How Cultural Differences Affect Conflict Management within Lenovo - Case Study Example

How Cultural Differences Affect Conflict Management within Lenovo Dissertation s: Lenova is a Chinese based cosmopolitan computer Know-how corporation that builds up, produce and uphold desktop and note pad PCs, servers , Information Technology administration software, terminal , storages mechanism and allied services. This being said, it is required to consider the aims and objectives of a research undertaking of this type which seeks, at its core objective, for the deeper analysis of the impact of culture differences within Lenova. Impacts of cross functional dissimilarities leads to the conflict within the workplace surroundings. Cultural clash and dealings along with the Chinese and non-Chinese employee’s obstacles in Lenova generates an unhappy job atmosphere, influences positive cooperation and employment effectiveness. The research methods used for the examination of cultural differences and its effect of conflict management within Lenovo by way of the Chinese and non-Chinese civilization is the observation based study.The dissertation pursues a typical questionnaires method of collecting data using standard performances.This is mainly used for the examination of cultural differences and its effect of conflict management within Lenovo by way of the Chinese and non-Chinese civilization is the observation based study. Dissertation also encompasses the discussion and conclusion on the matter of Cultural Differences Affect Conflict Management within Lenovo. Introduction: Lenovo was established in the year of 1984 by 11 Chinese researchers with RMB200, 000 in seed cash. It is not simple to defeat obstructions of verbal communication, business cultural dissimilarity, nationwide cultural dissimilarity, and hiring behaviour. Conflict of any of the business establishment is extremely embedded in cultural dissimilarities in the circumstance of communal, financial, and chronological conflict. The Chinese habitual clothing reveals that they were very much informed about the monument of stitching and binding, subsequent to the prehistoric era. Chinese culture and civilization is one of the extremely elder culture followed in the world. At the same time, Chinese culture and customs expresses a contradiction amid at a variety of towns and regions. A subject on Chinese civilization and customs would be imperfect with no mentioning of their foodstuff, clothing, education and construction and transportation. “Since then three different cultures, the old Lenovo culture, Dell’s management culture, and IBM Pac’s existing culture, have existed uneasily at Lenovo simultaneously. Three years have passed and still the cultural conflict has not been resolved.” (Botched integration and Lenovo faces reorganization, 2009). Culture is a vital ingredient of conflict and conflict Management. Also cultures are one of the most influential aspects of the organization that are regularly unconscious. Cultures are entrenched in all conflict for the reason that conflicts happen in human relations. Culture is constantly an aspect in conflict, whether it acts as a central position or influences it finely and smoothly. Conflict management necessitates a managerial Ombudsman to be responsive to how civilization may have an effect on the views and actions of those concerned. The beginning of a conflict stimulates citizen’s gray matter and this is valuable for the business. The key characteristics of cross-cultural incorporation of human resources are the organization and execution of a collection of reliable principles in the course of the business. Cultural amalgamation of every organization is a must and also it has a most significant result on the organizations strong expansion. Cultural clash and interaction among the Chinese and non-Chinese employee’s obstacles in Lenova generates an unhappy job environment, influences positive cooperation and employment effectiveness. So that amalgamation of the Chinese and non-Chinese employee’s should begin by means of the frank contact and mutual perceptive. Literature Review: Lenova is a Chinese based cosmopolitan computer Know-how company that builds up, produce and promote desktop and note pad PCs, servers , Information Technology administration software, terminal , storages mechanism and connected services. Impacts of cross functional differences leads to the conflict within the workplace environment. “Lenova believes that this deal will help to create a global brand. IBM’s new direction means it will concentrate on large systems and providing consultancy and business solutions for organizations that will wish to outsource their IT management.” (Doole & Lowe 2007, p.74). For any business establishment to be efficient and well-organized in attaining its objectives, the inhabitants in the business require to have a collective idea about what they are determined to attain, in addition to clear aims for every set division and human being. Proper conflict management must be maintained to overcome conflicts in the workplace environment. “Overall, the strategy that Lenovo has adopted to manage two teams seems to have worked well and the culture integration committee appears to have served well in encouraging the communication between two teams. On the other hand, as the participants in the interview were not directly involved with the designing and crafting the strategy of culture integration, that might have some limitation on the result.” (Peng 2008, p.3). China is one of the four