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Asia Pacific Journal of Marketing and LogisticsEmerald Article: Acculturation of local new product development team members in MNC subsidiaries in ThailandChonlatis Darawong, Barbara Igel

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To cite this document: Chonlatis Darawong, Barbara Igel, (2012),"Acculturation of local new product development team members in MNC subsidiaries in Thailand", Asia Pacific Journal of Marketing and Logistics, Vol. 24 Iss: 3 pp. 351 - 371

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Acculturation of local newproduct development team

members in MNC subsidiariesin Thailand

Chonlatis Darawong and Barbara IgelSchool of Management, Asian Institute of Technology, Klong Luang, Thailand

Abstract

Purpose – The purpose of this study is to explore the phenomenon of acculturation in new productdevelopment (NPD) teams in a multicultural working environment. This paper providesrecommendations for multinational companies (MNCs) in dealing with problems among teammembers from different cultures.

Design/methodology/approach – Data were collected through 24 in-depth interviews with localmiddle-level managers (e.g. R&D, marketing managers) and expatriates working on NPD projects inMNC subsidiaries located in Thailand. A qualitative method was employed to explore and attaininsightful information about the acculturation of local NPD members when working with expatriates.

Findings – Results show that local NPD team members may acculturate themselves to foreign workculture when they have regular contact with expatriates during the product development process. Theacculturation may also affect the team performance and the relationship among team members.Cultural training programs for local NPD team members are recommended.

Research limitations/implications – Since this qualitative pilot research has a rather smallsample size of cases, it limits the ability to generalize the findings. The findings from MNCssubsidiaries may not represent all other cultures of MNCs operating in Thailand.

Practical implications – The findings of this study significantly contribute to MNCs fromNorth America and Asia that develop new products in Thailand. Cultural training programs andfrequent and two-way communications are suggested to increase the familiarity of local employeeswith the foreign work culture, to develop mutual objectives, and to promote shared interests amongmulticultural NPD team members.

Originality/value – This study extends the application of acculturation of local NPD team memberswithin a multicultural setting, which has been rarely explored. Theoretically, the findings provide anin-depth understanding of the local managers’ acculturation pattern found in NPD teams. Also, itprovides recommendations on how to support the local NPD team members more effectively in adoptingcritical values of the parent firm’s culture so as to achieve NPD tasks facing less miscommunication andimproving project performance.

Keywords Acculturation, Thailand, New product development, Multinational companies,Performance management

Paper type Research paper

IntroductionIn the era of globalization, knowledge of cross-cultural business practices enhances theability to operate businesses in different countries or cultures (Lindholm, 1999).When multinational companies (MNCs) expand their businesses in a foreign country,they inevitably encounter a host-country culture which more or less differs from thehome-country culture. Understanding the host-country culture enables the headquarters

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Received 14 September 2011Revised 29 January 2012,

16 February 2012Accepted February 2012

Asia Pacific Journal of Marketing andLogistics

Vol. 24 No. 3, 2012pp. 351-371

q Emerald Group Publishing Limited1355-5855

DOI 10.1108/13555851211237867

to adapt business strategies and practices in accordance with local cultural beliefs,norms, attitudes and behaviors. On the contrary, lack of sufficient knowledge of theother culture potentially hinder work processes shared with local employees, especiallyin the coordination between expatriate managers and local employees (Kopp, 1994;Sriussadaporn, 2006). Hence, MNCs need to recognize and identify the most effectiveway to cope with the host-country culture in order to achieve international businessgoals.

MNCs’ success relies on a variety of international strategies including new productdevelopment (NPD) which significantly strengthens competitiveness and increasemarket opportunities (Cooper and Kleinschmidt, 2000). Managing NPD projects abroad ismore challenging than in domestic market as customer needs become increasinglysophisticated and complex. Changing customer preferences and needs are importantconsiderations for NPD, especially for market pull innovations which often areincremental improvement of existing products (Rothwell and Zegveld, 1981). To facilitateNPD and marketing process, cross-functional teams that hold expertise from differentdisciplines and functions (e.g. marketing, R&D) are employed. Specifically, marketers usetactical ability to examine customer requirements and develop competitive advantagestrategies. In addition, R&D professionals exploit technological know-how to transform aproduct concept into a prototype and then pass through manufacturing to production.The combination of these individuals with distinctive knowledge and skill enables theteam to solve more complex problem, make faster decisions on NPD management, andincrease NPD success (Cheng and Shiu, 2008; Griffin, 1997; Song and Thieme, 2006).

Given fierce global competition, MNC headquarters transfer technological knowledgeto their subsidiaries in order to improve technological capability (Techakanont andTerdudomtham, 2004). Under this circumstance, traditional cross-functional teamscomprising only local members (i.e. monocultural team) may not be sufficient to ensurethe success of NPD projects. Expatriates are sent from headquarters as part of the controlmechanism for business operations and involved with local NPD teams (e.g. marketingand R&D managers). These expatriates are considered as transfer agents whodisseminate knowledge to improve performance of local operations (Minbaeva andMichailova, 2004). On the other hand, local managers provide valuable information ofmarket needs, local resources, and competition situation. Having different country oforigin, both expatriates and local employees constitute a multicultural team in whichdifferent ethnicities and cultural values intertwine. Such multicultural settings offerknowledge sharing that is useful for new product idea creation, especially forinternational markets (Schweiger et al., 2003).

