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An Overview of Culture
The term ‘culture’ – which derives from the Latin cultus – refers to cultivation. The term refers to sophistication or social refinement, and particularly, the results of such refinement including art, literature, and education (Hofstede, 1991). Originally, culture was ascribed to individuals rather than groups (Jensen, 2003). In modernity, culture is expressed through a diversity of fields in human society such as beliefs, languages, arts, customs, and technical equipment (Geertz, 1973). In a broader perspective, culture is identified through institutions, organisations and other structures of groups, or of nations (Amaladoss, 1998).
The concept of culture has been developed by anthropologists and sociologists in the past decades; However, it still remains debated and contradictory (Freilich, 1989). In early nineteenth century, Tylor (1871) defined culture as:
“That complex whole which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits acquired by man as a member of society” (p. 1).
This view indicates that culture belongs to what human beings experience and attain in their lives through external activities within social environment. Culture is seen as an object obtained by human beings, while human beings are considered as subjects that shape culture. In this sense, culture completely relies on human beings and is spread from person to person, from this society to others, and from this generation to the next. In Asia, the ideas and teachings of Confucius, Lao-tzu, and Buddha have considerably influenced on the cultures of many countries, including Vietnam, on this continent. They encouraged people to live in harmony with society. In the beginning, their ideas and teachings were lessons for their disciples, but gradually, their disciples brought these studies to others. As a result, these studies became popular and so one often refers to the Confucian culture, the Buddhist culture, and the Taoist culture. This one-way relationship between human beings and culture is inadequate due to the fact that human beings are also objects of, and are dependent on, cultural change (Owen, 1817, as cited in Williams, 1987).
By the mid-twentieth century, there were hundreds of definitions of culture. Many authors viewed culture in term of symbols and artefacts as the core factors explaining culture (Kroeber & Kluckhohn, 1952, as cited in Adler, 1997). In other words, culture expresses itself in human society without relying on knowledge, intention, or behaviour of human beings (Tillich, 1959). Geertz (1973) advocated this idea and highlighted culture more in terms of “meanings embodied in symbols” through his definition of culture, which is:
“An historically transmitted pattern of meanings embodied in symbols, a system of inherited conceptions expressed in symbolic forms by means of which men communicate, perpetuate and develop their knowledge about and attitudes toward life” (p. 89).
Culture, in regards to symbols, mediates between human beings, as well as between human beings and social environment. The meanings embodied in symbols provide the way for people to approach culture. Through these symbols, people can reach and identify other realities in their social environment in order to build up their own lives as well as the life of the whole community. The cultural cognition of each society shows the differences in use of means and tools of manufacture. For example, Americans and Australians use modern machines in the process of cultivation, while Vietnamese and Laotians consider buffaloes or cows as the major means for cultivation. In this sense, culture has governed these technologies, ideas, habits, and actions. In other words, culture shapes human beings in terms of leading and building up their ideas, behaviours, and attitude towards a social environment.
In general, different groups or nations reveal different symbols, meanings and practices. To understand these differences, many authors have accessed and approached these groups or nations in order to study in-depth the value and practice belonging to their culture (Hofstede, 1991; Schein, 2004).
Organisational culture and strategy-as-practice
The concept of culture in organisations have been studied and highlighted by numerous authors (Hofstede, 1991; Hofstede, Neuijen, Ohayv, & Sanders, 1990; Schein, 2004). However, the different definitions and ideas have continued to puzzle many researchers as they continue to develop their works on organisational culture.
