“Fair and Generous” Missteps in Cross-Cultural Business: A Case Study

An American company was looking to build an assembly plant in Eastern Europe.

In an attempt to be “fair and generous,” the company decided not to pay the average living wage of the area, which was much lower than the average living wage in America; rather, they offered to pay new laborers four times that average.

Sounds pretty generous, right?

Well, what they didn’t consider is the disharmony this would sow in the community.

The new lucrative jobs tore the town’s social fabric apart. Folks were anxious about which families would benefit. Things got cutthroat.

The company was now in a precarious position. What should they do in this situation?

Identify the Culture’s Values

With relationship-based cultures, the family unit is often the most important unit in society. Unlike in rule-based cultures, which are often individualist, the family is more important than the individual. In fact, the two are one.

Many in relationship-based cultures support the family financially. Not just parents taking care of their children, but sons taking care of their parents, older brothers and sisters financially responsible for their younger siblings.

In hearing of such a lucrative wage for labor, who wouldn’t jump at the opportunity? Especially when it meant you could better support your in-group financially.

Moreover, the families of potential workers were also invested in these top-paying jobs. Securing the work would mean more money to go around.

Considering this society’s cultural values, what did the company do?

Did they close up shop in Eastern Europe for fear of the consequences of their offer?

Did they take the initial offer off the table and put forth a more comparable living wage?

Nope, they found a cross-cultural solution.

Work within the Culture’s Values

Rather than cut their losses or go back on their word, the company identified the culture’s values and incorporated them into their own.

In order to preserve social harmony in the town, they hired one person from every family unit. The anxiety of potentially being refused this opportunity was spared, and each family was better supported.

This is just one example of a cross-cultural solution that works.

Identify the culture’s values and work within those values the best you can. If you know what your workers care about, what matters most to them, then you know how best to support them, which is mutually beneficial to you.