The issues of cross-cultural management of an international or multinational company operating in China
1. Power Distance
2. Long-term Orientation
The issues of cross-cultural management of an international or multinational company operating in China.
„Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster."
Prof. Geert Hofstede, Emeritus Professor, Maastricht University.
In the modern time of globalisation, companies mostly communicate and work across cultures. Especially China with its fast economic development has attracted the attention of the international business community. New businesses in China as well as the number of business people working there are increasing rapidly. Nevertheless, to understand how to do business effectively with the Chinese it is essential to be well prepared and to understand cultural background of negotiations. In this essay, I am going to present some issues of the cross-cultural management in China on the Catering industry example by using Geert Hofstede analysis of culture’s dimensions. How did I hit on the catering industry? I just was looking for a traineeship in Shanghai and found one offer for the hotel management with following obligatory skills: “…Attractive personality and physique "well groomed" smart, strong interpersonal/communication skills, high tolerance for uncertainty and a special interest and keenness for the Chinese culture”. I was very surprised of these requirements, especially about culture knowledge- I have never seen such a claim for a job application in other countries like U.S. or Russia before. Hence, I will try to find the reason for that in my essay.
Dr. Geert Hofstede, Emeritus Professor of Organizational Anthropology and International Management of Maastricht University, worked on the question: how values in the workplace are influenced by culture. From 1967 to 1973, he collected and analyzed data from over 100000 individuals from forty countries. From those results Hofstede developed a model that identifies five primary dimensions to differentiate cultures. In the next step, I introduce the criteria of the model for measuring a country’s culture.
Power Distance Index (PDI) focuses on the degree of equality or inequality between people in the country's society. A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow considerable upward mobility of its citizens.
A Low Power Distance ranking indicates the differences between citizen's power and wealth. In these societies equality and opportunity for everyone is stressed.
Long-Term Orientation (LTO) focuses on the degree the society embraces, or does not embrace long-term devotion to traditional, forward thinking values. High Long-Term Orientation ranking indicates the country determines to the values of long-term commitments and respect for tradition. Business may take longer to develop in this society, particularly for an "outsider". A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change.
Individualism (IDV) focuses on the degree the society reinforces individual or collective achievement and interpersonal relationships. A High Individualism ranking indicates that individuality and individual rights are dominant within the society. Individuals in these societies may tend to form a larger number of looser relationships. A Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group.
Masculinity (MAS) focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power. A High Masculinity ranking indicates the country experiences a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination. A Low Masculinity ranking indicates the country has a low level of differentiation and discrimination between genders. In these cultures, females are treated equally to males in all aspects of the society.
Uncertainty Avoidance Index (UAI) focuses on the level of tolerance for uncertainty and ambiguity within the society. A High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks.
Actually, culture of each country is different. However, the cultural behaviour in China is much different from normal business industries. Many foreign owners in the catering industry see in China a good opportunity to improve their business and are thinking about establishing of the hotel lines in this country. I would like to analyse culture issues and to give some advices to the “beginners” in PRC. By observing Hofstede’s results to the cultural dimensions for China I will try to find the exemplifications for them referring to the catering industry.
- Quote paper
- Anonymous, 2006, International Marketing: Hotel Industry in China, Munich, GRIN Verlag, https://www.grin.com/document/68222