First of all, various scholars (Abdul Rashid, Sambasivan, & Johari, 2003; Lundberg, 1990) refer values and beliefs as the core of organisational culture. Differences in behaviours and actions are resulted from the discrepancies in values (Fritzsche & Oz, 2007), and accordingly, differences in values between organisations have led to the heterogeneity among their cultures. The values of culture have been identified by Hofstede (1991) based on five dimensions: individualism vs collectivism, power distance, uncertainty avoidance, masculinity vs femininity, and long-term vs short-term orientation. Hofstede’s dimensions have been widely used by numerous researchers (Baskerville, 2003; Merritt, 2000; Ralston, Van Thang, & Napier, 1999). However, Hofstede implies that these dimensions could be changed if the sample includes more emerging countries, namely developing countries. In addition, the research data was only collected from a single multinational company, IBM, and its own subsidiaries. It is inadequately significant to express the interaction effects between national culture, professional culture as well as organisational culture since different organisations would bring about heterogenetic dimensions (Merritt, 2000; Ralston et al., 1999). Therefore, many researchers refute the idea that values and beliefs are the core of organisational culture. They explain that the work practices in organisation are significant factors that distinguish the cultural discrepancies between organisations (Van den Berg & Wilderom, 2004). Admittedly, Hofstede (1991) advocates that the values of founders and key leaders are crucial factors in shaping organisational culture, but practices expose the unique of organisations more than values do. As a result, Schein (2004) developed a definition of organisational culture in a wider perspective. He determined culture (culture of a group) as:
“a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaption and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (P. 17).
In this definition, Schein emphasises that basic assumptions are the main factors which show the way for employees in groups to cope with their problems of internal integration as well as external adaption. Additionally, the author also underscores that culture is built up by group experience. Kaarst-Brown, Nicholson, Von Dran, and Stanton (2004) strengthens that basic assumptions are initially originated from experiences of its founders or key leaders. Later on, because of the shared experience among employees as well as employers over time, these assumptions become unconscious and taken-for-granted, and imbedded in underlying assumptions of activities that they are arduously explicable.
Schein (2004) implies that there are three levels of organisational culture that interact with each other. The first level of culture is artefacts, which are the most visible – but harder to decipher – structures and processes including language, technology and products, and behaviour patterns. The next level focuses on values. Values are moderately invisible and based mostly on founders or key leaders. Schein (2004) mentions that if leaders communicate their beliefs, and these beliefs result in success, the perceived value will transform ultimately into a shared assumption. Basic assumptions lie on the deepest level of organisational culture. It is highly invisible, unconscious, and takes for granted beliefs, perceptions, and feelings that result from repeatedly successful activities. Intensive interviewing and observation are required in order to understand these basic assumptions in an organisation (Kaarst-Brown et al., 2004).
Recently, a practice turn in current strategy research has been utilized in order to link values and practices (Whittington, 2006). This turn highlighted the important of routine activities of individuals as well as organisations under the term of Strategy-as-Practice (SAP) (Jarzabkowski, 2005; Schatzki, 2005; Whittington, 2006). G. Johnson, Ann, Leif, and Richard (2007) defines SAP as:
“a concern with what people do in relation to strategy and how this is influenced by and influences their organisational and institutional context” (P. 7).
According to this definition, micro and macro level of strategic practice are interrelated. In other words, there is a link between praxis of practitioners and organisational or sub-organisational praxis (Jarzabkowski & Paul Spee, 2009). Strategy is related to practitioners (people who do strategic activities), practices (routine of behaviours, tools, and artefacts that people use in doing strategy work), and praxis (actual activities people do in practice) (Jarzabkowski, 2005; Whittington, 2006). Procedural strategizing (plans, budgets) and interactive strategizing (face-to-face interactions between top managers and other actors) are two key practices that contribute to the view of SAP. In research of SAP, Jarzabkowski (2005) emphasises the importance of interactions between top managers and organisational community in shaping strategy.
According to Hofstede (1991), values are acquired early in people’s lives—mainly in the family—and remain unconscious in their mind. Values are not really visible for people to achieve; however, they can be reflected through the practices existing within an organisation (Van den Berg & Wilderom, 2004). Consequently, to study the cultural differences, one can examine the values and practices in organisations.
An overview of Vietnamese culture
Vietnam has a fairly large cultural community, called the Dong Son cultural community, which was formed thousands of years ago. Dong Son culture has formed by the combination of local cultures in numerous places including the deltas of Red River, Ma River, Ca River and so on. The culture has its own characteristics but still bears the features of Southeast Asian culture due to the Southern Mongoloid root and the wet rice culture. During the history of Vietnam, there have been three layers of existing culture which are the local culture, the culture that mixed with those of China and other countries in the region, and the culture that interacted with Western culture. Vietnamese culture has been strongly influenced by the Chinese culture due to a-1000-year period where Chinese feudalism was dominant as well as the Chinese cultural imposition on Vietnam. As a result, with the influence of the ideologies of Buddhism, Confucianism and Taoism, Vietnam has conciliated and Vietnamized them in order to contribute to the development of the society and culture (“Vietnam culture overview,” n.d.).
