Description
Business Process expert role, a precise definition of the term "business process" is never established. The term has been around for so many years and is used by so many people that everyone assumes a common understanding.
STUDY REPORTS OF SWEDISH AND CHINESE BUSINESS PERSPECTIVES
Summery
If you look out the window today you can observe influences from all over the world. It seems like the world has shrunken and accessibility has gotten a bigger impact. We are talking about globalization and it can be said to diminish the boarders and unite people all over and contribute to more interactions between different countries and cultures, which in turn will lead to new challenges for companies. More companies can therefore meet in different contexts and for instance a company from Sweden where production costs are comparatively high will be attracted to markets like the Chinese because of their comparatively low production costs. The culture differences between these two nations are wide and will therefore cause implications like cultural clashes or misunderstandings. This is where our interest of the subject grew and hence our research question is: "How can Swedes avoid incidents of a cultural descent when developing business relations with Chinese corporations?" The main purpose of this study is to get a better comprehension on how businessmen perceive cultural differences in situations where business relationships are essential and how they avoid such incidents. In addition we have in this study divided the main purpose into three subpurposes. These are: to gain a better understanding on how both Swedes and Chinese build relationships in business-to-business situations, to gain a better understanding of the differences in the Swedish and Chinese business culture, and to provide suggestions for Swedish entrepreneurs in becoming more aware of cultural gaps when entering the Chinese market. Our study is based on an hermeneutic approach. We have used an qualitative research strategy where our empirics are based upon seven semi-structured interviews with businessmen today resided in Sweden but have experience from Chinese business interaction. In addition both Swedish and Chinese businessmen have been interviewed to obtain a more balanced data. The contextualization we have made is aligned towards an individual perspective. Our theoretical frameworks consist of a wide range of theories such as: business relationships theories, relationship marketing theories, Guanxi theories, cultural theories, and culture clash theories. Based on our empirics we have been able to interlink many aspects to conclusions. These have mainly been differences in the two cultures, such as; difference in hierarchy level and how this has caused implications for Swedish businessmen. It was also showed that there are differences in approaching potential business proposals, where the Swedes tended to be direct in contrast to the Chinese who preferred a slower paste. In addition this study showed that what is referred to as Guanxi is far more linked to the Chinese culture than networking is in Sweden. For a Swedish business man these findings can help prevent incident of diversifying range but raise awareness of other cultural aspects that needs to be considered before going to China in business purposes.
Table of Contents
1. INTRODUCTION............................................................................................................................. 1 1.1 Background ....................................................................................................................................... 1 1.2 Research Problem.............................................................................................................................. 2 1.3 Purpose .............................................................................................................................................. 2 1.4 Limitations ........................................................................................................................................ 2 2. THEORETICAL METHODOLOGY ............................................................................................. 3 2.1 Choice of Subject .............................................................................................................................. 3 2.2 The Authors' Preconception.............................................................................................................. 3 2.2.1 Common Preconception............................................................................................................. 3 2.2.2 Theoretical Preconception.......................................................................................................... 4 2.2.3 Epistemological Approach......................................................................................................... 4 2.3 Perspective of the Thesis................................................................................................................... 5 2.4 Research Strategy .............................................................................................................................. 5 2.4.1 Qualitative Strategy.................................................................................................................... 5 2.4.2 Critique of Qualitative Strategy ................................................................................................. 6 2.5 Iterative Approach............................................................................................................................. 6 2.6 Secondary Sources ............................................................................................................................ 7 2.6.1 Critique of Secondary Sources................................................................................................... 7 3. THEORETICAL FRAMEWORK .................................................................................................. 9 3.1 Relationship....................................................................................................................................... 9 3.1.1 Relationship Marketing............................................................................................................ 10 3.1.1.1 The Commitment-Trust Theory........................................................................................ 11 3.1.2 Guanxi...................................................................................................................................... 12 3.1.2.1 Origin and Meaning.......................................................................................................... 12 3.1.2.2 The Dimensions of Guanxi............................................................................................... 13 3.1.2.3 Disparities with Relationship Marketing .......................................................................... 14 3.2 Culture............................................................................................................................................. 15 3.2.1 Mental Programs ...................................................................................................................... 15 3.2.2 Dimensions of Culture ............................................................................................................. 15 3.2.2.1 Power Distance ................................................................................................................. 17 3.2.2.2 Uncertainty Avoidance ..................................................................................................... 17 3.2.2.3 Individualism and Collectivism........................................................................................ 18 3.2.2.4 Masculinity and Femininity.............................................................................................. 18 3.2.2.5 Long- versus Short-Term Orientation............................................................................... 19 3.2.3 Chinese Culture........................................................................................................................ 19 3.2.3.1 The Concept of Face......................................................................................................... 19 3.2.3.2 The Concept of Time ........................................................................................................ 20 3.2.4 Organizational Culture............................................................................................................. 