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Managing a truly global multinational company would obviously be much simpler if it required only one set of corporate objectives, goals, policies, practices, products and services. But local differences make this impossible. The conflict between globalisation and localisation has led to the invention of the word “glocalisation”. Companies that want to be successful in foreign markets have to be aware of the local cultural characteristics that affect the way business is done.

A cultural divide has been much studied between the countries of North America and north-west Europe, where management is largely based on analysis, rationality, logic and systems, and the Latin cultures of southern Europe and South America, where personal relations, intuition, emotion and sensitivity are much of greater importance.

The largely Protestant cultures on both sides of the North Atlantic (Canada, the USA, Britain, the Netherlands, Germany, Scandinavia) are essentially individualists. In such cultures, status has to be achieved. You don’t automatically respect people just because they have been in a company for 30 years. A young, dynamic, aggressive manager with an MBA degree can quickly rise in the hierarchy. In the most Latin and Asian cultures, on the contrary, status is automatically granted to the boss, who is more likely to be in his fifties or sixties than in his thirties. This is particularly true in Japan, where companies traditionally have a policy of promotion by seniority. A Japanese would also want to take time to get to know the person with whom he was negotiating, and would not appreciate a confident American who wanted to sign a deal immediately and take the next plane home.

In northern countries, the principle pay-for-performance often successfully motivates sales people. The more you sell, the more you get paid. But the principle might well be opposed in more collectivist cultures, and in countries where reward and promotion come with age and experience. One interesting story happened in an Italian subsidiary of a US multinational company, where a sales rep was given a huge quarterly bonus under a new policy. His sales – which had been high for years – declined dramatically during the following three months. It was later discovered that he was deliberately trying not to sell more than any of his colleagues, so as not to reveal their inadequacies. He was also frightened not to earn more than his boss, which he thought would be unthinkable humiliation that would force the boss to resign immediately.