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To give an overall understanding background of German culture, German companies' culture is described. Based on the elements in conceptual framework, details are delivered. The discussion is going to be used as standard of comparing to other cultures that chosen companies entered.
A Planning Culture:
In many respects, Germans can be considered the masters of planning. This is a culture that prizes forward thinking and knowing what they will be doing at a specific time on a specific day. Careful planning, in one's business and personal life, provides a sense of security. Rules and regulations allow people to know what is expected and plan their life accordingly. Once the proper way to perform a task is discovered, there is no need to think of doing it any other way. Germans believe that maintaining clear lines of demarcation between people, places, and things is the surest way to lead a structured and ordered life. Work and personal lives are rigidly divided. (Kwintessential)
Greetings are formal. A quick, firm handshake is the traditional greeting. Titles are very important and denote respect. Use a person's title and their surname until invited to use their first name. You should say Herr or Frau and the person's title and their surname. In general, wait for your host or hostess to introduce you to a group. When entering a room, shake hands with everyone individually, including children (Kwintessential).
China is believed to have the oldest continuous civilization. China has over 4,000 years of verifiable history. Beijing is the capital of China and is the focal point for the country. The official language is standard Chinese, which is derived from the Mandarin dialect. Most business people speak English. There are many dialects in China however there is only one written language (Hofstede website, 2003).
Guanxi and Mianzi:
As far as Chinese business etiquette or mindset is concerned, two words often spring to mind: Guanxi and Mianzi. The first may be translated as 'social connections', and the second, 'face keeping'. If you are interacting with Chinese, or doing business in China, you must have an understanding what the two words imply, because: they are so much part of the culture and code of conduct that people expect that you appreciate their importance; they can be quite different from the ways things are done from the international points of view.
HOFSTEDE'S CULTURAL DIMENSIONS:
In the Hofstede's cultural dimension, score of Germany indicates power distance 32, individualism 69, masculinity 66, uncertainty avoidance 29, and long-term orientation 33 (Hofstede, 1980). In the Hofstede's cultural dimension, score of China indicates power distance 80, individualism 20, masculinity 66, uncertainty avoidance 25, and long-term orientation 118 (Hofstede, 1980). Except to masculinity, all scores show almost the opposite tendency to score of Sweden.
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Hofstede's Analysis of Sweden and China, (Hofstede website, 2003)
Hampden-Turner & Trompenaar:
According to this model, Germans are neutral while Chinese are emotional in their behaviour. Except
Neutral vs. Emotional
Specific vs. Diffuse
Achievement vs. Ascription
Internal vs. External Control
Achievement, Germans and Chinese differ in their behaviour.
Hess in China:
If we attended the Olympic Games in Beijing, we had to have noticed Hess's presence, as its light columns illuminate the way long the entire length of the promenade leading up to Olympia Park and throughout the public viewing area behind the Olympia stadium.
"This prestigious order represents a wonderful start of our activities in China, which we plan to significantly expand," says Christoph Hess, CEO. Mr. Hess calls China the market of the future.
Having received the first contract for the Olympic Games, Christoph Hess is confident that more orders are sure to follow. "It is extremely important to be physically present, so that they can study and understand the market."
http://www.hess.eu/en/Aktuell/Hess_beleuchtet_Olympia-Park_in_Peking/hess_news_20080821_project_beijing_01_1.jpeg http://www.hess.eu/en/Aktuell/Hess_beleuchtet_Olympia-Park_in_Peking/hess_news_20080821_project_beijing_04_1.jpeg http://www.hess.eu/en/Aktuell/Hess_beleuchtet_Olympia-Park_in_Peking/hess_news_20080821_project_beijing_05_1_1.jpeg
Cultural clash and conflicts:
In every cross border alliance, there are starting points of potential cultural conflicts and misunderstandings. According to researches, cultural differences are the largest problem and source of difficulty in integrating cross border acquisitions, and cultural differences is considered by 35 percent of senior executives as the number one problem in cross border acquisitions (Schneider and Barsoux, 2006).