21 3.2.5 Cultural Clash .......................................................................................................................... 22 3.2.5.1 Cultural Shock .................................................................................................................. 22 3.3 Summary of Theoretical Frame....................................................................................................... 23 4. PRACTICAL METHODOLOGY ................................................................................................. 24 4.1 Semi-structured Interviews.............................................................................................................. 24 4.1.1 Selection of Participants........................................................................................................... 24 4.1.3 Practical Aspects of Interview ................................................................................................. 25 4.1.4 Criticism of Semi-structured Interview.................................................................................... 26 4.1.5 Presentation and Analysis of Interview.................................................................................... 26 4.2 Truth Criteria................................................................................................................................... 26
4.2.1 Credibility ................................................................................................................................ 26 4.2.2 Transferability.......................................................................................................................... 27 4.2.3 Dependability........................................................................................................................... 27 4.2.4 Confirmabilty........................................................................................................................... 27 5. EMPIRICAL PRESENTATION ................................................................................................... 28 5.1 Relationship..................................................................................................................................... 28 5.1.1 The Swedish Perspective on Relationship ............................................................................... 28 5.1.2 The Chinese Perspective on Relationship................................................................................ 29 5.1.3 Summary of Relationship......................................................................................................... 30 5.2 Business Relationship...................................................................................................................... 31 5.2.1 The Swedish View on Business Relationships ........................................................................ 31 5.2.2 The Chinese View on Business Relationships ......................................................................... 32 5.2.3 Summary of Business Relationships........................................................................................ 34 5.3 Culture............................................................................................................................................. 34 5.3.1 The Swedish Perspective on Culture........................................................................................ 34 5.3.2 The Chinese Perspective on Culture ........................................................................................ 36 5.3.3 Summary of Culture................................................................................................................. 37 5.4 Business Culture.............................................................................................................................. 37 5.4.1 The Swedish View on Business Culture .................................................................................. 37 5.4.2 The Chinese View on Business Culture................................................................................... 40 5.4.3 Summary of Business Culture.................................................................................................. 41 5.5 Cultural Clash.................................................................................................................................. 42 5.5.1 The Swedish View on Cultural Clashes................................................................................... 42 5.5.2 The Chinese View on Cultural Clashes ................................................................................... 44 5.5.3 Summary of Cultural Clash...................................................................................................... 45 5.3 Summary of the Empirical Presentation.......................................................................................... 46 6. ANALYSIS....................................................................................................................................... 48 6.1 Relationships ................................................................................................................................... 48 6.2 Business relationship....................................................................................................................... 48 6.3 Culture............................................................................................................................................. 49 6.3.1 The Dimensions of Culture ...................................................................................................... 50 6.4 Business Culture.............................................................................................................................. 51 6.4.1 The Dimensions of Business Culture....................................................................................... 52 6.5 Cultural Clash.................................................................................................................................. 54 6.6 Authors' analysis of the respondents............................................................................................... 55 7. DISCUSSION and CONCLUSION ............................................................................................... 57 7.1 Sub-purpose 1:................................................................................................................................. 57 Gain a better understanding of how both Swedish and Chinese build relationships in business to business situations............................................................................................................................. 57 7.2 Sub-purpose 2:................................................................................................................................. 58 Gain a better understanding of the differences in the Swedish and Chinese business culture.......... 58 7.3 Sub-purpose 3:................................................................................................................................. 59 Provide suggestions for Swedish businessmen on how to become more aware of the cultural gaps when entering the Chinese market .................................................................................................... 59 7.4 Conclusion and Suggestions............................................................................................................ 59 How can Swedes avoid incidents of cultural descent when developing business relationships with Chinese corporations?....................................................................................................................... 59 Our Suggestions ................................................................................................................................ 59 7.5 Further Research.............................................................................................................................. 60 REFERENCES APPENDIX A
Introduction
1. INTRODUCTION
This chapter provides an overview of the history of change in China, with a focus on globalization which leads to cultures coming closer together. The overview leads to a currently existing knowledge gap i.e. how Swedes could avoid incidents of cultural descent when doing business with China. Below the research problem is presented which has been derived from the existing knowledge gap. We additionally provide the readers with limitations in our study.
