Combining global and local strategies is crucial for organisations operating in multiple markets and cultures. While doing this, how can organisations balance the benefits of standardisation and maintain a sense of authenticity in each location?
We spoke with Zsolt Tánczos, Compensation and Benefits Europe for Dana Incorporated, and Ágnes Nyester, HR Manager for JYSK Hungary, during the 2023 Top Employers Inspire event to learn more about this topic. Both companies have been navigating the global-local balance for years. Dana Incorporated has over 40 000 employees in more than 30 countries, and JYSK has 3 100 stores in 51 countries.
Through our discussion, we gleaned some practical tips and examples of creating a successful global-local strategy, which I will highlight in this article. Watch the complete discussion for more details about Zsolt and Ágnes’s experiences and actionable plans for replicating their success.
Integration & Differentiation for Multinational Organisations
Multinational organisations must decide how much to integrate or differentiate activities and policies across locations. Integration refers to standardising processes, systems, and policies to create efficiency and consistency. Differentiation means customising those aspects of an organisation–processes, systems, and policies–to meet the specific needs of each office.
As a conceptual retail company, JYSK has carefully considered the balance between integration and differentiation in their offices and stores. Ágnes explained why they chose to integrate their recruitment process, “Whether you are in Hungary or Spain, the recruitment process is the same, which means it’s transparent. This makes the process easy to measure, and progress is trackable from year to year.” If one location achieves notably higher or lower metrics, headquarters can gain insights into what’s happening and adjust accordingly.
Similarly, this unified approach helps the organisation retain talent. “Our policy is that 80% of open positions need to be filled with internal candidates. This helps us develop our future talents and support existing staff,” Ágnes described the reasoning behind their approach. If it is not possible to fill the position internally, then external candidates may be considered.
Zsolt gave examples of when differentiation is beneficial. “Local regulations need to be considered. If they aren’t, it can be a very painful situation that will block the entire process,” he explained. For example, he mentioned how data protection rules vary from country to country. Involving local experts and engaging key stakeholders early in the implementation process is essential to successful local operations.
Limited resources are another standard challenge organisations face on the local level. Zsolt described how this challenge often plays out, “if a local office is told to implement a change, the key questions are really: who and when? Because they might not have enough staff support, or it might be a bad time because they have other projects.” So, considering the dynamic of each office is essential while trying to implement policies across multinational organisations.
Global-Local Challenges For Multicultural Organisations
Navigating cultural differences is challenging for international organisations, especially when determining global-local strategies. Ágnes described a time when offices in three countries had the same management team. “We took the collaboration quite seriously. We had cultural training to better understand our different perspectives and motivations. We talked about the business plan and how to make it work in each office, and we met several times to keep things going smoothly,” she explained. Regular communication was the key to their success. Although it sounds simple, having good communication requires intentional effort to bridge cultural divides.
Zsolt described how fostering relationships between country offices is advantageous. “There were some production problems in our Belgium office. Because there was a good relationship between the Belgium and Hungary offices, we were able to quickly move some employees from one to the other to resolve the issue immediately while working on a more long-term solution,” he said.
As a multicultural and multinational organisation, Dana Incorporated knew the relocated employees would need help settling into their new environment. Zsolt elaborated, “We supported our colleagues with housing, tips about the local community, and connected them with colleagues through a kind of buddy system to help them have a smooth transition.”
While developing a global-local strategy, organisations must remember it’s a balancing act. There is no one-size-fits-all approach. Considering local dynamics helps avoid operational issues and creates a positive, efficient work environment, ultimately giving organisations a competitive advantage.