very old Societies of the world according to Chinese researcher Liang Qichao (1900).Many features of Chinese civilization and culture can be traced back a lot of centuries ago. Chinese civilization is so varied and exclusive, yet harmoniously merged by presenting itself a valuable advantage to the globe. “Lenova, with 4,800 retail outlets, has been the market leader in China and is now making global push with purchase of IBM’s PC unit .Lenova managers are gunning right for Dell in its established market as well.” (Daft 2008, p.105). According to Ting Wang in his book called Understanding Chinese Culture and learning says that, Chinese learning and education civilization have been very much manipulated by Chinese civilization generally and Confucianism in exacting for many centuries. Within a lot of disciplines of consideration in Chinese conventional civilization, Confucianism has been played a significant influence. “Conflict persists at all levels of contemporary life, including top. Yet conflicts rarely escape the boundaries of executive contexts to escalate into large-scale public disputes or firings-the kinds of events that receive widespread media attention.” (Morrill 1995, p.1). According to Calvin Morrill in his book called the Executive Way: Conflict Management in Corporations says about the conflict in organization. He also says that conflict administration submits to the communal congregation by which citizens follow their complaints against one another. “Lenovo is also moving its market centre back to Asia Pacific, finally approving its former strategy and possibly putting an end to its culture conflict. After the reorganization, the operation income of APR is expected to account for over 50% of the company’s total, and APR will undoubtedly become Lenovo’s key market. In the past years, Lenovo has hesitated over focusing on the US and Europe or Asia Pacific, and its indecision has been the source of many missed opportunities.” (Botched integration and lenovo faces reorganization, 2009). The culture and civilization of Chinese be merely one of its types. The rich custom and civilization of Chinese provides significance to physical condition. That means, they are very much cautious in foodstuff and eating behaviours. (The executive way: conflict management in corporations by Calvin Morrill.1995). “Conflict management requires recognition that conflict is occurring. However, often there is no such recognition. Boundaries are often violated, behaviourally or verbally, by apparent abusers, harassers or aggressors unaware of the effects of their actions. And some people perceive no constraint on their actions. Sometimes also, those who are injured are not able to understand — or find it hard to name – what has happened.” (Miller 2010). According to David Miller in his article called Managing Cultural Differences in an International Organization Conflict Management System says that, conflict administration necessitates universal acknowledgment of values, principles or policies in which conflict is described as explanations and resolution or remedies may be establish. (Managing Cultural Differences in an International Organization Conflict Management System by David Miller, Staff Ombudsman, and World Health Organization.). “When International negotiation takes place, the cultural differences and implications can spin the negotiation in unanticipated directions.” (Moran et al 2007, p.92). According to Helen Meek, Richard Meek, Roger Palmer, Lynn Parkinson in their book called managing marketing performance 2007-2008 says that the major reason of the acquirement was for Lenova to turn out to be an earth performer .In order to do this, Lenova manger was supposed to obtain IBM ability and trade culture. However, they primary wanted to have faith in the IBM employees who were thought to assist to build up. “Contrasting corporate culture is rooted deeply in the societies in which there are based. People who work in ‘western’ organizations tend to be highly focused on job. This is agreeable to the people in ‘eastern ‘organizations, especially Asian organizations, who have the so-called ‘relationship’ orientation. The focus of merged organization needed to develop ‘relationship’ orientation for the business to succeed in the long-term, in addition to adopting the international task orientation.” (Meek et al 2008, p.8). He also says that Chinese workers have a great deal of confidence in the successful process of worldwide marketplaces and company scheme and are habitually unsuccessful to distinguish to facilitate themselves in executing and assessing these schemes in addition to refining them. Also the success of the entire organization rested on the construction of efficient multi and cross-cultural groups where interactions among them were viewed as significant. (Managing marketing performance 2007-2008 By Helen Meek, Richard Meek, Roger Palmer, Lynn Parkinson 2005). “Many of these 460,000 firms discovered that human resource management--recruiting, selecting, training, appraising, and compensating employees, and ensuring their safety and welfare--is different in China (Zhu and Dowling, summer 2000). For example, threatened by the All China Federation of Trade Unions (ACFTU), the notably anti-union Wal-Mart recently agreed to let its Chinese workers unionize if they asked (MMR, 2004).” (Gary 2006). According to Guo-Ming Chen, Ringo Ma in his book called Chinese Conflict Management and Solution says that, Chinese view of conflict and organization of conflicts recommend that