1.1 Background
Since 6,000 B.C. there has been a non-stop record of China's history. As one of the few civilizations to have survived this long, China has both seen days of glory and tougher days. During the last hundred years China has had a dramatic makeover going from having an emperor to becoming a socialist republic under Mao Zedong till today is being run by the Communist Party. But during the last 40 years China has made several reforms in the economic area and has started to be more industrialized (Tikka, 1999) and today it seems, wherever you turn, China is stealing the limelight everywhere because of their ongoing economic boom. Today we are living in an age strongly influenced by ongoing globalization, where the world has become smaller, we have better communication systems, and we have more availability of standardized products due to the ascendance of global corporations and global marketing activities (Potter et al., 2004). When the world is shrinking it will contribute to more interaction between different countries and cultures which could lead to new challenges for the companies. They would have to change their methods they use for the domestic markets due to the different cultural norms, competitive dynamics, and demographics that exist in the market abroad (Javalgi & Martin, 2007). Undoubtedly, there are both possibilities and risks to do business, not just across borders, but most importantly in different business-cultures. One of the most attractive factors for foreign corporations is the low production costs they currently have in China. More and more corporations want to establish their production or outsource to China. One way to illustrate that many multinational corporations today have production in China is just to look at how many of your clothes have the famous "made in China" tag. According to a Swedish trade report from 2006 Sweden has steadily increased both their investments and number of employees in China. There is also another trend currently taking place where small Swedish companies are moving to China and targeting the Chinese market (Swedish Trade, 2008). The fact that the interaction between Sweden and China also has grown becomes apparent when looking at the import/export statistics between the two countries. The exports to China have increased by 26% and imports increased by 22% last year (Statistics Sweden, 2008). When a firm is becoming a multinational company there are aspects that need to be identified in the host country that could impact the commitment to internationalization. Such factors are cultural distance, political, economic, technological, and market factors (Javalga & Martin, 2007). It is also important that the managers have a global mindset, i.e. that they acknowledge the interdependence of their company with the global economy. A global mindset is characterized by openness to an awareness of cultural diversity and market (Gupta &Govindarajan in Javalga & Martin, 2007), persons possessing this attribute are open minded and viewing the world from a broad perspective according to Arora et al. (in Javalga &Martin, 2007). -1-
Introduction
There are many complications that can occur when a company is trying to expand their business to another country. The managers then have to operate with a wide range of assumptions which vary in the different countries' culture. Trompenaars and Hampden- Turner (1997), state that it is important for corporations to gain an understanding to these premises in order to achieve their corporate goals. According to Usunier (2000), Swedish businessmen need to create personal relationships with important business contacts in China, in order to be successful. This type of networking is called Guanxi and is a part of the business culture in China and therefore is very important for a foreigner to understand (Worm 1997). There is a wide range of differences between cultures, e.g. Power Distance, Uncertainty Avoidance, Individualism/Collectivism to mention a few, and it is important that we recognize them and learn to use them for our advantage (Adler, 2002). Several studies have been made in order to help entrepreneurs who want to enter the Chinese market. However, they have mostly focusing on one aspect like Guanxi or problems for a specific organization. We then see the opportunity to contribute with a more complete information base for businessmen who are going to enter the Chinese market.
1.2 Research Problem
How can Swedes avoid incidents of cultural descent when developing business relationships with Chinese corporations?
1.3 Purpose
The main purpose of this study is to get a better comprehension of how businessmen perceive cultural differences in business situations where relationships are essential and how they avoid such incidents. To be able to achieve that we have divided our purpose in three different sub-purposes, which now will follow: Our first sub-purpose is to gain a better understanding of how both Swedes and Chinese build relationships in business-to-business situations. Our second sub-purpose is to gain a better understanding of the differences in the Swedish and Chinese business culture. Our third sub-purpose is to provide suggestions for Swedish businessmen on how to become more aware of the cultural gaps when entering the Chinese market.
