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The Influences of National Cultures on the Company Culture

Alex Smith    12/08/19

Business, International Online Marketing, Intercultural Competence

 

“Culture is not made up but something that evolves which is human.”

Edward T. Hall

 

Everybody who has worked at more than one company knows that each one of them has their own ways of getting things done and unique forms of interaction. Every company has its own culture with its norms and values. Identifying these and creating the right company culture, is crucial for well-being and productivity. It gives the frame in which a company acts and helps employees understand where they are coming from, what they stand for and where the company is going.

 

One important aspect influencing the company culture are the national cultures the company is interacting with. The location, employees, customers and industry, are all influenced by the cultural setting. Everybody brings their own experiences, values and expertise to the workplace, making it a rich, stimulating environment. And just like every culture, every company is different. Therefore, the interaction of company and national cultures is crucial for self- and other understanding.

 

To highlight this fact, we first need to analyze the elements that define the company culture. These are the corner stones every company can analyze for themselves and identify where they need to improve. To emphasize the importance of national cultures for the company’s one, we will look at our company culture at effective. As we have colleagues from 17 different nations and work for clients around the globe, cultures are not just a byproduct, but central for our definition. So, for any company interacting with international stakeholders, it is crucial to create a salient organizational culture for each interested party.

 

Key Take Aways

  1. National Cultures are a learned trait that define a group in a certain region
  2. Company cultures are a sub-culture to national ones and define traits of this group
  3. The four most important elements for company culture are:
    • The Location
    • The Work
    • The Employees
    • The Customers
  4. Company culture gives identity to the company and is a reference point for all stakeholders
  5. Companies with culturally diverse stakeholders must ensure that the four elements are clear to all parties involved

 

National Cultures

 

National cultures are defined by Geert Hofstede, the pioneering researcher on cross-cultural groups and organizations, and his associates as “[…] the collective programming of the mind that distinguishes the members of one group or category of people from others” (Hofstede et al., 2010). Culture is the response to outside influences. And, as culture can only exist in a group, it is communicated over various channels and mediums, mainly through language. Culture as a learned trait is common for a group, which mostly lives in, or comes from, a specific geographic location. So, it is an analysis of how common qualities of a group are formed and expressed. It only comes into existence through the interaction between people.

 

The interactions determine why groups of people find different solutions to common problems and dilemmas. They describe a tendency, and everybody derives from it in every aspect to a different degree. The individual personality determines the actions, the culture gives the likely direction. There are no right or wrong cultures and therefore theories must approach them from a non-judgmental, reflective point of view (Hall, 1989).

 

Company Cultures

 

This leads us to the company culture. Hofstede et al. (2010) dealt with organizational culture and defined it almost identical to their definition of national culture as “[…] the collective programming of the mind that distinguishes the members of one organization from another” (Hofstede et al, 2010, p. 346), emphasizing the similarities between the two.

 

To analyze a company culture, four elements need can be depicted: The location of the company, the work/the industry it works in, its employees and its customers (Rosauer, 2013). Every company needs to ask themselves:

  1. Where are we doing things? Answer: “The Location”
  2. Why are we doing things around here? Answer: “The Customers”
  3. What things gets done around here? Answer: “The Work”
  4. Who does things around here? Answer: “The Employees”

 

The perfect intermixing of these four elements and knowing how the influence the internal and external interactions determine the perception of the company. The possible outcomes of the fourfold interactions are just as diverse as there are companies out there.

 

Before we look at the four general elements, one factor shall not be overlooked: The influence of the company founder(s). Many customs and norms are defined by their initial setting, at times be considering the four questions above, at others intuitively. The CEO of the company selects the important elements and their values. Even more, as long as they are leading the company, they have the strongest influence on it. The company is their “baby” and, at the end of the day, until they retire, they must take care of it with the parenting methods they find suitable. And, just like with national values, these methods manifest themselves in the company’s habits, thus can be very hard to change afterwards.

 

Also, it must be noted that in regional and national companies with only local stakeholders, national and organizational cultures complement and reflect each other. So, the variations one sees between companies, are the same as one sees between people from the same region.

 

For multinational companies on the other hand, the question is what elements of the corporate culture need to be implemented in what intensity, in which area and how the transcultural communication can be channeled to meet the company’s goals. So not only does one need to consider the different personalities and jobs, but also their cultural background which highly influence the expectations of the company.

 

The Interaction of Company and National Cultures at effective

 

For us, multiculturalism and the German culture are the corner stones for the four elements, as described by Rosauer (2013). On one hand, the German culture is central in the definition of the company. Not only is it a necessity to conduct business (external reasons) but also provides a meeting point for our employees (internal reasons). Regarding the employees, cultural diversity is likewise internally and externally relevant. Internally as enhancer for creativity and selection reason for staffs, as many seek the international encounters at work. Externally as unique selling point for our customers. Language is the denominator.

Our core values are, embracing intercultural contact and cherishing the benefits. every culture is unique, equally valuable and the mixture of them an enrichment for us. The other side shows, how the common ground for this encounter is the focus on the German values. Multiculturalism are the arteries of the company, German culture the veins. Together they determine our positioning for customers, employees and the industry. To emphasize the importance of these elements to us, we signed the “Mannheimer Erklärung” in June, 2019.

