ADVISORY ARTICLE
By Angelica Larios
Mexico City, Mexico
Companies that are in the expansion process will face a tremendous challenge of keeping current values and culture that were defined based on the founder’s vision, leadership style and other important aspects from the main leaders. The problem comes from trying to expand current business using different strategies such as franchising, joint ventures, acquisition and greenfield investment that will bring new elements and modify the current culture.
Culture is a multidimensional and multifaceted occurrence that satisfies some important aspects of each organization such as stability, meaning, and predictability in the present that is based on past valid decision taken by the group. Culture affects everyone’s approach and performance. As an organization transforms for business purposes becomes internally more multicultural representing issues and challenges to find common ground, language and meaning.
Companies that decided to go to the next level in growing their business which represents the need of having more employees, partners, providers, customers and others that might come from another culture and another country will face the fact of having cultural distance. Such cultural distance seeing as “foreignness” or “cultural misfit” would become in threats to the organization. Perceived as difficulties, barriers, costs, and risk related to working or doing business with others different than us, or across national borders; instead of leveraging of this cultural diversity facilitating and benefit the organization in creating value as a global organization.
What Culture means
Culture is something hard to view and measure, but it is an asset that exists in every group, family, organization, institution and nation, and it defines the way the group behaves what values and cares and what rejects or forbids. Culture is defined as the homogeneity of characteristics that separate one human group from another. Each culture incorporates inherent norms, values, and institutions. (Hofstede, 1980)
Culture is defined by what a group has learned in solving its problems of external adaptation and internal integration. (Schein, 2017). This definition gives us the idea of what conforms the ideology of a group, how the culture is developed inside an organization or enterprise. Culture is a complex compound formed from many particles. To transmute culture, leaders must first understand the underlying forces involved. (Pater, 2015). Leaders should search for ways to understand the cultural values and leadership’s preferences of the people they are about to lead.
Cultural distance is understood as a gap between the culture of two different groups. Cultural distance is interpreted, sometimes as the source of problems, misunderstanding, and conflict in the interaction of groups of different cultures. Cultural distance captures differences in values, attitudes, and behavior between two different nations (Kogut and Singh, 1988; Solberg, 2008). Differences in norms, ideas, values and beliefs in culturally distant markets, increase the liability and uncertainty that makes the firm see itself as lacking sufficient market information to predict the challenges facing in the new foreign market accurately. (Harzing, 2003; Yamin and Sinkovics, 2006; López-Duarte and Vidal-Suárez, 2010).
Benefits from cultural distance
The concept of cultural distance is one of the most widely studied concepts in international business, is shown to be a major source of uncertainty for firms during their internationalization process. However, this cultural distance makes attractive to the investors to explore new markets and increase the business strategy expansion.
One of the first benefit that bringing people from other organization can give us is the notion that social systems include several members that are equipped with an extended range of potential problem-solving. Decision-making processes are improved by complementary perspectives and approaches that would bring creativity and arbitrage at the same time.
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How to cite this article: Larios, A. (2020). Five ways to maintain cultural values while expanding, PM World Journal, Vol. IX, Issue VII, July. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/11/pmwj99-Nov2020-Larios-Five-ways-to-maintain-cultural-values-while-expanding.pdf
About the Author
Angelica Larios
Mexico City, Mexico
Angelica Larios, MBA, PMP, is a project manager with more than 20 years of experience in implementing software projects related to business intelligence, planning and budgeting, and financial consolidation solutions based on software applications to support the business decision process. She is the owner of ALACONTEC, an I.T. consulting company founded in Latin America. She has held several professional positions in private and public organizations, such as the Health Ministry in Mexico as I.T. director, and as a business manager for several firms in Mexico.
She holds a master’s degree in business administration and a bachelor’s degree in computer science from National University of Mexico (UNAM) in addition to her studies in project management and her Project Management Professional (PMP)® certification, which have helped her to consolidate her career and have a better understanding of what businesses and projects need nowadays. She is a doctoral student in strategic leadership at Regent University, VA, USA; she is a PMI volunteer since 2007, starting in the local Mexico chapter, being Past President. At a global level, she has been part of the Chapter Membership Advisory Group (CMAG), the Board Volunteer Advisory Committee (BVAC), and the Ethical Membership Advisory Group (EMAG).
Angelica can be contacted at angelica.larios@gmail.com
To view other works by Angelica Larios, visit her author showcase in the PM World Library at https://pmworldlibrary.net/authors/angelica-larios/.
