China Gets a Taste of World Class Swiss Chocolates - Essay Example

China Gets A Taste of World Swiss Chocolates In an environment with people from different cultures work together, one needs to understand the culture where another comes from if harmony is to be achieved. Culture is defined as “the collective programming of the mind which distinguished the members of one human group from another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture” (Hofstede, 1994). From this definition, one can perceive how much influence culture has on people (French, 2010). If people are considerate and understanding other cultures, and makes the necessary adjustments to accommodate the needs of others, then they can earn the cooperation of others. On the other hand, if they insist on promoting their own culture and their value system, whether it agrees with others or not, then it can be surmised that sooner or later, the personal relationship will encounter major conflicts. This analysis is logical and general, but it goes without saying that there is more than meets the eye. In the case of merging two different cultures in business, many factors need to be considered in order for people to work together harmoniously. Key to understanding cultural differences are theoretical foundations that explain them. Case Scenario Chocoladefabriken Lindt & Sprüngli AG (known as Lindt) is an international company that prides itself of being recognized as the leader in the market for high quality chocolates and other chocolate related products. Its history spans more than a century of developing the best formulas for chocolates, with the business run and developed extensively by a family organisation. From humble beginnings, the business has expanded enormously with its products being sold internationally in more than 80 countries with almost $1 billion in worldwide sales. “The predominantly Swiss-owned corporation manufactures various products of its renowned Lindt brand in Switzerland, Germany, France, Italy, and Austria, as well as in the United States. The international group includes major sales and distribution firms in England, Poland, Spain, Canada, and Australia, as well as sales offices in Buenos Aires, Hong Kong, and Dubai. Lindt & Sprüngli products are distributed by a network of distributors that spans the globe.” (Fundinguniverse.com, 2010, para. 2). The top management of the company do not rest on their laurels and would want to expand further in the Far East and Asia. However, a thorough study of possible cross-cultural issues must be undertaken, since European and Asian culture are vastly different. To explain such difference and the probable conflicts that may arise, this paper will assume that the Swiss company intends to put up an expansion business in China, in Far East Asia, a country of great food cuisine. Before the specific issues are discussed, a brief background on the study of cultural dimensions must be understood. The theoretical framework of this paper is provided by Hofstede’s Five Dimensions of Culture. Understanding Different Cultures Hofstede’s work has provided a seminal framework for understanding cultural value orientations and their effect on the workplace. His efforts culminated in a mass study that established typologies of over 50 countries, evaluating attitudes towards power distance, uncertainty avoidance, societal orientation, social gender and time 1. Collectivism vs. Individualism (IDV) Hofstede and Peterson (2000) assert that “collectivism implies a link between the individual’s self-identity and a collective, whereas individualism implies that the two are more fully distinct” (p.408). It must be noted, however, that the individualist sees the distinction between self and other as the defining characteristic of social interaction, whereas the collectivist sees the distinction between in-group and out-group as paramount in social interaction. This results in the notion that collectivists do not believe that social interaction is fundamentally universal in nature; there is always a self and an other that allow an individual in any type of society to identify more closely with some (Michailova and Anisimova,1999). For example, research shows that “European Americans have been found to dominate conflict situations while Asians and Asian Americans tend to either avoid conflict or to oblige the other party. A high degree of individualism has been attributed to the use of a confrontational- oriented style among Euro Americans, while greater collectivism and a desire to avoid loss of face have been attributed to the use of more passive and accommodating conflict styles among Asians and Asian Americans.” (Khoo, 1994). A lot has to do with the personality and cultural upbringing of the conflicting parties. Strong personalities usually dominate and crush the conflict into oblivion by claiming their stake. More cooperative parties integrate their ideas and compromise for a “win-win” solution to the problem. Some subservient ones just oblige in spite of their own opinion to avoid conflict. Triandis & Suh (2002) agree that people in individualist cultures have more positive self-esteem (Heine et al, 1999) and show more optimism (Lee & Seligman, 1997) than those from collectivist cultures. On the other hand, people in collectivist cultures find it easy to establish intimate and long-term relationships (Verma, 1992) as opposed to those from individualist cultures who usually establish non-intimate and short-term relationships. 