Importance of Organizations culture regarding their international development
Having worked between France and Japan for 7 years, lived in Southeast Asia for 3 years and being now in Qatar, I’ve watched and observed how French companies expand their activities abroad. As Consultant in organization I’m very concern about the impact of organization’s culture regarding international expansion. Why a company’s DNA could be either a lever or a brake for its growth abroad?
What does define culture of a company?
We have first to remind what define culture of an organization.
Transactional analysis distinguish 3 company’s cultural features:
Etiquette which defines implicitly or explicitly the social contract within the company or how people get into relationship together. What could be said, what could not be said, dress-code, how we introduce ourself or how we talk with hierarchy…
Technique, linked to the main activity of the company, practices, occupations. We find here, processes, organization, analysis systems or think ones…
At least we find Character, which gathers contradiction to the Etiquette, individual behaviors, moods, personality expressions which are accepted or encouraged as emotions, laughing, to get angry…
Culture of an organization borns with its founders. Those first leaders give their imprint and color to all the company and that for some decades sometimes.
The 3 features, we talked about, will evolve through time according to the company’s life, its environment, its activities, staffing, acquisitions, technological changes, partnerships and international development.
Organization’s culture: Brake or lever abroad?
While large companies are involved in global businesses and SME’s export more and more their products and services, it is legitimate to measure impact of their cultural components in their abilities to operate abroad, in environments which are different by definition.
So we have to wonder if there are organizations that have a more global vision than others because of their culture.
First, we have to study the history of the company, its habits, its openness to novelty, to difference. Is the other one a source of mistrust or a source of discovery? Is our strength formed by our protectionism or rather by our ability to open and to question ourselves? Is the reception of persons from another professional world, by external recruitment, a part of our modus operandi or do we train everyone internally?
There is no easy answer, as there is no right or wrong culture. It is in the ability to adapt to an environment and new issues that culture becomes brake or accelerator. The CEO who wants to expand into other markets, must question the facilitating factors included or not in the cultural characteristics of the company he leads.
Culture of an organization, a real lever for international expansion
I believe that each company has capacity to expand its activities abroad and that the multiplicity of cultural features which are engaged will influence necessarily the adaptation duration within new markets.
The ability to work with an other country depends on adjustments between cultural features of a company and those of the target market and its stakeholders (partners, customers, suppliers, agents, distributors…).
At this level, cultural differences could be levers of meeting and sharing.
A company which aims to run business with a foreign partner (JV) has to wonder about how people of this last one consider hierarchy and what are the rules and processes regarding decision process (Etiquette). As example, if your partner is a Japanese firm, you have to respect strictly organization chart, every steps, a long time before signing any agreement with the chairman. If it’s a Cambodian one, links with CEO are direct and you’ll have to spend a lot of time for « social » activities.
It is therefore necessary to examine precisely the target company in order to know how relationships are built, to avoid odds, but also to identify good practices. In questioning the relational modes of the other side, it sharpens your ability to change yours.
It is this prior dialogue, « how do you do in your structure to … » which will help facilitating adjustments between the two entities. Of course, these questions will concern three of Etiquette, Technique and Character.
Greetings, dress code, corporate gifts, meals before or after negotiations, Karaoke, invitation into Majlis, discussions on family considerations, preferred modes of communication, know-how, transmission of knowledge and information channels, freedoms given to individual inclinations, duration of meetings, contract values … are all issues that need your deep attention.
Under these conditions, the cultural upstream concerns will be catalysts to operations/relations with the foreign partner.
Involve your teams
As culture of an organization is progressing and is supported with and by its members, the involvement of all teams is required if you’re engaged into international adventure.
The preparation of a new market can be an opportunity to raise awareness throughout the company. For example through reports, surveys, benchmarking (how competitors are doing it in this market), making a sponsorship with a city or company, engaging in a local humanitarian association, etc. The fact to focus more broadly on economic and social context of the target country could federate without confronting while it’s arousing curiosity and widening the field of view of all employees.
To choose the right channels and action modes, it is necessary to know beforehand its own culture. For instance, if the collaborative aspect is very important, we can rely on it to launch a study on the market through workshop; if the competitive aspect is predominant, we can launch it as a team or individual challenge.
Furthermore, international development can not be the sole concern of one dedicated department. Beyond the commitment and federation around a common project, it is the cultural growth of the entire organization which is involved. Take the risk of not involve all members of the company, is to risk division, confrontation and therefore create blocking processes on these specific issues, or even within the entire organization.
Rely on your people
Finally, as previously mentioned, the culture of a company is redrawn everyday by women and men who compose it. The diversity of profiles, the inclusion of employees from different countries or from other entrepreneurial cultures are strong assets for anyone wishing to grow, provide or export outside its borders.
To sum up, 5 points to remind
- Analyse your company’s culture,
- Define strengths and brakes to global expansion in it,
- Share about your cultural features and wonder about the other one’s,
- Involve all your company
- Include diversity within your staffing processes.