Alignment throughout independent systems is required so that the selected corporate model and its purposes are synchronized with the culture and its values and worldview. Terpstra and Kenneth (1992) have identified five critical factors that multicultural corporations should consider when developing a corporate cultural model and/or choosing to expand into a new global area:
1. Cultural variability refers to the conditions of stability within the orga- nization. The more unstable an organization is, the more it needs strong inter- nal structures to manage rapid change, open communication channels, and decentralized decision-making with local experts to provide responses.
2. Cultural complexity relates to high- and low-context cultures and concerns itself with the need to match the degree of context with the appro- priate communication content, style, and quantity.
3. Cultural hostility is the degree to which local conditions appear threat- ening to employees and organizational values. It reflects the perception of the local or host culture toward the multinational corporation itself. The greater the degree of hostility, the more difficult it is to establish trust and build rela- tionships between the host culture and the organization.
4. Culturalheterogeneityisthedegreetowhichtheorganizationalculture is similar to or different from the local or national culture. When cultures are very diverse or heterogeneous, it is more difficult to coordinate the behavior of local subsidiaries and their employees, thereby requiring management to be more differentiated and to decentralize communication and policy. The greater the similarities or increased homophily, the easier it is to purposefully com- municate mission and vision.
5. Cultural interdependence refers to the economic dependence the orga- nization has with other interacting cultures to obtain resources such as raw materials, equipment, technological support, and critical institutional and infrastructure processes. The more independent the organization is, the less need for strategic alliances and host culture support.
These critical cultural factors are helpful in gaining a global perspective and developing specific strategic objectives. Alldregde and Nilan (2000) studied 3M’s leadership style to determine those characteristics of strong multinational corpo- rations that respect and leverage other customs, cultures, and values to better understand and grow the total business. They found that it is highly important to optimize and integrate resources on a global basis, including manufacturing, research and development, and information technology. John R. Fulkerson, Vice- President of Organization and Management Development for PepsiCo Foods and Beverages International, concurs and describes the organization of the future as “global, competency based, virtual/fluid, empowered, decentralized, and con- nected” (Odenwald, 1996, p. 94). The global organization has the potential for exponential growth and financial success if the integration of cultures can be har- nessed and aligned with the strategic goals of the corporation.
Subject: Five critical factors when developing a corporate culture model 
Thu Apr 24, 2014 9:42 pm