2. Power Distance (PDI) Power distance refers to the differing levels of power individuals possess. High power distance typically results in a greater sphere of influence of managers over subordinates. However, a high power distance does not necessarily ensure compliance or attitudinal agreement (Hofstede and Peterson, 2000). In theory, influence breeds respect between a manager and subordinate, and the subordinate will defer to the manager’s instructions. But complying with direction does not mean a subordinate agrees with nor respects a manager. It simply means that, in high power distance cultures, subordinates recognize the position of the manager as one of greater authority and power. According to Hofstede and Peterson (2000), “’superiors’ ability to use specific directions to shape compliance by employees who are reluctant to express disagreement is quite different from their ability to shape attitudes and beliefs” (pp. 407-408). Thus, power distance only measures a manager’s degree of influence but does not contend that managers have any actual effect on subordinates’ value systems. Creating an inclusive environment involves organization culture and culture change (Young, 2007). It takes re-evaluation of long-held beliefs and practices to accommodate such change. For instance, power distance may intimidate some minority groups from being participatory in the organization. In a typical hierarchal organization, the dominant groups control the resources and hold the power to set rules. Organizational change shortens the power distance form the top to the bottom of the pyramid (Young, 2007). 3. Uncertainty Avoidance (UAI) Uncertainty avoidance describes the reaction of a group to that which is different or unfamiliar (Hofstede and Peterson, 2000). Typically, those cultures that are allowed more freedom to define themselves as individuals experience a lower level of uncertainty avoidance, whereas cultures that stress conformity tend to experience higher levels of uncertainty avoidance. Culture and group formation themselves are the result of a desire to reduce uncertainty, as membership in a particular group defines value systems and provides a framework for behavior. 4. Masculinity/ Femininity (MAS) According to Hofstede and Peterson (2000), values typically associated with a particular gender have been part of social science research for decades. Hofstede’s work was the first to translate these gender-based values into a culture context. Cultures tending towards masculine values are associated with more ego-based principles, whereas cultures tending towards feminine values more closely associate with social goals. 5. Time Orientation of Goals (LTO) This pertains to what people prioritize in terms of time. Values such as thrift and perseverance (long-term) vs. respect for tradition, fulfillment of social obligations, and protections of one’s “face” (short-term) may be leveled depending on how the culture gives significance to it (Trompenaars & Hampden-Turner, 1997). This time dimension was not one of Hofstede’s original four – it was only developed in 1988. General Traits of the Swiss and Chinese A general understanding of cultural traits of the Swiss and Chinese people is necessary for harmonious cross-cultural relations to ensue if the business of Lindt (predominantly Swiss) will succeed in China. Chhokar, Brodbeck & House (2008) describe the Swiss people may be both collectivistic and individualistic at the same time. The may be comfortable being in groups yet also unwilling to give up their identity. They have a clear view of being embodied in social entities and society as a whole while still maintaining their own individuality and respecting autonomy and freedom (p. 268). On the other hand, the Chinese put so much value on “face” or “mianzi” in Mandarin, which means “dignity, prestige and reputation”. Their greatest fear is losing face so they go out of their way to be polite and accommodating to maintain their dignity. They try to avoid disputes, conflicts and embarrassment. They also value loyalty and keeping their word. They are a very clannish people and go out of their way to protect the reputation of their family (factsanddetails.com, 2010). Cultural Profiling of Swiss & Chinese Hofstede’s Dimension of Culture Switzerland China Power Distance 34 80 Individualism 68 20 Uncertainty Avoidance 58 35 Masculinity 70 50 Fig. 1 Hofstede Values of Switzerland and China (from http://www.geert-hofstede.com) Knowledge on cultural