Corporate Culture or Local Culture?

Author: Joy Huang

Recently I had a conversation with a four-time expatriate from one of the largest oil companies in the world. She has been on multi-year assignments around the world in places such as Saudi Arabia, Thailand and Singapore. Most recently, she finished a two-year assignment in China. When asked about how her company adapts to the different cultures around the world, I got a surprise answer. "We do not adapt to local cultures", she said, "We teach them our corporate culture, and it's the same everywhere in the world".

Although answers like this were common ten years ago, they are increasingly changing in recent years. The change took place not because businesses suddenly decided to become more culturally sensitive. Rather it was the reality of the cost of business that made many rethink the “one size fits all” model. Today, McDonald and KFC’s menus in China are peppered with local flavors and side dishes that are nowhere to be found in the U.S. Wal-Mart, after more than a decade of struggling to compete in the Chinese market, finally acknowledged that what sells in Little Rock, AK does not in the burgeoning cities of China, India or Mexico. Microsoft tried to do the same to reverse their decade-long hard line tactics confronting IP piracy problem, and are seeing more results by creatively working with, not against, the local governments.

Most western cultures believe that there is absolute truth in the world. Many also believe that there should be universal values. On the contrary, eastern beliefs value the particularity of each instance, and consider it too simplistic to apply the same rule to every situation.

But how do we find the balance to satisfy both our corporate culture and the local culture? Respecting local customs and practices makes it easier to do business overseas. But it is not without risk when the corporate rules are in sharp contrast to the local rules. Take gifting, for example. In most Asian countries, gifting is a key part of doing business. Gifts are given and received as a symbol of goodwill and trust. They are essential in building relationships. Extravagant gifts can sometimes be presented to the recipient in order to demonstrate the depth of trust, gratitude and "friendship" in the giver's eyes. If you work for a western company where strict gift rules are enforced, and receiving such an expensive gift would no doubt be considered "breaking the rules" or worse, "borderline corruption", what should you do? This is a dilemma over which even the most competent and culturally sensitive managers scratch their heads searching for the right answer.

There is no one answer to such a complex question. It depends. One way is to adhere to the corporate rules and allow no exceptions, like what the oil company chose to do. It is not certain whether this will work in the long run, but one thing is certain is that there will be cost to the business in the short term. As long as the consequences and the willingness to absorb the consequences are clear, it is perhaps the right solution for this company. Another way is to strike the balance between the corporate culture and the local culture. This type of solutions is more complex, and therefore demands more creativity. Many companies have succeeded in finding the creative solutions, even though it requires constant diligence and balancing. And the payoff can be handsome when local cultures are respected and local employees and partners are motivated in culturally sensitive ways.

In the end, each company must review their own policies and strategic goals, and in weighing the pros and cons of adapting to the local culture, find solutions that make the most sense for the company.

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