Despite the mix of cultures, previous research on the Vietnamese culture characterised it, based on the culture dimensions of Hofstede (1991), as high power distance, high collectivism, moderate uncertainty avoidance and high context (Quang & Vuong, 2002; Ralston et al., 1999).
Due to the influence of Chinese culture, it is conspicuous to recognise the power distance happening in daily life as well as in business environment in Vietnam. Within family life, children have to obey parents, and juniors need to listen to seniors. In organisations, including the government, subordinates must to conform to their superiors (Quang & Vuong, 2002). Vietnamese, especially, place an emphasis on social networks and superior – subordinate relationships, or guanxi in Chinese perspective (Thang, Rowley, Quang, & Warner, 2007).
In Chinese society, guanxi has several meanings including ‘relation’, ‘relationship’, or ‘connection’ (Wong, Wong, & Wong, 2010). In Vietnam society, guanxi can be translated as ‘quan hệ’, or ‘mối quan hệ’. In both daily life and the workplace, the term guanxi involves the development of relationship between individuals (Wong et al., 2010).Vietnamese people tend to follow the group’s interest in order to maintain and improve the guanxi since the more guanxi a person has, the more trusted and respected a person obtains from other people (Chen & Tjosvold, 2006).
Collectivism is another characteristic describing Vietnamese culture. According to Bich (2013), a member in a family is normally expected to live in harmony with others and tend to be responsible for supporting and helping other members when they are in need. The success or failure of an individual has a strong effect to the spirit of family or community (Bich, 1999). The notion of “losing face” also reflects the feature of collectivism. Vietnamese place importance on avoiding losing face. The research of Borton (2000) explains that: “loss of face is painful in any society, but unbearable in Vietnam” (p. 24). Most of them have an inclination toward hiding feelings, avoiding conflicts, and rejecting confrontation in order not to embarrass other people (Nguyen, 2002).
Like other Asian countries, one of the characteristic features in Vietnamese culture is high-context. The feature has been indicated by Hall (1976) as: “a high-context communication, or message, as one in which most of the information already is in the person, while very little is in the coded, explicit, transmitted part of the message” (p. 91). Indirect speech sometimes results from the significance of “saving face” (Quang & Vuong, 2002). For example, people usually do not say “no” directly in many circumstances in order to express a polite way to avoid hurting the feelings of other people.
According to (Quang & Vuong, 2002), Vietnamese culture is also indicated by moderate level of uncertainty avoidance. People try to avoid the ambiguous circumstances in the work environment, and feel more comfortable with a stable job (Vo & Hannif, 2013).
The Vietnamese culture in the business context has been rarely investigated. There is only a work of Ralston et al. (1999) on Vietnamese cultural values has been implemented so far. However, their research only focused on the dimension of individualism and collectivism. Therefore, it is significant to study the culture of Vietnam, especially organisational culture, in order to fill this gap in literature.
Influence of Culture on IJVs
This section provides an overview of studies featuring IJVs. The papers cited are based on three major groups of literature. The first covers literature that defines and introduces the concept of IJV, the second features comparing the advantages and disadvantages of IJV operations around the globe, and the third set covers studies regarding the experience of other countries, and Vietnam, in relation to conducting IJVs.
The concept of IJV has been formally introduced and defined by many researchers. Geringer and Hebert (1989) define IJV as the partnership or collaboration of at least one parent organisation headquartered outside the country of operation. In other words, IJVs are firms established by several corporations from different countries as a mean of competing within the domestic or global competitive markets. In another study, J. L. Johnson, Cullen, and Sakano (1996) suggested that IJVs happen when “two or more corporations from different countries collaborate to establish a new organisation separate from, but owned by, the parent company” (p. 80). The reason of forming IJVs are to palliate the risks obtained from unfamiliar cultural environments (J. L. Johnson et al., 1996). In twenty-first century, Griffith, Zeybek, and O’Brien (2001) indicate that IJV forming in which “two or more parties engage in the development and operation of a new business entity, create synergies by combining resources to secure a competitive position within the global marketplace” (p. 1).