Chinese have the propensity to take up no confrontational approach or strategy in conflicting circumstances. The normal clarification of this type of approach is that, the Chinese are mainly concerned regarding the saving of expression and preserving interpersonal affiliation and think that confrontation will wound the affiliation of the conflict groups. “There was no lack of participants who supported this view and were comfortable in using confrontational strategies in managing conflict. They believed that confronting the conflict situation with the involved parties allowed identifying the differences so that they could work on the differences and get conflict resolved.” (Chen & Ringo Ma 2002). According to Mike W. Peng in his book called Global strategy says that, cultural Chiness administrator regularly struggle by means of a vague supervisory individuality. (Global strategy by Mike W. Peng.) “ In the context of currently shifting global political and economic power, no two nations are better equipped than India and China to show the world how the common concerns of humanity can be addressed through mutual respect, friendship, healthy competition, and sharing of resources.” (Ahmad 2008). Methodology: A research methodology is an organized practice or a step by step development in realizing an assured task or purpose. A methodology employs different ways in realizing the ultimate result by incorporating different techniques. “Research directed toward the increase of knowledge, the primary aim being a greater knowledge or understanding of the subject under study.” (Research: Military Dictionary: Basic research, 2010). The research methods used for the examination of cultural differences affect conflict management within Lenovo by way of the Chinese and non-Chinese culture is the observation based study. Also, this methodology will be useful for the valuation and examination of the impact of cultural different in the Lenova. “In marketing and the social sciences, observational research (or field research) is a social research technique that involves the direct observation of phenomena in their natural setting.” (Marketing research method-observational techniques, 2004). Data gathering is an essential ingredient in the design of the methodology. It assists the acquiring of data so that judgments can be taken on the important problems Research Design. The data collection for this study is mainly done by way of well structured questionnaires in the employees in Lenova. Cultural differences among the Chinese and non-Chinese are mainly by way of its principles, Assumptions and performances. Also the complexities, expenses and risks connected with cross- cultural speak to enlarge with increasing cultural dissimilarities in the Lenova. Various citizens believe in various ways but some of them think that cultural dissimilarities as a basis of conflicts. But some other may believe that it will leads to the development of organization as well. The research plan is valuable categorizing and evaluating the variety of methods in performing the research and occupies in the judgment making subsequent study of the information collected. This will also helps to create the construction block of the research scheme. The research method used for analyzing the cultural differences in the Lenova is the observation based study. The Cultural differences among the two different communities shows “two side-edged blade” that may be sometimes optimistically or unenthusiastically connected with routines of the organizations depending on possibilities. For example, the amount of relatedness and incorporation plan. The capability to administer the sociocultural incorporation procedure is the most effective way to show the key issues influencing the result. Research plan is also a theoretical construction or the blue print of the data which the consumer needs to implement for company forecast. “Some observation bases studies will includes no interviewing, some will utilize only informal interviews. Standardized interviews will likely to be used by post positivist researchers in conjunction with observation and formal interviews.” (Hatch 2002, p.97). The idea of the quantitative method is the employment of the mathematical and statistical model and the analysis of the hypothesis. The quantitative link is the main link among the empirical methods. Qualitative Research: The qualitative process considers the why and how in decision production approach. In the existing scenario, the key worth of the cultural differences within Lenova leads to the conflict in the organizations. This is mainly because of their diversity among the cultural aspects. One of the most popular methods used to assess the cultural variation within the organization is the Observation based study that is much supportive in the variety of recognition of the potential data. Cultural amalgamation is not only the contact of amalgamations and attainments a key feature in the accomplishment, but also an encouragement for the alteration in corporate civilization plays a most significant position Observation Based Study: Observation based study helps to get the alertness of the actual, corporeal, and communal globe in which we live. Also, the observation may be sometimes directly or indirectly. Due to this type of research methodology, it will help to get the most accurate data. Various types of observation study used for this analysis are, Conversation Analysis, Discourse Analysis, Interactional Sociolinguistics, and Micro-Ethnography as the