1.4 Limitations
We have limited this study to only investigate how relationships and culture influences the cooperation between Swedish and Chinese corporations. Hence all the Swedish respondents in the empirical research mainly have experiences from doing business in China and the Chinese respondents all have experiences from conducting business with Swedes. Furthermore all out respondents were male, which is a result of our sampling method, and could therefore be seen as a limitation of the study.
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Theoretical Methodology
2. THEORETICAL METHODOLOGY
In this chapter we will first discuss the choice of the subject and which common theoretical preconceptions we as authors had before starting the research which might have affected the course of the study. The thesis has an individual perspective and we have used a qualitative research in order to conduct, interpret and analyze the data. Since we have gone back and revised the data several time during the study an iterative approach has been used.
2.1 Choice of Subject
Prior to writing this thesis both of us studied Service Marketing and Marketing Ethics together. During that time an interest for marketing arose for both of us which led our thoughts to coincide for a possible future paper. The idea of culture entered our minds after a discussion about how globalization links different cultures through business exchanges. With this in mind we wanted to combine parts of the marketing concept with culture and especially a culture with multitude differences from what we are already familiar with in our Swedish culture. Since one of us had extensive experience about China the subject of this paper quickly became obvious for us.
2.2 The Authors' Preconception
The research questions of a study are based on the writers' preconception of the reality that surround them but also how the writers' personally perceive their reality. Therefore to conduct any research without any preconception in that certain field can be virtually impossible (Bjereld et al. (2002). People relate to the reality differently and this is called a frame of reference. The frame of reference is part of everything we do because it limits what we see, how we think and ultimately how we as human beings act (Lundahl & Skärvad, 1992). With this in mind it is apparent that our frame of reference will influence the result of this study therefore is our preconception and views prior to this study important to disclose. The concept of preconception is a general term that has three dimensions which are: common preconception, the theoretical preconception and last but not least the epistemological approach (Johansson Lindfors, 1993). We will now present these in the same order starting with the common preconception.
2.2.1 Common Preconception
A person's common preconception is the same as firsthand preconception and refers to what an individual has gone through in his/her life, for instance his/her personal experience, societal influences, and education (Johansson Lindfors, 1993). In this section we share with our readers our firsthand preconception since it is of importance that we elucidate the factors that may have subconsciously affected our work. Let us start with our shared commonalities from our different backgrounds. We are both in our mid-twenties, have Swedish parents, have studied and lived for at least two semesters abroad (one of us has studied in China for a year and the other one year in France), and we have both been brought up in Sweden. Because both of us have studied abroad, and therefore have been in contact with other cultures for a longer period of time, we feel that we are in a position were we both can reflect upon our own Swedish culture and mentality but also how we are perceived by other cultures. This is very important given the purpose of our paper. One of us has both worked and studied in China for a duration of more than a year. The author has had an internship with a Chinese-American joint venture company for almost half
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Theoretical Methodology a year where he experienced the Chinese business culture up close. The other author has worked when studying in France in a project group with people situated in France and Chinese situated in Hong Kong. This has given her some experience of which obstacles that may arise working with the Chinese culture. One of the risks with a person having much extensive experience of China is that the objectivity can be questioned. However, this knowledge has not limited the depth or width of this paper because both culture and business are two concepts that go beyond this empirical knowledge. Also the theories used within these two fields require a more analytical insight which had made both of us to view it from a different perspective. With this in mind we have tried to find a balance between the two of us to prevent subjectivity as far as possible.
2.2.2 Theoretical Preconception
The theoretical preconception is also called second-hand preconception and refers to the experience we obtain about theories or viewpoints in textbooks, scientific reports or lectures (Johansson Lindfors, 1994). According to Gummesson (1985) humans need help obtaining experience of things which we have not yet any knowledge of. When knowledge is not possible to obtain on a first hand base we will require help by learning about other people's descriptions and interpretations. We have obtained our theoretical preconceptions mainly by studying at the Umeå school of Business where we both have studied Marketing at an undergraduate level. This has given us an insight of marketing which we have been able to apply here and it has therefore contributed to our paper. These theoretical preconceptions are wider than a basic knowledge but we do not feel it has clouded our judgment and affected our paper in a certain direction.
