Cross-Cultural Release Candidate 1

8/8/2019 Cross-Cultural Release Candidate 1

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Report Assignment

University of Huddersfield

BusinessSchool

The report on the impact of nation culture on

organizations and management aspects in

China and Sweden

Module: Cross Cultural Studies

Module No: BHO 0034

by

Mirosaw ukaszczyk


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Table of Contents

1. Summery................................ ................................ ................................ ........................... 42. Background................................ ................................ ................................ ....................... 5

2.1 Culture ................................ ................................ ................................ ......................... 52.2 Chinese Culture ................................ ................................ ................................ ............ 52.3 Swedish Culture ................................ ................................ ................................ ........... 6

3. Culture dimensions ................................ ................................ ................................ ........... 63.1 Hofstede Analysis ................................ ................................ ................................ ......... 6

3.1.1 Power Distance ................................ ................................ ................................ ...... 73.1.2 Uncertainty Avoidance ................................ ................................ ........................... 83.1.3 Individualism and Collectivism ................................ ................................ .............. 83.1.4 Masculinity and Femininity................................ ................................ .................... 93.1.5 Long- versus Short-Term Orientation ................................ ................................ ..... 9

3.2 PESTEL Model ................................ ................................ ................................ .......... 104. Practical implications ................................ ................................ ................................ .....125. Conclusion ................................ ................................ ................................ ...................... 126. References................................ ................................ ................................ ....................... 14

6.1 Books ................................ ................................ ................................ ...................... 146.2 Articles ................................ ................................ ................................ ................... 15


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1. Summery

In the 21st century one of the most important issues affecting worlds economy is

expanding globalization process. Cross nation business is experiencing great challenges in

cultural differences. Todays world has become smaller, we own better communication

systems, and we have more availability of standardized products thanks to global corporations

and global marketing activities (Potter et al 2004). When the world is shrinking it will

contribute to more interaction between different countries and cultures which could lead to

new challenges for the business managers. They would have to replace the methods they use

for the domestic markets and discover different cultural values, competitive dynamics, and

demographics that exist in the new market (Javalgi & Martin 2007). Therefore, there are

different possibilities and risks to provide business, not only across nations, but most

importantly in other business cultures. That is why this particular study is based on two

relatively different countries: Sweden and China. To present how international companies can

beat the cultural differences to start economical activity in those country, this report contains

culture definitions, political and economic environment, the work ethics, implementation for

organizational relationship and managerial process with Hofstedes five dimensions analyze,

all those aspects should be useful for firms future managers.


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2. Background

2.1 Culture

Many definitions of word culture may be found in existing literature. It is a concept that is

known very well to all of people through books, papers and magazines which are filled with

this in. However it is quite difficult to define what this concept actually means.

Anthropologist Kroeber and Kluckhohn (1952) catalogued 164 separate and different

definitions. But in this case as Schein (2004) suggest Culture is a collective experience, since

one will gather with persons who have the same view on things and all the members that have

the shared system of meanings. However, those shared meanings are rather stable since they

contribute to define the groups identity and this status should be maintained. According to

Hofstede (2005) word culture means the collective programming of the mind which

distinguishes the members of one group or category (nation) from another. It has been also

argued by that Culture: learned and shared human patterns or models for living; day- to-day

living patterns. These patterns and models show all aspects of human social interaction.

Culture is mankind's primary adaptive mechanism Hofstede (2005).

2.2 Chinese Culture

The Chinese people are part of a civilisation, that longer than any other in the world

have kept their common culture and made it survive and develop through a 5000-year

evolution. Certain elements have had an enormous impact on this development, such as the

ideology of Confucianism. This philosophy has strongly influenced the moral code of Chinese

society by its values of loyalty, friendship, faithfulness, righteousness and the importance of

education (Pang et al 1998). Confucianism consists of five cardinal relations (between

sovereign and subject, father and son, husband and wife, elder brother and younger brother,

and friend and friend) which prescribes a vertical relationship between superior and

subordinate (Chan et al. 2007). Therefore there is the importance to look deeper into this

culture to be able how to understand it and make a correct analysis. The Chinese culture is

summarized by (Pang et al 1998) as the Chinese Hallmark which includes; patience, harmony,

flexibility, time, trust and collectivism, communication, the rule of Guanxi and the concept of

face.


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2.3 Swedish Culture

Sweden is the largest of the Scandinavian countries, both in numbers and in area, with

its 9 million people spread over a land 1000 miles long (Hickson et al 2001). The Swedish

culture is among the small number of business cultures which are transaction and deal

oriented. Swedish people are reasonably open dealing with people or companies they have

never heard of and usually respond positively to requests for meetings without a third-party

introduction or recommendation (Gesteland 2002). Egalitarianism and informal business

behaviour strongly distinguish the Swedish culture from others. Swedes value equality,

efficiency and modesty, this being expressed in the flat structure of the Swedish management

model (Gesteland 2002). A manager tends to think of himself as a coach rather than a

commander, and he often delegates tasks and authority to his staff. Swedes are very punctual

and adhering to schedule, what makes their behaviour very time-rigid, or monochromic.

