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Organizational Culture and National Culture: What’s the Difference and Why does it Matter?

Based on the research of Dr. Geert Hofstede, there are differences between national and organizational cultures.  For global companies, it is important to understand both in order to impact organizational performance.  

In a webinar conducted for ITAP International, Dr. Geert Hofstede discussed “Integrating Corporate Practices and National Cultural Values.”  The topic is highly relevant to organizations operating in a volatile global economic environment.  While economic turmoil creates challenges and failures, it also creates opportunities as evidenced in a large number of mergers and takeovers:  Doosan and Bobcat, Lloyds and HBOS, Barclays and Lehman Brothers, Citigroup and Wachovia.  The list is long.  Many of these names have strong national brand identity.  They are goliaths with offices in many economic centers around the world.  How should they integrate to become one organization?   At least part of the key to success in this area lies in the lessons shared by Dr. Hofstede.

Our national culture relates to our deeply held values regarding, for example, good vs. evil, normal vs. abnormal, safe vs. dangerous, and rational vs. irrational.  National cultural values are learned early, held deeply and change slowly over the course of generations.  

Organizational culture, on the other hand, is comprised of broad guidelines which are rooted in organizational practices learned on the job.  Experts, including Dr. Hofstede, agree that changing organizational culture is difficult and takes time.  What is often overlooked or at least underestimated when two or more companies merge/integrate is how the underlying personal values of employees impact how they perceive the corporate culture change efforts.  A person can learn to adapt to processes and priorities, and a person can be persuaded to follow the exemplar behaviors of leaders in an organization.  But if these priorities and leadership traits go against the deeply held national cultural values of employees, corporate values (processes and practices) will be undermined.  What is appropriate in one national setting is wholly offensive in another.  What is rational in one national setting is wholly irrational in another.  And, corporate culture never trumps national culture. 

The answer, then, lies not in abandoning efforts to unify organizations after a merger or cancelling efforts to build high performance culture, but in overlaying and harmonizing local interpretations of corporate practices to cultural norms.  

ITAP International works at the intersection of business and national cultural value differences.  ITAP provides the following services for organizations across borders:

  • M&A consulting to align leadership, processes, operational structure, and stakeholder perception  
  • Culturally adapted competencies for recruiting, selecting and measuring employee performance
  • Localization of change initiatives such as training and coaching
  • Global team development
  • Global leadership development

Below are links to two audio clips from the webinar:

Clip one on the difference between practices and values:

 Clip two on understanding corporate values:

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