13527601011068333

Cross Cultural Management: An International JournalCross-cultural management in ChinaKeyong Dong Ying Liu

Article information:To cite this document:Keyong Dong Ying Liu, (2010),"Cross-cultural management in China", Cross Cultural Management: AnInternational Journal, Vol. 17 Iss 3 pp. 223 - 243Permanent link to this document:http://dx.doi.org/10.1108/13527601011068333

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http://dx.doi.org/10.1108/13527601011068333

Cross-culturalmanagement

in China

223

Cross Cultural Management: AnInternational Journal

Vol. 17 No. 3, 2010pp. 223-243

# Emerald Group Publishing Limited1352-7606

DOI 10.1108/13527601011068333

Cross-cultural managementin China

Keyong DongSchool of Public Administration, Renmin University of China,

Beijing, China, and

Ying LiuInstitute of Organization and Human Resource, School of Public

Administration, Renmin University of China,Beijing, China

Abstract

Purpose The purpose of this paper is to: summarize the major research that has been conductedregarding cross-cultural issues in China; show the current practices on cross-cultural management inChinese organizations; and then identify future research needs on cross-cultural management in China.Design/methodology/approach Meta-analysis was carried out to summarize research of cross-cultural management in China.Findings Empirical studies on cross-cultural management in China have been conducted since the1990s, and numerous empirical studies have been done in the past two decades across different levelof constructs and practices (individual, group and organization). Among all the intercultural researchconcerning China, there are mainly two common types: the first type focuses on foreign managersand employees, center on their adjustment and performance in Chinese culture; and the second typeof study examines Chinese who work with these foreigners in the multinational management setting.Furthermore, in recent years, emphases have been shifted from examining the effects of culture onsingle variables to examining the relationships among same and different level of variables.Research limitations/implications Systematic conceptual model development and assessmentof important topics are in great need. Although there is an increasing amount of comparative studiesbeing done in China, very few studies have been conducted to study Chinese firms that are doingbusiness abroad, which represents one of the most critical problems in the field of cross-culturalmanagement research in China. Most studies focus on cultural value identification and practicalissues in Western global companies, which is concerned with comparison between Eastern andWestern culture. Research should be conducted to study cultural differences among eastern countries,for example, countries in Asia.Practical implications Future cross-culture management practices in China should followseveral basic principles: be applicable, that is, build unique organizational culture that is embedded inthe host country; be practical, since there is no well-developed multinational culture in China, newculture should be concerned with both sides; be systematic, cross-culture management practicesshould have supporting system; be equal, no single culture is better than another; culturalpenetration, two different cultures have mutual impact; merit-based appointment and promotion, uselocal personnel, not just talents from the home country. In Chinese settings, the most common cross-cultural management interventions include: cross-cultural training, cross-cultural communicationsystem and unified organizational culture.Originality/value This paper comprehensively reviews the research and practices on cross-cultural management in China; identifies topics that have been studied in individual, group andorganizational level. Implications on cross-cultural selection, training are provided based research evidence.

Keywords Cross-cultural studies, Cross-cultural management, Research, China

Paper type Research paper

IntroductionGlobalization is changing behavior, team composition and team dynamics in theworkplace. Businesses of all sizes are increasingly seeing the entirety of the world as a

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/1352-7606.htm

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source of business opportunities and one interconnected economy. Organizationsthat remain domestic-only are already falling behind their multinational competitorcounterparts (Cullen, 2002). With the progressive globalization of the workforce,businesses are more and more finding themselves working more often with culturallydiverse employees and business partners, an experience that has proven to be rewardingand yet challenging. In fact, the impact of cultural diversity on team productivity andorganizational culture is not clear and yet doing so is becoming more the norm than itis the exception. While in some cases, research suggests that teams characterized bydemographic heterogeneity have advantages over teams who are not demographicallydiverse (e.g. added ideas, approaches, perspectives), other research indicates that themulticultural aspect of a team creates potential for added conflict. Still further researchoffers that conflict itself is not a problem as long as it is constructively handled. To atleast some extent, the notion of what constitutes constructive handling is subjectiveand culturally sensitive. For example, the same silence or increase in personal space inone context or culture may be seen as respectful and constructive, the same might beviewed as non-participatory and disrespectful in another. Beyond very broad descriptors,the contributors to effectiveness within a multicultural team appear to be contextual andsubjective. To this end, we focus on the Chinese culture and what the research reveals interms of findings and accompanying recommendations with regard to cross-culturalteams and management.

BackgroundCulture acts as an external source of influence on employee behaviors on daily personallives which consequently influences each persons behavior within the organization,since each person brings another piece of the outside world into the workplace.Collectively, the impact of culture on each individual creates a change in the cultureof the organization itself. Trice and Beyer (1993) argued that organizational memberscope with uncertainties and ambiguities individually and collectively based onattitudes and strategies that have been influenced by their culture. Managers fromdifferent nations vary in their decision-making choices. Understanding culture isimportant to multinational companies and managers to be prepared to compete withfirms from other countries.

