Why is it important for international companies to look at differences in national cultures? This question seems to be highly relevant in times of globalization, and in times when national borders seem more fluid than ever before.
Theorists such as
Geert Hofstede and
Fons Trompenaars have identified different dimensions that can be used to evaluate differences in national cultures. The notion is that these differences between cultures may have an effect on how to effectively lead foreign employees and manage foreign stakeholders, and that these differences may create managerial challenges for companies employing people from other cultures.
This short article deals with the problems arising from differences in national cultures in leadership, and how international companies, or companies employing employees with different national backgrounds, can seek to overcome differences and eventual problems. Likewise, this article discusses how companies might use a unified organizational culture to streamline the behavior of the employees, and how a unified organizational culture might smoothen out managerial problems arising from cultural differences.
Geert Hofstede (1991) offers some guidance to the extent of the problems, and how these might be resolved.
Geert Hofstede explains that the differences between national cultures are mainly found in the deep rooted values of the respective cultures. These cultural values can shape how people expect companies to be run, and how relationships between leaders and followers should be. Ideally, these expectations are balanced between the employer and the employee, but many times the cultural distance results in great differences that can cause problems for the management of the international company.
When employing people from different cultural backgrounds, companies may benefit from generating a unified organizational culture. The difference between national and organizational cultures is that the differences between national cultures are mainly found in the values of the different cultures, whereas differences between corporate cultures are mainly found in the practices between different companies. (Hofstede, 1991) The corporate culture of an international company can therefore very well be uniform across borders, whereas the deep rooted values of different people from different cultures potentially still exist.
This means that employees from other national cultures can be socialized into the culture of the respective company, and hence learn the practices of the respective corporate culture, even though these practices might be contradictory to the practices normally found in the employee's national culture.
However, if the practices of the corporate culture are very unlike the normal practices found in the national culture, companies may find it difficult to socialize foreign workers into a corporate culture.
Companies can, if they want to pursue a unified corporate culture, use different measures to strengthen the socialization process.
- Hire people that demonstrate values equal to corporate values
- Hire people not yet socialized in other corporate cultures
- Create a strong socialization process
Not every company will benefit from generating a uniform corporate culture to cope with national cultural differences, and many companies may gain benefits from accepting and exploiting the cultural differences within the company. The choice of whether or not to seek a uniform corporate culture is oftentimes determined by the importance of maintaining e.g. uniform product offerings, leadership styles, management systems etc. Companies like IKEA or McDonalds may want to create a uniform corporate culture, because this may strengthen the uniformity of leadership, management systems, shopping experiences and product offerings world-wide.
Other companies may not benefit from a uniform corporate culture, where differences in both corporate cultures and national cultures are not regarded as a problem, and instead seen as competitive necessity to remain viable. Companies like Unilever, may not see it as important to create a strong uniform corporate culture across its portfolio of companies, because this uniformity will not strengthen the company on a global scale, and maybe act as a barrier in catering various employees and customers around the globe.
The choice of corporate culture uniformity is often, as said, determined by the international business strategies followed by the respective company, which can be discussed and evaluated using the work put forward by
Howard Perlmutter, and by
Christopher A. Bartlett & Sumantra Ghoshal.