Usually the same behaviour is expected from the business partners. Being punctual is not only

regarded as a sign of respect but also of efficiency. Moreover, the Swedish culture is

characterized by an emotionally reserved communication style. Swedish society prefer to

avoid open displays of emotion, like to get down to business right away, do not gesticulate a

lot, and avoid intense eye contact. In addition, one feature of business communication and

expression of emotions is Swedish verbal directness (Gesteland 2002).

3. Culture dimensions

3.1 Hofstede Analysis

Hofstede conducted a comprehensive study about cross-cultural management. The aim

was to analyze the employee values in different countries. His research concluded in the

finding of 5 dimensions which enabled him to point out certain characteristics for each

analyzed country. In this thesis, the five dimensions function more as a conceptual

framework, trying to explain the influence of culture on the research (Hofstede 2001).


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1. Hofst culture di ensions di ram based on (Hofstede 2001).

3.1.1 Power Di e

The extent t whi h the less powerful members of institutions and organizations within a

country expectand acceptthatpoweris distributed unequally. (Hofs tede 2001, pp. 98)

Hofstede (2001) state t atin countries wit hi h Power Distance the subordinates are

very dependent on their boss, butthey are also normally the firstto blame for anything wrong

in the system. The emotional distance is often quite huge between the subordinate and the

boss in these cases and itis notli ely that any disagreement will occur with the boss. China isan example with a high Power Distance in contrast to Sweden who has a very low Power

Distance. In countries li e Sweden, the subordinates dependency on their boss is limited and

instead is many times consulted which leads to a mutual dependence between the two. The

emotional distance between the subordinate and the boss is then also rather small and the

employee can disagree without any further consequences (Hofstede 2001, 2005).

CULTURAL

DIFFERENCES

POWER

DISTANCE

INDIVIDUALISM

&

COLLECTIVISM

MASCULINITY

/ FEMININITY

LONG-SHORTTERM

ORIENTATION

UNCERTAINTY

AVOIDANCE


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3.1.2 Uncertainty Avoidance

The extent to which the members of a culture feel threatened by uncertain or unknown

situations. (Hofstede, 2001, pp. 161)

Hofstede (2005) states that it would be wrong to claim that uncertainty feelings are

only personal since he argues that they also can be shared by other members of the peoples

society. In an organization the technology, rules and rituals are used to cope with uncertainty

and to measure possible anxiety and worries an employee may have over their work in the

future Hofstede (2001) has considered several aspects. He observed the degree of nervousness

and anxiety that employees feel towards their work. In the study he states that both Sweden

and China are considered to be countries with low Uncertainty Avoidance, although China is

seen to have a somewhat higher level. This means that the both countries have cultures where

individuals are secure about the future and believe that new circumstances are interesting with

new things in contrast to those with high Uncertainty Avoidance who find what the future

holds danger (Hofstede 2001, 2005).

3.1.3 Individualism and Collectivism

Individualism standsfor a society in which the ties between individuals are loose: Everyone

is expected to look afterhim/herselfandher/his immediate family only. Collectivism stands

for a society in which people from birth onwards are integrated into strong, cohesive in

groups, which throughout peoples lifetime continue to protect them in exchange for

unquestioning loyalty. (Hofstede, 2001, pp. 225)

This dimension in Hofstedes study describes the relationship between the individual

and collectivity that is applicable on a given society. Hofstede (2001) argues that the level of

Individualism could be identified with the valued spare time, freedom and challenges since it

emphasizes the employees independence regarding the company. Within a collectivistic

society, on the contrary, people are appreciating good education, good physical work

conditions, full use of talents and competence in the company and are expecting a broad

responsibility from the organization. In the result of Hofstedes study it is shown that a

majority of the individualistic countries are rich while the majority of the collectivistic


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countries often are poor. The outcome could then be the reason to why people in collectivistic

countries are appreciating for example education more than in individualistic countries when

they take that for granted. Sweden is said to be a more individualistic country than China and

that could be because Sweden is a richer country where the people have more space to

develop their personal goals (Hofstede 2001, 2005).