Culture, as the collective programming of the mind, distinguishes one group orcategory of people from another (Hofstede, 1993). The type of values and the importanceplaced on those values varies from culture to culture and is greatly influenced by itscurrent and historical ecological and sociopolitical contexts. Cultural values play asignificant role in shaping customs and practices that occur within organizations.Understanding cultural values is important in that it facilitates each team membersability to properly identify, understand and response to differences in thinking, feelingand acting of potential team members around the globe. For companies that includemembers of varying cultures, knowledge and sensitivity of cultural values is a necessitythat must be addressed in management practices and training.

Adler (1997) wrote that managerial values affect every aspect of organizationalbehavior, and that culture profoundly impacts managerial values. As such, a managerwith cross-cultural sensitivity and skills is in high demand in todays workforce.Successful managers practice people skills as well as technical excellence (Elashmawiand Harris, 1998). Keld Alstrup, Vice President of human resources for Volvo Cars ofNorth America, offers a strong, bottom-line rationale for companies to pay closeattention to the human side of doing business globally organizations spend more on

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in China

225

dissatisfied employees than on satisfied ones, and satisfied employees are moreproductive (Elashmawi and Harris, 1998).

The reform of the Chinese economy from heavy state intervention to marketorientation as well as membership in the World Trade Organization (WTO) has forcedChina to become integrated into the global economy. Chinas continued rapid economicdevelopment has also helped China establish dominant economic power in East Asia.The interest in China is growing steadily and companies in Japan, the westernEuropean countries, the USA and others view the Chinese market as one of the biggestmarkets of all. In the past two decades, more and more international operations havebeen widely adopted in China, whereas many Chinese firms have established newbusiness in other countries. In fact, China is the biggest investigator among all thedeveloping countries. National culture is widely viewed as a constraint on managementpractice, which makes it an increased urge among organizations to improve theirknowledge about cultural differences across nations. Therefore, cross-culturalmanagement in the work settings has become an emerging issue in China both in theacademic and the practical field.

To promote innovation, the Chinese central government created and enforced severaltalent recruitment programs geared toward recruiting personnel from other countries,such as the ongoing Thousand People Plan in the past decade, which greatlyreinforced the importance, and challenges of cross-cultural management in all kinds oforganizations in China. Personnel who are competent in cross-cultural management haverecently received a lot of attention by the Chinese government and are listed among themost important skill areas in the next ten years. Chinas central government has decidedto provide more support to the enterprises needed to obtain certain talents and, therefore,many public policies have been set regarding discovering, motivating and developingskills in the area of cross-cultural management.

Here, we report on our review of the literature and document the existing evidencerelated to cross-cultural management. Through our review, we explored the evidencethat sets up the basis of Chinese culture; summarized the major research that has beenconducted regarding cross-cultural issues in China; showed the current practiceson cross-cultural management in Chinese organizations; and then identified futureresearch needs on cross-cultural management in China.

Research on cross-cultural management in ChinaIn this section, we organize cross-cultural management research in China into fourresearch domains. These are the essence of Chinese culture, effects of individualcharacteristics on organizational outcomes in a cross-cultural setting, group processissues in cross-cultural management and organizational-level issues on cross-culturalmanagement. The research we reviewed encompasses both international comparativeresearch and intercultural research in multinational organizations. Summaries ofliterature are listed in Tables I and II, but only key variables are discussed in detail.

Essences of Chinese cultureOrigins of Chinese culture. In China, a critical issue about culture is that there arecompeting ideologies including traditional culture from the ancient past, ideologies fromthe Communist/socialist era of the mid-twentieth century and the new ideology of marketsocialism (Granrose et al., 2000). Traditional Chinese culture is highly influenced by theprinciple of Confucianism, which emphasizes hierarchical interpersonal relationships.The other leading belief is developed by Lao Zi, which emphasizes harmony in which

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Table I.Summary of cross-cultural managementresearch reviewed

Key

wor

ds

Top

ics

Fre

qu

enci

esC

itat

ion

Gu

anx

iG

uan

xi;

per

son

alre

lati

onsh

ips;

pow

erre

sou

rce;

ind

icat

ors

ofg

uan

xi

33C

hen

and

Fra

nce

sco

(200

0),

Ch

en(1

995)

,B

urt

(199

2),

Lu

o(2

000)

,T

sui

and

Far

h(1

997)

,X

inan

dP

earc

e(1

996)

,C

hen

etal.

(200

4),

Tsu

iet

al.

(200

0),

Tsu

ian

dF

arh

(199

7),

Lu

o(1

997)

,F

uet

al.

(200

6),

Yan

g(1

993)

,F

uan

dY

uk

l(2

000)

,S

oan

dW

alk

er(2

005)

,X

inan

dP

earc

e(1

996)

,F

arh

etal.

