Now more than ever, as the world becomes more and more interconnected, even firms operating in one country need to have a global strategy to assess the impact of globalization. One of the most important aspects to consider regarding globalization is the translation of a company’s own corporate culture into a new market, which may have a vastly different local culture. The effectiveness with which firms can replicate their existing culture in new markets will be a direct predictor of their success, as this culture directly determines the quality of the experience that employees provide for customers – an integral aspect of brand loyalty (Maheshwari et al., 2014). However, the act of transplanting an organizational culture and trying to make it supersede a local culture, from which it can be radically different, is often easier said than done. There are important concerns raised about how it can be done most ethically, and with the smallest degree of negative impact to all stakeholders involved.
First, it is important to understand the stakeholders. Obviously the new employees being cultured would be the first set to name, as they will go through the largest transformation. The new-market customers and communities are also salient stakeholders in this situation, since they must interact with the brand and accept it as authentic to their culture as well, or it will not be successful. However, even existing employees in the “home” country are important stakeholders to consider, as there may be a great amount of change to their daily work lives to now consider peers who are remote and radically different than themselves in terms of culture and perspective. Current employees must be brought in through the change in a positive way, or success will not be reached.
To all of these groups of stakeholders, special consideration must be paid. To do this most ethically and effectively, a company must follow a few critical steps to ensure all people are cared for and supported during this change:
1. Understand the culture shock that will occur. The first step for any company going multi-national – or into a different subculture within the same country – is to thoroughly understand the local culture into which they’re venturing. To do so, I recommend utilizing Hofstede’s system of rating cultures along a scale for six different dimensions: Power Distance; Uncertainty Avoidance; Individual/Collectivism; Masculinity/Femininity; Long-term/Short-term orientation; Indulgence/Restraint (Hofstede & Hofstede, n.d.). By rating the current organizational culture as well as the new market culture along the same criteria, it can be easily determined where the largest set of growing pains will occur. The further away the two cultures are on the scale, the more the effort needed to bridge the gap.
2. Formalize Communication Channels. As Meyers (2015) discusses, there is much to be said about implicit communication – the body language, unspoken norms, and understanding of what was “meant” that occurs even without our intention. When a new office or location opens up in a different culture, an organization will not get the benefit of this implicit communication. What’s worse is that it may actually work to their disadvantage because there will be a lot of misunderstandings and potentially even cultural slights. Simply allowing communication to become a free for all will end up as a catastrophe, which is neither ethical nor effective. To combat this, Meyers (2015) recommends a full formalization of the communication expectations – when do you go through email versus phone, how early are agendas sent out prior to a virtual meeting, when do you go to someone directly versus their boss, etc. Detailed recaps are also recommended as they ensure all participants are on the same page with what was discussed and agreed upon.
3. Provide Support. No one can be expected to change overnight with simply a prescription that “this is the way we do it now”. As such, it is essential for companies to provide training for their employees and resources to help them work in a new way. Consider L’Oreal as it expanded; they value confrontation and debate to generate excellence, but in other cultures this was seen as negative and unnecessarily aggressive. Instead of compromising, L’Oreal provided training to the new employees about how to effectively handle conflict, which helped them work in the existing culture (Meyers, 2015).
4. Invest in New Leaders. Many companies take the approach of sending current managers and executives overseas to run their business. However, there are some limitations to this approach, as these managers may oftentimes not be as sensitive to the new market culture. Also such a strict adoption of the corporate culture that made them successful at “home” may make them unwilling to compromise with or support those employees who are going through the process of being cultured. Research and case studies have shown that an alternative to this approach is gaining ground. The ability to recognize, develop, and nurture talent in these new markets is becoming a competency differentiating many global brands, the most successful being willing and able to take a global approach to strategy (Dunnagan et al., 2013). Promoting a manager from the new market is effective, and may also be more ethical if the alternative is considered. By not promoting talent and instead shipping over expatriates for every open management position, the company is oppressing the new talent market by not allowing them opportunities for advancement.
These four steps above are not a global strategy, but are a good starting point for companies to understand how culture can effectively and ethically be translated across national boundaries. Companies who understand the fragile balance between what happens in the company and what happens in the local culture will be best able to deal with it and be successful in the long term.
Dunnagan, K., Maragakis, M., Schneiderjohn, N., Turner, C., & Vance, C. M. (2012). Meeting the global imperative of local leadership talent development in Hong Kong, Singapore, and India. Global Business and Organizational Excellence,32(2), 52-60. doi:10.1002/joe.21472
Maheshwari, V., Lodorfos, G., & Jacobsen, S. (2014). Determinants of Brand Loyalty: A Study of the Experience-Commitment-Loyalty Constructs. International Journal of Business Administration,5(6). doi:10.5430/ijba.v5n6p13
Meyer, E. (2015, October 14). When Culture Doesn’t Translate. Retrieved December 01, 2016, from https://hbr.org/2015/10/when-culture-doesnt-translate