2.2.3 Epistemological Approach
As mentioned above, the third and last dimension of preconception is the epistemological approach. Epistemology can be explained as the nature of knowledge (Fisher, 2004), and as a branch within scientific theories, deals with our preconceptions about obtaining knowledge about the world (Svensson & Teorell, 2007). Two of the most common approaches today within this field are positivism and hermeneutics (Johansson Lindfors, 1993). Andersson (1979) describes positivism and hermeneutics as two diametrically opposite approaches or outlooks of life. Positivism has its origin from natural science and the researchers' goal has been to formulate laws to account for physical phenomenon. The predecessor for natural science researchers has been mathematics because it is built on absolute universality (Andersson, 1979). In the positivistic approach the most important way to reach knowledge is through observing the reality in natural situations or through experiments from an objective position (Hartman, 2004). Hermeneutics have on the contrary a more holistic view of reality where these pieces need to be understood in their context (Johansson Lindfors, 1993). Hermeneutics has its origin from medieval interpretations of the bible. These interpretations were used as a means to clarify the bibles view of our creation (Hartman, 2004). With time, hermeneutics developed from just being applicable on bible transcripts to a common methodology for human science (Patel & Davidsson, 2003). Unlike positivism, hermeneutics does not try to explain how the world is but rather how the world is perceived by its people. This conception cannot be measured; instead the behaviour of mankind needs to be interpreted in order to reach comprehension (Hartman, 2004). Today hermeneutics stands for a scientific approach where one studies, interpret and tries to understand the very foundation of human existence (Patel &Davidsson, 2003).
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Theoretical Methodology
In our paper we are studying how incidents of cultural descent can be avoided for Swedes in business to business cases when dealing with the Chinese. We will conduct several semistructured interviews of which the gathered information will be interpreted from its context. This aligns our paper with a hermeneutic approach because of the interpretative context. Metaphorically speaking; instead of asking why something exist we want to understand the how the existence is perceived. This is unlikely to discover when using a positivistic approach instead it needs to be interpreted from a social science perspective just like the hermeneutic is based upon. In addition we can identify our paper with a hermeneutic spiral which stands for a symbol of the interpretation and comprehension process. This basically means that phenomena will be subject to interpretations and re-interpretations so that it can be placed in a bigger picture making the knowledge more intrusive (Johansson Lindfors, 1993). It should not be forgotten that we as researchers will be approaching our research objects, i.e. our respondents, subjectively. Our preconceptions, our impressions, our thoughts, our emotions and knowledge should not be seen as an obstacle but rather a possibility in the interpretative process for understanding our respondent (Johansson Lindfors, 1993).
2.3 Perspective of the Thesis
Our thesis was written from an individual perspective and the purpose of the paper was not to elucidate gaps between the Chinese and Swedish business and culture, on an organizational level, but rather emphasizing these differences on behalf of an individual level, to avoid incidents. From this perspective contextual factors could be drawn and they are very important to investigate in order to understand business situations where cultural aspects are vital. This reasoning was also in line with how we have built our research question. A more thorough explanation on our research strategy will now follow.
2.4 Research Strategy
Research strategies can broadly be divided into two categorise; qualitative and quantitative. The latter one is characterized by the usage of quantitative measures in the collection and interpretation of data and has normally a deductive approach. This type of approach is employed when theories are to be tested. The qualitative strategy, on the other hand, emphasizes the use of discourse as a mean to collect and analyse the data. The approach is normally inductive and stresses the emergence of theory through research. Since qualitative strategy is associated with hermeneutic approach and constructivist view to knowledge the social reality is seen as constantly changing and is emerging through the construction of the social individual actor (Bryman & Bell, 2005). The purpose of this study was to develop a better understanding of how Swedes can avoid incidents of cultural descent that can occur when building business relations in China to provide Swedish companies with suggestions on how to prepare them for the cross-cultural interaction. We believed that this purpose was best fulfilled using a qualitative research strategy. Below we discuss the choice and implications more in detail.