(199

8),

Ch

enan

dC

hen

(200

4),

Ch

enet

al.

(200

4),

Bu

kle

yet

al.

(200

6),

Ear

ley

(199

7),

Ch

eng

(200

0),

Su

e-C

han

and

Das

bor

oug

h(2

006)

,W

ang

etal.

(200

5),

Boz

ion

elos

and

Wan

g(2

006)

,C

han

etal.

(200

2),

Tu

ng

and

Wor

m(2

001)

,L

awet

al.

(200

0),

Foc

kan

dW

oo(1

998)

,R

edd

ing

etal.

(199

3),

Won

get

al.

(200

3),

Won

gan

dC

han

(199

9),

Li

etal.

(199

9),

Pea

rce

(200

0)O

CB

OC

Bit

ems;

dim

ensi

ons

ofO

CB

13K

ick

ul

etal.

(200

4),

Ch

eng

etal.

(200

3),

Far

het

al.

(200

4),

Ch

eng

etal.

(200

3),

Lam

etal.

(199

9),

Hu

iet

al.

(199

9),

Bla

kel

yet

al.

(200

5),

Far

het

al.

(200

7),

Far

het

al.

(199

7),

Hu

iet

al.

(200

4a,

2004

b),

Far

het

al.

(200

4),

Beg

ley

etal.

(200

2)C

omm

itm

ent

Org

aniz

atio

nco

mm

itm

ent

(OC

);co

mm

itm

ent

tosu

per

vis

or;

psy

chol

ogic

alco

ntr

act;

mu

tual

obli

gat

ion

s

12K

ick

ul

etal.

(200

4),

Wal

um

bw

aet

al.

(200

5),

Wan

g(2

004)

,C

hen

get

al.

(200

3),

Ch

enet

al.

(200

0,20

03),

Ch

eng

and

Sto

ckd

ale

(200

3),

Hu

iet

al.

(199

9),

Ch

enet

al.

(200

2),

Kin

gan

dB

u(2

005)

,L

eeet

al.

(200

0),

Hu

iet

al.

(200

4b).

Con

flic

tC

onfl

ict

reso

luti

on;

con

flic

tav

oid

ance

;co

nfl

ict

man

agem

ent

11F

ried

man

etal.

(200

6),

Mor

ris

etal.

(200

4),

Lin

gan

dP

owel

l(2

001)

,A

ryee

etal.

(199

9),

Leo

ng

and

War

d(2

000)

,L

eun

gs

(198

8),

Mor

ris

etal.

(199

8),

Sh

ian

dC

hen

(200

9),

Yan

g(2

006)

,Ji

n(1

989)

,T

ang

and

Lu

(200

5)Ju

stic

eO

rgan

izat

ion

just

ice;

pro

ced

ura

lju

stic

e;ju

stic

eco

nce

rns;

just

ice

per

cep

tion

s;d

istr

ibu

tiv

eju

stic

e;re

war

ds

allo

cati

on

11L

eun

get

al.

(200

1),

Ch

en(1

995)

,H

eet

al.

(200

4),

Lee

etal.

(200

0),

Lam

etal.

(200

2),

Far

het

al.

(199

7),

Beg

ley

etal.

(200

2),

Bro

ckn

eret

al.

(200

1),T

yler

etal.

(200

0),

Beg

ley

etal.

(200

2),

Bro

ckn

eret

al.

(200

0)

Per

son

alit

yT

yp

eA

per

son

alit

y;

per

son

alit

ytr

aits

;ex

tern

allo

cus

ofco

ntr

ol;

Ch

ines

etr

ait

term

s

10Ja

mal

(200

5),

Bar

ryan

dF

ried

man

(199

8),

Ch

eun

gan

dL

eun

g(1

998)

,L

iuet

al.

(200

5),

Ch

an(1

989)

,C

osta

and

McC

rae

(199

2),

Lao

etal.

(197

7),

Hsi

ehet

al.

(196

9),

Tse

ng

(197

2),

Yan

gan

dB

ond

(199

0)In

flu

ence

stra

teg

ies

Infl

uen

ceta

ctic

s;in

flu

ence

stra

teg

ies;

lead

erin

flu

ence

;p

erce

ived

effe

ctiv

enes

sof

infl

uen

ceta

ctic

s;re

lati

onal

pow

er

9F

uan

dY

uk

l(2

000)

,L

eon

get

al.

(200

6),

Sch

erm

erh

orn

and

Bon

d(1

991)

,F

uet

al.

(200

3),

Far

het

al.

(200

4),

Van

de

Vli

ert

etal.

(200

4),

Sch

mid

tan

dY

eh(1

992)

,Y

uk

let

al.

(200

3),

Kro

ne

etal.

(199

7)

(con

tinued

)

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Table I.

