From cultural gaps to high-performance subsidiaries: A practical framework for foreign executives building American teams
Foreign companies expanding into the United States often find themselves navigating unexpected hurdles that extend beyond legal and financial considerations. Even with adequate funding and clear strategic direction, many subsidiaries struggle to gain traction because of misaligned leadership approaches that fail to accommodate American workplace expectations.
Five critical leadership model misalignments consistently undermine U.S. subsidiary performance:
Centralized Decision-Making: Excessive headquarters control stifles the autonomy and initiative American employees expect
Insufficient Communication: Under-explaining rationale and context leaves U.S. teams feeling disconnected and uninformed
Uniform Global Policies: Applying standardized approaches without local adaptation ignores the choice-driven American talent market
Misaligned Feedback Systems: Subtle or infrequent guidance fails to meet American expectations for clear, ongoing performance dialogue
Overlooking Workplace Belonging: Treating inclusion as secondary rather than fundamental to American employee experience
These leadership misalignments create friction points that slow momentum, increase turnover, and ultimately limit the strategic value of U.S. operations. Foreign executives who recognize and address these five areas can transform their American subsidiaries from execution outposts into strategic growth drivers and innovation centers.
This article provides a practical framework for achieving two critical types of alignment:
Global–Local Alignment: Establishing clear decision rights and strategic autonomy
Leader–Team Alignment: Implementing appropriate feedback systems, shared values, and inclusion practices
FOR FOREIGN companies entering the U.S. market, strategic clarity and financial preparation are necessary but insufficient conditions for success. In my companion article "Inside the Mind of the American Employee," I explored the cultural foundations that shape workplace expectations in the United States—how American employees think, what they value, and how they respond to leadership.
After working with dozens of international companies scaling in the U.S., I've identified five critical missteps foreign executives make with American teams. Each connects directly to how American employees think, what they value, and how they respond to leadership. More importantly, I'll share the strategies that consistently build alignment from day one.
These aren't just operational tweaks—they're fundamental leadership model shifts that determine whether your U.S. subsidiary merely executes or genuinely thrives.
Why it happens: In many corporate cultures—especially those shaped by strong central headquarters—strategic decisions are made top-down. The local office executes. I see this frequently with European and Asian companies expanding into the U.S.
This dynamic is particularly common in companies based in countries with higher power distance indices, where hierarchical relationships are accepted and even expected. Parent companies naturally assume that successful management models at home will translate directly to their U.S. operations.
Why it fails in the U.S.: American teams expect local empowerment. Without defined autonomy, leaders feel like middle managers, not executives. Initiative stalls. Innovation dies.
A subsidiary president I advised in the past put it bluntly: "In my previous position with a European parent company, I spent more time seeking permission than making progress. After six months, our best people started leaving. They wanted to build something, not just execute someone else's vision."
What the research says: Subsidiaries gain strategic influence in two ways—weight (economic value) and voice (visible initiative). Without both, they become operational islands with minimal attention from headquarters.[7]
Further, companies that treat foreign subsidiaries as innovation hubs rather than execution engines unlock a steady stream of new ideas, tailored strategies, and local market adaptation.[8] This isn't just about morale—it's about business performance. I've consistently observed that subsidiaries allowed to act as "peninsulas" (connected but independent) rather than "islands" (isolated outposts) deliver substantially higher innovation outcomes.
What to do:
Why it happens: In high-context cultures (e.g., Japan, France, Brazil), leaders can imply decisions and expect alignment. Language is layered. Subtext matters.
Many executives from relationship-oriented cultures assume that professional politeness means avoiding directness. They worry that explaining decisions in detail might appear condescending or suggest a lack of trust in their team's intelligence.
Why it fails in the U.S.: Americans are the lowest-context communicators in the world. They expect directness, detailed rationale, and structured messaging.[3]
One Japanese executive I advised was shocked when his American team described him as "secretive" despite his efforts to be inclusive. The disconnect wasn't about intent—it was about communication style. His subtle, indirect approach left American employees feeling uninformed, even when he believed he had thoroughly explained himself.
What the research says: Employees expect leaders to be transparent and explanatory. Rationale matters just as much as results. Americans want to understand the "why" behind decisions—not just the directive.[5]
Communication styles fall along a spectrum from low-context (explicit, direct) to high-context (implicit, nuanced). The U.S. sits at the extreme low-context end of this scale—meaning Americans prefer communication that spells out meaning clearly rather than requiring listeners to infer meaning from subtle cues or shared understanding.
What to do:
Use structured briefings, FAQs, and context-setting memos when making changes. Don't assume that important information will flow through informal channels or that employees will "connect
Why it happens: Global benefits and policies create consistency, reduce risk, and simplify compliance.
I understand the appeal of standardization. Your corporate headquarters rightfully wants efficiency and equity in how the organization operates. A unified approach is administratively cleaner and helps maintain the parent company's culture and values worldwide.
Why it fails in the U.S.: American workers operate in a choice-driven talent market. Uniformity often feels impersonal—or worse, out-of-touch.
U.S. employees expect policies to reflect local market conditions and personal preferences. This is particularly true for work arrangements, benefits, and career development. A few years ago I worked with a European company that lost three key managers in their first year of U.S. operations because they insisted on applying their standard European vacation policies—without recognizing how this positioned them at a competitive disadvantage in the highly competitive U.S. talent market.
What the research says: Americans craft their jobs based on meaning, autonomy, and identity.[6] Flexible policies increase retention—especially in hybrid and high-skill roles.[9]
The concept of "job crafting"—where employees actively reshape their roles to align with personal strengths, interests, and values—has strong roots in American workplace culture. Research shows that companies that enable this kind of personalization see higher engagement, innovation, and retention.[6]
What to do:
Why it happens: In many cultures, feedback is implicit, hierarchical, or reserved for formal reviews.
