this competitive marketplace? (What can we realistically hope to achieve? What results are we willing to commit to?)
- What are our governing values that define how we will work with stakeholders and with each other?
- What organisational capabilities do we need in order to achieve these results?
- What do our work processes, roles and systems need to do so that we are consistent with all of the above?
Running the gauntlet of these questions will naturally sift through cultural differences and help you to reach agreement on a customised formula for your marketplace – a unique blend of company principles and local values that are key to strategic success. Following are two cases in point.
For years, one global company ran product advertisements in Japan using its US commercials featuring Caucasian actors speaking English with Japanese subtitles. This was the result of a company tradition of senior executives (English speakers only) personally approving all final advertising. After years of poor results, the company’s business grew significantly after it started running advertisements with Japanese actors in local settings.
Another case involved a global giant having difficulty retaining associates in its team-based manufacturing plant in Germany. Most prospective employees had never worked in a real team system. The company started an experiential orientation for new hires that introduced them to the principles and realities of the team system. The new associates came out of these learning experiences anxious to contribute to their production teams. Attrition rates dropped sharply and the plant eventually became the company’s global leader.
The driver in both of these cases was a passion to win in the marketplace. As they examined cultural and corporate traditions in the light of the goal to succeed in the marketplace, all parties learnt something new and grew from the experiences.
The Hofstede Centre’s research on national cultures
- Power distance: (high) less powerful members expect and accept that others have more power; (low) both managers and employees expect to be consulted on decisions, and information flows freely at all levels.
- Individualism: (high) “I” thinking (people should look after themselves); (low) “We” thinking (groups should look after individuals).
- Masculinity: (high) people want to be the best; (low) people want to do what they like to do.
- Uncertainty avoidance: (high) people feel threatened by ambiguous or unknown situations and have created ways to avoid these; (low) people accept that the future is ambiguous and respond to events as they occur.
- Long-term orientation: (high) people encourage preparing for the future; (low) people maintain time-honoured traditions while viewing societal change with suspicion.
- Indulgence: (high) people restrain their desires and impulses; (low) people indulge their desires and often focus on leisure time, acting as they please, and spending money based on the way they were raised.
Source: The Hofstede Centre. Image source: supplied