3.1.4 Masculinity and Femininity

Masculinity stands for a society in which social gender roles are clearly distinct: Men are

supposed to be assertive, tough , andfocused on material success; women are supposed to be

more modest, tender, and concernedwith the quality oflife. Femininity standsfor a society in

which social gender roles overlap: Both men andwomen are supposed to be modest, tender,

and concernedwith the quality oflife. (Hofstede, 2001, pp. 297)

Different societies cope with the fundamental differences between the sexes in

different ways according to Hofstede (2001). He argues that almost universally there are

tendencies showing that women attach more importance to social goals such as helping

others, having a relationship and the physical environment while men attach more importance

to ego goals such as money and careers. In Hofstedes research he found that the values of

men and women in the same jobs differed less in lower-MAS (Masculinity Index) countries

than in a higher-MAS countries. When a conflict arises the Masculinity-Femininity dimension

is one core factor that affects the handling of the conflict at the workplace. In a masculine

culture, like China, the conflict will be solved by a good battle. May the best man win is a

motto they often use. On the contrary, conflicts in feminine cultures, like Sweden, are usually

solved by negotiations and compromises (Hofstede 2001, 2005).

3.1.5 Long- versus Short-Term Orientation

LongTerm Orientation standsfor thefostering ofvirtues oriented towardsfuture rewards, in

particular, perseverance and thrift. Its opposite pole, ShortTerm Orientation, stands for the

fostering of virtues related to the past and present, in particular, respectfor tradition,

preservation offace andfulfilling social obligations. (Hofstede, 2001, pp. 359)


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Hofstede (2001) suggests that in cultures with Long-term Orientation are family and

work not separated, it is common with family businesses and the values of this pole foster

entrepreneurship. Perseverance, hard work, respect for memorisation, honesty, openness for

new ideas, responsibility taking, self-discipline and confidence are values that are high ranked

in Long-term Oriented cultures. Values that are ranked highest in Short-term Oriented

countries are; freedom of speech, personal freedom, self-confidence, individual rights, hard

work, personal target achievement and to master your own thoughts. China is one of the

countries with highest score on the LTO-dimension which means that they are accustomed to

working towards strong positions in their markets without expecting any immediate results.

Managers in cultures like China are often allowed resources and time to make own

contributions while managers in Short-term Oriented countries like Sweden constantly are

judged by the results from the past period like a month, quarter or year (Hofstede 2001, 2005)

3.2 PESTEL Model

Second very popular method after Hofstedes analysis of culture dimensions is

PESTEL model of research. PESTEL analysis stands for "Political, Economic, Social,

Technological, Environmental and Legal analysis" and describes a framework of macro-

environmental factors used in the environmental scanning component of strategic

management. It is a part of the external analysis when conducting a strategic analysis or doing

market research and gives a certain overview of the different macro-environmental factors

that the company has to take into consideration. It is a useful strategic tool for understanding

market growth or decline, business position, potential and direction for operations (Johnson et

al2006).

The PESTEL framework has categorised six main types of macro-environmental

influences that has an effect on a company:

Political

Economic

Social

Technological

Environmental

Legal


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These factors are not independent of each other, instead many of them are linked and

affect each other. If one of them change it is most likely that one or a few other also change

thereby changing the organisations competitive environment. The PESTEL framework is best

suited for looking at the future impact of environmental factors, since the future impact may

not be the same as the past impact (Johnson et al2006).

2. The PESTEL framework based on (Johnson et al 2006).


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4. Practical implications

This report suggest that when doing business between different cultures there will

always be clashes or misunderstanding that can delay or hinder an agreement but it is then

best to take a step back, be patient, and be attentive to reactions. The better knowledge a

person have about his/her counterpart and about the context they are in the easier it is to be

flexible and create good relationships (Hofstede 2005). When the businessmen is going to

China he should try to adapt to the Chinese way of building relationship and that is best way

by creating a profound knowledge about the Chinese culture and business culture (Cooke

2008). Since culture is not anything that could be learned by reading a book, but need to be

lived to learn that time should be deposit to build up a profound network before rushing into a

business deal. The best way to be able to comprehend the culture is to live there, however that

might not be an option for some people. By spending time in China a person will acculturate

and see how for instance Guanxi is interlinked to culture and society. When gained this

knowledge the person can build more relationships and networks applying Guanxi, which

could make the relationships built today later become potential future business partners, if a

business proposal should arise, the person should have patience and let the Chinese slow paste

reign to not disrespect them (Cooke 2008). In this case it is important to create a bond rather

than proceeding with business, which is normal in the Swedish way of conducting business

(Lawrence & Spybey 1986). Cultural clashes will always emerge and it is important then to

remember the values that are valid in Sweden do not necessary have to be valid in China and

opposite. Therefore these misunderstandings should not be rejected but embraced rather with

an open mind and a will to solve them.

