Cultural Challenges Regarding Volvo Entering China Introduction The management team of Volvo needs to be able to bridge the cultural distance with the Chinese workers, as the cultural challenges present the greatest challenge to any firm who is dealing with a completely different country 2002, p…
xvi). The country’s culture will determine how the firm will respond to strategic issues, and how these issues are interpreted (Becker, 2000, p. 90). Sweden verses China – the Cultural Challenges Hofstede’s cultural dimensions will be used as a framework to explain the cultural challenges between Sweden and China. These dimensions are widely used in different contexts, where there is going to a cross-cultural challenge, and different countries will fall within these dimensions (Steenkamp, 1999). Hofstede proposed that culture has different dimensions, and that these dimensions must be taken into account whenever one is looking at cross-cultural relationships. Volvo is based in Sweden, which obviously is a Western country. China is obvioiusly an Eastern country. As such, there is bound to be many cultural challenges which might arise when these two countries merge. One of Hofstede’s dimensions is the concept that some countries are individualistic, while other countries are collectivist. Basically, the individualist countries are an “I” countries – the individuals are paramount, and everybody is expected to be able to go it alone. The collectivist countries, on the other hand, see that everybody is a part of a group. This group might be a family, it might be a clan, or it might be an organization. At any rate, the members of the group, if the country is a collectivist country, show unfailing loyalty to that group (Hofstede, 1984, p. 84). In individualistic cultures, individual concerns are put ahead of group concerns; in collectivist countries, this is just the opposite (Steenkamp, 1999, p. 59). What the research shows is that China is a collectivist country – they score low on the scale for individualism, while Sweden scores high on this scale. What this means is that there is bound to be culture clashes, as the Chinese workers will have loyalty to the people inside their group – research shows that, within the collectivist cultures, the members of a group are willing to share with other members of that group, and are less willing to share with members who are not in that group (Ardchivilli et al., 2006). The Chinese workers therefore might decide to bond together and not share information with the Swedish workers, and this might be the same with the management. On the other hand, the workers and management in Sweden might be reluctant to share with anybody (Ardchivilli, 2006). Another dimension is power distance. The power distance concept has to do with hierarchies. Hierarchies may either be rigid or fluid, respected or not respected. It depends on if the country has a large power distance or a small power distance. The rigid hierarchies are often found in countries that have a large power distance. The hierarchies in these countries are in place, and they are not questioned. Therefore, the members of the hierarchies know their place in the hierarchy, and this is something that is accepted by the members of these groups. If there is a power inequality, this does not have to be explained. However, in the case of countries with a smaller power distance, this is not the case. If there are power inequalities within these groups, there needs to an explanation for the power inequalities. Moreover, the members of the hierarchy do not accept their fate – they strive for more equality. This means that, while they might respect the hierarchy, if they are not ...
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