How to Map and Compare Culture Across Firms
Skip to content
The Insightful Leader Live: What to Know about Today’s AI—and Tomorrow’s | Register Now
Leadership Policy Jul 1, 2007

How to Map and Compare Culture Across Firms

Cultural differences between U.S. and German pharmaceutical companies due to nationality have decreased since the 1980s

Based on the research of

Klaus Weber

In a globalizing economy, corporations and industries increasingly need to manage across cultural as well as geographic boundaries in communicating with their stakeholders. Do companies from the same country use similar cultural styles when they talk about business? What about companies that operate in the same industry but are located in different countries? To see similarities and differences in the way companies communicate with stakeholders, it is important to consider the overall package of cultural concepts at the companies’ disposal. Klaus Weber, Assistant Professor of Management and Organizations at the Kellogg School of Management, provides a step-by-step process for simplifying the information involved in analyzing comprehensive sets of cultural concepts.

Weber’s work extends the notion of a “cultural toolkit” developed by Ann Swidler (1986) and helps to address questions of corporate culture in complex environments. Put simply, Swidler pointed out that culture supplies people and firms with a large reservoir of resources to talk about themselves and to navigate their environments. Weber provides one way of measuring the influence of culture by examining how pharmaceutical companies in the United States and Germany portrayed themselves over twenty-one years. He particularly focused on corporations’ cultural toolkits as expressed in annual reports, though he noted that toolkit analysis could be generalized to other aspects of culture, such as behaviors, material symbols, and images.

Having once worked in the pharmaceutical industry himself, Weber was particularly drawn to the challenges posed by the companies’ triple roles as commercial enterprises, performers of cutting-edge research, and promoters of health. “They often try to appeal to several different audiences at the same time,” he explained. “This makes them particularly interesting because they need to tap into diverse cultural concepts to do so. It is easy to see that they want to portray themselves as more than one thing.” Thus, Weber’s objective in this research was to assess the comprehensive repertoires, or cultural toolkits, that these companies use in their annual reports, and to test if their industry and national environments influence them.

Published in the journal Poetics, the research relied on a dataset of annual reports from ninety-four pharmaceutical companies in the United States and Germany between 1980 and 2001, resulting in 943 data points at the level of the firms (541 U.S., 402 German). To discern cultural ideas in each firm’s language, Weber used several systematic techniques to create a dictionary of cultural concepts that appeared in the reports. He found six broad groupings or “clusters” of sixty-three observed cultural elements (the overall toolkit). For example, the “action style” cluster contained twelve attributes of competent management: rational, committed, careful, decisive, etc. Weber then coded the presence of these elements in each report through textual analysis. To visualize comparisons between firms, he assigned an “emphasis score” to each cultural element based on the number of times the element was used, standardized by the total number of occurrences of all elements. Figures 1 and 2 show the average profiles of U.S. and German firms in 1980 and 2001 for two clusters, “action style” and “means of action” (corporate strategic actions). The graphs provide three types of information:

  • The shapes indicate national styles, or the relative emphases on alternative cultural elements by U.S. and German firms.
  • The degree of overlap shows the degree of profile similarity.
  • Compared across years, the graphs show the extent and direction of changes.

Figure 1: Action Style
Figure1: Action Style

Figure 2: Means of Action
Figure 2: Means of Action

To evaluate the overall cultural similarity among firms, Weber suggested additional techniques to simplify the data, such as multidimensional scaling. This technique revealed trends in how firms differed over time. In 1980 German and U.S. firms clearly used distinctive sets of cultural concepts in their communications, which suggested the home country was a key cultural influence. By 2000, however, such concepts were no longer so distinctive. Much of the convergence occurred in the early 1990s.

This pattern suggests that pharmaceutical companies do indeed talk quite differently about what it means to run a company, but that differences due to nationality have been diminishing since the 1980s. Weber explains this finding as the outcome of two distinct processes. First, in a generational dynamic, “More recently created companies and younger executives appeal to quite similar cultural ideas from the outset. They differentiate themselves more by virtue of their position in the industry, and less based on nationality.” Second, the fact that the companies’ shareholders and customers are becoming increasingly similar erodes the importance of location for determining what cultural style prevails. “These companies are talking to increasingly similar audiences. They are owned by similar investors and compete more with foreign companies, which influences the way they want to portray themselves.”

