Over the past 30 years in the United States, the theme of Corporate Culture has come to be a vital element in a company’s growth and success. Corporate Culture is defined as that which is unique to a given company: its values, traditions, symbols, and its competitive advantages in the marketplace. One of the reasons for its popularity is that analysts and investment specialists have determined that suppliers and investors who study the company’s culture have more success. Those that take the trouble to study in depth the unique features of a company like Apple, Nestlé, or Toyota, are significantly more successful in selling goods and services to them, as well as investing in their securities.
International banks, for example, have found that large multinational companies (MNC’s) like the Dow 30 offer highly lucrative earning opportunities for those banks that can meet the MNC’s needs in cross-border payments and trade finance. And to get a share of this profitable business, the banks dig into the target company’s corporate culture so as to align their services with the business objectives of the target.
Since the study of Corporate Culture is now universally recognized as critical in generating lucrative business with multinational companies, it is puzzling that these same MNC’s who have spread the word that “if you wish to do business with us, you better understand our unique culture,” so often fail to heed the same lesson in building their business in foreign markets which themselves have their own unique culture. For example, if a MNC targets Brazil as a market for rapid expansion, they need to make sure that their senior executives in Brazil know something of Brazilian history and can speak Portuguese.
Yet it is remarkable how often this does not happen. Senior expatriate managers in the country often justify their failure to learn Portuguese by explaining that their tour of duty will be a maximum of 2-3 years, and that the large investment in time to learn the language cannot be justified in the context of their other priorities. And these other priorities are naturally focused upon increasing the earnings of the Brazilian subsidiary.
Unfortunately, this tends to be the rule rather than the exception in far too many MNC’s. The message that it sends, however, is bad for business and will hurt earnings over time.. The message, as interpreted by the employees and the clients in the country is, “Your real target market s not Brazil, but instead it is the senior executives at your Head Office, whether that happens to be Chicago, London, Tokyo, or Paris. You’re more interested in positioning yourself for your next promotion than you are in learning what makes the Brazilian market unique.”
What they miss is that the local language is the gateway to the culture and the market. Even if the expatriate country manager only gets to a two on a scale of ten in the language, she is making a strong statement to the local employees and clients that the language and culture are important to her personally and to her parent company.
The good news, however, is that there are some notable exceptions to this sad majority rule. There exists a thoughtful minority of multi-national companies who understand that learning the language of the target country is vitally important. These companies have as a policy that the new Country Manager will study the language for 4-6 months before arriving in the new post.
This thoughtful minority allows the new leader in the county, in our example Brazil, to hit the ground running. In addition to the company’s financial and product goals for Brazil, the new boss arrives with the non-negotiable goal of marrying the company’s Corporate Culture with the Culture of Brazil.
And this cannot be done unless the leader shows a dedication to speak Portuguese.
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