The Cross Border Transition Commerce Essay

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Culture can be defined as "A pattern of basic assumptions, invented, discovered, or developed by a given group as it learns to cope with the problem of external adaptation 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". Schein(1985)

This study is undertaken with Unilver which is headquartered in England, United Kingdom. The company is looking to establish a manufacturing company within Hong Kong. We will look at culture from a national, organizational and industrial level using Hofstede's , Schein and Deal and Kennedy models as we compare and contrast the two nationalities. We will also examine possible issues that may be encountered and recommend solutions.

1.10 Objective

To investigate the cultural issues that the firm might encounter in trying to make the cross-border transition.

To make suggestions on the feasibility of the possible move based on the cultural analysis.

To recommend strategies to give the firm a competitive advantage with dealing with cross-cultural issues in terms of organization structure and human resource management

1.11 Theoretical framework

Different theorist has been established with a theoretical framework on the key cultural dimensions. Trompenaars,Kluckholn and Strodbeck,Adler, and Schein are similar and related in some aspects. "Culture can be interpreted as the way a group solve their problems of external adaptation and internal integration.(Schneider and Barsoux,2003).

Figure 1.0 Theoretical Framework of Culture

1.10 Unilever

Unilever is a manufacturing company which was established in 1980. They offer a range of products to include foods, ice-cream, household products and over 400 brands. They are located in 190countries with over 2 billion consumers worldwide. We will look at culture from a national, Business and Organizational in order to ascertain similarities and differences with the two cultures.

2.0 National Culture of Hong Kong and England

National Culture of England

National Culture of Hong Kong

• A European territory, the largest of the 4 countries that make up the United Kingdom with a long history of European influences. They were colonial masters of ¼ of the world at one point in their history.

A Far East Asian territory, often herald as the gate way to China where east meets west. Lost to the British empire during the opium wars. Re-instated to China in 1997, as a SAR which still holds its unique identity separate from China

• Build on immigrants from a number of European groups and post colonies regions e.g. South Africa and the Caribbean, diverse in ethnic groups and religion.

Also build on immigrants Hong Kong immigrants are now Chinese 98%, the other 2% are, British, Indians, Filipinos and many other European, North American and Asians.

• Main religion is Christianity, but because of diversity from ex-colonials there are Hinduism, Islam, Jewish groups etc.

Main religion is Buddhism, other religions include Taoism, and Christianity (RC), Hindu, Muslims and Jewish as well.

• Government is that of the UK, which a constitutional Monarch is as head of state. (The Queen)

Government is a limited democracy, under Chinese communist rule. The head of state of Hong Kong is an elected CEO.

• National animal is the lion symbolic emblem symbol of bravery, national drink is tea, The Tudor rose the national flower is a symbol of peace.

The National flower is Bauhinia Blakeanaor Orchid found on the Hong Kong flag and currency and symbolizes sincerity and joy of life.

Official Language

The "Queens English" or "British English" it's a west Germanic language, originating from England.

Two official language

Cantonese most commonly spoken

English used in business predominantly

Other dialects - Maderin, Shanghanaise, Chiu-chow

Greeting Rituals

Prefer lighter handshakes with direct eye-contac"How do you do?" t followed by a polite greeting e.g."How do you do?"

Also men greeting women, a regular hand shake will do but men should wait on women to extends her hands first.

Greeting Rituals

A rather light hand shake when greeting westerners

Lowering heads as a sign of respect

Large functions introductions are by self, but in smaller setting they wait for the host to introduce guests

They prefer to be addressed as by titles and first name unless otherwise told to use other ways

Higher ranking, older persons are normally introduced first

Family Value

Children are thought from a young age to be independent

More women are leaving traditional household functions and

entering the workforce

There has been a rise in the number of single parent families

The culture stems from Confucianism as a result family values are highly valued. Confucianism teaches respect, duty sincerity and courage

Concept of Time

Everyone likes to be on time, they view punctuality, as important and are offended if appointments are not met.

Forms of Address

Most people prefer to be called by their formal "you" unless invited to be called by their first names or informal "you".

Forms of address

People are referred to as Mr or Mrs followed by their surnames

Table 1.0 National Culture of Hong Kong and England

One of the most renowned researchers specializing in national culture is Hofstede. Hofstede's framework (Hofstede (1980;2001) is widely used in the field of intercultural management. He found that the difference in response to four main factors could be explained. The factors are: uncertainty avoidance, power distance, individualism/collectivism and masculinity/ femininity.

able 1.2 gives a comparison of the two cultures according to Hofstede dimension.

Hong Kong- low-uncertainty avoidance Confucian society , value relationships

Comfortable with ambiguity

Adaptable and easy to change

Not too many rules

Tea drinking society - many variety

An array of different types of foods

United Kingdom -high uncertainty avoidance

Comfortable with ambiguity - the term muddling through British way of expressing this.

