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How ‘The Culture Factor’ Impacts Global Payroll

By Nicole Barile


Payroll is a fundamental business need. It’s nuanced, ever-changing, and complex. Make it global, and you’ve just added a whole other set of challenges.

Most organizations are so busy focusing on new payroll laws, regulations, and technologies in order to keep up with the constantly evolving workforce that they are leaving out an important piece in global payroll—the culture factor.

In order to work more effectively with your global colleagues, you must first understand what makes them different than you. How do they prefer to communicate? How do they prefer to do business? What are the norms in their culture? Not understanding these differences can lead to serious obstacles within an organization. It can certainly lead to a disconnect between headquarters and international locations. Once that disconnect is there, it’s hard to repair. Getting in front of these obstacles is a sure way to keep teams aligned and operations running smoothly. In today’s global world, learning about other cultures is no longer a luxury—it’s an essential part of doing business.

Here are some common ways in which cultures differ around the globe and how that impacts the way they do business. Strategies and tips are offered to help bridge any differences.

Communication-Specific Cultures

There are two types of cultures that prefer a certain way in which to communicate. Let’s look at each of these:

  1. Direct cultures prefer communication to be simple and precise. Messages are direct. Yes means yes. Words are used explicitly to carry the exact meaning in order to avoid misunderstanding. Those from direct cultures believe it’s the responsibility of the speaker to make sure his or her ideas come across clearly. They may appear rude to those from indirect cultures. Some countries that prefer this communication style include Germany, Israel, the Netherlands, and Switzerland.
  2. Indirect cultures prefer a more nuanced communication style. Messages are implied. Yes may mean yes, no, or maybe. Information is embedded into the style and context of their communication and not in the specific words. Those from indirect cultures, like in the countries of China, Japan, Peru, and Saudi Arabia, believe it is the responsibility of the listener to understand what is being communicated. They may appear untrustworthy or inefficient to those from direct cultures—“Why don’t you just get to the point already?!”

When communicating with each of these types of cultures, people should do the following:

When working with direct cultures:

  • Pay attention to the words spoken
  • There’s no need to look for any hidden meanings
  • Don’t be too detailed in your communications, whether they are verbal or in an email
  • Use concise language and keep it short

When working with indirect cultures:

  • Look at non-verbal cues such as eye contact and body language
  • Read between the lines
  • Always get clarification
  • Use open-ended questions. Ask, “When will you be able to get that report to me?” instead of, “Will you have that report to me by 3 p.m. Thursday?”

Team or Loner Types

Some types of cultures prefer to work individually and others like to work in teams. They are:

  1. Individualistic cultures tend to look out for themselves and emphasize “I” vs. “we.” These cultures take responsibility for individual successes and failures and reward individual initiative and achievement. Some countries that represent this cultural style include Australia, Sweden, the United Kingdom, and the United States.
  2. Group-oriented cultures are more consensus-driven and emphasize “we” vs. “I.” They put the needs of the group ahead of the individual and reward group work and team collaboration, like Colombia, Kenya, Oman, and Vietnam.

These two types of cultures require different tact as well, which include:

When working with people from individualistic cultures:

  • Don’t be afraid to discuss individual goals and objectives
  • Be careful not to micromanage
  • Don’t be afraid to express your own individual ideas
  • Use individual competition as a motivator

When working with people from group-oriented cultures:

  • Be patient; decisions may need input from many stakeholders, as consensus is the goal
  • Don’t be afraid to monitor group progress (micromanage)
  • Set collaborative goals
  • Don’t force your ideas on others

Authority-Driven Cultures

There are some cultures that emphasize a more status-approach, which differs from another culture type, including:

  1. Hierarchical cultures value status and rank over competencies. Titles are important, as is respect for authority. Organizational structures are multi-layered, and people are more formal. Countries that adhere to hierarchical structures include India, Mexico, Thailand, and Venezuela.
  2. Flat-structured cultures value competencies over status and rank. These cultures are less formal, so first names are often used. Organizational structures tend to be flat, and it’s acceptable to challenge higher-ups. Countries that exhibit egalitarian traits include Denmark, Iceland, New Zealand, and Norway.