theories go a long way in understanding cultural differences among people in a multicultural environment. In analyzing how Swiss and the Chinese are different, managers should keep in mind the theoretical explanations of such. From the table, a wide gap in power distance scores is of persons in authority to be respected. It also implies that observed between Switzerland and China, implying that the Chinese perceive the powerful people as intimidating and that they need to comply to their authority while the Swiss may be more comfortable in the company of people in positions of power and do not get easily intimidated by them. The table also shows that the Swiss are more individualistic than the Chinese as shown in their scores. This implies that the Swiss are more comfortable working on their own while the Chinese value collective participation. It also indicates that the Swiss have a more independent nature and tend to take care of themselves and their close family but do not meddle in other people’s business. The figures also indicate how the Chinese are very family-oriented and need to belong since most of them come from huge clans. Also, being a communist country, there is a high level of collectivism that is why China ranks lower than any other Asian country in the Individualism ranking (Itim International, 2009). In terms of Uncertainty Avoidance, the table shows that the higher score of the Swiss imply that they may not very comfortable with things they are not familiar with while the Chinese are more open to learning more about unknown information. If a population has a high UAI index, it establishes several rules, laws, policies and regulations for its people to follow in order to reduce uncertainty. However, comparative to world values in which the average is 64, both Swiss and Chinese fall below it, so it may indicate that both countries may be more accepting of unique and unusual situations and ideas with greater tolerance of divergent points of view (Itim International, 2009) The Masculinity dimension has the smallest difference between the Chinese and the Swiss. However, the difference reflects that the slightly higher score of the Swiss implies that they value ambition, performance and fortune more than more socialized values such as quality of life, service and people-orientation. On the other hand, the lower score of the Chinese implies that they are more inclined to value people, character and society. The Swiss may be perceived to have more masculine traits such as being assertive, competitive, tough and results-oriented while the Chinese may be perceived to possess traits more associated with feminine ones such as being modest, cooperative, nurturing, tender and equity-oriented (Schneider & Barsoux, 2003). Possible Sources of Cross-Cultural Conflict Gauging from the Hofstede values of Swiss and Chinese, it would be easier to understand how their cultures will interact and hence, prevent possible sources of conflicts (Itim International, 2009). In terms of power distance, Lindt managers may want to be more equitable in relating with their Chinese employees, however, since the Chinese see people in positions of power as distant to them, they may maintain such distance in the professional relationship. With regards to individualism, the Lindt people may expect their Chinese employees to be able to independently work on their own while the Chinese may be more used to working as a team and may delay decision making until everyone has agreed to one. Uncertainty avoidance may be easier to deal with since both cultures may be open to new ideas and explore them together. They may also jive in terms of the masculinity values since their scores differ only slightly, but the Swiss may be more hard-driven and assertive while the Chinese may be more cooperative and compromising. Most conflicts that surface in intercultural settings are caused by miscommunication and misunderstanding. Managers must fully understand the ethical considerations of Swiss and Chinese, as they may be subject to interpretation. “The reason there are cultural differences is because there are differences in how the situation is understood. Almost everyone agrees that ‘ethics’ is doing the ‘right thing’ but how to reach an ‘ethical’ decision is open to debate.” (Brisbane Institute, 2005). Coming up with a final business decision depends on situational factors such as organizational goals, organizational codes of ethics, the legal environment and the perception of the other party. National culture influences these factors. Organizational goals may be set but people from different cultures may have different approaches in reaching them. The organizational code of ethics plays an essential role in the way a business is handled. Negotiators who are advised that the culture of the business they are interested in adhere to a code of ethics which is deeply ingrained in the workers and is expected to be practiced by everyone would think twice in using ethically ambiguous