ABSTRACT:–The culture depicted within organizations can revolutionize the work environment once the diverse challenges are properly addressed. This paper seeks to delve into the challenges that American companies encounter when operating in Serbia, specifically challenges relating to organizational culture. It provides a comprehensive examination of Hofstede’s model of organizational culture and its application to Serbia and the US. Furthermore, the paper provides a background to Serbian cultural dynamics and how it has evolved over time. It emphasizes the importance of Foreign Direct Investments (FDIs) in the Serbian economy, in which the culture is a deciding factor of foreign companies to invest or not.  Information  including FDI figures were sourced from government publications and official websites, including AmCham reports among others in addition to  previous surveys that were conducted in Serbia. The review of previous studies reveal that there are some challenges including duplicating identical training practices and transferring performance appraisals in some MNCs due to cultural differences. Additionally, the culture has some implications on the employee recruitment processes. Having an awareness of the culture is crucial when conducting business in a foreign country. In addition it can also lower the level of communication misunderstandings within the organization. Furthermore, it reveals that the culture is important and is a deciding factor in its success. This paper contributes to an ongoing discussion while subsequently highlighting the challenges of establishing and maintaining organizational culture for American companies operating in Serbia.

Key words: Organizational Culture, Foreign Direct Investments, Multinational Companies