Cultural Differences

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ceHalmstad School of Business and Engineering

Rufei He & Jianchao Liu (2010)

Barriers of Cross Cultural Communication in Multinational Firms --- A Case Study of Swedish Company and its Subsidiary in China

Abstract
In times of rapid growth, both in terms of economic development and globalization, an increasing number of firms extend their businesses abroad. A subsequent challenge of this development is the managerial implications of cross-cultural management. This study employs a qualitative approach in a single case study of Swedish company and its subsidiary in China. After reviewing the previous studies, the authors summarize the differences of management style, staff behaviors and communication system in different culture context and find the barriers of cross cultural communication in multinational firms. The findings of this study indicate that the barriers of communication come from the national culture’s influence on the work place and behaviors of people with different identity. Moreover, culture also influences people’s way of thinking and behaving and result in different understandings toward vision and purposes of firms. Key words: cross cultural, communication, multinational firms, management style, staff behavior

Prelude
It is 9:00 a.m. on Monday in Sweden. The Technical product manager of company X sent an email about the new design of the product to its subsidiary company in China. He would like to have a production ready model of the new design by Friday when he flies to China. An email came on Thursday saying that there was a 1mm error of the product they made and asked the manager what they should do. The product manager finds himself confused: “Do they need to ask such a question? They could simply adjust the error and give me the model on Friday, why are they waiting for orders instead of taking initiatives?” (Swedish Technical and Production manager, 2010, see in Appendix III) It is 15:01 Monday in Shanghai. The Chinese R&D manager in Shanghai received an 1 / 32

Halmstad School of Business and Engineering

Rufei He & Jianchao Liu (2010)

email from the parent company in Sweden. The parent company asked for a production ready model of the latest design in five days. He called the production manager immediately. Three days later he got the new model but with 1mm error. He knew it would be better to provide a standard model. However, he decided to notify this problem to the Swedish manager first and let him to decide what to do. It is the Chinese way of showing their respects to superior by asking their opinions on everything. (Chinese R&D managers, 2010, see in Appendix III) The cases above illustrate some of the main issues of multi-cultural management during the process of international knowledge transfer. The management team has devoted both time and energy in efforts to solve the issues, yet fail to derive any effective solutions.

Introduction
Because of the globalization and the rapid development of economics, multinational firms are more and more prevalent. Intercultural communication presents a new challenge to managers. Culture, as Hofstede (1997, p. 4) states, is the “software of mind” that can influence people’s patterns of thinking and behaving. Mental programming influences people’s living and working all over their lives. For example, Sweden and China are immersed in different cultures which lead to different ways of thinking and behaving. When a Swedish company tries to understand the management style or behaviors of Chinese staff, some basic principles are challenged. For instance, Chinese feel that all men are born unequal and they should all obey the decision of the authority (Martinsons & Hempel, 1998). While Western people believe that all men are born equal and they can make independent decisions and act on their own (ibid). Ambos and Schlegelmilch (2008) argue that one culture may support certain type (or types) of organizations rather than other types, and...
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