strategies to get ahead. “There will also be cross-cultural differences in how code of ethics are understood depending on the familiarity with, and tradition or longevity of, codes of ethics within individual business organizations.” (Brisbane Institute, 2005). In terms of merging two different cultures in one organization, so much more need to be considered when communicating about the company’s philosophy and goals. It is essential that no matter who they are, employees’ values must be aligned to the company’s. Differing values create conflict and will impede goal achievement. According to Mishra and Morrissey (1990), the following factors propagate trust: open communication; giving workers a greater share in decision making; sharing of critical information and true sharing of perceptions and feelings. This is consistent with the views of Eisenhardt (1989, 1990) who concludes that companies should reflect on three things when analyzing a group’s perception in planning and decision-making: the sharing of information, their current orientation in the company and take on the issues concerned, and their intuition. Management of Possible Cultural Conflicts It is vital that the source of conflict is examined. Personal backgrounds need to be studied to be able to understand where the conflict is coming from and to predict future behavior. Explaining differences in a non-threatening manner may just be the key, if conflicting parties are mature individuals (Mor Barak, 2000). Managing cross-cultural work environments entails much investment on the part of the managers. The following solutions are recommended to if long-term goals for the merging of the two diverse cultures are envisioned to be fulfilled. 1. Effective Communication The leaders of the company, Chocoladefabriken Lindt & Sprüngli AG should lay everything on the table on their plans of expansion of their business in China. A well prepared presentation on the detailed plans as well as a written document to supplement it should be provided to and agreed upon by the prospective Chinese associates. Any questionable detail should be brought up and discussed thoroughly to ensure that negotiations are acceptable to both parties. Management must be consistent in communicating to each worker its philosophy, mission and vision. Each worker should be able to feel that he is part of a great team that sets high goals and successfully attains them. Creating the conditions that engender knowledge transfer entails significant structural and cultural changes by top leadership, which will require leaders to be convinced that the benefits of knowledge transfer outweigh the costs. In the absence of this commitment, it is unlikely that attempts to increase knowledge flow will succeed (Burgess, 2005). 2. Knowing the Local Culture and Appointing A Credible Local Counterpart Still on maintaining effective communication and good faith with the Chinese, the Swiss managers should propose that they get to know the Chinese culture better to better understand each other in how Chinese live and conduct business. If not, it is inevitable that problems to disrupt the harmony of the business relationship and possibly the business operations will prevail. The Swiss managers must be aware of the local culture so they would know how to adjust. They should also invest in getting to know the the local employees. Next, among these locals, select and appoint members with English or German language capabilities to help the foreign counterparts learn the Chinese language. This willingness to learn the local language will be seen as a sign of respect for the Chinese colleagues and their culture (Michailova and Anisimova,1999). Another recommendation is to pay attention to how headquarters in Switzerland handles the communication flow with the Chinese subsidiary and rectify any erroneous practices to preserve harmony of communication and relationships between cultures. 3. Apply Top-Down Perspective in Decision-Making Although independent thinking is encouraged, a possible risk could be wrong decisions made by some local managers in China that could be costly to the business. This is not to say that the locals are not trustworthy, but it is best to hold the wheel especially in major areas of the business. It is recommended that when making decisions, managers need to be more open to apply top-down oriented techniques. The Swiss managers need to adjust to the host country’s known systems in management, and in terms of decision making, the Chinese respect decisions coming from top management even if they are left out in the process of arriving at the final decision. 