Literature reviewPrevious cross-cultural studies have demonstrated the impact of culturaldifference of NPD team members on practices and performance. McDonough et al.(2001) found that a multicultural NPD team faced greater challenges associatedwith effective communication, project management and interpersonal relationship than amonocultural team. This is because members from different countries may have differentwork norms, beliefs, and experience that hinder project coordination. Murray and Chao(2005) suggest that NPD team members who are from different cultural backgroundsmay experience a less harmonious relationship and reduce team performance. In thecontext of expatriate and local members, Speece and Suwannaporn (2004) found that

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different cultural backgrounds of two parties can disrupt the communication betweenthem. Local employees view themselves as in-group members whereas expatriates areperceived as out-group members. With this perception, communication between bothparties is inhibited and NPD outcomes are undermined. Although a large body ofresearch has demonstrated the impact of cultural difference on NPD team behavior andperformance (Garrett et al., 2006; Shaw et al., 2004), the empirical studies on acculturationof NPD team members is scarce. This study, therefore, aims to explore the phenomenon ofacculturation in NPD teams in multicultural working environment.

Acculturation theory was initially introduced by anthropologists, Redfield et al.(1936), who explain the outcomes of cultural change of immigrants who migrate acrossregions. Acculturation was defined as a phenomenon in which groups of individuals ofone culture have changed their value, attitude, and behavior due to a continuous contactwith another culture for a period of time. In other words, after one cultural group adaptswith the other group and vice versa, the original culture of either or both groupssubsequently changes. In later applications to social studies by Berry (1980),acculturation refers to the result of cultural change due to the diffusion of culturalelements between two cultural groups. The change of an individual’s cultural valuesdepends upon how this person perceives the own and the foreigner’s cultural values.This perception determines the degree to which one wants to:

. adopt foreign cultural values encountered during ongoing interaction with aperson from a different culture; and

. maintain own cultural values of one’s society.

Acculturation has been increasingly examined in many fields of studies includingmarketing (Martin, 2005). This study focuses on the acculturation within NPD teamswhose members are expatriates and local employees.

In a multicultural team, coordination between local and expatriate managers iscrucial, especially for a NPD project. Since expatriates come from different nationalcultures, they remain, to some extent, tied to their own national culture-specificbehaviors and norms (Adler and Graham, 1989; Smith and Berg, 1997). While workingwith expatriates, local employees hold their own national culture and related workvalues which cause different behaviors. Experiencing behavioral differences makesboth expatriates and locals adjust their work styles and values to accomplish theNPD project (Toh and Denisi, 2003, 2007). Many previous studies have found thatexpatriates tried to acculturate to the host-country culture to feel more comfortableand adapt to living and working more efficiently in the new environment(Mendenhall and Stahl, 2000). However, it is necessary that local managers need to beaware and understand how foreign managers are different in their behaviors, workcultures, and performance assessment and expectations (Neupert et al., 2005). Moreimportantly, local employees, who acculturate to parent-country business practices andnorms, tend to gain more promotion opportunities within MNCs (Herrmann and Werbel,2007).

To date, management literature confirmed the existence of “local acculturation”in multicultural organizations. Selmer and De Leon (1993, 1996, 2002) found the localacculturation of local middle-level managers who have worked for Swedish subsidiariesin Thailand, Singapore, and Hong Kong for a period of time. To measure the localacculturation, they applied the concept of “work value” which refers to the individuals’

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perception and opinion about job goals and related behaviors (Elizur, 1996).Essentially, these studies found that local managers adopted a significant level ofwork values from Swedish expatriates (e.g. meaningful work, chances for promotion).Work value adoption occurs when local employees perceived changing work values andrelated behavior useful for their career opportunities. Nevertheless, these studiesinvestigated local acculturation in subsidiaries of MNCs only with managers fromWestern countries. Since most corporate headquarters are located either in Western orAsian countries, acculturation study should explore, understand, and compare theresults of local acculturation between both groups of these countries. Moreover, thestudy of local acculturation in the context of NPD teamwork is not very well understood.This research, therefore, investigates local acculturation that is defined as the result ofcultural change when local NPD team members adopt foreign work values duringNPD work.

Between 2007 and 2009, Thailand had become one of the most preferred destinationsfor foreign direct investment in Asia. Many MNCs from the West (e.g. the USA,Germany) and Asia (e.g. Japan, South Korea) established business operationsthrough majority-owned subsidiaries in a wide range of industries mainly in food andelectronics products. Thai cultural characteristics are considerably different fromWestern cultures and are also not very similar to other Asian cultures (Hofstede, 1980).In addition, given that NPD activities in MNC subsidiaries located in Thailand aremainly performed by local employees, this provides a suitable choice to explore patternsof acculturation among the local NPD team members in both Western and Asian MNCsubsidiaries.

Taking all aforementioned contentions into consideration, we propose the followingresearch questions:

RQ1. Does acculturation occur among local NPD team members in MNCsubsidiaries located in Thailand?

RQ2. Are there any differences between acculturation types of local NPD teammembers in Asian and Western MNCs?

RQ3. What are the effects of acculturation on the outcome of NPD projectundertaken in these foreign-owned subsidiaries?

Research methodologyTo gain an in-depth understanding of the nature of local acculturation and its formationin multi-cultural NPD teams, a qualitative research approach using discovery-oriented,in-depth interviews was chosen. A narrative approach was employed to gain verydetailed information about participants’ experience in working expatriates during NPDprocess. This method involves personal interaction of the researcher who carefullyobserves participant’s expressions of their experience, feelings, and perceptions inaddition to the reply to questions and thus renders a deeper understanding of humanexperience and perspectives (Neuman, 1997).

Face-to-face interviews were conducted with 15 local Thai NPD team members andnine expatriates holding managerial positions in MNC subsidiaries located in Thailand.Each interview lasted between 60 and 90 minutes, depending upon the informationprovided by each participant.

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ParticipantsParticipants were selected from purposive and theoretical sampling method that reliedon a predetermined source of population (Maxwell, 1996). Initially, the targetparticipants were screened by telephone interviews in order to examine theirqualifications and ensure their willingness to participate. Two criteria must be fulfilled.First, the participants had to be a member of a team and involved with NPD projectsfor at least three years to ensure sufficient knowledge of NPD. Second, they had to haveregular contacts with expatriates of the parent country related to their NPD work.

