The role of recontextualization and HR practices in transferring corporate values

Abstract

Companies that nurture a shared corporate culture based upon corporate values can drive companies towards high performance. However, when companies go global and establish subsidiaries in foreign countries, transferring these corporate values may be challenging. This process is particularly challenging when there are significant linguistic and cultural differences between the headquarters and the subsidiary that may lead to a misalignment of values. This study examines the transfer of corporate values and HR practices of a small Norwegian IT company into a subsidiary in India. Our data are based on a four-year field study of a small IT company based in Norway that during this period established a subsidiary in India. We examine how the leaders recontextualize the company's corporate values, how the corporate values were implemented through a set of HR practices in India, and how the local employees perceived the corporate values. Our main findings show how the Indian leaders are active participants in the recontextualization process, translating the meaning of the headquarters corporate values into the specificities of the Indian culture and day-to-day practices. Moreover, we show how a small company without a formal HR department and with no expatriates to guide the process can use activities related to more formalized and structured HR practices to implement the values. We discuss theoretical and practical implications.