Intercultural business communication case analysis

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INTERCULTURAL BUSINESS COMMUNTICATIONS

A Case Study of Swedish Company and its Subsidiary in China

Assel Mamezhanova

Introduction

Now, in the era of Internationalization and Globalization of business, an intercultural business communication becomes a challenge for managers. The main cause of miscommunication may become a difference in cultures of countries of interacting companies. The greater the cultural difference is the more likely problems in communication will occur.

A culture, as the case states, is a mindset that directly influences people's way of thinking and behavior. Consequently, culture has influence on behavior of people in terms of business, management and communication style, decision making style and, thus, the performance of the company. For instance, the style of conducting negotiations in Kazakhstan would differ from United States. In Kazakhstan, if you want to present something, it would be more effective to address to the most empowered person in the room because the decision making totally depends from him. In contrast, in United States, country with relatively low power distance, an individual must address all participants of negotiations assuming that the final decision would depend from all of them.

Case description

A Swedish company X, which was founded in 1936, owns several subsidiary companies around the world, including Denmark, France and China. The mission of the company states that they want to be the leading manufacturer of high quality products, satisfy customers and be competitive. On the interview, company representatives mentioned that because of the tremendous cultural difference dealing with Chinese subsidiary is more complicated than with subsidiaries in other countries. However, it did not reflect on successful cooperation during 12 years.

A Chinese subsidiary, located in Shanghai, is a very famous manufacturer with 70 years history and huge experience. Even after merging with Swedish company most of the old managers and employees stayed in the company.

At the beginning of their relationships, a Chinese company was operated as a joint venture with 51% of stocks owned by Swedish. Both sides kept in mind a strategy that “Sweden is Sweden” and “China is China”, and thus were operated separately as two companies. In 2002 Chinese merged with Swedish company with 100% of stocks owed by Swedish headquarter.

The separate management remained the same until 2008, when Swedish parent company began to involve in the management of the Chinese subsidiary company. As a result some Swedish elements, such as management style, started penetrating. However, because of the long history, Chinese cultural peculiarities which deeply rooted into the Chinese subsidiary, management style cannot be changed quickly. As a result of differences they faced some difficulties in communication.

On Monday morning a Technical Product Manager of a Swedish company sends and e-mail to the Chinese Subsidiary in which he asks to develop a production model of the new design by Friday. On Tuesday he receives an answer saying that there was a 1 mm error of the product they madeand asking the manager what they should do further. In this situation the Swedish manager was wandering why the Chinese were waiting for orders instead of taking initiative and fixing the error by themselves.

Case Analysis

multicultural communication swedish chinese

There are several cultural dimensions that can become the parameters to identify differences between cultures. In accordance to Hofstede (1980), there are four dimensions of culture: Low and High Power Distance; Individualism and Collectivism; Masculinity and femininity; Uncertainty avoidance.

Cultures with high power distance are hierarchical, authoritarian and have vertical spine of control between superiors and subordinates. In high power distance cultures subordinates are dependent from superiors, which is reflected in decision making and means of showing respect. Chinese culture can be described as high power distance culture and asking permission for actions is quite natural. For Chinese party, taking into consideration that they are a subsidiary country and depend from headquarter, the asking for permission from headquarter was a way of showing their respect and dependence. However, for Swedish party this way of behaving was considered a failure of independent decision making in a simply solvable problem, not deserving any participation.

A collectivistic culture is the culture that values a group's performance and group's rights more than individual input of each member. In contrast, individualistic societies appreciate more individual achievements and tolerate individual, and, thus independent, decision making. However, cultures with low power distance tend to be more individualistic, and cultures with high power distance are likely to be collectivistic. For a Swedish company it is natural to be initiative and make some actions without asking, especially to such unimportant things as 1 mm error in product. However, combination of collectivistic nature of Chinese culture and high power distance reflected on their unwillingness to take a decision by their own.