As the accelerated development of the global market, many corporations have been taking advantages of alliances, especially IJVs, in order to attain new strategies, share risks, and access resources (Hennart, 1991; Inkpen & Beamish, 1997). Since the Law of Foreign Investment was signed in 1987, according to Anwar and Nguyen (2011), Vietnam has become an attractive market for foreign companies to invest in, especially in the form of IJV. For example, one of the most recent IJV in the literature is the one written by Tri (2013) regarding the partnership called Evergreen Vietnam Corporation between Phuoc Vinh Son Corporation, a local logistics company, and Evergreen Marine Corporation, a transnational corporation from Taiwan. The IJV was established in 2001, in Vietnam, for marine transportation services. In addition, Honda Vietnam, established in 1996, is another IJV built up from Honda Motor Co., Ltd (Japan), Asian Honda Motor Co., Ltd (Thailand) and VEAM Corporation (Vietnam). The IJV has been one of the most prestige automotive corporations in Vietnam during 20 years.
Studies regarding famous joint ventures have been already established in the literature. Tang (2009) studied the joint venture between the Italian auto group Fiat and the Chinese company Chery Automobiles that was formed in China in 2007. Abramkov and Panibratov (2012) also documented the IJV of Dutch Shell Overseas Investments and Russian Aerofuels Group, which was registered in Moscow in 2001 with shares of 70% and 30%, respectively. There were also recent huge IJV transactions that were highlighted in corporate websites articles. For example, Sumitomo Corporation of America and Sumitomo Corporation of Brasil have agreed to joint with Brazilian cosmetic ingredient and pet supplies distributor Cosmotec Especialidades Quimicas for cosmetics ingredient distribution business in 2013. The Boeing website also mentioned that the world’s largest aerospace company in US, and Tata Advanced Systems (a leading systems integration company in India) just recently announced a joint venture in 2015.
According to Blodgett (1991), IJVs improve the efficiency of international business because they are established to combine strengths, and capitalise on the core advantages of two or more partners. Furthermore, IJVs offer additional benefits to venturing firms such as reducing risks, absorbing new skills and technologies, and creating economies of scale (Bleeke & Ernst, 1993; Yip, 2001). In another set of studies, some researchers added that local partners are strong at contributing knowledge and familiarity of local legislations, preferential contact to the government, accessing the local market and providing distribution channels (Inkpen & Beamish, 1997; Kale & Anand, 2001). On the other hand, foreign partners provide brand equity, capital, and production technology (Pan, 1996; Tsang, 2005).
Despite the mentioned advantages, IJVs have been viewed as high-risk (Ozorhon, Dikmen, & Birgonul, 2007; Young, Hamill, Wheeler, & Davies, 1989). Park and Ungson (1997) have mentioned on a number of occasions that IJVs have a failure rate of approximately 50% to 70%, due to cultural conflict between partners. Cultural distance usually leads to a number of negative effects, like distrust and lack of clear communication, that depress the organisational performance (Lane & Beamish, 1990). Different partners may contain different thoughts, values and methods that end up with synergic clash based on the observations of Dawe (2000). A particular example in the study of Büchel (1998) highlighted these negative effects which was that a joint venture between Vietnamese and European partners in the lubricant industry was discontinued when conflicts emerged due to the heterogeneous culture between the two parties. Furthermore, the study of Hennart and Zeng (2002) illustrated that conflicts between parents of different nationalities, such as Japanese-American partnerships, are prone to dissolution. A similar research of Meschi and Riccio (2008) has also shown that IJVs in Brazil found to be dissolved due to the differences of national culture. Pothukuchi, Damanpour, Choi, Chen, and Park (2002) concluded that culture differences play a critical role in IJV performance, because alliances with cultural consensus have more chances to be successful than with partners that have cultural conflicts.
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