National Culture vs. Corporate Culture

 

Takeaway

  • Many companies try to establish a universal corporate culture, but there are often local adaptations at different branches 
  • It is important not to ignore the effects a corporate culture may have on the national norms that we suppose to exist

Recently I was asked to be a judge at an MBA case competition. It was a fairly formal event and other judges from various companies were also invited to participate. Given the formality and professional environment of the event, everyone dressed in business formal attire. That is to say, everyone except the judges from Apple Computer. While everyone else was dressed in a suit and tie, the judges from Apple computer were all dressed casually. What was interesting to see was the reaction from everyone else that attended the case competition. “Oh, that’s just the way Apple people are.” There was almost a “cool factor” associated with their casualness. 

With this example in mind, today I want to address the issue of national versus corporate culture. 

When we speak of international business, we often categorize our experience based on nationality. For example, Americans have a reputation for being well prepared for meetings, while Japanese business professionals are known for being detail-oriented. However, given the image, mission, philosophy, and branding that a company builds for itself, it might also have its own corporate culture that doesn’t completely align with the larger national culture.

So which type of culture carries more weight in shaping a company’s identity? Do some people gravitate to IBM over HP because they fit the “IBM profile” better than they do the “HP profile”? Does the corporate culture of Nestlé differ from that of Hershey’s? And if so, is there something inherently Swiss about Nestlé and inherently American about Hershey’s? 

Similarly, we can ask ourselves whether there is something about the American cultural background of a Sam Walton or a Bill Gates that caused their corporate identity to become what it is today.

The example of Apple above can be counterbalanced with another story from an opposite perspective. A number of years ago I was arranging international internship experiences for our UT MBA students with FranklinCovey, the education and training services company that was modeled after Stephen R. Covey’s book The Seven Habits of Highly Effective People. 

Part of this model includes the four quadrants of the time management matrix. I recall asking the FranklinCovey home office representatives about whether any of the principles from the matrix had to be modified in other parts of the world due to conflicting cultural values. Their response, as expected, was that their principles were universal and applied equally to all people in all situations. Later, however, when I was dealing directly with the local branch offices in Latin America, I asked the same question. Their answer, in effect, was something like, “Yes, the truth is that we do have to modify some of the principles to fit our situation here locally.” There was even a small confession that they didn’t always tell the home office about some of these local changes because they didn’t want to be told to stick to the established model! In this case, there may have been a corporate culture, but there were clearly local adaptations as well.

We have a number of interesting comments on this topic from the international executives that we have interviewed about cultural issues. Christina Hafka, a German executive from Hamburg, notes: 

“What I can say is that company culture is heavily impacted by the national origin of the company. If it is an American company, an American culture will dominate its subsidiaries worldwide. That’s why I believe that one cannot separate those two things, because negotiation strategies specific to the company are always typical of the national culture that the company originates from.” 

Rainer Anskinewitsch, who is from Düsseldorf, expressed a similar point of view:

“Those of us who have traveled know Americans from different occasions, on a personal level. I think there are some typical American negotiation styles that we Germans appreciate. They are openness, honesty, and transparency during negotiations. These characteristics are always obvious, no matter whether in our organization or in other organizations.” 

Both of these comments illustrate that many times there is a philosophical blending of national and corporate cultures. 

In another interview, Udo Kiesslich, who is from Berlin, observes that corporate style can also be influenced by industry sector (e.g., a service provider vs. a manufacturer) and company type (e.g., a conglomerate vs. a family-owned business). All of these go beyond a national culture. 

In quoting these three German executives, it reminds me that if we want to review the effects of national and corporate cultures, we need go no further than recall the failed merger of DaimlerChrysler.

Houn-Gee Chen, from Xinju, Taiwan, agrees that American companies have their own corporate style, but underlying this, they are also connected to the larger national style. His advice is to identify the underlying national style, and then fine tune your understanding with the specific corporate style. 

On the other hand, Chao Zhen from Hunan, China, believes that we can get lost in all of these artificial attempts to continually modify things for cultural differences. For him, since all are focused on reaching trade agreements and all work from a set of common trade standards, it is best to not focus too heavily on the particulars of certain countries, cultures, or traditions.

To conclude, I share the comments from Javier Cantera, a lawyer from Castilla y León, who believes that corporate cultural tendencies often trump national cultural tendencies. The bottom line is that we should not ignore the effects that a corporate culture may have on the national norms that we suppose to exist. (See a video of Cantera’s comments in their original Spanish here.)

The idea that there exists a difference between an American culture and a European culture, in the way they understand a company, is sometimes more of a stereotype than a reality. We are always finding more people that are unique to their own company, their own personal culture, their own cultural features that are a result of their history, their evolution, of their socialization processes. For an example of this we can look to the drink sector here in Spain and you will notice a big difference between those that are from Coca Cola and those that are from Pepsi Cola and those that are from Schweppes. They are people that have different styles of conduct. Many times when you are conducting an interview with a person from a company you know right away which company it is, and it is independent from the fact that the person is American, Belgian, French, or Spaniard, right? So, at any given moment you know right away that the person is from Coca Cola. Why? Because, for example, he is more focused on results, and if the person is from Pepsi Cola, he is more focused on the client. It is their own personal culture that creates their own way of thinking. These are cross-cultural characteristics. We believe we have been able to observe that these are very important in negotiations, many times more important than the national culture from where they are from.

 

At the UT Center for International Business Education and Research (CIBER) we have developed a series of online materials related to international business, culture, and language. All of the materials are provided open access and without password restriction. Feel free to visit Prof. Kelm’s Homepage and the CIBER website for more materials and information.

Disclaimer

The views expressed are those of the author and not necessarily The University of Texas at Austin.

About The Author

Orlando Kelm

Associate Director, Business Language Education - Center for International Business Education and Research , McCombs School of Business, The University of Texas at Austin

Orlando R. Kelm (柯安良) holds degrees from Brigham Young and UC Berkeley, and his professional interests include the teaching of foreign language and...

Leave a comment

We want to hear from you! To keep discussions on-topic and constructive, comments are moderated for relevance and for abusive or profane language.
Login or register to post comments