Key

wor

ds

Top

ics

Fre

qu

enci

esC

itat

ion

Lea

der

ship

Lea

der

ship

styl

e;tr

ansf

orm

atio

nal

lead

ersh

ip;

pat

ern

alis

tic

lead

ersh

ip

9M

isu

mi

and

Pet

erso

n(1

985)

,S

mit

het

al.

(198

9),

Ch

eun

gan

dC

han

(200

5),

Pet

erso

n(1

998)

,W

alu

mb

wa

etal.

(200

5),

Wal

um

bw

aan

dL

awle

r(2

003)

,W

ah(2

004)

,F

ello

ws

etal.

(200

3),

Wal

um

bw

aet

al.

(200

5)E

xp

atri

ate

Ex

pat

riat

ero

les;

exp

atri

ate

sele

ctio

n;

cros

s-cu

ltu

ral

trai

nin

g(C

CT

);ex

pat

riat

ead

just

men

t

9L

eun

get

al.

(200

1),

Tu

ng

(200

8),

Var

ma

etal.

(200

6),

Sel

mer

(200

5),

Hu

tch

ing

s(2

003)

,B

ran

ine

(200

5),

Leo

ng

and

War

d(2

000)

,S

hen

and

Ed

war

ds

(200

4),

Liu

and

Dav

is(2

000)

Job

sati

sfac

tion

Lev

els

ofjo

bsa

tisf

acti

on;

turn

over

inte

nti

ons

7K

ick

ul

etal.

(200

4),

Wal

um

bw

aet

al.

(200

5),

Wal

um

bw

aet

al.

(200

5),

Ch

eng

etal.

(200

3),

Ch

eng

and

Sto

ckd

ale

(200

3),

Fro

ne

etal.

(199

2),

Ary

eeet

al.

(199

9)V

alu

esC

hin

ese

val

ues

;w

ork

-rel

ated

val

ues

10B

ond

(198

8,19

96),

Ch

ong

etal.

(198

3),

Cra

gin

(198

6),

Goo

dm

an(1

995)

,B

ond

and

Yan

g(1

982)

,H

ofst

ede

(198

0,19

91),

Sh

enk

aran

dR

onen

(198

7),

Liu

and

Dav

is(2

000)

Pow

erd

ista

nce

Pow

erd

ista

nce

val

ues

,p

ower

dis

tan

ceas

mod

erat

ors

7B

rock

ner

etal.

(200

1),

Lee

etal.

(200

0),

Beg

ley

etal.

(200

2),

Tyl

eret

al.

(200

0),

Far

het

al.

(200

7),

Fu

and

Yu

kl

(200

0),

Su

nan

dB

ond

(200

0)C

olle

ctiv

ism

/in

div

idu

alis

mC

olle

ctiv

ism

;in

div

idu

alis

m;

coll

ecti

vis

tic;

ind

ivid

ual

isti

c;so

cial

loaf

ing

;ro

leof

coll

ecti

vis

m

15K

ick

ul

etal.

(200

4),

He

etal.

(200

4),

Hu

i(1

984)

,E

arle

y(1

989)

,E

arle

y(1

993)

,C

hen

etal.

(199

8),

Bai

ley

etal.

(199

7),

Ary

eeet

al.

(199

9),

Yan

get

al.

(200

0),

Wal

um

bw

aan

dL

awle

r(2

003)

,W

alu

mb

wa

and

Law

ler

(200

3),

Bro

ckn

eret

al.

(200

0),

Wh

arto

nan

dB

lair

-Loy

(200

2,20

06),

Ear

ley

(199

4)W

ork

-fam

ily

con

flic

tW

ork

-fam

ily

con

flic

t(W

FC

);w

ork

-fam

ily

inte

rfac

e;p

red

icto

rsof

WF

C;

lon

gw

ork

hou

rs

6L

ing

and

Pow

ell

(200

1),

Ary

eeet

al.

(199

9),

Fro

ne

etal.

(199

2),

Yan

get

al.

(200

0),

Wh

arto

nan

dB

lair

-Loy

(200

2,20

06)

Man

ager

ial

role

sE

xp

atri

ate

con

trol

role

;k

now

led

ge-

tran

sfer

role

2D

elio

san

dB

joer

km

an(2

000)

,C

ui

etal.

(200

2)

Oth

erto

pic

sK

now

led

ge

shar

ing

;fa

ce;

soci

etal

syst

ems;

econ

omic

own

ersh

ip9

Ch

owet

al.

(200

0),

Gab

ren

ya

and

Hw

ang

(199

6),

Ear

ley

(199

7),

Red

din

g(1

980,

2002

,20

05),

Ch

iu(2

002)

,G

ran

rose

etal.