In conducting a face-to-face interview, the participant was directed to the general areain relation to the research topic. This allowed the issues to emerge mainly from theconversation about their NPD work experience in a multicultural context. After the firstinterview, additional participants were selected through snowball sampling by askingthe first participant to recommend other NPD team members who meet the requiredcriteria. This sampling approach allowed us to capture a wide variety of conditions andmajor perspectives about acculturation that had emerged in NPD teams.

Local Thai participants were composed of nine females and six males with anaverage age of 34.18 years. Tenure in their current company ranged from three to13 years. Above three-year tenure was found to be a suitable sample for acculturationstudy (Selmer and De Leon, 2002). Six local participants worked in Japanese MNCs, twoin a Singaporean MNC, two in a Canadian MNC while the remaining five were fromsubsidiaries of US MNCs. These four company nationalities represent two groups ofculture: Asian (Japanese and Singaporean); and Western (US and Canadian) cultures.The participants were from a variety of functional areas including marketing, researchand development (R&D), product design, packaging, and product management.Regarding educational background, three participants held an undergraduate degreewhile the rest had a Master’s degree from either a university in Thailand or abroad. Wealso included nine expatriate managers from the same company of the respondents(one American, two Canadians, five Japanese, one Singaporean) to triangulate theinformation from local members. All nine expatriates have had NPD managementexperience in working with Thai managers from three to ten years. The participants’characteristics are summarized in the Table I.

Data collectionFollowing Yin’s (1994) method, a list of open-ended questions was developed and usedas an interview protocol. The questions were derived from both the NPD literature andnew insights during interview process to cover all potentially relevant problem areasfrom each participant. Initial questions asked general information about the companyin relation to main business, products, and services, followed by a brief description ofthe NPD process. This approach helped to gain very detailed information about:

. the entire NPD process, starting from idea generation to market entry; and

. the specific task involvement of the participant and other team members.

To obtain further information of local acculturation, four major questions were framedaround topics of interest. First, both local and expatriate NPD team members wereasked the question why and when they are in close contact with each other within thescope of their NPD project work. This question reflects causes of regular contact thatmay lead to local acculturation. Second, participants were asked to describe the way

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they changed some of their original cultural values in order to adopt some work values.With this question, work value adoption reflects different types of acculturationin NPD teams. Third, the question about the results of having changed work valuesconcerning new product projects was asked to find out the effects of acculturation.Finally, participants were asked to provide recommendations to the corporateheadquarters and local Thai NPD members how to attain positive outcomes ofacculturation. Probing questions were used to follow-up when an answer seemedincomplete, vague, or when no answer was given and to clarify the understanding ofthe responses (Stewart and Cash, 2000).

After conducting the in-depth interviews, a pilot survey was undertaken by using asmall convenience sample. We gathered additional data from 32 Thai NPD teammembers who work for the same MNCs in Thailand where the interview participantswere employed. The following questions were adapted from Dona and Berry (1994). Thepreliminary results were used to confirm the findings from our explorative study basedon the interviews.

Data analysisEach interview was recorded and carefully noted. All unclear answers were clarifiedwith the participant and analyzed by the researcher in order to gain a comprehensiveunderstanding of each participant’s experience. Following Miles and Huberman (1994),the verbatim transcripts, along with field notes and corrections from all participants,were iteratively content analyzed multiple times. To avoid researcher bias, eachtranscript was read, coded, and grouped into themes by two independent researchassociates. The use of more than one analyst can also improve the consistency orreliability of the analysis (Armstrong et al., 1997). The emerging themes of interest werethen identified and further explored through follow-up interviews and discussions.

Company(Industry)

Countryof origin

Localmember

Function/department

Age(yr)

Tenure(years)

Expatriatemember

Age(yr)

Tenure insubsidiary

(yr)

A (food) Japan AL1 R&D 37 10 AE1 48 10AL2 Product

development38 12 AE2 39 5

AL3 Production 35 5 AE3 42 3B (chemical) Japan BL1 R&D 36 5 BE1 44 4

BL2 R&D 33 7 BE2 40 7BL3 Marketing 37 11

C (software) Singapore CL1 Marketing 31 3 CE1 41 3CL2 R&D 39 4

D (electronics) Canada DL1 Marketing 32 5 DE1 43 4DL2 Product

development35 3

E (food) USA EL1 Marketing 35 13 EE1 45 5EL2 R&D 32 12 EE2 42 4EL3 Marketing 37 8EL4 Packaging 37 5EL5 Product

development38 13Table I.

Interview participants

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In addition, cross-case analysis was employed by comparing themes within and acrossthese two groups of company’s country of origin. The method revealed the similarities anddifferences and identified common themes across the two case groups. This iterativeprocess helped gain a number of categories which were compared with each other todeeply understand the properties of each category. Repeatedly, the process was executeduntil one or more categories were frequently mentioned and related to other emergingcategories by many participants. Such a repeated category became a core category when itappeared central to this study. After a core category was identified, the raters coded onlystatements which relate to the core category and other connected categories. The codingwas completed once the theoretical saturation was achieved, meaning that the informationadded nothing new to what we have already discovered from previous data about thiscategory. This technique increases the reliability and methodological trustworthiness ofthe results (Miles and Huberman, 1994).

Findings: research propositionsThis study aims to explore the phenomenon of acculturation of local NPD teammembers by comparing two groups of MNC’s origin of culture; Western (USA/Canada)and Asian ( Japan/Singapore) countries. Based on insights obtained from the literaturereview and the field data, the research propositions were developed. Table II presentscultural characteristics, cultural distance with Thai culture, and the results of threecore categories emerged during the interviews:

(1) causes of local members’ acculturation working in multi-cultural NPD teams;

(2) types of acculturation; and

(3) effects of acculturation on the team performance.

