How to balance corporate culture with local culture

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Are you an International HR Manager managing expat employees? As your business grows and moves into new markets, one of the challenges you may face is managing the corporate culture.

By Allianz Care | April 11, 2019

Allianz Care - company culture

When sending expats to work in new countries with very different societal values and norms, should you:

  • Stick with your existing corporate culture?
  • Find a balance between your existing corporate culture and local culture?

It can be a difficult area to navigate and we hope to give you an overview of both options with real world examples.

What is corporate culture?

It is important to have a good understanding of what corporate culture is when managing it at an international level.

Corporate culture is the “how we do things around here” ideology that exists in every company. The norms of company founders may initially influence an organisation’s culture. However, as a business grows, other behavioural norms are likely to evolve. The Society for Human Resources says most corporate cultures are based on assumptions around:

Effectiveness: what metrics indicate the business is doing well? This needs to be supported by an effective mission statement and strategy that ties in with the organisation and desired culture.

Appropriate emotions: what emotions should employees express and which should be repressed?

Human nature: Do we react in advance of a situation arising or wait until there is a problem? An organisation’s views on these assumptions will impact how people interact within the organisation but also how customers and suppliers are treated.

Fostering the right company culture is an essential part of many company’s competitive advantage.

Animation giant Pixar have created a company culture that:

  • Puts people first
  • Encourages self-expression
  • Focuses on purpose

They had to go through some pain to get to that point, including overworking employees to the point that it impacted their welfare. The lesson was learned and Pixar now put their people ahead of any one film. The result is a happier workforce who continually create animations that are box-office hits.

How is corporate culture influenced by HR?

HR influences an organisation’s culture in a number of key ways:

Hiring: traditional hiring focused on matching an employee’s skills to a role. Today, ensuring an employee is a good cultural fit for an organisation is also important. An ill-fitting employee is much more likely to be unhappy in the role. 

Onboarding programmes: International HR Management play a pivotal role in the design and implementation of employee orientation. These programmes should communicate the employers’:

  • Norms
  • Value Systems
  • Desired behaviours

Helping employees assimilate into the existing culture within the organisation.

Performance management: as the employee settles into their role, effective performance management programmes help reinforce the company culture. Setting goals that align with company culture allow HR to ensure employees are fitting in with the culture of the organisation.   

Global vs local company culture

The Society for Human Resource Management say research shows national culture has a greater impact than that of the culture of the organisation. Therefore, international Human Resource Managers with expats working in countries with very different cultures will have to work out the best approach for helping them to adjust. There is no doubt robust pre-departure training is required but there also needs to be preparation to minimise cultural clashes.

The approach you take will depend on your organisation's needs and goals. To avoid a collision between your organisation and local culture Equatex recommend:

Know your objectives:

What does the business want to achieve? What are the potential cultural points of conflict that may prevent this from happening?

Organisations need to be aware of:

  • How decisions are made? Is it by consensus or does the manager decide?
  • How important is time? Is being on time critical or is flexibility more important?
  • How do people communicate? Is direct communication valued or is politeness valued more?

Decisions need to be made on whether the local culture will be incorporated or if the organisations existing culture will prevail.

There is not one right answer to this. There are multinational companies who do both. Take Google as an example. Their corporate culture is largely built around the innovative Californian work culture where they were founded. Rather than adapt, Google focus on hiring people who are a good fit for their existing culture.

Cross cultural engagement

If your business already has an expat contingent, then cross cultural engagement is likely to be something you factor in. Employees are naturally more likely to build the closest relationships with those they see every day. The introduction of expat employees and a focus on diversification within the workplace can help build understanding where gaps do occur. It is an effective way of breaking down the ‘you versus us’ mentality where it does exist.

There is no doubt developing the work environment of your business as it becomes more international is a challenge, but as a global HR manager it is critical to the happiness of employees no matter where they are based.

An equally important but more clear cut decision to make is looking after your expat’s physical and mental wellbeing with international health insurance.