Managing cross-cultural differences for cross-cultural advantage


Culture is in itself a difference. Differences come from people. People can bridge differences. The effort to converge culture differences can turn these differences into cross-cultural advantages. Let us take a look at how this is achieved at a Sino-American food company.

This is a 50-50 joint venture. The American partner sent just one manager to represent the parent company, a Chinese American who had obtained an MBA degree in the US and had a good understanding of Chinese culture and history. His position in the joint venture was general manager. He implemented a typical American model of management in terms of business strategy, marketing and accounting practices, while at the same time making efforts to minimize the cultural differences at both inter- and intra-cultural levels. Among many management measures adopted by this individual, the following have the distinctive features of cultural convergence.

Hierarchical management ladder to offset the negative side of power distance

He understood that too many deputy positions in a typical Chinese organization would often lead to a shirking of responsibilities, so he established a middle management team without deputies. The managers at each level were held responsible for their own performances , good or bad, with no room for excuses. They were also delegated independent decision-making rights, such as reward and penalty of their subordinates , promotion and dismissal. Meanwhile, he made a strictly hierarchical reporting rule so that no one could circumvent their immediate supervisor. Management instructions were also required to follow through such a hierarchical ladder. This exercise incorporated the power distance characteristics of the Chinese culture, while assigning clearly defined responsibilities (job definition), decision-making (power definition) and reward (salary scheme according to positions held) to the managers.

Incentive system to encourage individualistic contributions without inflicting collectivist setbacks

To avoid the usual egalitarianism, a bonus system was established using a strict rating system. Bonuses were not part of the salary scheme as they are in other companies. The bonus amount was kept confidential in order to minimize the chances of negative impacts such as a loss of self-esteem, jealousy and comparison among the workers.

Requirements for teamwork expressed in a collectivist framework

The joint venture advocated team spirit in a slogan “ 'Unity and Cooperation' “ which has a typically collectivist feature. To encourage team cooperation and coordination, the general manager made a special rule that if one department failed to achieve its assigned targets, all other departments' rating scores would be reduced accordingly .

Respect for everyone to demonstrate American-style corporate culture

Inequality in the form of different treatment for people in different job positions is omnipresent and such inequality is tolerated by most Chinese people. To maintain order and management authority, such inequality is guarded by the hierarchical management ladder, but compensated for by equality in paid annual leave for non-management staff and workers.

Example set by the general manager in observing corporate rules

The general manager takes the lead in observing the rules he has established for the managers, staff and workers. A heart-warming scene was when the general manager was seen bending down to pick up a small piece of litter, which produced a strong psychological impact on the workers.

Informal communication with non-management staff and workers

To establish an effective channel of communication, the general manager uses his weekly breakfast meeting to interact informally with his staff and workers. This has shortened power distance.

Generosity only for the benefit of the joint venture

The general manager holds that the joint venture is a place of business operation, the ultimate goal of which is to profit from the market. Anything other than this will not be considered . He rejects the idea of an enterprise running redundant functions such as nurseries and schools . He refuses sponsorship requests that have nothing to do with the profit objectives, while being very generous in public events that increase corporate publicity and improve the corporate image. He also invests heavily in staff training, which has increased the sense of responsibility at all levels.

These approaches, together with other management measures, have turned a joint venture of cross-cultural differences into a harmonious enterprise of cross-cultural advantages. A year after the joint venture was put into operation, the Chinese side had recovered its investment with a marginal profit.

The above example illustrates the possibility of effectively managing cultural differences in the context of joint ventures. Analysis of this single success story is not intended to provide a universal reference point for all joint ventures in China, but it may provide insightful observations into how cultural differences can interact with each other to produce a positive rather than a zero result. One conclusion that can be drawn is that cultural differences are not written into the genes of human beings, be they from China or any other part of the world. A possible solution for cultural differences could come from the following:

  • adapting to each other's culture

  • building shared values

  • adjusting decision making references

  • forming a unique management style accommodating both cultures

  • establishing effective interpersonal communications that are free from prejudiced assumptions.




Doing Business with China
Doing Business with China
ISBN: 1905050089
EAN: 2147483647
Year: 2003
Pages: 648
Authors: Lord Brittan

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