Causes of local acculturation in NPD teamsAcculturation of local team members may occur when they are in close contact withexpatriates for a period of time. Our findings show two major conditions that primarilycause the contact between two parties during the NPD project.

(1) Headquarter-subsidiary relationships. In line with past research (Ghoshal andBartlett, 1990), our findings show that the relationship between headquarters and theirforeign subsidiaries is crucial for international business operations that face resourcedependency. Subsidiaries are controlled by headquarters through rules and prescribedwork procedures that are enforced by expatriates who are in personal contact withlocal employees. During the interviews, several Thai NPD team members in bothAsian and the North American firms stated that they were supported and monitoredby the parent firm headquarters through personal interaction with expatriates whocommunicated corporate policies and ensured their implementation. Local teammembers have to follow policies and procedures specified by headquarters thatincludes specifications about:

. the new product design and functions;

. materials and component inputs for new product; and

. marketing and promotion strategies.

All Asian MNCs in this sample had a formalized, hierarchical organizational structure.Most local Thai members from both Japanese and Singaporean subsidiaries had

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to strictly follow the rules and regulations prescribed by headquarters. Local NPDteam members were required to directly and routinely report the progress of the NPDproject to expatriates. The Thai R&D manager (AL1) from a Japanese MNC shared thefollowing example:

Expatriates from headquarters explain us the new product strategy as well as providedetailed procedures for executing the NPD project until its completion. The new productstrategy must specify whether a new product is for the global, a regional, or the host country

MNC’s origin of cultureTopic Japan/Singapore USA/Canada

Cultural characteristics(Hofstede, 1980)

Collectivistic IndividualisticHigh power distance Low power distanceHigh uncertainty avoidance Low uncertainty avoidance

Cultural distance with Thaiculture

Low High

Causes of acculturation in NPD teams(1) Headquarter-subsidiary

relationshipFormalized procedures withclear task assignment

Autonomy of NPD team in the MNCsubsidiary

Centralized and hierarchicalorganizational structure

Decentralized organizationalstructure

(2) Social interaction Sports and entertainment Special events and sportsTypes of acculturation(1) Integration Local team members adopt

certain Asian work valuesand maintain Thai workvalues

Local team members adopt certainWestern work values and maintainThai work values

Adopted Asian work valuesResponsibilityAchievement in work

(2) Assimilation Not found Local team members adopt Westernwork values but do not maintain Thaivalues at workAdopted Western work values

Advancement, chances forpromotionInfluence in workUse of ability and knowledge inworkIndependence in work

Effects of acculturation(1) Task outcomes NPD speed and commercial

success after market launchAssimilation: on-time performance,effective decision makingIntegration: NPD speed andcommercial success after marketlaunch

(2) Interpersonal relationshipoutcome

Integrated team membersbuild effective relationships,higher job commitment andsatisfaction in working withboth expatriates and otherThai colleagues

Assimilation: higher job satisfactionin working with expatriatesIntegration: higher job commitmentand satisfaction in working with bothexpatriates and Thai colleaguesTable II.

Summary of results

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markets. When we know the exact direction that headquarters wants our subsidiary to beheading to, we can perform our tasks effectively. This is important for us to know becausedifferent types of NPD projects execute different strategies and require different procedures.

The finding of highly formalized work procedures in Asian MNC is confirmed byAsakawa (1996) study of Japanese R&D labs located in Europe. Japanese MNCs seemto preserve administrative heritage by maximizing the use of internal linkages betweenparent and local subunits, especially at the management level. As such, the majority oflocal R&D managers are encouraged to share their understandings with parent R&Dcounterparts in the headquarters. Therefore, we propose that:

P1. In Asian MNC subsidiaries, formalized procedure and hierarchicalorganization structure cause acculturation of local NPD team members.

In Western MNCs, although headquarters prefer to control their overseas subsidiaries toensure global profitability, the subsidiaries try to expand their autonomy to better servethe local markets. More autonomy enables the local NPD staff (e.g. marketing, R&D) tomake their own decisions on the tasks assigned by headquarters. The local marketingmanager (EL1) from a US MNC explained:

I am given full responsibility for exploring potential new markets and forecasting customerdemands before reporting to expatriate managers. This gives us correct information aboutThai consumers’ needs and preferences so that we can develop a new product that suits thelocal market.

In a decentralized organizational structure, local functional managers are empowered topropose their ideas for new products as well as product changes. However, they stillrequire approval from an expatriate manager to ensure compliance with headquartersstrategy and expectations. Thus, the headquarters-subsidiary relationship involvescomplex give-and-take activities between local and expatriates managers. These intenseinteractions require frequent and close personal contacts between NPD team membersand managers from other cultures. This finding is consistent with Nobel and Birkinshaw(1998) study of control and communication in 20 largest Swedish MNCs. They found thatmost Swedish subsidiaries engaged high level of control and communication in alldirections to facilitate NPD projects. A work environment where employees are inconstant and close touch with others from a different culture is likely to stimulateacculturation. Therefore, we propose that:

P2. In Western MNC subsidiaries, autonomy of NPD team anddecentralized organization structure cause acculturation of local NPD teammembers.

(2) Social interaction between expatriates and local team members. Consistent withprevious research (Mendenhall and Oddou, 1985), MNCs in Thailand from both Asianand Western countries have made several attempts to improve expatriate manager’sability to learn appropriate social skills that help adjust to the local culture. To someextent, expatriates were trained to learn the local language and practice theircommunication skills to help them establish a good working relationship with their staff.On the other hand, local members perceive that a good relationship with expatriatesprovides greater opportunities for career fulfillment and advancement as well asrewards such as monetary incentives and recognition.