An important factor that must be considered is that Chinese people have Confucian values and disciplines as a source of social principles. One of the main principles of Confucianism states that all people were born unequal and everyone have to accept this fact and, thus, know his place in life and behave appropriately. Consequently, Confucianism contributed to uneven high power distance and, furthermore, to total acceptance of it. As for, Sweden and Western European countries a predominant belief is an equality of people, which explains low power distance in relationships.

In addition to attitude to equality, there is a difference in ways of showing and gaining respect. The difference is a believe that power is not born-with asset, but an individual must gain power, and as a result respect, by hard workingness and active contribution to the group. In conjunction with the fact that Chinese culture is a more feminine one, in relationships a priority is keeping harmony, long term relationships, sense of conformance and reciprocal respect, rather that spontaneity and it's manifestations, such as initiative.

There are some differences in management style as a result of cultural differences. The difference can be seen in attitude towards questioning, initiative, communication between different organizational levels, ways of conflicts and problems resolutions and general staff behavior. Management style influences the language used in communication, meaning that how employees and managers express and receive messages. Attitude and level of empowerment within the organization affects interaction a lot.

As it is known from the case, Swedish company preferred project team, and in major projects people from all departments were involved. The communication was easy and had relatively flat structure. Decisions were also made with consideration and expertise of all project participants. Swedish managers were trying to empower and encourage their employees to do what they want, to be initiative and express their attitudes, thoughts and proposals freely, as well as take some decisions by their own.

As for Chinese, they communicate more officially which can be explained by tall hierarchy and high power distance. Communication between different levels of hierarchy contains a lot of bureaucracy. In general Chinese managers prefer to control the situation and give commands to subordinates. From subordinate's side, they are somehow afraid to say “no” to managers because they do not want to make a superior unhappy, and in general tolerance for inequality and subordination affects the communication. It is common for Asian business cultures that decision is made by a leader in accordance with his personal knowledge and experience.

Communication system and information exchanges are closely interrelated with management style and power distance, which can be seen as potential obstacle makers. In Sweden you can easily approach a responsible manager and ask for advice, consultation or help in case if you cannot fix the problem by yourself. This process takes few times. In contrast, in China approaching a manager is not common and if it is unavoidable it becomes a routine procedure. Generally, employees just wait for official orders. Having this mind set, asking for orders and not making own decisions as a natural and logical behavior, Chinese party expected Swedish managers to behave accordingly.

Possible solutions

Based on my analysis of the problem and its causes I offer following possible solutions and measures to solve them:

· Make a conference with Chinese representatives with the purpose of sharing company's vision. On this conference, Swedish party must explain their management style and what they consider to be an effective communication.

· Another thing that would probably help is a strict list of things or situations that Chinese company a s a subsidiary can or cannot solve by themselves

· Employee exchange program would probably help to get experience and understand another company. Especially this is useful for managers that will learn new and more efficient ways of leading and communicating with employees and headquarter. Also, coming back home Chinese managers could become Swedish values messengers and implement some tactics to their company. As for Swedish company, who used to complain about low level of interest on information and experience exchange from Chinese party, they will get an excellent opportunity to fix it.

Conclusion

Cultural background has a strong influence of individual's behavior in terms of private, public and business life as well.

Culture forms our values, attitudes, mental schemas of what is normal, right or wrong. Based on that knowledge we make decisions, not only big ad important, but also every day routine small decisions, that seem completely unimportant, but altogether form our way of behaving.

All cultures are different, which causes troubles in communication. But, culture is not innate, it is learned. Thus, anyone can be taught or aware of foreign culture to predict behavior or prevent miscommunication. The question is who is and individual willing to learn or not.

References:

1. Rufei He and Jianchao Liu, 2010, Barriers of Cross cultural Communications in Multinational Firms- A Case Study of Swedish Company and its Subsidiary in China, Halmstad School of Business and Engineering

2. Iris Varner and Linda Beamer, 2011, Intercultural Business Communication in the Global Workplace FIFTH EDITION

3. http://employees.csbsju.edu/proske/nursing/apa.htm

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