When culture meets compliance
Assistant Professor John Gray and
PhD candidate Brett Massimino
Companies continue to explore the viability of establishing their operations in foreign locations -- but does such a strategy have an effect on operational performance? A study by Fisher's John Gray (pictured left) and PhD candidate Brett Massimino found that cultural differences between the location of a firm's headquarters and that of its operations can play a significant role in process compliance (the procedures by which a company functions).
The study, which examined 1,554 pharmaceutical manufacturing plants located primarily in 34 nations, revealed two telling indicators of process compliance:
- A language difference between the location of a firm's headquarters and that of its manufacturing plant consistently results in decreased process compliance at the plant level
- Evidence directly linking national culture differences to a company's process compliance is limited, suggesting that a nation's culture has a minimal direct effect on operations performance
Gray's research concluded that certain similarities between a firm's plant and its headquarters – like language and some dimensions of culture -- can lead to improved compliance performance. The findings were notable in that most plants were in Western nations.