 

On a more granular level, our company created a culture which mixes sectorial, ethnocentric (German) and globalist elements in a unique way:

 

1.     Our locations

 

The locations reflect two elements: The location of our headquarters and of our customers.[1]

As the headquarter is in Germany, there are three different kind of employees regarding their culture: foreigners, Germans and, the smallest group, Germans with mixed heritage. This already indicates that all employees are familiar with German standards, want to live here and are willing to adapt to the host country. This eases disruptions between the German employees and foreigners. On the other hand, all German employees have intercultural experiences, either because they have lived abroad or speak English, indicating that they at least have learned English. Furthermore, everybody encounters other cultures daily at work, making intercultural encounters part of the daily routine.

 

Ethnocentric, meaning German, elements in our company are expressed through direct criticism, punctuality, focusing on business during working hours and a universal appeal of the office rules.

 

2.     Our Work

 

As a digital marketing agency, we fall into the same category as other technology companies such as Google or Amazon. Traditional forms of company organization and communication are reevaluated and adapted to the everchanging needs of the employees.

For example, the hierarchy is flat; formally two levels exist regarding the decision power: management and employees. The interpersonal communication style is informal, everybody is on a first name basis. There is no strict dress code. Furthermore, the office design enables informal interactions: Our big kitchen has a foosball table (which is the center of every BBQ), open meeting rooms and an open-door policy is in place; office doors are only closed during customer calls, meetings or when someone does not want to be disturbed. Moreover, there are several company events encouraging bonding and casual encounters.

 

3.     Our Employees

 

As a prerequisite, the HR policy is the determining factor of selecting the right fits for the existing employee pool in hard and soft skill requirements. The image of effective world as an international agency also sets the tone for applicants. People are aware that they will encounter different cultural backgrounds. All employees have an international mindset and are therefore conscious of possible cultural differences and can more easily handle them. Through this selection process a prerequisite of whom to employ was created, ensuring the candidates match the company’s preferences.

 

The individual culture of each employee is cherished here because it is part of their expertise. Each culture is valuable, multiculturalism is embraced. All employees are of equal value by being different. This gives each employee a stronger sense of security and the ability to express themselves. As culture cannot be taught, multiple culture and language skills are part of our key assets that separates us from many other digital marketing agencies. Most of our colleagues speak three or more languages on expert level and have lived in multiple countries for several years.

 

4.     Our Customers

 

Externally, as a service provider, we must adapt to its clients’ preferences in regard of time, hierarchy and formalities. As many customers are German B2B companies, it is necessary to follow traditional German business culture fundamentals. These include being on time, putting business before personal relationships and a respect for authority. Switching to first name basis, is often done because of the international context. The general decision to select first or last name serves to reduce uncertainties, which can negatively impair communication. First-name is selected because most communication is conducted in English and the dominance of the Anglo-Saxon culture. So, for us it important to find the sweet spot between being ourselves and giving room for our clients to do the same. As in every relationship, this is a constant learning experience full of collaboration and evaluation.

 

Conclusion

 

This article can be summed up in the following way: The national cultures a company interacts with determine its organizational one. Highlighting the elements of Rosauer (2013), we showed that every company must deal with these four to know its organizational culture and what could be improved. It must be aware of the general preferences of its industry, customers and employees. It defines the expected forms of communication; thus, organizational culture is the precondition for productivity and success. Analyzing our company took this to an extreme, as culture is not just one factor but a central one for the company. Even more, cultural diversity of our employees mixed with an ethnocentric focus, exemplifies how complex and hard it can be to find the right balance. Cultural preferences can be contradictory, and it is a small path to navigate through them safely. Once it is achieved though, it is beneficial for everybody involved.

 

Although organizational culture is not as central to a person’s self-definition as national culture, it has an impact on people’s lives. This has implications for employers and employees, as it directly influences productivity and well-being. It is the prerequisite for group functioning and understanding. As there is no right or wrong culture, employers and employees must select the fitting company culture, according to the elements described. One of the challenges within a diverse employee pool is that very different people must identify with it to make the organization work. Managers must try new approaches to keep their employees satisfied, while not losing the central identification elements of the company. Cultural diversity is one aspect that influences these considerations and certain approaches may already appear to be old-fashioned for one employee, while innovative for the other one. A common ground is needed. The company culture is the vantage point for this endeavor.

 

 

Sources:

Hall, E. T. (1989). Beyond Culture (2nd ed.). New York: Anchor Books.

Hall, E. T., & Hall, M. R. (2014). Understanding cultural differences. Boston, MA: Intercultural Press.

Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations. Software of the Mind. Intercultural Communication and its Importance for Survival (3rd ed.). New York: Mc Grawhill.

Rosauer, B. L. (2013). Three Bell Curves: Business Culture Decoded. Retrieved February 03, 2019, from http://www.threebellcurves.com/

 

[1] The importance and the role of our subsidiaries will be highlighted in a later post.