Are national and organisational cultures isomorphic? HQ-subsidiary relations

Abstract

Cultural differences between countries are widely acknowledged, and these differences manifest in HQ-subsidiary relations of MNCs. Central to the strategies that MNCs implement outside their home countries is the understanding of the dynamic nature of culture. While studies exist on the HQ-subsidiary relations these studies fall short in understanding the impact on individuals employed by MNCs. Thus, understanding if common differences between MNCs from different countries exist and how these manifest at the individual level may provide valuable insight into the nature of culture. 404 responses from 12 MNCs representing 5 countries was collected and analysed. Analysis included principle component analysis, ANOVA, correlation co-efficients and the cultural distance index. Results indicate that individual and organisational cultures are weakly correlated to home and host country national cultures; and individual culture is correlated to organisational culture. Common differences exist between MNCs with HQ in different countries. MNCs from South Korea are the most accommodating to the subsidiary organisational culture, while the Netherlands the least accommodating. Unintentionally results indicated that the perception of cultural distance is different to what is predicted. Culture is elastic and evidence exists for individuals holding an in-culture and out-culture. MNCs should understand the impact of culture at the individual level rather than only at the national level.