When working with people from hierarchical cultures:

  • Be careful not to contradict or correct your supervisors, especially not openly
  • When delegating, expect your requests to go unquestioned
  • Do your research; if you don’t have the answers to a supervisor’s questions, it can negatively impact your credibility
  • Don’t be afraid to negotiate for a win-lose outcome

When working with people from flat-structured cultures:

  • Don’t be afraid to openly question or contradict those with higher positions
  • When delegating, you may need to explain the reason for the request
  • Don’t worry about not having all of the answers, but know who does
  • Negotiate for a win-win outcome

Trust-Worthy Cultures

Some cultures value trust the most, but it depends on how it is given. These include:

  1. Task-oriented cultures, where trust is often given from the start. Relationships don’t need to be strong in order to complete projects successfully; the relationship will come later, once the task has begun or is completed. Decision-making can occur quickly, even if you’ve just met, and this occurs in Canada, Norway, Sweden, and the United States.
  2. Relationship-oriented cultures, where trust needs to be earned. Relationships build up slowly over time and are required in order to successfully complete tasks. Decision-making will go more quickly if you put in the time upfront to get to know all parties. Countries that lean towards a more relationship orientation include Brazil, Indonesia, the Philippines, and Russia.

When working with people from task-oriented cultures:

  • Don’t spend too much time in pre-negotiations or meetings
  • Use virtual communication for meetings; it’s seen as efficient
  • Understand that flexibility may not come naturally; be patient
  • When giving feedback, be sure to define standards

When working with people from relationship-oriented cultures:

  • Take time to get to know your colleagues
  • Use face-to-face (in-person) meetings whenever possible
  • Remain flexible and willing to consider unanticipated events
  • When giving feedback, listen and show appreciation

Rule-Bearing Cultures

For some cultures, rules are everything. These cultures types include:

  1. Situational cultures, where rules are meant to be broken, or at least bent. Circumstances determine the action. Favors and exceptions are permitted and expected. Countries that are generally situational include Bolivia, Ethiopia, Morocco, and Sierra Leone.
  2. Rule-oriented cultures have rules that are meant to be obeyed. Policies and procedures determine the action. Special favors are not seen as acceptable and may, in fact, get you into legal trouble. Countries that are very rule oriented include Germany, New Zealand, Sweden, and the United States.

When working with people from situational cultures:

  • Make decisions based on each individual situation
  • Be flexible in meetings; they may not follow the structure you are accustomed to
  • Expect information sharing to be open
  • Allow for fluid processes; they will change often

When working with people from rule-oriented cultures:

  • Make decisions based on logic; be prepared to prove and justify them
  • In meetings, be sure to stick to agendas; don’t go off-topic or down rabbit holes
  • Expect information sharing to be controlled
  • Pay close attention to processes; create process maps and guidelines to follow closely

Understanding how, and more importantly why, cultures differ is an essential part of working globally. These differences can affect everything from leading and supporting teams to negotiating and closing a deal. For those working in global payroll, learning how to improve communications with those from abroad is an essential part of creating a truly global organization.

Global Communication Styles

Have you ever worked with someone from another culture or country and encountered a challenge or a roadblock? Or you left the conversation not really sure if you understood one another? This is common when working across cultures.

  • “Let me get straight to the point.”
  • “If you want something done right, do it yourself.”
  • “I love when people take initiative.”
  • “Let’s get right down to business.”
  • “If I make an exception for you, I’ll have to do so for everyone.”

The above are typical comments that an American might say. These phrases are greatly influenced by our history and values and are seen as “normal” ways of thinking. But not everyone shares these same values.

5 Ways Communication Styles Differ in the U.S.

Direct vs. Indirect

While Americans tend to be direct communicators, others believe an indirect style is the best approach, as it is less likely to offend.

Individual vs. Group

Americans are generally individualistic, putting themselves first; however, other cultures believe that the group is most important.

Flat vs. Hierarchy

While Americans value equality and fairness, others believe strongly in status and formal rankings.

Task vs. Relationship

Americans pride themselves in being able to get right down to business, but other cultures insist on building relationships first, and that may take time.

Rules vs. Situation

Americans follow rules because they keep things orderly, but in other cultures exceptions must be made for special situations.

Which countries are you working in? What is their preferred communication style? Understanding a country’s values and norms is key to building a global mindset, forging strong relationships, and succeeding across cultures.

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Nicole Barile is an Intercultural Consultant and Trainer with more than 15 years of experience helping companies and individuals improve business communications across cultures. She works closely with executives at Fortune 500 companies to create globally-minded leaders and organizations, helping to facilitate their success around the globe. Barile also consults with organizations looking to create, refine, and optimize cultural diversity programs internally. She has traveled to more than 40 countries, has worked with individuals from more than 100 countries, and speaks conversational Portuguese and Spanish. She has a bachelor of arts in Global Economics and her master of arts in Intercultural Relations.