It’s not easy to build a strong organizational culture worldwide — but “cultural hubs” beyond headquarters can help.
For more than a decade, multinational companies (MNCs) have been encouraged to create a strong global corporate culture through shared core values and practices. Building a global culture is hailed as a robust and flexible approach to dealing with the complexity and rapid changes these companies face. Indeed, several recent surveys of global executives have all identified the ability to maintain a common corporate culture as one of their greatest challenges and a top concern. However, our research suggests that a strong global culture is the exception rather than the rule. As companies expand globally, corporate culture often lags behind; it frequently remains too headquarters-centric to pull together far-flung operations, or it disintegrates under the turmoil of globalization.
We have studied organizational culture in global companies for 12 years, interviewing 250 executives at 10 multinational corporations, and we have found that few companies succeed at building an organizational culture that is globally integrated, yet flexible enough to accommodate local variations. (See “About the Research.”) Based on our research and that of others, we have identified at least two key barriers. One barrier is a headquarters-centric mindset: Companies often approach the process of developing a global culture as a one-way process dominated by corporate headquarters, exemplified by common terms such as “cultural transfer” “and “culture dissemination.” Also, core values often originate at corporate headquarters and fail to reflect and incorporate diverse cultural influences. This approach breeds skepticism about global culture among overseas employees, who may perceive headquarters’ core values as ethnocentric and parochial.