Getting Foreign Personnel to Comply, While Respecting Cultural Differences and Allowing Some Level of Operational Independence

Abstract

Multinational companies often struggle with what is the appropriate level of diligence and oversight to apply to their foreign subsidiaries, particularly those foreign subsidiaries in underdeveloped nations, or in regions with widespread corruption. It is almost an art to strike the perfect balance. On the one hand, you want to respect the fact the foreign subsidiaries have developed a routine that works, and thus would not benefit from a mandate to revamp their entire practice. On the other hand, you want the foreign subsidiary to recognize that the parent company is the final decision maker, and for the foreign subsidiary to take pride in being part of the larger team. There are stark cultural differences from one country to the next, and you risk losing credibility if you do not familiarize yourself with those differences and take them into account when establishing expectations for your foreign subsidiaries. Key elements to successfully striking the delicate balance include: (i) learning to collaborate with the foreign subsidiary, so knowledge and ideas flow both ways and are not just pushed down; (ii) demonstrating awareness and sensitivity for cultural norms; (iii) learning to trust in and have faith in your foreign operations, but nevertheless behind the scenes taking the time to verify the facts; (iv) enlisting and empowering boots on the ground at the foreign subsidiary; (v) learning to say no when it is necessary; and, (vi) conducting compliance visits and sending out compliance-related communications without overdoing it and risking dilution of the message.