Sources of cultural conflict:
TingToomey and Oetzel (2001) have depicted different sources of cultural conflicts: Cultural differences:
Misunderstandings related to different points of view and ways of communicating that come from cultural differences.
Assimilation vs. ethnic identity maintenance:
These are the competing needs of assimilation and conservation of cultural/ethic identity.
The manner power is distributed.
Competing conflicts goals:
Groups within the organization may have different goals and conflicts may arise while interacting.
Competition for scarce resources:
It's the competition for the allocation of resources.
It is necessary that the German and Chinese managers are conscious of the sort of conflicts existing in order to manage them anticipatively and afterwards rapidly.
As Hess is going to China, they can face some difficulties regarding culture. Hess should adapt their marketing strategies to meet Chinese local consumers' needs. The focus for marketing activities in China should be on culture-specific aspects.
At first, language will be totally different. German managers can face some problems in communication with the Chinese employees. Also, Chinese language is not direct but high context language. English is a popular language and there are many Chinese speaking English, but there are little Chinese workers can speak English good enough. If a German manager want to communicate to a Chinese worker with poor English, it is very hard. It also may be issues when they discuss something such as strategy, management style and other plans if there is little understand. Therefore, when Hess entered China, considerations about language will be necessary.
We can observe different work styles in German and Chinese employees. Some work cultures promote individual thinking and suggest rewards for individual contributions- like the Germans for instance. While in some work cultures employees are uncomfortable with independence on the job and prefer to be tied to the boss in decision making-like Chinese.
We can observe in German and Chinese cross-cultural group that a section of the team that has some cultural similarities attempts to control the team procedure and try to claim superiority to the rest of the team. This group within the team may try to swing decisions towards a direction that they are comfortable with. This can create a frustrating environment for the rest of the team.
International Managers" from both countries:
In order to overcome the language problem, IKEA hired the managers from the both countries. It will help IKEA to overcome the cultural problems which they are going to face in China. IKEA also decided to use a Chinese name. It is pronounced 'Yi Jia', similar to the English pronunciation of IKEA. The meaning is positive and very appropriate: 'desirable for home living/comfortable home' (Burt et al., 2008)
To get success in China, Hess should form a multicultural team. In this team, workers from both countries work together for the success of the company. Multicultural team will overcome the problems such as the different work styles because their mission and vision will be the same.
Social interaction in Chinese is high. To overcome the dominating influence problem, Hess should create a social and friendly environment between their employees.
Based on the assessment above, the study aimed to draw conclusions and find the cultural gaps in the operation of Hess in Shanghai. The goal of this study was to assess both from European and Chinese co workers (of Hess) point of view:
Major differences/similarities between Chinese and Swedish culture.
Major differences/similarities between culture in Shanghai and IKEA culture.
Assimilating all conclusions that we have reached, and all gaps we have identified, we have
Chinese culture is diffuse, while German culture is Specific
High Power Distance in China, as compared to German
The culture in Shanghai is Individualistic while Hess' culture is collectivistic
Cross cultural and language orientation should be provided to expatriate individual.
Organizational culture needs to be addressed, to bring in feeling of belonging and effort parity with mother organization
Communication/Education differentiating Management and Leadership Hess.
Not just educate about Hess culture, but also market the effort and investment made to do so.
Suggestions for future research:
My suggestions for future research are to make the scope of this work enlarged and more diverse. Several steps may be taken, few of them being:
Arrange for a higher percentage inclusion of respondents in the interview.
Study how Hess created synergy in other countries, which had similarly cultural differences as China has with German.
Study the specific techniques used by Chinese companies, such as Guanxi, and how those techniques compare with similar techniques used by Hess. Also, if those techniques could be integrated with Hess way.
Not only draw conclusions and find gaps, but also suggest possible ways to bridge these gaps, drawing examples from other successful German companies in China.