Think locally, act globally
With the rise of multinational corporate culture, it is easy to forget that both companies and their employees have their own roots in national traditions. When companies begin to extend their operations across country borders, it is just a matter of time before they face the problem of aligning their own culture with that of local employees. Communication, as always, is critical and often a key issue when it comes to tackling the challenges that may arise.
Hungarian employees tend to lack general openness and a willingness to express opinions, even if that means confrontation, at least according to many executives who encounter difficulties in their everyday communication with local staff members.
“Avoiding conflicts, even at the price of sacrificing one’s standpoint, is one of the most common misunderstanding between a Hungarian employee and an executive with an Anglo-Saxon or Western European background,” says communication consultant Péter Szerémi, who gained his experience through personal coaching sessions with executives over the past six years in Hungary.
While this attitude is not unique to Hungary, it is definitely unusual and unexpected to senior businessmen, who are used to tough arguments as well as being challenged by their own direct reports. A banal example is the Q&A session at the end of the executive’s presentation of the company’s yearly goals. While the audience is not likely to ask questions, rumors on the corridor will be about unrealistic expectations. “The only logical reaction an executive can have is ‘If they thought the plans were unrealistic, why haven’t they told me so?’” Szerémi says in explaining the different understanding of openness, and the willingness (or the lack thereof) to undertake conflict situations.
Taking risks and making decisions is another key area where conflicts between a manager and a direct subordinate can have their backgrounds in the difference between their cultures. “Hungarians are a lot more conservative than Americans but are ready to take risks when we compare them to Germans or Asians,” says Zsolt Szeleczki, a partner and regional human resource-consulting leader at PwC Hungary. He highlights six key areas where cultural interference is most likely to occur within an MNC (see our box Six degrees of separation) and says that Hungarians have a reputation of being relatively easy to get along with.
“Hungarians are known to be flexible and cooperative. Flexibility, however, has two sides,” he points out. “When it is within the framework of the rules and company goals, it is obviously a good thing. But on the other hand, Hungarians will be the first to bend the rules in their own favor and enter through the exit the moment they notice that nobody is asking for their tickets there,” the consultant says. But while this might be annoying to some, on balance, the reputation of the Hungarian workforce is still very favorable.
“A positive attitude is something a foreign executive will likely miss when working with Hungarian staff,” says László Bek-Balla, HR director at Erste Bank Hungary. “When facing a problem, a Hungarian employee will mostly focus on the difficulties, and he will try to explain why it cannot be solved. Also, enthusiasm, and particularly the acceptance of change, is extremely low among Hungarian workers,” the director highlights.
Another common area of miscommunication is separating the personal from the professional. “A Hungarian employee will write a detailed email to his American boss, and when the executive replies with a single ‘OK’, he will take it as an insult,” says Péter Szerémi. “Staying high-level, getting to the point and focusing is common practice in Anglo-Saxon cultures but seems impolite from a Hungarian perspective. It is like ‘I’m not worth a Hello and a Goodbye and a few polite words’. When senior executives first encounter these problems, they are utterly surprised,” the consultant explains.
As a rule of thumb, we can say that the longer the traditions of being part of a globalized economy, the better a certain country’s corporations can handle the related challenges. “U.S. companies are best at coping with these issues, followed by Dutch corporations. Germans have learned their lesson well (for example with BMW’s infamous Rover acquisition), and they are improving at an amazing pace. French companies have a lot to learn, and so do Italians and Spaniards. Far Eastern and Indian companies are not performing very well in this league at all,” Szelecki says.
Although these issues are important, there is no need to exaggerate their gravity. According to Szelecki, corporate culture is a lot more important than national culture. “Most of the executives who come to Hungary represent the culture of the corporation, rather than the nation behind it,” he says. László Bek-Balla agrees: “We have more important organizational development issues to handle and more important areas to focus on. In most cases, the single intention to cooperate and to understand the motivation of one another goes a long way,” he concludes.
Six degrees of separation
According to Zsolt Szelecki, PwC’s HR consulting leader for Central and Eastern Europe, there are six common factors that define whether a company is exposed to problems due to cultural differences.
Executive communication: how formalized, organized and regular it is, and whether it exists at all.
Organizational structure: whether there is a mutual understanding of tasks and responsibilities and if relations are clear to all involved parties.
Teamwork: whether the environment is competitive or if employees are encouraged to cooperate. Are there personal goals or team objectives?
Performance management: whether there is a mutual understanding and agreement in what is expected and what is required from an employee.
Decisions and risks: whether employees are expected to make decisions and take risks or, to the contrary, avoid risks and do what they are told to.
Long-term strategy: whether the company has a long-term strategy and vision.
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