Adaptable and easy to change

Not too many rules

Tea drinking society

National food is fish and chips

Hofstede Dimension - England

Hofstede Dimension- Hong Kong

Power Distance

At 35 England has a low score on PDI, that is the society that believes that inequalities amongst people should be minimized

Power Distance

Hong Kong score on power distance is 68 this indicates that inequalities amongst people are acceptable.


At 89 England is a highly individualistic success oriented and driven society.


The score on individualism is 25 indicating that this culture is highly collectivist. Therefore group interest is put above self-interest.

Uncertainty Avoidance

At 35 England has a low uncertainty avoidance. They are more susceptible to change.

Uncertainty Avoidance

At 29 Hong Kong this indicates a low uncertainty avoidance. Therefore in this society obedience to rules and regulation may be adaptable to suit the situations and reasonableness is a fact of life.

Short Term Orientation

With a score of 25 England has a low long term oriented society in which they are heavily focused on quick results.

Long Term Orientation

Kong Hong score is 96 indicating a society that is persistent and perseverance is high. Order is respected and relationships are built on status


The score on masculinity is 68 for England and 57 which indicated that such cultures are goals oriented, aggressive and driven.


Table 1.2 Comparison of Hong Kong and United Kingdom using Hofstede

2.11 Comparison - Hong Kong and UK

2.1.1. Uncertainty Avoidance

"Uncertainty Avoidance refers to a society's discomfort with uncertainty, preferring predictability and stability". Schneider & Barsoux (2003) p.87

According to Hofstede we are all faced with the uncertainty and ambiguity about the future and we try to cope through technology, religion and law. Extreme or high uncertainty produces severe anxiety and as a result human society has adapted to cope by turning to technology (all human artifacts), law (Formal and informal rules), religion (revealed knowledge of the unknown). (Hofstede,G, 1984). In contrast for those with weak uncertainty, societies have adapted by reinforcing basic institutions such as family, school and the state.

Both Hong Kong and Britain according to Hofstede are societies with low uncertainty avoidance. Based on the Uncertainty Avoidance Index for Hong Kong the country's rank in uncertainty avoidance is 29 and United Kindom rank is 35 (Schneider & Barsoux, 2003, p.88). This rank indicates that both Kong Hong and United Kingdom, according to Hofstede, are more family oriented and relationships are more personalized. The culture is less formalized.

2.1.2. Power Distance

Power distance for Hong Kong is low as compared to England which is high. Leadership issues between the two nationalities can be addressed to have a national from England take up key position in Honk Kong. Since the nationals from Hong Kong respect authority this option if implemented can complement this decision.

2.1.3. Long Term Orientation

Long term orientation for the both nationals is different. Since Hong Kong

2.1.4. Masculinity/Femininity

Masculinity for both Hong Kong and England are high indicating that both cultures are success oriented and driven. This is exemplified many hours of work.

3.0 Business Culture

Recognizing cultural differences is the necessary first step to anticipating potential threats and opportunities for business encounters. The business culture of England has some similarities as well as some differences.

England Business Culture

Hong Kong Business Culture


The British pride themselves sin being well dressed and tastefully groomed.

Men: traditionalist with medium or dark colored suits with shirts and conservative ties. Avoid striped ties.

For women: fashionable yet typical business suits or blouses and dresses.  Accessories are usually worn.

Casuals business wear and jeans is usually not appropriate but this may vary depending on the industry.


For men: medium to dark colored and traditional suits with shirts and ties.

For women: traditional business suits or blouses and dresses are appropriate. Avoiding low necklines, high heels tight fitting or sleeveless attire.

Slacks and colored shirts are usual acceptable

Titles and Business Cards:

Directly addressing people by using Mr or Miss followed by their surnames is customary


Business cards are essential and usually exchanged.

Titles and Business Cards:

In Hong Kong, people are normally addressed using Mr. or Mrs. followed by their surnames

One side of business cards usually translated in Chinese and should be presented with two hands with the Chinese facing the receiver

Business cards should be given with both hands and should be looked at with keen interest.


When doing business direct questions often receive evasive responses. Arriving on time for a meeting is important.


Punctuality is appreciated and highly valued sometimes arriving 5 minutes earlier is traditional

Stages of silence are expected and acceptable avoiding interruptions and talking over someone head


Decisions are made from the top down and can take sometime. Humor is often used in negotiations, sometimes as a defense mechanism or in the form of self-deprecation and/or irony.


Chinese value relationship building and harmony so avoid hard selling, pressure tactics and any sort of conflict or confrontation. 

Chinese an indirect communication style and will avoid using no in answering questions. "Maybe", "we'll see," or "perhaps" will be used as alternatives.

It is common to be taken out to dinner during negotiations and drinking together will usually be encouraged.

Gift Giving

At initial meeting gifts are exchanged

If invited to an English household, it is appropriate to bring flowers (avoid white lilies as they are reserved for funerals), good wine, liquor, or chocolates.

Make sure that gifts are nicely wrapped

Gift Giving

Gifts are not usually exchanged at a first meeting.  Avoid giving gifts of knives, scissors, or letter openers as they signify severing of a close bond.  Clocks, cut flowers and anything in groups of four are to be avoided as well.

