Strategy & Leadership

Multiple countries, one culture

May 27, 2014

Global

May 27, 2014

Global
Victoria van Lennep
Contributor, The Economist Intelligence Unit

Victoria is Head of Operations at Lendable, a peer-to-peer lending platform. Previously Victoria worked as a deputy editor in the EIU's Thought Leadership team. She holds a Bachelor and a Master in Economics from the Universite Libre de Bruxelles, and an MSc in Environmental Policy from the University of Oxford.

Interview with Pietro Leone, EMEA CEO of Geometry Global, about the need for companies to develop a clear organisational culture.

Victoria van Lennep, Economist Intelligence Unit: In your experience, is it possible to develop a single organisational culture for a global company working across different regions?

Pietro Leone: Of course. For a company to congregate around a single culture, it needs to have a specific purpose which everyone within the business is willing to fight for. The most famous example of successfully achieving this today would probably be Apple: its purpose is to facilitate people’s lives through technology, with complicated hardware effectively becoming accessible software. Although the company operates across different cultures, it has developed a single organisational culture by cultivating that specific purpose.

What are the biggest challenges for a global company seeking to develop an overarching organisational culture?

The biggest challenge is to form a link across cultures and achieve a balance between the expectations of both the company’s employees across the world and the company itself.

Problems will typically arise when the purpose of a company is conflicting with a population’s core cultural values. This is why having a more “future-facing” purpose makes it much easier to create a single culture for an organisation.

For example, a company would find it difficult to expand into Poland by being too imposing, as its people have a strong culture of asserting their own point of view. Companies operating in the UK, in contrast, should seek to create a consensus. Some cultures relish the concept of working within a strong community, whereas for others this is a barrier. The challenge is to establish a continuum between the local history of the market and where the company would like to stand.

Is there such thing as a “golden rule” which every individual should follow when working with another culture than its own?

There are no golden rules but it is certainly more important for human-capital-intensive firms to blend the corporate and the local culture than for companies which are highly automatised, where it is less essential.

What are the risks facing an organisation that does not have a clear organisational culture?

A lot of companies when expanding into new markets tend to focus on their political and economic aspects but neglect to take the country’s culture into consideration. This can lead to disastrous consequences as was the case for Star TV which entered the Asian market assuming that English would be acceptable as a broadcast language, to no avail. A company that fails to account for cultural differences will end up creating a patchwork rather than an effective network into its organisation.

How differently should corporate strategies be approached across cultures and sectors?

Many companies opt for a top-down approach, which consists of pushing down a specific regional corporate culture agreed by senior management. Instead, the best solution is to ensure that the top-down regional culture meets the bottom-up (i.e. employees’) expectations. Companies must understand that they can only ever be what the people from within and outside the organisation allow them to become. They should therefore work out the potential tensions between the top-down approach and the bottom-up expectations to find a common ground allowing them to grow and succeed in different regions. 

Receive forward-looking perspectives from our editors - Subscribe now for our Weekly Digest