(200

0),

Bre

wst

eran

dM

ayrh

ofer

(200

8)

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Table II.Relationship amongvariables in cross-cultural research

Top

ics

Fre

qu

enci

esC

itat

ion

Col

lect

ivis

m/i

nd

ivid

ual

ism

and

pro

ced

ura

lju

stic

e/O

CB

/in

flu

ence

tact

ics/

man

ager

ial

role

s/ex

pat

riat

ead

just

men

t/W

FC

(wor

k-f

amil

yco

nfl

ict)

14B

ond

and

Yan

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leaders care for followers, respect tradition, exhibit morality and live in harmony. Morerecently, Chinese culture has been influenced by the political philosophies of socialismand communism. The typical principle of this political philosophy is egalitarianismrather than elitism. Under this culture, followers are expected to follow the decision ofleadership strictly, and leadership is more transactional. Traditional structure of Chinesestate-owned companies constrains a single leaders ability to change the organizationalculture and enlarges the scope of cultural change possible. The structure of the Chineseorganization consists of two systems: the business system and the Chinese CommunistParty (CCP) system. The business system is similar to the business operating system inWestern companies, and the CCP system exists to ensure that work is done according tothe central plan and performs a social control function. Current organizational change inChina grants more autonomy to organizational leaders of the business system, at thesame time, the role of top managers in leadership position is still enacted in a specialmanner. China now emphasizes a market economy and the competitiveness of firms(He et al., 2004), and the competitive echoes in contemporary China may override thetraditional value placed on equality and harmony within a group.

Comparative studies on cultural values. Chinese cultural values have been studiedextensively by both Chinese and Western researchers. Chinese from Hong Kong,Taiwan and Singapore were included in Hofstedes (1980) original studies. Manyresearch studies concluded that Chinese people in Hong Kong, Singapore and Taiwanare united in their high power distance, low individualism, low uncertainty avoidanceand medium masculinity ratings (Bond, 1996; Chong et al., 1983; Shenkar and Ronen,1987; Cragin, 1986).

In addition, Goodman (1995) compared Americans and Chinese on several Westernand Eastern cultural values. Chinese received higher scores on dogmatism whichindicates a more rigid personality, and higher scores on external locus of control whichindicates a feeling of being controlled externally. Chinese received lower scores onmachiavellianism which is also a measure of preference to use power to meet a desiredgoal, and lower scores on tolerance of ambiguity which shows a desire for morecertainty. Eastern characteristics include Confucian dynamism, human-heartedness,integration and moral discipline. Confucian dynamism is a measure of long-termorientation. Human-heartedness is a concept similar to masculinity (Hofstede, 1991).Integration is a concept similar to power distance (Hofstede, 1991). Moral discipline issimilar to collectivism (Hofstede, 1991). Compared to Americans, Chinese are higherin all of these values (Goodman, 1995). The study performed by the Chinese CultureConnection (1987) shows that Chinese might be characterized as high on identificationwith their various in-groups, which means Chinese tend to keep high harmony withinin-groups. Hofstedes IBM survey and Bonds Chinese value survey showed thatChinese more than Americans are likely to choose long-term orientation decisionsrather than short-term orientation decisions (Hofstede, 1991).

Yang and Bond (1990) found five factors in Chinese trait terms. Chinese are chieflydistinguished from Americans by their low extraversion scores. On agreeablenessitems, Chinese score high on straightforwardness and compliance, low on altruism.Chinese generally score within the average range on facets of the other domains (Costaand McCrae, 1992), whereas in collectivist societies, harmony with in-group membersis a more central goal. In comparison to Americans, Chinese have a more external locusof control (Chan, 1989; Hsieh et al., 1969; Lao et al., 1977; Tseng, 1972). Therefore, wecould conclude that among Americans, the more adaptive response to stress mayinvolve actively and effectually accruing and employing support resources. The

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Chinese, who expect self-discipline from those with high education and high socialstatus, may prescribe more self-directed coping strategies rather than seeking morehelp. Researchers conducting cross-national generality of the Big Five factors failed tofind traits that match those found in China, but additional traits were identified:relatedness (Cheung et al., 2003). Chinese are also found more particularistic thanAmericans or other Westerners (Tsui et al., 2000).

Guanxi. According to Tsui and Farh (1997), the term guanxi is used to refer toa special relationship that develops between members within a team. As manyresearchers (e.g. Fock and Woo, 1998; Law et al., 2000; Pearce, 2000; Wong and Chan,1999) have pointed out, guanxi is one of the most striking features of Chinese culture. Itis difficult to find an equivalent English word to accurately express the meaning ofguanxi. Redding et al. (1993) believe guanxi is a network of personally definedreciprocal bonds. Guanxi is a special kind of relationship of both obligation andreciprocity. In China, within a team or an organization, the distinction between the in-group and the out-group is particularly important. In-group members are those withwhom one has strong guanxi (Li et al., 1999).