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In Asian MNCs, both Thai employees and expatriates stated that they tried to build apositive relationship with each other because this supported the accomplishment of theNPD project. As explained by Thai marketing manager (BL3) from a Japanese MNC:

My boss and I often hang out together after work. Sometimes we play sports such as golf andswimming or we have dinner with other colleagues and clients. Our good relationshipincreases satisfaction and job performance. Given this satisfaction, I can also gain a higherchance of promotion and recognition within the organization.

In Western MNCs, social interaction between different nationals providesopportunities for learning by observation while participating in social activities suchas recognition of employees in award ceremonies. Both Thai and expatriate managerscommented that having a good relationship increases the motivation to collaboratewell and to try to solve emerging problems immediately. The local marketing manager(EL1) from one US subsidiary expressed this as follows:

We always communicate openly with the expatriates whenever there are issues at work. Whenwe clearly explain our work progress and emerging problems, the expatriate can understandthe current situation well and provide full and timely support to solve the problem.

Social interaction between expatriates and local NPD team members are apparent inboth cultural groups. Specifically, this interaction could lead to acculturation wherebylocal team members acculturate to expatriates’ culture of origin through imitation ormodeling of foreign superiors (Bandura, 1971). In this imitation process, local membersseem to adopt useful work values exhibited by expatriates in performing NPDactivities. Therefore, we propose that:

P3. Social interaction between expatriate and local NPD team members causesacculturation of local NPD team members in both Asian and Western MNCsubsidiaries.

Types of local acculturation in two MNCs nationalitiesAccording to Selmer and De Leon (2002), we considered that work value adoption oflocal members reflected types of local acculturation in multicultural NPD teams. Ourfindings show that the local acculturation of Thai NPD team members can bedistinguished into two types (e.g. integration and assimilation). These types are basedupon the intensity of adopting a foreign work value and the degree of maintaining ownwork values (Table II).

(1) Western MNCs. From research findings, we identified two acculturative typesnamed as assimilation and integration. First, the assimilation type of acculturationoccurs when Thai employees adopt foreign work values while performing NPD tasksand do not maintain Thai culture values at work. Our findings show that four ThaiNPD managers (DL1, EL2, EL3, EL5) were assimilated to Western culture work values.These assimilated managers explained that they preferred to work like American orCanadian because they felt that work values of this other culture helped improve theircompetence and professionalism.

Second, the integration type of acculturation refers to the situation when the Thaiemployee adopts selected foreign work values that are perceived useful for successful taskperformance but at the same time maintains many other work values from the Thaiculture. Our findings show that three participants (two from US MNCs and one from

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a Canadian MNC) have integrated foreign work values into their Thai value system. Whenthese integrated managers worked closely together with expatriates, they personallyexperienced how useful foreign work values could be to facilitate achieving NPD projecttasks.

Work values that both assimilated and integrated local NPD team members adoptedfrom Western expatriates consist of advancement, chances for promotion, influence inwork, use of ability and knowledge in work, and independence in work. First, teamproject performance is evaluated by the output or goals rather than the process of eachactivity. Local managers attempt to perform NPD activities to reach a specified goal byall means because they are motivated by career opportunities. Second, local managersinfluence NPD projects as a team member. They often participate in decision makingand confidently suggest work procedures to improve their project performance. Third,Western work cultures encourage employees to use several work alternatives to producesatisfactory results. All NPD team members are stimulated to use their ability andknowledge to perform their tasks regardless of age, gender, and position level. Fourth,local team members are able to work independently and are free to make decisions. Theirexpatriate superiors support them by providing flexibility that makes their jobscreative. Moreover, they often introduce new product modifications for the local marketin response to information from market research. For example, local productdevelopment manager (EL5) expressed this experience as follows.

The American culture stimulates creativity and individualism which is extremelyimportant for managing high complex tasks such as NPD projects. In the US firms, ThaiNPD members are able to freely express their opinions and ideas to managementposition. American managers are open-minded and listen to all comments from theirsubordinates. Such exchange of arguments happens frequently during a meeting for thepurpose of clarifying all issues.

This description of Western cultural work values are supported by Hofstede(1980, 1991), who found that Americans and Canadians exhibit high levels ofindividualism. Local NPD team members were assigned to independently work withinself-interest and pursue own personal goals. Such high individualistic environmentsupports Thai team members to increase self-confidence and encourages independentthinking and decision making at work.

The difference between assimilated and integrated NPD team members is thatassimilated respondents did not seem to maintain their Thai values at work. Thefindings show two reasons this group of managers do not intend to maintain workvalues they had experienced previously in Thai-owned firms. First, Thai work valuesinvolve comfort on the job, that is, Thais prefer to conform to norms and rules given bysuperiors rather than independently create new ways of performing tasks. According toHofstede (1980), Thai culture that is characterized by high uncertainty avoidanceconstitutes a clear organizational hierarchy within the firm. Given the highly formalizedand hierarchically ordered, employees have to closely follow all rules set by theirsuperior and execute formal procedures step by step. Second, Thai work values rely oncentralized decision-making processes. In other words, all important decisions are madeby a few people in top management positions. Numerous studies have shown that highlyformalized structure and centralized decision making inhibits innovative ideasand creativity that are essential for NPD (Gupta et al., 1986; Hage and Dewar, 1973;

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Pierce and Delbecq, 1977; Weber, 1947). One Thai marketing manager (DL1) shared thefollowing experience:

My experience in Thai firms was that we have to report every emerging issue to seekinstructions from the top management how to proceed. This top-down decision making oftenslows down the entire development process. Younger managers have to listen and complyfully with all decisions from top management without questions. Such limited opportunitiesto contribute own ideas and solutions restrict new ways of achieving complex organizationaltasks such as the NPD projects.

Given this experience, assimilated local managers did not maintain Thai values at workduring NPD process. Interestingly, we found that personal background and pastexperience of managers in this group were the major factors that drove their preferencesfor the American culture. Two of these four Thai managers had obtained their Master’sdegree in the USA and all of them had over five years of work experience in Americanand other Western companies. Education background and work experience in a foreigncountry apparently accelerates the process of assimilation because the individual ismore familiar and more likely to assimilate to the foreign culture.

