Question

Discuss what you believe would be the different organizational culture & local culture aspects that you would have to take into consideration if your company was expending into Germany?

Answer 1

Organisational culture Vs Local Culture

Corporate culture refers to shared values, attitudes, standards, codes and behaviors of a company’s management and employees. It is rooted in the company’s goals, strategies, structure and approaches to business activities.

Local culture is learned and absorbed during the earliest stages of childhood, reinforced by literature, history, religion, teachers/schools and parents. It affects the way we perceive and judge events, how we respond to and interpret events, and how we communicate to one another in both spoken and unspoken language.

Companies have to learn to master the paradox of global/corporate/standardization vs. local/ customization/responsiveness. In other words, corporate culture vs. local culture.

A good example of a company that has made an attempt to integrate both corporate and local culture is McDonald’s. They insist on some aspects of standardization and values. Quality, cleanliness, speed and branding remain uniform. These values are not negotiable.

Many companies I’ve worked with have strong, centralised corporate cultures, which means that they have clear personalities and tend to hire for fit. They look for individuals who have a certain personality type and then train them to assume a very specific set of behaviours. A good example of this is Google and their Googlers. Google’s corporate culture is similar to Californian work culture and they hire talent with values as close to this as possible. Other companies have decentralised corporate cultures in that each location has a separate organisational culture, often similar to the local way of working.

There is one strong benefit to having a strong centralised culture as companies internationalise: it makes them more efficient. I designed a framework called The Culture Map, which allows businesses to plot the similarities and differences between their corporate and local cultures across eight scales.

Let’s take one of the dimensions: disagreeing. Some nations or companies feel that open debate and lively disagreement are largely positive; others believe that this type of behaviour is destructive. So if a company is confrontational in nature, they tend to hire people who likewise enjoy disagreement. The company is therefore more streamlined as all employees are similar – it provides a more homogenous way of working.

There are difficulties in hiring for fit, however. Companies are in danger of missing out on local talent if they only hire people who fit in with their corporate culture. Another challenge that comes with hiring for fit is that employees may work harmoniously with other employees, but may struggle to communicate effectively with local customers or suppliers. ExxonMobil, for example, is very task-orientated and focused on efficiency. They employ task-orientated people, which makes it easier for the business internally, but they also have large operations in relationship-orientated societies like Nigeria.

When employees are located in the same place in the same culture, much of our communication is implicit, whether this is through eye contact or body language. The closer the space we share, the stronger our reliance on unspoken cues. A manager at Louis Vuitton told me: “At our company, managers didn’t finish their sentences. Instead, they would begin to make a point and then say something like, ‘OK, you get it?’ And for us, that said it all.”

As companies internationalise, the ability to pick up on subtle messages breaks down simply because employees are no longer in the same space. Companies often automatically move to a more documented way of communicating to ensure meaning is not lost. What I’ve found, however, is that companies with creative environments have highly implicit communication. At Louis Vuitton, ambiguity is part of the value proposition, and one manager told me: “The more we wipe out ambiguity between what was meant and what was heard, the further we wander from that essential mysterious ingredient in our corporate culture that has led to our success.”

Companies can purposefully draw lines or boundaries around their creative departments and let communication within them remain more ambiguous. The rest of the company becomes more documented, while those creative units don’t suffer. This can help to protect your creative spaces.