Guanxi links two individuals to enable a social interaction and exchange. Forexample, when one person offers a favor to another, the recipient must do an evenbigger favor for him/her later. In continuing such a relationship, both people willbenefit, and if the reciprocal relationship goes on and on, guanxi between them willbe developed. Tsui and Farh (1997) argued: a basis for guanxi exists when sharedattributes, identity, or origin exist among people. In the Chinese context, Chen andFrancesco (2000) argued that employees with good guanxi would be promoted tohigher positions and hypothesized that position would be associated with higheraffective commitment. Wong et al. (2003) argued that the best indicators of guanxi arethe actual activities or behaviors that occur among people. Doing business in China isgreatly influenced by guanxi since Chinese managers use their personal guanxi morewidely to exchange information, negotiate with planning authorities and acceleratedecision-making processes than do managers from Western firms.

Effects of individual characteristics on organizational outcomesAs shown in Table I, numerous cross-cultural studies have been done on thepsychological characteristics and processes that link individuals to the organizationsand nations, more specifically, organizational commitment (OC), psychologicalcontract, organizational justice and organizational citizenship behavior (OCB).

Chen et al. (2002) developed a commitment to supervisor scale in Chinese, whichincluded identification with the supervisor, internalization of the supervisors values,willingness to dedicate oneself to the supervisor, willingness to exert extra effort onbehalf of the supervisor and a desire to follow the supervisor. Jamal (2005) found thatjob stress was negatively correlated with OC for Chinese. Cheng et al. (2003) showedthat Taiwanese employees commitment to their supervisor had a significant impactnot only on outcomes evaluated by the supervisor but also on those that are moreglobal. Wang (2004) found that Chinese state-owned enterprises (SOEs) had higherlevels of passive continuance commitment and lower levels of value commitment thanforeign-invested enterprises.

Only few cross-cultural research has been done on psychological contract usingChinese samples. Kickul et al. (2004) tested the differences between the psychologicalcontracts operating in the USA and in Hong Kong, and confirmed that the Hong KongChinese react more negatively to organizational outcome variables to breaches of the

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extrinsic components of the psychological contract while the American workers reactmore negatively to breaches of the intrinsic components.

Quite a few cross-cultural studies have been on justice. For example, recent studieshave demonstrated that employees in Taiwan (Farh et al., 1997), Hong Kong (Lam et al.,2002) and mainland China (Begley et al., 2002; Tyler et al., 2000) are influenceddifferently by justice perceptions from Western countries, depending on their valueorientation. Lam et al. (2002) also demonstrated stronger effects of procedural anddistributive justice on work performance among those Hong Kong and US employeeswho endorsed more egalitarian values.

Begley et al. (2002) found that greater power distance was associated with a strongpositive relationship between procedural justice and OCB. Brockner et al. (2000)showed the effect of procedural justice in various experiments was stronger amongChinese employees.

Farh et al. (2004) argued that the construct of OCB is not entirely conceptuallyor structurally equivalent across China and the USA. They also presented strongevidence that the national culture could condition the nature, meaning and importantof various forms of OCB to the effectiveness of organizations. Begley et al. (2002)indicated that helping colleagues in personal life situations and social welfareparticipation have emerged as Chinese context-specific OCB dimensions. Blakely et al.(2005) compared 116 Chinese managers of SOEs in mainland China with 109 USmanagers and found that the Chinese were more likely than their US counterpartsto define OCB as part of their job. Farh et al. (2007) tested the moderating effects ofcultural values on POS-OCB relationships with Chinese samples, and found thatpower distance had a stronger and more consistent moderating effect on POS-OCBrelationships than did Chinese traditionality.

Group process issues in cross-cultural managementAs shown in Tables I and II, some empirical studies have been conducted on issuesof interpersonal and group process. More than ten studies concerned leadership. Forexample, Wah (2004) identified Chinese Chief Executive Officers transformationalleadership, such as good moral character, belief in relationships and a naturalisticapproach (e.g. allowing things to unfold themselves and playing a facilitator role inrelationship). Walumbwa and Lawler (2003) showed that transformational leadershipwas more strongly related to satisfaction with coworkers and commitment in the highcollectivist like China. Walumbwa et al. (2005) also found that both collective efficacyand self-efficacy moderated the relationship between transformational leadership andcommitment and job satisfaction across their Chinese, Indian and American samples.Cheng et al. (2004) showed that paternalistic leadership are positively associated withsubordinate responses in China, including feelings of gratitude and repayment to theleader, identification with the leader and compliance with the leaders wishes.

Studies have indicated that team members in individualistic and collectivisticnational cultures react differently to some organizational practices, such as teammembers attitude and behaviors (Halevy and Sagiv, 2008). Earley (1989) found thatmanagers from collectivistic cultures worked better in a group, but did not performany better than managers from individualistic cultures. Chen et al. (1998) found that theChinese who learned that they had performed better than their in-group maintainedtheir positive evaluations of fellow in-group members to protect their groups image.Ho (2000) found, for example, that Chinese managers shared significantly lessknowledge with recipients outside their in-group compared with US managers. Gibson

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(1999) argued that Hong Kong students are more likely to consider group efficacyas being meaningful. Liu and Davis (2006) developed a team performance model ofChinese setting by examining the relationships among 11 team process variables.

