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CORPORATE CULTURE

Introduction
Assessment of the national characteristics, such as language and traditions, can provide high level indications as to how well participating nations are likely to work together on international projects. In reality, these characteristics may be too general to provide any more than an indication as to whether there are likely to be significant problems, or identify whether any special management techniques are likely to be required. Therefore, there is a need to understand the characteristics and approaches to work and business from a more detailed, business or organisation, related cultural perspectives.

Over time, organisations develop their own unique culture. This Corporate Culture will be strongly influenced by the national culture of the organisations originating nation. However, other aspects will also influence the Corporate Culture of organisations. These may result directly from the process, or marketing needs, of the organisations. They may also come from less direct sources, such as trading partners, competitors or transactions with other nations.

The Corporate Culture characteristics can be considered to be external to the management of international work, but they will have a significant impact on the work itself. This could be in the structure, reporting, or management requirements of the work. They could also effect the practices of the work, such as decision making, work group tasking, or resource management. Managers will have some control over these business cultural characteristics. However, the amount of control may be limited. In addition, the work may be subject to sudden changes, as a result of business decisions made by the stakeholder organisations. Because of the limited control over these cultural influences by the work, they provide an additional level of risk which needs to be taken account of in risk management planning.

  • Culture Clashes
    The Corporate Culture of every organisation will be different. For most basic transactions, such as sales / purchase of supplies any differences may not be noticeable. As business transactions between organisations become more complex, any differences become more noticeable. Differences are often most noticeable when organisations need to work together in order to complete a product, service or other work. Some examples of the culture clashes that may occur when organisations need to work together include:
  • Mergers                When one organisation is acquired by another. The two organizations may have different historical and industry origins, which results in the two organisations having  different working and management methods. Traditional rivals may not be able to reconcile differences easily, at any level of the organisation. 
  • Sub Contracts     When purchasers and suppliers need to work together in order to provide the final product. The purchaser may have more exacting requirements than the supplier. All of which need to be undertaken before the product is considered acceptable. The requirements may include additional process steps, more comprehensive documentation, additional testing, preparation of more reports
  • Outsourcing        When routine operations are performed by an external organisation. The outsourcing organisation may not have the depth of knowledge. Following outsourcing, the additional management safeguards, necessary to control the work, may not be fully acceptable.
  • Joint Ventures    When a number of partners work together to provide a product. Partners may not understand the way the other partners work, or their preferences regarding management issues such as reporting. Partners may have different ideas and approaches to achieving the product of the venture. Partner organisations may have slightly different objectives for the work. 

Usually these differences in Corporate Culture are visible in  the early days of working with other organisations. However, they may also appear when moving to a new stage of the work, or when major changes are required. Differences in Corporate Culture can also appear after a change of management or the introduction of a new strategic direction.

Any differences in Corporate Culture between organisation must be identified and resolved quickly, otherwise they will  have a detrimental effect on the product. This may result in the product not being as successful as originally envisaged. Ultimately, these differences will have a detrimental effect on the organisations concerned.

Understanding Culture
It is therefore essential that managers, involved with international work, are aware of the business characteristics of participating nations. This awareness will allow them to utilise the business practices for the benefit of the work, including:

  • Understanding the way participants work and conduct their business
  • Understanding the additional constraints that may be required by various participants
  • Being aware of the potential impact of differences in business characteristics
  • Assessing how much the Corporate Culture characteristics can be adapted to the work needs
  • Assessing how much of the management needs will have to be adapted to the Corporate Culture of the participants

Details of the Corporate Culture of nations and organisations can be more difficult to obtain than data on national cultures. This may be because the data is only available within the organisations, or is produced in the native languages. The use of techniques, such as dimensional analysis, can improve the level of data available on participants, as well as indicate levels of difference and tolerance. In order to undertake the analysis, a rigorous approach should be adopted, using a systematic framework such as Spectra Analysis, from Migrators. 

 Details of the Spectra Analysis approach are also discussed in the Research Focus topic assessing elements of International Management. Further information is also available for download on the  Papers & Presentations page. A case study illustrating how Spectra Analysis can be used to help resolve Corporate Culture issues encountered following a merger is available for download, by clicking on the Case Study link.

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