methodology. The type of observation analysis used for analysing the impact of cultural differences in the conflict within the Lenova is the Interactional Sociolinguistics. This type of study is mainly a face to face to face interaction so it will help the researcher to acquire the most effective data. “Lenovo Group Limited today is a household name in China. But it wants more. It has been trying hard to become a household word in the world since after its merge with IBM PC business.” (Advani 2006). Interactional sociolinguistics: It is an approach to use for the type of discourse study that has its foundation in the exploration for replicable ways of qualitative investigation that provide an explanation for our capability to understand what contributors mean to express in daily outgoing practice. “Interactional sociolinguistics is concerned with how speakers signal and interpret meaning in social interaction.” (Bailey n.d. p.2314) So that by of the Interactional sociolinguistics it will help the researcher to identify the culture difference within the Lenova as it’s of leading the conflict. This type of research methodology is relies greatly on analysis in the fieldwork. It is a qualitative explanation from a straight, immediate observation of topic every day behavior in circumstance. Interactional sociolinguistics is apprehensive by means of how speakers gesture and construe connotation in social communication. Cultural dissimilarities in contextualization conferences can challenge interrelated communication dangerous for the reason that persons be liable to be unaware of this measurement of relations. “The key theoretical contribution of Interactional sociolinguistics is to illustrate a way in which social background knowledge is implicated in the signaling and interpreting of meaning.” (Interactional sociolinguistics, 2010). Conflict management necessitates a managerial Ombudsman to be responsive to how civilization may have an effect on the views and actions of those concerned. “Transnational business enterprises are facing so that the host culture and the home country cultural differences, cultural differences, such a direct impact on management practice in the culture of the risks of doing business. In a particular cultural environment in an effective management method applied to another culture environment may produce the opposite result.” (The culture of business risk and its management, 2007). Observations help to learn that persons are observed or definite results are calculated. No effort is given to influence the result. It has various scope and the research methods and the data analysis method constitute the part of methodology. The scope of the methodology is vast in comparison to the methods incorporated. In order to carrying the big size examination; the method must be consistent, quick and not space consuming. “There are many positive aspects of the observational research approach. Namely, observations are usually flexible and do not necessarily need to be structured around a hypothesis.” (Brown n.d). Data Collection and Analysis of Data: This research study admits the fact that culture and cultural implications play a major role, especially in the case of MNC like Lenova, which, is China based, boasts of a multi-cultural work force. Besides, there is also a fact that the MNC’s in China and other places conducts operations that are definitely exposed to western influences which help to shape its corporate destinies. Besides this, there are also typical Chinese cultural aspects which are quite evident in the workplace, not only in mainland china where Lenova conducts its main operations but also global destinations. “Four years after it acquired the PC business from leviathan IBM, Lenovo, China’s largest PC producer, is being forced to reorganize its business and lay off 11% of its total employees. Aside from pressures from the global financial shake out, unsuccessful internal integration and an ambiguous market strategy are the main culprits.” (Botched integration and lenovo faces reorganization, 2009). Thus, the cultural aspects surrounding Lenova needs to consider the after effects of the recession that has hit the PC market, especially Lenova and the ways and means by which this could be marginalized and countermanded. Conflict areas do arise, especially in human resource building with a large staff force, as commanded by the Lenova management. This would be more than obvious. Thus, it is important that strategies are developed to address cultural conflict areas, especially with regard to the Lenova- IBM takeover. The main issue related to Lenova till the IBM takeover was dealing with low end PC and was ranked eighth in world ratings. While IBM with Rank 3, was concentrating mainly on high end products. “Furthermore, would Lenova, until the IBM purchase almost unknown in the West, be able to hold on to IBM’s best employees, who were used to the prestige and privileges with working for one of the top global companies?” (Murphy & Willmott 2009, P.534). Thus the main issues that this study needs to analyze is in terms of the fact that; though a marriage of disparity, IBM-Lenova stood steadfast and sustained over time. The cultural differences between the American and Chinese way of management stand out conspicuously. But it nevertheless remained true during testing times. Some of the major areas of cultural differences between the Chinese (Lenova) way of doing things, and American culture management (IBM) was as follows: There were pay scale differences – although