Organizational-level issues on cross-cultural managementShi and Chen (2009) concluded that the most important factors that influenceinternational business are cultural environment, strategies of the organization,economic conditions of the host country and the labor market of the host country. Shiand Chen (2009) identified four major factors affecting cross-cultural management:cultural difference, interventions concerning future contingencies, communication aswell as adjustment on back-cultural shock.

Researchers tried to speculate about factors influencing cross-cultural conflicts andmanagement. For, example, Chen et al. (2004) found that cross-cultural conflicts prevailin management norms of the organization, behavioral style of the foreign managers,respect for the culture, human resource development and power distance. They furtheradvised that multinational firms in Chinese communities should be concerned withculture integration, and try to build the third culture, use a norm-based managementsystem with consideration of patriarch-based Management style. Yang (2006)suggested using environment pressure, organization competence and leaderscompetence to analyze cross-cultural conflicts, among which leaders ability to managecross-culturally is the most important factor. Jin (1989) concluded that to avoid cross-cultural conflicts, expatriates need to:

. be prepared for a different culture;

. learn the form and conventions of communication in different cultures;

. participate in social activities with people from different cultures;

. be able to learn from others and take risks;

. develop cultural sensitivities;

. recognize cultural complexity;

. consider themselves as culture messenger;

. be patient and understanding;

. have realistic expectations; and

. have the courage to experience culture shock.

Friedman et al. (2006) found that Chinese were more likely to avoid a conflict than wereAmericans. Both types of comparison may be compromised by non-equivalence acrossnational cultures.

Leung et al. (1996) found that in the early 1990s, locals within international firms inChina regard high salaries of expatriates as fair; however, in the late 1990s, Chineseemployees perceived a high degree of injustice about the differences between their salariesand those of their expatriate counterparts. Delios and Bjoerkman (2000) used the surveyand archival data of 797 Japanese multlinational enterprises in China and the USA, andfound that the controlling function of being a manager was emphasized more in Chinathan the USA. Delios and Bjoerkman (2000) also noted that knowledge transfer was moresignificant in technology and market-intensive industries in China than the USA.

Song and Li (2006) compared Chinese and Western employees by collecting datafrom an international university in China, and suggested that Chinese employees

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should be more direct and efficient, and should be prepared with enough data beforemeetings including negotiation. Tang and Lu (2005) proposed a diamond model forcross-cultural management, which include trust, cooperation, goals/objectives andintegrating-innovation. They demonstrated their managerial strategies on cross-cultural management using the diamond model and argued that facilitating cross-cultural communication, building management systems concerning cross-culture anddeveloping human resources that have cross-cultural management skills.

Cultural distance between the home and host country can have significant influenceon selection, training and performance management system. Liu and Davis (2000)compared Chinese and Americans using Hofstede and Trompenaars cultural valuesand found there were effects of culture on cross-cultural human resource managementpractices. Shen and Edwards (2004) found that Chinese multinational companiesemphasize attributes such as education, past performance, management or technicalskills, language ability and willingness to undertake expatriates assignments. Manymanagers distribute expatriate assignments based on their guanxi with relevantemployees. Chinese individuals are found to respond better to group rather thanindividually focused training and feedback (Early, 1994; Van de Vliert et al., 2004).Chinese subordinates were anticipated to have a more difficult time accepting directand public feedback especially negative feedback.

Implications for cross-cultural management in ChinaSummary of current researchEmpirical studies on cross-cultural management in China have been conducted since the1990s, and numerous empirical studies have been done in the past two decades acrossdifferent level of constructs and practices (individual, group and organization). Amongall the intercultural research concerning China, there are mainly two common types: thefirst type focuses on foreign managers and employees, center on their adjustment andperformance in Chinese culture; and the second type of study examines Chinese whowork with these foreigners in the multinational management setting. And in recentyears, emphases have been shifted from examining the effects of culture on singlevariables to examine the relationships among same and different level of variables. Manyimportant topics and relationships were tested in cross-cultural settings.

Research shortcomings include the following: insufficient systematic conceptualmodel development and assessment of important topics, such as teamwork, leadership,motivation, communication, as well as satisfaction in cross-cultural environment.Although there is an increasing amount of comparative studies being done in China(Brewster and Mayrhofer, 2008), very few studies have been conducted to studyChinese firms that are doing business abroad, which represents one of the most criticalproblems in the field of cross-cultural management research in China. Most studiesfocus on cultural value identification and practical issues in Western global companies,which is concerned with comparison between Eastern and Western culture. Not muchresearch has been conducted to study cultural differences among eastern countries, forexample, countries in Asia.

Implications for practices and future researchCompanies have found cross-cultural teamwork to be both rewarding and challenging.It has only been relatively recently that the workforce been evolving to adapt toresearch and first-hand experience about individual differences, the addition of cultureas a factor on top of individual differences can be overwhelming and yet necessary.