4. Investment in Professional and Personal Development Swiss managers must be ready to invest in the professional and personal development of all their workers. Full-fledged diversity management, as opposed to a mere sensitivity training class, requires a radical upending of basic assumptions, patterns, and structures. Also, regular trainings and participation in seminars or enrollment in courses shouldered by the company (whether partial or full) may be perceived as part of the job, but it should be communicated to the employees that although application of their learnings will highly profit the company, ultimately it will redound to their own benefit. This knowledge from trainings is bound to increase their market value. 6. Regular Evaluation and Follow Up Being aware of diverse employees’ gripes and complaints as well as constructive suggestions may be brought up to the proper authorities and dealt with seriously. It should be made clear to the Chinese that regular evaluation of company performance should include the assessment and feedback of employees of their employers and employment. Managers should not be remiss in this duty of bridging communication or else employees may perceive management to be incompetent. “This negative perception could also lead to widespread problems satisfying other psychological contract obligations. This may be particularly troubling because it may often be the responsibility of an employees manager (acting as the organizations agent) to see that the individuals psychological contract is fulfilled.” (Lester, Clair & Kickul, 2001, n.p.) Should all precautionary measures and conflict prevention steps are followed, then there is no doubt that bringing a Swiss chocolate business company will thrive well in Chinese shores whose people’s preference for sweets will definitely embrace the business and products of Chocoladefabriken Lindt & Sprüngli AG! References Brisbane Institute, Business Ethics, 2005 Burgess, D. (2005) What motivates employees to transfer knowledge outside their work unit?. The Journal of Business Communication. Volume: 42. Issue: 4 Chhokar, J.S., Brodbeck, F.C. & House, R.J. (eds) (2008) Culture and Leadership Across the World: The GLOBE Book of In-depth Studies. Taylor & Francis Group, LLC Chinese Personality Traits and Characteristics (2010) Retrieved on December 3, 2010 from http://factsanddetails.com/china.php?itemid=116&catid=4&subcatid=18 Eisenhardt, K. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management Journal. 32 (3): 543-576 Eisenhardt, K. (1990). Speed and strategic choice: how managers accelerate decision making. California Management Review. 32 (3): 39-54 French, R. ( 2010), Cross- Cultural Management in Work Organisations; 2nd Edition. The Chartered Institute of Personnel and Development. Fundinguniverse.com (2010 Chocoladefabriken Lindt & Sprüngli AG, Retrieved on November 25, 2010 from: http://www.fundinguniverse.com/company-histories/Chocoladefabriken-Lindt- amp;-Spruuml;ngli-AG-Company-History.html Heine, S.J, Lehman, D.R., Markus, H.R., Kitayama, S.(1999). Is there a universal need for positive self-regard? Psychol. Rev. 106:766–94 Hofstede, G.(1994) Cultures and Organizations: Intercultural cooperation and it’s importance for survival –software of the mind, London: McGraw- Hill/ HarperCollins Hofstede, G. and Peterson, M. (2000) ‘National Values and Organizational Practices’, in N. Ashkanasy et al (Eds.), Handbook of Organizational Culture, Thousand Oaks, CA: Sage, 401-415 Itim International (2009) Geert Hofstede’s Cultural Dimensions. Retrieved on December 3, 2010 from http://www.geert-hofstede.com/ Khoo, G P. (1994) The role of assumptions in intercultural research and consulting: Examining the interplay of culture and conflict at work. Paper presented at Pacific region forum on business and management communication, David See-Lam Centre for International Communication, Canada, November, 1994 Lee, Y.T. & Seligman, M.E.P. (1997) Are Americans more optimistic than the Chinese? Pers. Soc. Psychol. Bull. 23:32–40 Lester, S. Clair, E, Kickul, J. (2001) Psychological Contracts in the 21st Century: What Employees Value Most and How Well Organizations Are Responding to These Expectations. Human Resource Planning. Volume: 24. Issue: 1. Michailova, S. & Anisimova, A. (1999) Russian Voices from a Danish Company, Business Strategy Review, 10 Issue 4: 65-78 Mishra, J., & Morrissey, M. A. (1990). Trust in employee/employer relationships: A survey of West Michigan managers. Public Personnel Management, Vol. 19, No. 4, winter 1990, pp.443-463. Mor Barak, M. E. (2000) “The Inclusive Workplace: An Ecosystems Approach to Diversity Management”, Social Work, Vol. 45, No. 4 Schneider, S. and Barsoux, J.L. (2003) Managing across Cultures, Prentice Hall. London Triandis, H.C. & Suh, E.M. (2002) Cultural influences on personality. Annual Reviews in Psychology, 53:133-60. Trompenaars,C. & Hampden-Turner, F. (1997) Riding the Waves of Culture; London; Nicholas Brealey; London Verma, J. (19920 Allocentrism and relational orientation. In Innovations in Cross- Cultural Psychology, ed. S. Iwawaki, Y. Kashima, K. Leung, pp. 152–63. Lisse, The Netherlands: Swets & Zeitlinger Young, C. (2007) “Organization Culture Change: The Bottom Line of Diversity” The Diversity Factor, Winter 2007/ The Changing Currency of Diversity Volume 15, Number 1 Read More