(2) Asian MNCs. The findings show only the integration type of acculturation inthis group, consisting of eight participants (six from Japanese MNCs and two fromSingaporean MNCs). We identified some distinctive work values that manyparticipants preferred to adopt in their behavior at work in Asian MNC subsidiaries.Such critical values are responsibility and achievement in work. First, integrated Thaimanagers were fully responsible for a regular progress report about each step in NPDprocess to their supervisor. If any task was behind schedule, they had to identify thecause and suggest possible solutions in order to keep the project on track. Second,integrated members are willing to make an extra effort in their work and remain ontrack until NPD projects are achieved. These managers expressed their acceptance ofthe goals and values of the company. As one Thai R&D supervisor (BL2) described:

Japanese expatriates always kept close track of every single step in the NPD process. They stayinvolved in all NPD activities to ensure being on-time with the schedule. Japanese managerswere strongly committed to their jobs. They always asked about progress at each step of theNPD process. If problems occurred, Japanese managers would try to find a solution right awayto keep the project on schedule. I believe that these work values are essential for supportingcomplex tasks such as the NPD projects. These examples motivate Thai managers to carefullyperform their tasks and become more dedicated to their jobs until the project is completed.

This finding is consistent with previous cross-cultural studies by Hofstede (1980) whofound that the Japanese had higher degree of uncertainty avoidance than other nationsincluded in this study. It means Japanese people tend to avoid risks that come fromchange and unpredictable situations. To minimize such risk, employees are highlyconcerned and cautious about progress in each NPD process stage.

(3) Comparison between Asian and Western MNCs. In comparison between thesetwo groups of MNC’s origin of culture, integrated Thai managers adopted more workvalues from Western expatriates than from Asian expatriates. This can be explained by“cultural distance” that refers the extent to which an expatriate’s home-country cultureis different from the host-country culture (Mendenhall and Stahl, 2000; Shenkar, 2001).When expatriates and local NPD team members work together closely, they graduallyexperience the difference of each other’s work values. Thai work values

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(based on high power distance and uncertainty avoidance) emphasize a clearorganizational hierarchy and prefer following the norms and rules (Hofstede, 1991).These values differ more from Westerners (high cultural distance) than from other Asiannationals. Therefore, Thais tend to adopt more new work values from Westernexpatriates than from their Asian counterparts. In addition, in our sample we did notdiscover any assimilated manager in Asian MNCs. This finding, again, is consistentwith other research that reported business practices in modern MNCs becoming morewesternized (Pudelko and Harzing, 2010). An increased individualism of Thai and otherAsian nationals inspired by Western management can enhance efficiency,competitiveness, and profitability for MNC subsidiaries located outside the Westernhemisphere.

Given their perception and experience that both Asian and Western cultures offeruseful values they can apply at work, the 11 integrated Thai managers reported thatthey adopted new work values from their foreign bosses while working together. Still,they also considered local work values being valuable and necessary at work. Thaiwork values maintained by local NPD team members are collectivistic orientation inteamwork and respect for seniority. High collectivism emphasizes building consensusand group approval while respect for seniority requires following instructions andorders from superiors without questioning. Such values are considered useful inworking with other Thai NPD team members within the same and across differentfunctions. One local marketing manager (CL1) from a software company explained thecharacteristics of teamwork as follows:

After working with other Thai NPD team members for a period of time, I had built a verygood personal relationship with them which made me feel being a member of the team. Thisrelationship facilitates teamwork to work towards the same goal. I feel more open and relaxedwhen working with them. Complex tasks such as NPD projects are more effectivelyaccomplished because we understand each other well.

In addition, one local R&D manager (CL2) explained the appreciation of seniority beingimportant as follows:

It is necessary to listen and follow instructions from Thai NPD team members who are seniorto me. Even though we are working in an international company, most employees are Thaiand they prefer to be respected by younger team members. Many young employees like thiswork value because Thais are accustomed to following the instruction of their seniors ratherthan making their own decisions.

These statements confirm a clear perception among Thai respondents about the needfor integrating foreign work values into their own culture that help to work moreeffectively in multicultural teams and meet the NPD project goals.

Although all 15 Thai NPD team members perceived the parent firm cultures valuableand had gradually adopted them, we also discovered another group of Thai managers whowere not acculturated at all. These managers neither adopted new nor changed own workvalues. The non-acculturated Thai managers had worked for a Japanese MNC for morethan ten years. They obtained academic degrees from local Thai universities many yearsago andwere “old timers”whohad started their career withthiscompany at the operationallevel mostly in production. This finding was obtained from referring to a third partyobservation by three Thai respondents who had worked with non-acculturated managersin the same NPD team for quite some time. Such non-acculturated NPD team members

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seemed to have no perception of foreign work values being useful for achieving NPDproject goals. Different from acculturated managers, this group had maintained their ownways of working without making efforts to adjust to the cultural values of theirJapanese counterparts. The local R&D manager from a Japanese MNC (BL1) expressed thecharacteristics of non-acculturated NPD team members as follows:

I have seen some Thai managers who worked for a Japanese boss but had a negative attitudeand followed orders rather unwillingly. This may be because Japanese expatriates wereself-centered and highly determined to achieve the NPD tasks and thus quite demandingwhile these Thai employees did not seem to care much about the project outcome. They juststrictly followed orders from the Japanese boss. They preferred to work quietly in their ownway and without the pressure to adjust themselves to the Japanese culture. However, theyused their own way to accomplish the NPD project on time.