at the time of takeover, IBM PC bottom line was low. Still their pay scales and benefits were indeed inviting. Compared to IBM, Lenova were indeed poor paymaster, very much true to Chinese tradition. But, the merger brought in a new American CEO and perhaps nobody from the IBM Group was retrenched. Thus, staff attrition was indeed arrested; thanks to the forward looking and progressive mindedness of the Chinese management. Staff attrition post in IBM- Lenova merger remained nil and “10,000 Employees” of the executive team and management of IBM were absorbed by Lenova. (Vance & Paik 2006, p.102). The conducted research also arrived at the results that, after the IBM merge, cultural difference between the Chinese and American staff seldom occurred and there were no major culture issues between the predominant Chinese work force and American managers. In a global cross cultural akin to what was happening in Lenova, there are reasons to believe that work performance assumes total responsibility over other considerations, including cultural issues. This has been the main fact that has emerged out of this research study. In this study, there may be no grounds for discrimination and culture based issues in an equal opportunities’ employer like Lenova. But, this research has also analyzed the main reason for the alliance among inequality. For Lenova, they needed to entrench themselves more robustly in the PC market with larger market share and retaining /gaining customers. For IBM, PC was not their core markets and thus they anyway needed to dispose it and concentrate on high margin areas like enterprise software, servers and high end products, services and utilities. Thus, what could possibly be the main reasons was to use the stakes in core areas important to IBM and dispose off the rest for a settled price. An analysis of this study needs to further examine the culture differentiations between the Chinese and American style of management and functioning. While the American system is to delay decisions till all salient aspects are worked out under the Chinese method, contracts are often established on trust, mutual understanding and appreciation. Again, the American culture may be in terms of quick profit repatriatability and may not perform in the Chinese context where people are more tolerant, patient and self assessing- Orientals. Chinese are introspective and view things internally while other European cultures view things externally and are proactive, more forward thinking and progressive minded. While stereotypes may not really be correct, it is true that China has just emerged from the cocoon and she has build over many years. Thus more time may be required for her growth and development programs to materialize. Further, “Lenovo is the largest seller of PC technology in China and the current market leader in the domestic PC industry.” (Alliances of lenove-IBM-issue, 2010). Hofstede Cultural Dimensions: This analysis also needs to consider several cultural aspects that directly impinge upon business, especially that of a Chino-American nature. It is seen from a comparative analysis of Hofstede Cultural Dimension of the USA that the following facts and figures emerge. “Research, also by others, has shown that services are affected by the cultural dimensions.” (Wursten et al 2009). This analysis seeks to understand and throw light on the impact of culture on the performance of a Chinese company, Lenova. It is first necessary to make a comparative analysis of Chinese and American cultures with respect to the different elements envisaged in Hofstede cultural analysis. The aspects that need to be taken up are as follows: 1. “Power Distance Index” ( PDI) 2. “Individualism- collectivism” (IDV) 3. “Masculinity- Femininity” ( MAS) 4. “Uncertainty Avoidance” (UAI) 5. “Long term and short term orientation” (LTD). (Hofstede 2009).   1. Power Distance Index: This refers to the degree of equality and inequality in the centralization or decentralization of power and its implications. In the context of Lenova (China) it is seen that it is very high, while compared to IBM (US). Thus, it could be said with a reasonable degree of accuracy that in the Chinese context, power inequalities may exist and be centralized. In other words, “Hofstede’s Power distance Index measures the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally.” (Trompenaars 2009). 2. Individualism v. Collectivism: Individuals narrowly focused companies that claim loyalty to individuals against collectivism where group loyalty gains prominence and critical attention in the company for common benefit. Thus, it is seen that in the Chinese context has a low individualism while the American model is very high in this country, “Individualism holds that every person has inalienable rights.” (Individualism vs. collectivism, n.d). 3. Masculinity v. Femininity: In this culture it is envisaged that, corporate cultures must be better, aggressive and having the end in mind; without caring about the means. But in the case of feminism, the main accent would be on respecting norms and policies and not making transgressions for achieving things. “This dimension indicates the extent to which dominant values in a society tend to be assertive and look more interested in things than in concerning for people and the quality of life,” (Trompenaars n.d). 