Reference no: EM133095362

Danish brewer Carlsberg has grown through numerous acquisitions since its founding in the late nineteenth century to become the fourth largest international beer producer. The company now employs over 40,000 people and sells more than 500 brands of beer. While strongest in European and Scandinavian markets, its presence in Asia is growing, as Carlsberg Group now operates in Asia, both in mainland China and in Malaysia. The Asian market is deemed to be strategically important for the future of the company, and a research project was undertaken to study how corporate values and behaviors were transferred from Denmark to the Asian subsidiaries.

Carlsberg Group is similar to many MNEs in its attempt to strike a balance between standard, corporate-driven practices and customized practices adapted to each local setting. The company leadership team established a corporate culture initiative dubbed "Winning Behaviors," which focused on creating a culture focused on developing staff to constantly take the lead in the market. Since the organization grew primarily by acquiring companies in various countries, there was some initial pushback from some local subsidiary leaders who felt that imposing Danish values on them was not appropriate. Therefore, a planning session was held with leaders from around the company to determine a common culture they could all embrace.

The results of this diverse group's work were a set of five Winning Behaviors that would not only be universal throughout the company, but that would also respect local needs:

Together we are stronger

We want to win

Our customers and consumers are at the heart of every decision we make

We are each empowered to make a difference

We are engaged with society

The glocal approach involved workshops at various business units and designated "ambassadors" to disseminate the culture throughout the organization. The HR team was actively involved in rolling out the initiative and applying it to recruiting performance management, and training practices in particular. Ten leadership competencies were identified and embedded in the performance management and compensation systems. Further, the company's leadership academy is built around the ten competencies.

Managers in the Malaysia subsidiary embraced the culture initiative and painted the walls of the headquarters in "Carlsberg green" to demonstrate a deep commitment to the parent company. They sponsored a video script contest among the employees to encourage understanding and visual display of each of the five core values. The subsidiary was awarded the "Strongest Winning Culture" as a result. In China, a video starring company leaders was created to showcase the values in action. China's top-down hierarchical culture was better suited to using leaders rather than employees to spread the Winning Behaviors message. They also created two "stories" - one of losing behaviors and the other of contrasting winning behaviors to appeal to the Chinese employees. Storytelling is common in China, echoing a Confucian tradition.

The Winning Behaviors culture initiative has generally been successful, but some challenges persist in terms of adopting empowerment in Chinese operations where long-standing hierarchies are more customary. However, expatriate managers from Denmark have reported that many of the elements of the Winning Behaviors framework are alive and working well in Asian subsidiaries. As with most culture changes, Carlsberg Group's Winning Behaviors is a work in progress.

The global presence of Carlsberg and its diverse workforce have led the company to adopt a corporate culture that is universal and respects local cultures.

1. What role should leaders at headquarters play in establishing the preferred culture for an organization with diverse locations/subsidiaries? What is the role of headquarters and local HR professionals in such an initiative?

2. Why is it important to include the cultural tenets in the company's performance management and compensation programs? How successful would you expect a culture change to be if these HR practices are not updated to reflect the new culture approach? Why?

3. What actions did the Carlsberg group take to ensure buy-in from various stakeholders and operations?