[Author’s name]
Intercultural Communication Challenges for an American Company that Moves Production to China
1. Introduction
In times of globalization companies are free to choose any location of their production, and those of them that are planning becoming international and enjoying economy of scale tend to locate production in cheap-labor countries disregarding how remote they are from headquarters, as labor cost savings are expected to exceed shipping costs. With high labor costs in the U.S., the American companies tend to move manufacturing to such destinations as China, Vietnam, India, Bangladesh etc.
Cultural differences are one of the issues that may undermine success of such moves, especially when the cultures are as dissimilar as American and Chinese are. The fact that big corporations with vast international experience often struggle to address the issue speaks loudly about its importance, while the companies, which start their international expansion should devote particular attention to cultural differences.
This work focuses on the culture-related challenges faced by Brown Casual Shoes, a thirty-year-old American shoes manufacturing company, which wants to internationalize its operations by moving production to China and entering Asian markets. Notably, the company has virtually no international experience, having been present on Canadian and U.S. markets only by now.
2 Identification of problems
Intercultural issues related to can be divided into three groups: cultural differences in general, verbal communication and non-verbal communication.
2.1 Intercultural issues.
De Fatima Oliveira (2013) emphasizes the impact of values and belief, which are constituent parts of every culture, on corporate life and cooperation in business. Religion has a particular impact on formulation of values and beliefs; there may some customs and traditions unrelated to religion, but still influencing behavior significantly – those, among other things could be dictated by historical background of a country. Disrespectful treatment of these values and beliefs may result in failure of cooperation.
2.2 Intercultural verbal communication issues.
Verbal intercultural communication may also be an obstacle – Chitakornkijsil (2010) points out that the danger of language barrier is underrated, as even if both sides speak one language, but one has learned English as a second language, miscommunication is still possible. Differences in manner of speaking may be an issue, too, but in that case differences are individual rather than national.
2.3 Intercultural non-verbal communication issues.
Finally, non-verbal communication, according to Waldman and Stowe (1993), includes eight different aspects when applied to business: body language, eye contact, use of personal space, perception of time, silence and use of business cards (147) with each of these aspects varying across cultures and influencing how business is or should be done. With 80 to 93 per cent of all messages being communicated in a non-verbal way, it is arguably the most important category of three; also, non-verbal communication to some extent must be determined by general culture – the values and beliefs, so these two categories are interconnected.
3. Literature review
3.1 Description of the model
Hofstede's «Culture's consequences» are the most famous, recognized and, on the other hand, crtiticized attempt to explore cultural differences empirically and to describe them in a numerical way. It is a pioneer work, which is based on the analysis of the responses of IBM employees in more than 70 countries and regions with total number of questionnaires being more than 116,000. The surveys were conducted between 1967 and 1973 and included wide range of questions on values, to which the respondents were supposed to attribute the scores.
Hofstede's main contribution is development five dimensions of national culture (the sixth one has been added recently):
- Power distance (PDI)
- Individualism vs Collectivism (IDV)
- Masculinity vs Femininity (MAS)
- Uncertainty Avoidance (UAI)
- Long-term Orientation (LTO)
3.2 Strengths
The points on the scale from 0 to 100 for these dimensions have been calculated for 76 countries (Hofstede, 2010), which, if to rely on the results of the research, has taken capability to compare cultures to a completely different level. According to his study, the following are the score for the U.S. and China:
Source: Geert Hofstede Website
3.3 Weaknesses
However, there is substantial criticism of Hofstede’s work with validity of his numerical indicators being questioned. For example, McSweeney (2002) refers to «Culture's consequences» in a very sceptical way, stressing, among other things, serious shortcomings of the methodology employed by Hofstede. There is plenty of issues which are attacked by McSweeney – sample sizes for some countries, unclear definition of 'nations' (Yugoslavia and its derivative countries are offered as an example (2002: 111)), selection of dimensions, presumed uniformity of nations (perhaps, the strongest argument) and huge differences in the responses within particular countries constitute the list of the weaknesses mentioned by the author, which is far from complete.
3.4 Other models
Hall’s high context/low context framework is a decent contribution to understanding cultural differences between Western and Eastern worlds in general and between the U.S. and China in particular. Low-context communication implies that most of information is ingrained into the verbal message, and little of it is associated with the context, while in high-context communication physical context is of greater importance. It is commonly agreed that U.S. culture is low-context, as opposed to Chinese, which is on the other extreme. There are four important implication of Hall’s framework emphasized by Zhao (2012: 1483): first of all, verbal messages are very important for low-context communicators; at second, low-context communicators find it difficult to impress their high-context counterparts; at third, high-context communicators are usually more adaptable to grasping non-verbal cues; and finally, high-context communicators expect other people to understand hidden messages, which is the reason why they tend to speak less in general.