Leaders from high-context cultures often deliver constructive feedback indirectly, using gentle suggestions or subtle cues. They may wait for appropriate moments rather than addressing issues immediately, and they typically emphasize harmony over directness.
Why it fails in the U.S.: American teams expect clear, ongoing, and constructive feedback—ideally framed through individual growth, not compliance.
When feedback is too subtle or infrequent, American employees often miss it entirely or fail to recognize its importance. I've mediated numerous situations where international leaders believed they had clearly communicated performance concerns, while their American employees were genuinely surprised by negative reviews. The Americans interpreted the absence of explicit feedback as tacit approval of their performance.
What the research says: The U.S. is both low-context and applications-first in communication. Employees expect to know where they stand and how to improve—immediately and explicitly.[5] And psychological safety is a core condition for that clarity to be effective. Without it, even direct feedback can erode trust or be ignored entirely.[10]
Americans generally prefer direct, straightforward feedback delivered in private conversations. Research indicates they respond best to specific, actionable guidance rather than general observations.
What to do:
Why it happens: Inclusion may be understood differently—or deprioritized—in home office cultures.
Many multinational executives view diversity through the lens of compliance or as secondary to business objectives. Their primary focus remains on operational excellence rather than cultural elements they perceive as "soft."
Why it fails in the U.S.: Inclusion isn't just a value—it's an expectation, especially among younger, high-performing, and historically underrepresented groups.
American employees increasingly see workplace belonging as fundamental to their professional experience. When inclusion isn't visibly prioritized, it affects engagement, trust, and ultimately retention—especially among key talent segments.
What the research says: McKinsey found the top reasons Americans quit jobs were not pay—but lack of being valued, lack of manager connection, and absence of belonging.[9] For diverse employees, the absence of inclusion can accelerate exits.
The "Great Resignation" revealed that American workers are willing to leave secure, well-paying positions when they don't feel valued or included. This prioritization of belonging over compensation represents a fundamental shift in the U.S. employment landscape that I'm seeing impact mid-market companies significantly.
What to do:
Practical Application: Use this heat map during strategic planning to prioritize your cultural alignment initiatives. When addressing performance challenges in your U.S. subsidiary, match symptoms (left column) to the most likely cultural root causes (top row), focusing first on areas with the most critical impacts (●●●). For example, if you're experiencing high-performer turnover, address centralization and inclusion issues first. This tool helps transform vague cultural concerns into concrete business priorities with measurable impact. Share this with your board to justify investment in cultural alignment initiatives.
The most successful foreign companies I work with treat U.S. subsidiaries not as executors of global strategy—but as co-owners of the growth plan. That requires a leadership shift:
This is especially important in a U.S. work culture where trust is task-based.[11] Americans believe in results, competence, and communication. Social warmth is appreciated—but not a substitute for clarity, consistency, and fairness.
When U.S. leaders are empowered, trusted, and supported—they don't just deliver execution. They create lift. They attract better talent, surface smarter ideas, and scale impact across the enterprise.
To lead successfully in the U.S., foreign CxOs must align on two levels:
Global–Local Alignment: Establishing clear decision rights and strategic autonomy
Leader–Team Alignment: Implementing appropriate feedback systems, shared values, and inclusion practices
When both are strong, U.S. subsidiaries perform not just as profitable units—but as strategic growth drivers. Without dual alignment, even the best resourced U.S. offices can feel stuck. With it, a subsidiary becomes a multiplier.
Practical Application: Use this diagnostic tool quarterly with your executive team to honestly assess your U.S. subsidiary's current state. Place your operation in one of the four quadrants based on objective indicators (employee survey data, turnover rates, innovation metrics, headquarters feedback). For subsidiaries in the lower quadrants, develop concrete action plans to strengthen either Global-Local integration or Leader-Team alignment, depending on your most urgent gap. Set measurable goals for moving toward the upper-right quadrant over a defined timeframe.
When your U.S. employees believe they matter, they show up differently. They bring their best ideas, challenge assumptions, and create exponential value.
That's not about being American. That's about being human in the right system.
If you're seeking to build a deeper understanding of the cultural foundations that drive these expectations, I invite you to read my companion piece, "Inside the Mind of the American Employee: What Foreign Executives Need to Know."
References
[1] House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (Eds.). (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Sage Publications.
[2] Hofstede, G. (2001). Culture's consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). SAGE Publications.
[3] Meyer, E. (2014). The culture map: Breaking through the invisible boundaries of global business (Ch. 1: Listening to the air – communicating across cultures). PublicAffairs.
[4] Hall, E. T. (1976). Beyond culture. Anchor Books.
[5] Meyer, E. (2014). The culture map (Ch. 3: Why versus how – The art of persuasion in a multicultural world). PublicAffairs.
[6] Wrzesniewski, A., & Dutton, J. E. (2001). Crafting a job: Revisioning employees as active crafters of their work. Academy of Management Review, 26(2), 179–201.
[7] Bouquet, C., & Birkinshaw, J. (2008). Weight versus voice: How foreign subsidiaries gain attention from corporate headquarters. Academy of Management Journal, 51(3), 577–601.
[8] Birkinshaw, J., & Hood, N. (2001). Unleash innovation in foreign subsidiaries. Harvard Business Review, 79(3), 131–137.
[9] De Smet, A., Dowling, B., Mugayar-Baldocchi, M., & Schaninger, B. (2021). Great attrition or great attraction? The choice is yours. McKinsey & Company.
[10] Edmondson, A. C. (2018). The Fearless Organization. Wiley.
[11] Meyer, E. (2014). The culture map (Ch. 6: The head or the heart – two types of trust and how they grow). PublicAffairs.