Gifts should always be nicely wrapped ( red and gold paper are good) and they are not to be opened right away unless prompted to do so.

Receive and give gifts with two hands.  It is polite to refuse a gift several times before accepting

Table 1.3 Comparison of Business Culture of Kong Hong and England

For both Hong Kong and England business wear for both man and women is formal and conservative. Men usually wear dark to medium color suits with shirt and ties and women I Hong Kong, with modest suits or dresses, avoiding low neck line & high heels.

In Hong Kong meetings are punctual, interruptions and talking over someone head should be avoided, periods of silence is usually acceptable. Having a high orientation score according to Hofstede this culture is thrifty and results oriented. This can impact economic growth positively and sustainable business for Unilever.

During negotiations in Hong Kong, because the culture is one that dictates relationship building, pressure tactics and confrontation are avoided. Communication is high context according to Hall resulting in indirect and often vague communication. Therefore words such as perhaps or maybe are often used to avoid direct response. Hall indicated that cultures with high context usually communicate in a non verbal manner. Negotiations are prolonged according to Hofstede in cultures that exhibit long term orientation.

Gift giving is usually exchanged during the first meeting they should be nicely wrapped using red and gold paper. Gifts should be received and given with both hands. Since the Chinese culture is strongly entrenched in Confucianism, respect and relationship building is prominent.

4.0 Organizational Culture

How does Unilever match the culture synonymous of England. We will now examine this aspect of the cultural dimension.

Organizational Culture of Hong Kong

Organizational Culture of


Organizational Culture of


Family or Tribe (Asian)





Strong social versus task roles

Village Market (Anglo/Nordic)



People as free agents



Output control

Communication Flow

Hong Kong - Upward Communication

From subordinate to superior

Communication Flow

England - Downward Communication

From manager to subordinate

Communication Flow

Unilever decisions made from the Top down. From Manager to subordinate

Communication Styles

HK - High Context

Messages are often highly coded and implicit.

Communication Styles

England - Low Context

Messages are often explicit and speaker says precisely what s/he means

Communication Styles

Low context

Table 1.4 Organizational Culture of Hong Kong, England and Unilever

4.10 Communication Styles

Figure 1.1 Comminication Styles

Communication styles between the two nationals are quite different as can be seen on figure 1.1.



External adaptation

Cultures that depends on leadership such as management, this implies that, that manager have control over nature. Hong Kong culture is indicative of this and it can be seen by their respect for authority. On the other hand European nationals are not dependent on nature and are more fatalists; their concept is nothing can be predetermined. While in some cultures nature may seem as controllable in others it is accepted as a given. (Schneider & Barsoux, 2003, p.36).

5.0 Issues identified

As can be seen from the analysis there were some similarities and differences. Since both national; ranked low in uncertainty avoidance it indicates that these cultures are risk takers and are receptive to changes.

Communication styles are quite different as can be seen from figure 1.1 this can cause

Since Hong Kong who is steeped heavily in Confucianism and guanxi relationships are more focused within such a culture. The word quanxi refers to "connection between independent persons to enable a bilateral flow of personal or social transaction.(Wall,S,et,al,2010) In this relationship both parties must derive some benefit in order to ensure continuation of the relationship. In some instances "gifts" (bribes) maybe used to foster these relationships. This may pose problems with the parent nationals who may have issues and direct conflict with ethics and code of conduct and compliance. Quanxi can work as a positive as well in fostering good business realtions however caution maybe be taken so as not to violate codes and ethics from the Unilever.

6.0 Recommendation and conclusion

The Geocentric Approach:

Utilize best people for key jobs within the organization.

Staffing-Recruitment :

Best people for the Job, personality, team player, previous job experience, working in groups.

Training should be centralized as development through input from both headquarters and subsidiary staff, trainers could be from any location. This may help in curbing any issues regarding code of conduct and ethical behavior in the host countries with respect to gift giving and bribes .

Performance Appraisal:

Character appraisal, focus on positives, a geocentric approach - the same performance evaluation system worldwide, but it has universal applicability.

Compensation and rewards :

A Global approach

The International Manager

In venturing into Hong Kong the manager should exhibit some key qualities and abilities

in order to be successful. One is high interpersonal skills. This helps to integrate social fabric of the host culture by establishing relationships and building trust. Hence assisting

in transferring knowledge and improving coordination and control

Having capabilities to learn the host language will assist the international manager to establish contact therefore indicating an eagerness to communicate and connect with the host nationals Displaying self-confidence and a strong sense of self will assist the international manager in interacting with another culture without fear of losing one's own identity .Showing cultural empathy helps the manager to respect behavior, thoughts, feelings and experience of nationals in host country. This helps in integration and communication. It helps for the manager to have a sense of humor as this helps to buffer frustration, confusion and uncertainty that he or she may encounter

Patience and respect help the international manager to avoid recourse to cultural imperialism, which can be detrimental to fostering positive International business