CULTURAL COUNTERPOINTS: Global transfer of management practices across nations and MNC subcultures

Abstract

Executive Overview Our case shows how a Norwegian Multinational Firm (Norwegian Multi) introduced a new performance management practice. The initial starting point was a “best practice” developed by a U.S. consultancy based on the benchmarking of large global firms. Norwegian Multi chose to remove from this best practice the elements that were seen as most provocative to dominant cultural values. Over time more and more subsidiaries reintroduced elements of the original practice. The management practice we examine—performance management (PM)—can be regarded as an extension of the traditional performance appraisal, linking individual performance to corporate strategy.1 Researchers separate calculative PM (focus on individual contributions and rewards) and collaborative PM (focus on creating a partnership culture between employer and employee, for example through competency development).2 In the United States, PM practices contain both calculative and collaborative elements, whereas in Scandinavia the calculative element is downplayed.3 Norwegian firms have had a long tradition of holding annual “planning and development talks.” This is, however, a single, once a year event intended to promote good working relations more than a managerial system for evaluating, developing and compensating employees.4 We suggest that when introducing a “foreign best practice” into this setting, national values present initial barriers, whereas organizational capabilities and systems are crucial for the final shape of the practice.