Title
- Cross cultural challenges between America and China
Table of Contents
1.
Introduction
Due
to globalization of world-trade, overseas investors are attracted towards
Chinese market. The trouble of cross-cultural organization comes into existence
as the collaboration between China & its culturally diverse foreign
associates keep on increasing at an exceptional rate. The study depicts views
on the common cultural dissimilarities between America & China through the
application of cultural dimensions of Hofstede. Moreover, it helps to
develop understanding regarding influence of these cultural dissimilarities on
their business activities regarding following concerns - supportive plans,
work-group characteristics, decision-making, motivation systems and conflict
management.
This
report is focusing on a global company from a western economy, i.e. America
contemplating a joint venture with a foreign partner in China and analyzing the
cultural difficulties that are likely to be encountered.
The
twenty first century paves the way for globalization in world-trade.
International trade faces various concerns due to cultural dissimilarities. The
survey was conducted in order to find out main challenge while pursuing
international business which revealed that cultural dissimilarities is one of
the topmost concern along with law, verbal communication, price competition,
time differences, knowledge, deliverance, overseas exchange and cultural
differences. Hofstede (2003) stated that there is a little in every nation
called 'management', but its significance varies to a bigger or lesser degree
from one nation to another.
It
may be taken into consideration that various global organizations have failed
because of ignoring cultural differences. Though, internationalization of the
world economy resulted in prospects for international alliance among various
nations but has also resulted in different challenges and
concerns regarding efficient management of associations with diverse
cultures.
Due
to increased significance of the China market in the global market, various
global corporations depicted their interest for entering Chinese market for
exploring trade prospects. They entered the vast market through joint ventures,
mergers or acquisitions which stimulated the requirement for study of cultural
dissimilarities in China. It was stated that severe challenges due to cultural
dissimilarities such as communication problem, raised probable transaction
costs, various aims and methods for collaboration and operations have resulted
various unsuccessful Sino-foreign collaboration projects. The main concerns for
the corporation willing to enter Chinese market are as follows:
Ø The
way to be aware of China
Ø The
ways to do trade with Chinese citizens
2.
Common Cultural dissimilarities
Being the largest market and almost certainly the
most attractive of all Asian markets is pursuing international alliances with
variety of overseas associates. Along with the FDIs from Asian nations,
the 2nd major investors are from North America while 3rd
major investors are from Europe. Therefore, it is important to study the
cultural dissimilarities between China along with its global trade associates
in North America and Europe.
For
explaining the variations between the West and China, Hofstede's four cultural
dimensions may be referred. Many researchers tried to explain the concept of
culture but Hofstede initially adopted a realistic way for problem-solving in
the field & associated culture with management. Hofstede (2000) defined culture
being a shared programming of the human mind, differentiating the individuals
of one group from other group.
Additional
study by Javidan(2002) recognized a 5th aspect known as longer
period orientation or lesser period setting. Hofstede (2001) stated that
through the comparison of few Western nations and China and these 5 aspects as
per their cultural dimension points, few faltering concluding statements can be
stated. Firstly, Western nations appear to be normally lesser (Canada 40,
United States of America 50, United Kingdom 30, France 70 and Germany 45)
than China (80) in power distance.
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