4. Uncertainty Avoidance: “Uncertainty avoidance deals with a society’s tolerance for uncertainty and ambiguity; it ultimately refers to man’s search for Truth.” (Trompenaars 2009). In the context of China, it is seen to be quite low, comparing well with that of the American culture. It is however necessary that this will be improved, especially in the context of Lenova which is a global company that needs to face and overcome many threats and risks during the course of its career. 6. Long Terms v. Short Term Orientation: “Long-Term Orientation is the fifth dimension of Hofstede which was added after the original four to try to distinguish the difference in thinking between the East and West.” (Trompenaars 2009). It is seen that China scores high on long term orientation which includes prestige,      parsimony, value systems etc. The US is low on these counts. Thus after considering the above cultural analysis of Hofstede in the context of this Chinese company, that has shifted its headquarters to the United States; it could reasonably be said that both cultures are not similar and perhaps this is what has made them to combine to form the new holy alliance. Discussions and Conclusions:   It could therefore be reasonably said that Lenova, though basically a Chinese company, also need to be a part of the global business culture. In today’s global culture; corporate especially in the consumer ilk, could hardly operate on an island. China has realized this universal phenomena a bit late, but nevertheless have made rapid progress on all areas of pubic accountability, especially in industrial and commercial growth sectors. What Lenova does at this stage is to consolidate on its gains, its strategic partnering with global business houses and a burgeoning PC market in order to consolidate and improve the ranking in world business.” On one hand, Lenovo will continue to strengthen our China business and the relationship business that mainly services large enterprises outside of China. On the other hand, Lenovo will expand its successful dual “transaction and relationship” business model in China into the worldwide SMB and emerging markets. Lenovo’s dual business model approach was developed.” (Yuanqing 2006, p.2). Culture factors are important in business, especially in a multicultural environment like Lenovo. “In the context of economic globalization, multinational enterprises, and mergers and acquisitions have become increasingly frequent, companies will inevitably face of foreign competition, and multi-cultural conflicts, all managers need to use the concept of globalization to consider the operation and management of the enterprise, are cultural differences to consider the impact to the enterprise.” (The culture of business risk and its management, 2007). It is believed that the top management in Lenovo itself has played a major role in promoting cultural harmony and accord. “Led by Lenovo’s Vice President of Diversity, the session covered the historical background of members from Eastern and Western countries, different geographical, geo-political and religious experiences, and educational backgrounds.” (Management’s discussion and analysis: A winning culture, 2009, p.35). Yet, the story is that cultural diversities and unities apart, what really matters in a multi-cultural environment is that differentiation in cultures should not impact adversely upon business and performance. Lenovo, is committed to see that such events do not occur and even if they do, they are controllable and well within limits. ”Lenovo will continue to cultivate a fast, disciplined winning culture suitable for a PC company that needs to act fast and efficiently in the marketplace.” (Management’s discussion and analysis: A winning culture, 2009, p.35). While culture may be important in certain countries in the corporate worlds, it would hardly be said to be sustainable in corporate lives wherein targets and performance are most critical and achievements does not really matter. This is a main strategy of companies that has open and transparent HR policies against discrimination and equal opportunities like IBM and also Lenova. Thus, it could be said that with regard to the cultural aspects governing Lenova; most issues are settled without need for legal action and possibly through the use of mediators. “We recognize that having a workforce that broadly reflects the composition of the local communities in which we operate places us in a unique position to understand and respond to the needs of our customers. We thus use diversity as a competitive differentiator, both in employment and in customer markets.” (HSBC- an equal opportunities employer: Careers with HSBC, 2010). Besides, one of the major aspects is that Lenova is a global company with wide expertise and experience in staging positive cultural values. Thus, it is only in the fitness of things that this holy merge between two vastly differentiated cultures of the US and China should be positive, forward looking and progressive at the same time.   Reference List Advani, D., 2006. We are trying everyday to make lenovo c global brand: Interview. [Online] People.com. Available: http://english.peopledaily.com.cn/200606/19/eng20060619_275249.html [Accessed 30 June 2010]. Ahmad, A., 2008. India and China: Conflict, competition, and/or cooperation in the age of globalization. [Online] Globalization. Available at: http://globalization.icaap.org/content/v7.1/AqueilAhmad.html [Accessed 28 June 2010]. Alliances of lenove-IBM-issue, 2010. [Online] Docstoc.Com. Available: http://www.docstoc.com/docs/23542854/Alliances-of-Lenove-IBM--Issues-and-Challenges [Accessed 29 June 2010]. Bailey, B., n.d. 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