Overall, Weber’s research demonstrates that corporate culture is not just a matter of national differences or differences in executives’ deeply held values. Companies use cultural ideas pragmatically to influence their specific environment. Companies differ almost as much within countries as they differ between. The lesson for management teams is to develop a versatile cultural toolkit in order to most effectively portray their company to a more diverse public. Weber adds, “The language and cultural concepts used in these annual reports is important not so much because it provides a window into what the managers actually think. There is clearly ‘impression management’ going on. But that impression making is no less critical, because today the companies are under constant scrutiny by stakeholders and the public. Questionable and tarnished images and reputations are costly and hard to repair. And so I prefer to think of cultural toolkits as communication devices to influence and manage that public sphere. Being good at using the right cultural concepts gives companies legitimacy, strategic flexibility, and is ultimately linked to economic performance.” This research is therefore especially relevant for people trying to understand stakeholder management and corporate communications in a global environment, and for expanding the techniques for studying the culture of markets and organizations.

Further Reading

Swidler, Ann (1986). “Culture in Action.” American Sociological Review, 51(2): 273-286.

Featured Faculty

Thomas G. Ayers Chair in Energy Resource Management; Professor of Management and Organizations

About the Writer
Michaela De Soucey, a doctoral student in Department of Sociology at the Weinberg College of Arts and Sciences, Northwestern University.
About the Research

Weber, Klaus (2005). “A Toolkit for Analyzing Corporate Cultural Toolkits.” Poetics, 33(3-4): 227-252.

Most Popular This Week
  1. Understanding the Pandemic’s Lasting Impact on Real Estate
    Work-from-home has stuck around. What does this mean for residential and commercial real-estate markets?
    realtor showing converted office building to family
  2. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  3. Will AI Eventually Replace Doctors?
    Maybe not entirely. But the doctor–patient relationship is likely to change dramatically.
    doctors offices in small nodules
  4. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  5. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  6. What Happens to Worker Productivity after a Minimum Wage Increase?
    A pay raise boosts productivity for some—but the impact on the bottom line is more complicated.
    employees unload pallets from a truck using hand carts
  7. For Students with Disabilities, Discrimination Starts Before They Even Enter School
    Public-school principals are less welcoming to prospective families with disabled children—particularly when they’re Black.
    child in wheelchair facing padlocked school doors
  8. Why Do Some People Succeed after Failing, While Others Continue to Flounder?
    A new study dispels some of the mystery behind success after failure.
    Scientists build a staircase from paper
  9. Leaders, Don’t Be Afraid to Admit Your Flaws
    We prefer to work for people who can make themselves vulnerable, a new study finds. But there are limits.
    person removes mask to show less happy face
  10. Got a Niche Product to Sell? Augmented Reality Might Help.
    Letting customers “try out” products virtually can give customers the confidence to take the plunge.
    person testing virtual reality app on phone
  11. Take 5: How to Improve the Odds of Breakthrough Innovation
    Thorny problems demand novel solutions. Here’s what it takes to move beyond incremental tweaks.
    New invention sits on a shelf unused.
  12. Why Well-Meaning NGOs Sometimes Do More Harm than Good
    Studies of aid groups in Ghana and Uganda show why it’s so important to coordinate with local governments and institutions.
    To succeed, foreign aid and health programs need buy-in and coordination with local partners.
  13. How Has Marketing Changed over the Past Half-Century?
    Phil Kotler’s groundbreaking textbook came out 55 years ago. Sixteen editions later, he and coauthor Alexander Chernev discuss how big data, social media, and purpose-driven branding are moving the field forward.
    people in 1967 and 2022 react to advertising
  14. How Peer Pressure Can Lead Teens to Underachieve—Even in Schools Where It’s “Cool to Be Smart”
    New research offers lessons for administrators hoping to improve student performance.
    Eager student raises hand while other student hesitates.
  15. Immigrants to the U.S. Create More Jobs than They Take
    A new study finds that immigrants are far more likely to found companies—both large and small—than native-born Americans.
    Immigrant CEO welcomes new hires
  16. How Much Do Campaign Ads Matter?
    Tone is key, according to new research, which found that a change in TV ad strategy could have altered the results of the 2000 presidential election.
    Political advertisements on television next to polling place
  17. Executive Presence Isn’t One-Size-Fits-All. Here’s How to Develop Yours.
    A professor and executive coach unpacks this seemingly elusive trait.
    woman standing confidently
  18. Take 5: How Fear Influences Our Decisions
    Our anxieties about the future can have surprising implications for our health, our family lives, and our careers.
    A CEO's risk aversion encourages underperformance.
Add Insight to your inbox.