5. Conclusion

It is evident through this study that the Swedish and Chinese culture differs in many

ways. It is important to be aware of these differences to prevent misunderstandings or clashesfrom occurring. Hierarchy is one of the biggest differences between Swedish and Chinese

culture. The Chinese hierarchy is vast and the Swedish insignificant which can lead to

contrasting ways of making decisions in the two countries. Based on empirics there is a

believe that the Swedish non authoritarian leadership perspective has been subject to many

emerged cultural clashes (Lawrence & Spybey 1986). These clashes could be because the


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Chinese people have judged different Swedish interactions from their perspective. In Sweden

teamwork are applied to a greater extent than in China which has had the effect that in

Sweden several persons can take their own personal responsibility and decide in different

aspects, whereas in China it is only the top managers who have that authority (Lawrence &

Spybey 1986). One way of avoiding misinterpretations of this kind is for the Swedish

managers to be over explicit in their role when dealing with a Chinese counterpart so that they

can get a distinct comprehension (Cooke 2008).

The Swedish way of conducting business can be very practical and direct (Lawrence &

Spybey 1986). The Chinese are on the other hand very courteous and respectful towards

guests and they often have difficulties giving negative responses which also make them acting

ambiguously. This has caused a lot of problems since the business people often misinterpret

the Chinese courtesy for showing interest in their business factors (Cooke 2008). Instead they

should celebrate the non-existing deal they and bond and nourish the relationship so that

future collaborations can happen. In Sweden organisations are more Short-term Oriented and

are very monochromic in our approach which many times could collide with the Long-term

Oriented China (Lawrence & Spybey 1986). In China the future and past interrelate and are

therefore not as driven as the Swedes to accomplish everything under a strict timeframe. In

the eyes of the Chinese the Swedes have a habit of rushing into business transactions and

therefore they get the impression that Swedish businessmen are opportunistic. In the Swedish

eyes the slow paste that the Chinese are applying is seen as wasting money. To be able to

conduct business in China there is a suggestion that there is a need to respect the lower paste

by changing towards the Chinese perspective and becoming more patient (Cooke 2008).

It has been argued that this phenomenon appears because of two reasons. Firstly the Chinese

are afraid of doing anything wrong that also could damage their prestige and lead to lose Face.

The concept of Face is strongly influencing the Chinese culture which contributes even more

to the anxiety of offending someone or getting deprived of their own prestige. Secondly

because it is part of the Chinese culture to be attentive and courteous and not oppose someone

and risking losing Face (Cooke 2008). When someone will cross the line where the Chinese

feels he has lost the Face there is no turning back.


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6. References

6.1 Books

Cooke, F. L., (2008) Competition, strategy and management in China, Basingstoke:

Palgrave Macmillan,

Gesteland, R., (2002) Cross-cultural business behavior marketing, negotiating, sourcing and

managing across cultures, Copenhagen Business School Press,

Hickson, D. J., Pugh, D. S., (2001). Management worldwide: distictive styles amid

globali ation, London: Penguin,

Hofstede, G., (2005) Cultures and organi ations: software ofthe mind, 2nd ed., New York;

London: McGraw-Hill,

Hofstede, G., (2001) Cultures Consequences Comparing Values, Behaviors, Institutions,

and Organi ations Across Nations, Thousand Oaks, Calif.; London: SAGE,

Holden, N., (2002) Cross-Cultural Management a Knowledge Management Perspective,

Harlow: Financial Times Prentice Hall,

Johnson, G., Scholes, K., Whittington, R., (2006) Exploring corporate strategy: Gerry

Johnson, Kevan Scholes, Richard Whittington. Harlow: Financial Times Prentice Hall,

Kroeber, A. & Kluckhohn, C., (1952). In: Holden, N.J. (2002), Culture: Acritical review of

concepts and definitions, Harvard University Press,

Lawrence, P. and Spybey, T., (1986) Management and society in Sweden, London:

Routledge & Kegan Paul,

Potter, R. B., Binns, T., Elliot, J. A., and Smith, D., (2004) Geographies ofDevelopment ,

2nd ed., Pearson Education Ltd; England,

Rugman, A. R., Collinson, S., Hodgetts, R. M., (2006) International Business, 4th ed.,


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Harlow: FT Prentice Hall,

Schein, E. H., (2004). Organi ational Culture and Leadership, 3rd ed., San Francisco:

Jossey-Bass.

6.2 Articles

Chan, Ka Wai, Huang, Xu and Ng, Peng Man (2007), Managers conflict management styles

and employee attitudinal outcomes: The mediating role of trust, Springer Science +Business

Media, LLC 2007, Asia Pacific J Manage (2008) 25:277-95

Javalgi, Rajshekhar G. and Martin, Ch. L., (2007) Internationalization of services:

identifying the building-blocks for future research, Journal of Services Marketing, 21(6),

391-97

Pang, Chee K., Roberts, D., and Sutton, J., (1998) Doing business in China the artof war?,

International Journal ofContemporary Hospitality Management, 10/7, 272-82

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Cross-Cultural Release Candidate 1