Apart from these general studies, there is number of works that concentrate on particular issues of US-China communication. Nowak and Dong (1997) summarize these issues starting with language, continuing with what is related to Hofstede’s study (individual goals versus collective ones, attitudes to change and concepts of time) and finishing with more particular ones, such as greeting habits and approaches towards public speaking and interviews. Lianlian and Jones (2005) came up with set of observations regarding cultural differences in behavior in business setting – for instance, half of Chinese “believe that written agreements are not binding” (123); Chinese tend to honor deadlines more than Americans; Americans are more likely to hug a partner than Chinese, etc. Gao and Prime (2010) emphasized westernalization of industrial Chinese cities such as Beijing and Shanghai noticing the emergence of a new transnational culture. In spite of that, they believe that western managers should make a conscious effort in order to resolve language and cultural differences.
4. Case analysis
This section will focus on several cultural issues the shoe manufacturer Brown Casual Shoes faced during their first visit to China for establishment of production in the country. 4.1 Stereotypes about Beijing.
The option to approach potential partners in Beijing was dismissed by Mr. Brown due to a fairly ridiculous reason – being a capital of a country, which is infamous for its violations of human rights and far from democratic political regime. However, Beijing, as Gao and Prime (2010) showed, is one of the most business-oriented open-minded Chinese city, so ignoring this fact and dismissing the otherwise favorable option due to erroneous prejudices is a business mistake.
4.2 Language. It is exactly what Chitakornkijsil (2010) warns about: even though Chinese partners knew English well and made every effort to engage their guests in the conversation, Americans still felt pretty uncomfortable not being able to understand anything spoken around them. While Hofstede’s Uncertainty Avoidance scores suggest that it should not be much of a problem, it is obvious that American expatriates to China will feel way better should they participate in at least basic training in Chinese language.
4.3 Business cards.
It is not an accident that Waldman, L. and Stowe, J. (1998) included use of business cards into the range of important non-verbal issues. Indeed, treatment of business cards may say a lot about the attitude towards the partners and the project. While Americans exchange business cards not very often and do not pay much attention to them, Chinese may spend couple of minutes studying and memorizing information contained in them, which is one of the displays of their high-context culture.
4.4 Personal space.
“Gently grasping a forearm of Mr. Deng” might not be a very farsighted move, as Chinese tend to honor their personal space a bit more than Americans. It is supported by observations made by Lianlian and Jones (2012) – such familiarity may be the source of discomfort if not embarrassment.
4.5 Time orientation.
5. Recommendations
How can these issues be addressed? Gao (2010) emphasizes the advantages of intercultural training, and, indeed, there is hardly a better way to improve one’s potential for successful international communication.
5.1 Cultural awareness.
The first step is awareness of cultural differences, which hopefully would prevent Mr. Brown from behaving in almost the same manner he would have behaved on his turf; adaptation of behavior to peculiarities of another culture is a more advanced level. I would definitely advise Mr. Brown and his closest companion to go through this report and the works it referred to.
5.2 Stereotypes.
Getting rid of wrong stereotypes such as Beijing being an unfavorable place for doing business simply because it is the capital of the country with a long story of human rights abuse is an important step towards successful communication – again, stereotyping can be beaten by acquisition of relevant information about the country, which can be done through training.
5.3 Language.
The next step would be taking Chinese language courses for company representatives whose involvement in Chinese business will be constant. Knowing language at least on the basic level with prospect of future Chinese language skills development would be helpful for people who will be working there.
Brown Casual Shoes are lucky to have partners with experience of cooperation with American companies, so the initial errors are likely to be excused, but for successful cooperation adaptation is vital.
References:
Chitakornkijsil, P. (2010). Intercultural Communication Challenges And Multinational Organization Communication. International Journal of Organization Innovation, Aug 2010, 6-20.
De Fatima Oliveira, M. (2013). Multicultural Environments and Their Challenges to Crisis Communication. Journal of Business Communication, 50-3. 253-277.
Gao, G. (2010). The Effects of Intercultural Training upon the Organizational Performance of Multinational Corporations in China. International Journal of Business Anthropology 1-2, 97-115.
Gao, H, and Prime, P. (2010). Facilitators and Obstacles of Intercultural Business Communication for American Companies in China: Lessons Learned from the UPS Case. Challenges and Critical Junctures, 15-1. 143-166.
Lianlian, L., and Jones C.L. (2005). A Comparison of Business Communication in China and the U.S. with Implications for Business Educators. Delta Pi Epsilon Journal, 47-3, 113-127.
McSweeney B. (2002). Hofstede's Model of National Cultural Differences and Their Consequences: a Triumph of Faith – a Failure of Analysis. Human Relations, 55-1, 89-113
Nowak, L., Dong D. (1997). Intercultural Differences Between Chinese and Americans in Business. Business Communication Quarterly, 60-1. 115-123.
Waldman, L., and Stowe, J. (1998). Business Communication in Argentina. The Delta Pi Epsilon Journal, 40 (3), 145-157.
Zhao, B. (2012). Influence of Culture Differences on Sino-America Business Negotiations. US-China Foreign Journal 10-8, 1483-1488