In conclusion, the interview-based findings confirm the existence of both acculturated(i.e. assimilated and integrated) and non-acculturated local NPD members. The twogroups of acculturated individuals show different degrees of adopting foreign workvalues and of maintaining own work values at work. Moreover, the results from ourpilot survey confirm three different types of acculturation. In total, 22 out of 32 NPDteam members belonged to the integrated group while only two were assimilatedmanagers. The remaining eight participants were found not to be acculturated. Thesefigures reconfirm the presence of acculturated and non-acculturated NPD teammembers in MNC subsidiaries in Thailand with integration mode of acculturationbeing clearly dominant in this sample. Therefore, we propose that:

P4. In MNC subsidiaries, local NPD team members who acculturate themselves tothe parent firm culture mostly choose integration and assimilation modes,respectively, whereas a few members do not acculturate at all.

Effects of acculturationThe second research objective is to explore the effects of acculturation on NPD projectin multi-cultural teams. We propose that acculturation in multicultural NPD teams inboth Western and Asian MNCs impacts on two types of outcomes, consisting of taskperformance and interpersonal relationship.

(1) Task performance. First, assimilated local managers in Western MNCs are able toimprove their work in terms of time-related performance and effective decision making(Table II). When local members adopt useful foreign work values, they tend to havebetter coordination with expatriates and make faster decisions about problems which inturn reduce development time. For example, one assimilated local marketing manager(EL3) confirmed the outcomes of changing work values as follows:

American work values are very useful for me to perform NPD tasks. I have changed the wayI work in NPD projects. I have more confidence in making decision and I am more creative indeveloping new product ideas. When problems occur I can find a solution in time.

In addition, integrated local managers in both Asian and Western MNCs are able toaccelerate the NPD process and reduce time-to-market. Since local team membersadopt critical foreign work values and at the same time maintain their own values,they get along well with both expatriates and other Thai team members. In support of Burt(1992) theory of structural hole, the integrated Thai managers served as a bridge between

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expatriates and their non-acculturated subordinates and colleagues. When these twoparties are well connected, the information from both sides about advanced technologyand local customer needs is effectively utilized and communicated. Therefore, the newproducts tend to be successful after market launch. Therefore, we propose that:

P5. Assimilated and integrated NPD team members perform NPD tasks betterthan non-acculturated members.

(2) Interpersonal relationship. Acculturated Thai team members in both Asian andWestern MNCs explicitly stated that their relationship with expatriate managers wasstronger after adopting foreign work values while engaged in NPD project work. In thegroup of assimilated Thais, employees’ job satisfaction towards expatriates was muchimproved. These employees have positive feelings and are motivated in their jobexperience within the team. The integrated group of Thai managers reported higherjob commitment and satisfaction in working with both Asian and Western expatriates.Such positive feelings may be stimulated by local acculturation of team members. Onelocal R&D manager (BL1) in a Japanese firm addressed this issue as follows:

When I can adjust myself with a Japanese boss, we have a good relationship that makes myboss treat me well and support me in all matters. It makes me feel secure and confident inexpressing my own opinion in regard to NPD tasks. I can openly talk to him about anyproblem at work. As a consequence, all NPD tasks can be accomplished well.

In addition to the positive experience of the acculturated NPD team members, thefindings also suggest that non-acculturated managers who tend to resist or ignoreforeign work values may cause project delay or even new product failure. As one Thaiproduct development manager (AL2) observed:

Sometimes, Japanese expatriates believe that everything they know is correct. When they askthe local R&D team to do NPD work, the R&D manager who has a negative perceptiontowards Japanese work values will follow orders even though he knows that it is impossibleto fulfill the task. Such an attitude may cause negative project results. For instance, the R&Dmanager had doubts whether the high temperature in Thailand would affect the quality of anew chocolate product. However, R&D did not care about this problem and continued tofollow orders without providing their own suggestions on this matter. Consequently, this newproduct failed. Plenty of time was wasted in fixing the problem. If local R&D people wouldhave told us before, the new product launch would not have been delayed like this.

A R&D supervisor from a Japanese MNC (BL2) elaborated that the relationshipbetween expatriates and non-acculturated managers can be negatively affected:

I have seen situations when some Thai managers think that Japanese are selfish and takeadvantage on locals. Japanese expatriates are perceived by them as takers. Even thoughThais work for these foreigners, they just follow orders while having a negative attitude.These locals do not perform their jobs with the best intention and desire.

On the other side, a Japanese expatriate (BE1) explained such difficulties with thefollowing example:

As common in the Thai culture, some local employees do not express their opinion openlybecause they are afraid of making mistakes. This leads to a lack of new ideas and canpotentially slow down progress because we cannot make the right decisions in time.

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Even worse, Thais always stick with the same way of working. They mostly resist changingtheir established work practices.

Not only do non-acculturated NPD team members have difficulties in dealing withexpatriates, but they also experience work-related problems with acculturated Thaicolleagues. For example, an acculturated R&D manager from an American MNC (EL2)described his experience with non-acculturated local managers:

When I work with other Thai colleagues who never adjust their working style, I do not reallylike it. These people make me feel confused and misunderstood by giving unclear messages.They do not tell me everything, especially when problems occur in the NPD project.

In conclusion, acculturated NPD team members, especially the integrated ones, tend toperform better in their task assignments than non-acculturated colleagues. This findingis consistent with Dona and Berry’s (1994) study that found integrated refugeesexhibiting less stress than those who were not acculturated to the dominant host culture.

Moreover, expatriates are more likely to build a good relationship with acculturatedlocal managers whereas their relationships with non-acculturated managers tend toface considerable challenges caused by negative perception towards foreign workvalues. Therefore, we propose that:

P6. Assimilated and integrated NPD team members have better relationship withexpatriates than non-acculturated members.

