Corporate cultures vary greatly from one country to another because national cultures have direct and strong impact on an organization. What works well in one country may not necessarily apply to other cultures.
It is important for business managers of business organizations with operations in overseas markets to consider the cultural differences that exist.
How national cultures influence corporate cultures?
National cultures can have a profound impact on corporate cultures, shaping everything from leadership styles to communication patterns to decision-making processes.
- Values and priorities. National cultures often emphasize different values, such as individualism vs. collectivism, power distance, uncertainty avoidance, and long-term orientation. These values can then translate into corporate priorities, like individual achievement vs. group harmony, hierarchical structures vs. flat hierarchies, risk-taking vs. caution, and short-term gains vs. long-term stability.
- Communication styles. Communication styles vary across cultures. Some cultures favor direct and explicit communication, while others prefer indirect and implicit communication. This can lead to misunderstandings and misinterpretations in multicultural workplaces.
- Decision-making processes. National cultures also influence how decisions are made within an organization. Some cultures favor top-down decision-making, while others prefer a more consultative and participatory approach. This can impact the speed and efficiency of decision-making.
- Work-life balance. National cultures differ in their expectations regarding work-life balance. Some cultures prioritize long hours and dedication to work, while others value personal time and leisure. This can influence employee expectations and company policies.
Examples of impact of national cultures on businesses
Understanding the impact of national cultures on corporate culture is essential for anyone working in a globalized world.
Example 1: Universal Studios opened its theme park in Singapore on March 18, 2020 at precisely 8.28 in the morning with eighteen Chinese lions by the main entrance. All this because the number 8 is auspicious in the Chinese culture and favored by Chinese.
Example 2: In high-uncertainty avoidance cultures, like Germany, companies may have more formal rules and procedures. In low-uncertainty avoidance cultures, like Brazil, companies may be more flexible and adaptable.
Example 3: The American charismatic leadership style exuberant of confidence and dominance does not go well in Australia with its easy-going approach to living. Therefore, many large firms from the US that successfully operate in several countries will have a hard time finding a base for its culture in Australia.
Example 4: In high-power distance cultures, like India, decisions are often made by senior executives with little input from lower-level employees. In low-power distance cultures, like Denmark, decisions are often made more collaboratively.
Example 5: Sellers of cosmetics and lingerie tend to find it difficult to expand into Muslim countries in the Middle East were attitudes towards female liberation and freedom of expression are still extremely conservative.
Example 6: In individualistic cultures, like the United States, companies may have flatter hierarchies and focus on individual achievement. In collectivistic cultures, like China, companies may have more hierarchical structures and emphasize group harmony.
By learning about and appreciating different cultural perspectives, companies can create more inclusive and successful workplaces.
National culture models
Let’s take a look several global and regional frameworks regarding the impact of national cultures on corporate culture:
- Trompenaars’ Model of National Cultural Differences. This model identifies seven dimensions such as universalism vs. particularism and specific vs. diffuse in order to compare cultures across countries.
- House’s GLOBE Study. This model explores nine leadership dimensions in 62 societies, highlighting cultural variations in leadership styles.
- Hofstede’s Dimensions in Specific Contexts. Gerd Hofstede studied the links between national cultures and organizational cultures and found five dimensions of culture. This model applies his framework to understand cultural nuances in industries, professions, and even generations.
In summary, national cultures in different countries may be so strong that any attempts to change the way how things are done can create resistance and resentment. This might apply to countries such as Sweden, Japan, China or Switzerland.
Therefore, any attempts to establish a corporate culture in a multinational firm operating in various countries can be undermined by the strength of national cultures in those countries.
