Managing Across Cultures

Managing Across Cultures

Managing Across Cultures

The Strategic Role Of Corporate Culture

Much has been written about the concept of corporate culture as it applies to building a stronger, potentially more cohesive organization. A company's culture differs across and within companies. Although definitions of shared values will vary from person to person, it's safe to say that most will incorporate the following basics:

They provide the tacit mental and emotional guidelines that all managers and employees will follow and support when formulating and implementing strategy.

They lay the foundation by which people can better relate to one another, yet they create a unique sense of identity from other companies.

Shared and consistent values are the primary ingredients that management development program aim to instill in their managers. Well-defined, long-standing values have the special characteristic of serving as an organizational "lubricant" and "mortar." Such values transcend some of the inevitable problems that formal organizational structures cannot solve, particularly under rapidly changing and globally diverse conditions.

At Johnson & Johnson, for example, the unique sense of shared values that dominates that corporation's culture has encouraged its managers to grow: to develop new ideas and accept additional responsibility over time. J & J imposes few cumbersome procedures from above, so the notion that individuals are best able to tackle important jobs on their own, plus a commitment to meeting the special needs of any customer, have flourished and reinforced themselves over time.

Perhaps the strongest relationship between a sense of shared values and a competitive advantage is best seen in an example from Xerox over the past ten years. Having lost considerable market share to Japanese manufacturers in mid-range copiers, Xerox CEO David Kearns reshaped the company by refocusing its managers' efforts toward a common set of values. These values include dedication to customer satisfaction, constant product innovation, strict levels of quality control, and internal development of new technologies and skills at all levels. These values transcend all departments.

Types of Corporate Culture and Global Strategy

Just as globally and dispersed multidomestic strategies differ in many ways, the underlying culture that best supports both of these strategies differs from company to company. Corporate cultures may fall into one of two broad categories: clan-based cultures or market-based cultures. The term "clan" describes organizational cultures that embody a long, detailed socialization process; strong, powerful norms; and a defined set of internalized controls. "Market" cultures are those in which the organization functions and treats its managers no differently than it would treat an external market. Norms are loose or absent, socialization processes are limited, and control systems are based purely on performance and quantitative measures.

For the global firm, the clan type of culture has obvious benefits: It fosters a long-term commitment and a sense of internalized controls that work well under conditions of reciprocal interdependence, complex sourcing, and economies-of-scale arrangements. A strong corporate culture based on clan features helps overcome some of the deficiencies inherent in such formal structures as SBUs and technical ...