Recommendations for MNCsOur research findings provide significant insights and implications for managementpractices of MNCs that have already or will establish a subsidiary in Thailand. Previousstudies have focused on the situation of expatriate managers who have to manageoverseas subsidiaries and suggested to provide cultural training programs to help themadjust to the host-country culture (Mendenhall and Stahl, 2000; Sriussadaporn, 2006).This paper, however, offers recommendations for MNCs to improve local employees’NPD project performance. To solve the problems of non-acculturated NPD teammembers (both old-timers and new-comers), cross-cultural training programs should beprovided before they join a multicultural NPD team. Such training aims to improve localemployees’ understanding and appreciation of the characteristics of certain criticalforeign work values and improve the coordination among all three groups; expatriates,acculturated, and non-acculturated local managers.

The training content should be customized to reflect the MNCs’ culture-of-origin.Western MNCs may train local managers to become more confident in independentlyexpressing their work-related opinions while Asian MNCs may focus on understandingthe benefits of using formal documents and procedures and adhering to them. Thistraining would help both current non-acculturated and newly recruited local employees toadjust faster and interact better with expatriates and acculturated local managers.Moreover, such training would not only enhance the relationship between local NPD teammembers and expatriates but could also ultimately improve NPD project performance.

In addition, frequent and two-way communication between team members shouldbe reinforced by promoting more personal interaction and giving feedback. This couldassure that messages exchanged are understood correctly. Since Thais have ahigh-context culture, people do not always express everything they have in mind

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in words. Recognizing and understanding non-verbal communication are importantskills in dealing with hidden issues that maybe critical but are not talked about openly.

Conclusions and future researchThe exploratory findings have extended acculturation theory (Berry, 1980) into thecontext of managing multicultural NPD teams. Specifically, we provided a deepunderstanding of the phenomenon of acculturation among local NPD team membersworking in subsidiaries of foreign MNCs located in Thailand. The findings of ourresearch shed light on three important topics.

First, causes of acculturation in local NPD teams include the headquarters-subsidiaryrelationship and social interactions during NPD project. As assigned by corporatepolicy, the role of local NPD team members in both Asian and Western MNC subsidiariesis to coordinate with expatriates in carrying out complex tasks such as NPD project.Moreover, they need to establish close relationships through social activities so as toincrease job performance and career opportunities. These causes of regular contact maylead to the phenomenon of acculturation in NPD teams. Especially, when local membersare motivated by the value of job’s outcomes and rewards, they tend to acculturate toforeign work culture exhibited by expatriates.

Second, two types of local acculturation are found as a result of foreign workvalues adoption. This finding extends Elizur’s (1996) work into the context ofmulticultural NPD team. That is, acculturated Thai NPD team members accept and thenadopt foreign work values because they perceive these values as instrumental for theirfuture career advancement. Interestingly, local members (eight from Asian and threefrom Western MNCs) mostly maintained Thai work values in NPD projects while four oflocal managers from Western subsidiaries did not. Whether an individual maintains localwork values, leading to assimilation, depends upon a person’s educational backgroundand experience gained from working in foreign-owned companies.

Third, acculturation was proposed to impact on NPD project work and its outcomes,namely task performance and interpersonal relationship. As such, acculturatedmanagers can improve new product performance and strengthen the relationship withexpatriates better than the non-acculturated ones.

In addition, we have offered recommendations for MNCs to support acculturation oftheir local NPD managers in overseas subsidiaries. This research also providesrecommendations for MNCs to deal with problems created by cultural differences betweennon-acculturated and assimilated local managers and between non-acculturated localmanagers and expatriates. Highly recommended to MNC subsidiaries is to developcross-cultural training programs for local team members.

From the findings, two types of acculturation (i.e. integration and assimilation) areconsistent with the work of Berry (1980), who identified four types of acculturation in thesociety; assimilation, integration, separation, and marginalization. However, ourinterview and survey-based findings did not specifically show that any Thai NPD teammember identified his/her situation as separated or marginalized. Therefore, thenon-acculturated group of local employees in multi-cultural NPD teams should befurther investigated with larger sample and in different countries. A large empiricalsurvey will enable researchers to gain quantitative data to test the relationships betweenthe proposed constructs. Also, since acculturation is a dynamic process, a longitudinal

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study should be conducted to understand the process of acculturation among individualNPD team members and the related change of NPD work performance over time.

LimitationsThe explorative nature of this study offers rich and detailed information on thephenomena of acculturation within multi-cultural NPD teams in MNC subsidiaries.Although this research method yields several interesting insights, it only providesresearch propositions rather than conclusions. These propositions must be tested byusing a more conclusive method (e.g. survey) which is directed toward a large sampleof a specific group (e.g. NPD team). Moreover, small sample size limits the ability togeneralize the findings to the entire population. Despite the small size interviewrespondents and survey sample, we ensured high reliability by comparing and findingstrong consistency among interview responses and a pilot survey confirmed thefindings from the interviews. In addition, since the participants worked for MNCssubsidiaries only in Thailand, the findings might not represent all aspects of localacculturation in other countries.

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About the authorsChonlatis Darawong is a PhD Student in the School of Management at the Asian Institute ofTechnology, Thailand. His current research interests focus on the cross-cultural management innew product development (NPD), interpersonal relationships, and project performance.Previously he has worked in business and academic areas in a wide range of roles. Inbusiness, he has worked as a Production Supervisor, Technical Sales Representative, andProduct Manager for many years. He has become a Lecturer and a Researcher at the universitysince 2000. Chonlatis Darawong is the corresponding author and can be contacted at: chonlatis.darawong@ait.ac.th

Barbara Igel is a Dean of the School of Management at the Asian Institute of Technology,Thailand. Her current research interests include high-tech entrepreneurship, industrialeconomics, knowledge management, and management of innovation. Her research has beenpublished in several peer-reviewed journals such as International Journal of Quality andReliability Management, International Journal of Technology Transfer and Commercialization,International Journal of Learning and Intellectual Capital, International Journal of TechnologyManagement, International Journal of Entrepreneurship and Innovation Management,International Journal of Technology Management and Journal of Asian Business.

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