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Cross-cultural conflicts pose the biggest challenge for international business in anycountry, and China is no exception. Especially when the strategy of the organization isnot correctly executed, cross-cultural conflicts would heat up and create fatal problems.Yue (2008) argued that it is the inspiring, passionate and capable leader who is themost important culture carrier. Chinese employees who work for foreign firms or joint-ventures tend to like leaders who are tolerant and professional, and who respect andlisten to the concerns of employees. Yue (2008) provided suggestions to resolve culturalconflicts for Chinese international firms including cultural difference recognition,studies of other culture, cross-cultural training, as well as setting up a uniqueorganizational culture that integrates national culture from both sides.

Although the Chinese government continues to proactively seek personnel with cross-cultural management skills, recruitment and training in cross-cultural management issignificantly lacking. Key competencies of multinational managers would not onlyinclude competing with firms from other countries but it is also challenging to collaboratewith companies and people from those countries. Current recruitment of cross-culturalmanagers has focused more so on the initial hurdle of language, rather than thedifferences in approaches/customs and values in that culture. Although courses on cultureare provided, few training systems that convey cultural differences and implicationshave been designed and developed. Theoretical models need to be developed to set thefoundation for training on dealing with diversity management, developing culturalsensitivity, as well as the skills necessary to succeed as multinational managers.

Now that many organizations are doing business internationally, few have thecompetitive advantage of cultural sensitivity to peoples needs and the appropriatenessof interventions. Practicing managerial functions effectively is challenging in a onesown country and culture, but doing so in a foreign environment with a uniquecombination of political and economic imperatives, traditions, work ethics and cultureis a totally new ballgame for managers. Foreign companies have been facing greatchallenges when doing business in China, and most Chinese companies who have beenworking to make investments abroad have failed.

In general, foreign companies doing business in China are expected to progressthrough three stages of cross-cultural management (Cao, 2008). First, the companyreceives information geared toward providing an orientation to the norms andpractices of foreign culture; however, this information is often authored by their ownstaff as opposed to being authored by the staff of the foreign company. Second, thecompany is expected to immerse themselves in the foreign culture and in the thirdphase, the company seeks to integrate itself into the foreign culture. Most multinationalfirms are in the second stage, and the characteristics are as follows: First, the culturefrom the host country will be transferred into local culture. Usually multinational firmsappoint Chinese natives who were extensively trained in the respective home country.Second, foreign firms use the combined strategy of rule of law and the rule of man,that is, employees are provided with a benefit package and long-term contract. Third,culture-related training is provided to new employees. Finally, an effort is made tostrengthen cross-cultural management with a supporting system, such as career andperformance management plans.

Companies that hire culturally diverse employees or who wish to engage in businessinteractions with employees or companies of another culture would be best served toprovide a training curriculum that covers the categories above. Hiring practices shouldplace added value on applicants who have experience working for and withinculturally diverse teams; should be cognizant of interview questions that are culturally

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insensitive and/or illegal; and should be aware that some cultures do not ask questionsduring training/lectures.

Based on cross-cultural research, cross-cultural training should include personalspace (whether someone is close of distant from you when talking); terminology/language differences (and tone of voice); body language/mannerisms/gestures;hierarchy of leadership; physical dress/wardrobe; determination of leadership;personality characteristics; providing positive and negative feedback (how, when, andis it done publicly or privately).

Future cross-culture management research and practices in China should followseveral basic principles: be applicable, that is, build unique organizational culture that isembedded in the host country; be practical, since there is no well-developed multinationalculture in China, new culture should be concerned with both sides; be systematic, cross-culture management practices should have supporting system; be equal, no single cultureis better than another; cultural penetration, two different culture have mutual impact;merit-based appointment and promotion, use local personnel, not just talents from thehome country. In Chinese settings, the most common cross-cultural managementinterventions include cross-cultural training, cross-cultural communication system andunified organizational culture (Zhang, 2009). Zhao and Mao (1993) argued that the mostimportant strategies of cross-culture management in China are development of cross-cultural management human resources; propaganda of Chinese culture; and cross-culturalcommunication through exchange.

ConclusionIn this paper, we have attempted to summarize cross-cultural management researchand practices in China. Lack of research on model development makes it hard for cross-cultural management practices. Human resources skilled in cross-cultural managementare in great need in China. Another noteworthy concern worth to mention is that Chinanow emphasizes a market economy, new cultural values may stand out to override thetraditional values. New research and practices are required to study cross-culturemanagement issues in contemporary China.

It is a fact that cross-cultural management practices will benefit greatly from cross-cultural communication and cross-cultural training. To build effective training system,careful training needs analysis should be done to ensure clear objective and content oftraining. In addition, the context of cross-cultural interactions, individual differenceamong trainees and the evaluation of the training should also be taken into consideration.

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