2.4.1 Qualitative Strategy
Our researched problem in this study was, "How can Swedes avoid incidents of cultural descent when developing business relations with Chinese corporations? " Through this research we aimed to gain a better comprehension of how both Swedish and Chinese businessmen perceive cultural differences in business situations where relationships are essential. When this is fulfilled we can provide Swedish managers suggestions on how to -5-
Theoretical Methodology prepare for launching their business in China. The focus was to understand both parties and therefore was an in-depth study necessary and as Blomer (in Berg, 2001, pp. 8) suggests; meaning is derived from "social processes of people or groups of people interacting". In this study we wanted to acknowledge people's behaviour to understand the cultural settings that have consequences on their relations. It was our opinion that a quantitative method would not be able to capture the nuances of people's beliefs and actions. Our wish was to congregate unique responses from people from different background and experiences from working with Chinese or Swedish counterparts. We believed that they could help us identify the cultural gaps that need to be dealt with in these kinds of business situations. When using a qualitative design with a constructivist view the concern lies with how the interview participants actively create meaning. It is important to remember that you, as a researcher, are seen as an important research tool when it comes to collecting qualitative data, i.e. that the qualitative data not are restricted to any certain method to provide the collection. This means that anything you see or hear through which-ever feasible data-gathering (such as observations, casual conversation or a formulated interview) could be valid (Maxwell, 2005). Since we wanted to get knowledge of people's behaviour it was important to us to understandnot only how they act but also why they act the way they do. To gain such understanding we had to build a good relationship with the participants in order to get sufficient access to answer our research question (Maxwell, 2005). The method we chose to use, within the qualitative research strategy, was semi-structured interviews where we were able to pose open-ended questions and be flexible in the order of questioning and also be able to add additional questions (Saunders et al., 2003). It was the informal atmosphere we wanted to create in the semi-structured interview, which we believed would allow us to get to know the respondents and through that understand from which context they draw their opinions (Bryman & Bell, 2005).
2.4.2 Critique of Qualitative Strategy
Even though there are many advantages to use a qualitative research strategy, however, we also had to identify the constraints and disadvantages. For example many quantitative researchers are arguing that qualitative researchers often risk being biased, i.e. subjective in their research, when bringing in their beliefs and perceptions in the study (Maxwell, 2005). A quantitative method could also make a broader generalization thanks to its larger sample collection. It is very difficult to draw generalizations from a small sample like the one we have. Sometimes in qualitative studies it could be a lack of transparency where it is difficult to get an insight in how decisions on the study's set-up and choices regarding the interviewees have been made (Bryman & Bell, 2005). We have tried to alleviate these problems by attempting to be as neutral and transparent as possible.
2.5 Iterative Approach
As mentioned before, qualitative research strategy is usually associated with an inductive nature, which significates that generalized conclusions are drawn on observations. However, this paper follows an iterative approach when it carries aspects from both inductive and deductive design. After following out the phase of theoretical reflection on a set of data, the researcher may need to collect further information to be able to establish the conditions in which the theory will and will not hold (Bryman &Bell, 2005).
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Theoretical Methodology We started our study with an inductive approach by searching for relevant theories for our research problem and then narrowed it down when conducting our interview guide. Based on our theoretical findings we were able to extract five themes that we used both for the interview guide and our analysis. When formulating the interview guide we took a deductive approach. After the data was collected we turned back to the theories we had and added theories that had not been covered earlier and withdraw parts that were less relevant in relations to the collected results. In the analysis passage we discussed which theories that were strengthened and which did not fully correspond to our empirical study. Our reason for this was to provide evidence for existing theories and also to see if some did not apply. Furthermore, we wanted to keep our study open to new concepts and ideas that could come forth in the collection of data and add them as we went along, by constantly developing and refer back to our theoretical framework.
2.6 Secondary Sources
In our study we were using both primary and secondary sources. The former we obtained through our interviews and the latter we obtained from already existing information, such as books, articles and information on the internet, which could be either theories or secondary data (Bryman & Bell, 2005). In our research we have only used other theories as secondary sources. Some argue that it is preferable to use primary data to the greatest extent possible but consideration should be made to the time and money the researcher are able to put in. There are also many secondary sources which have a high standard and therefore could be more useful to use than doing the study oneself (Bryman & Bell, 2005). In our information gathering we used research articles, books and some electronic sources. The search for information was conducted mainly through the Umeå University's library. The books we used have been found through ALBUM and the articles mainly through the databases Emerald and Business Source Premier. In the databases we used search words such as; "relationship", "business relations", "Relationship Marketing", "Guanxi", "culture", "business culture", "culture clash", "face" etc to find relevant material to use in the theoretical framework. Many of these were categorized after title and words shown in the abstract and gave a variety of hits, but most of the searches yielded in at least one or two relevant matches. When searching for literature which included information concerning qualitative research methods we also mainly used ALBUM through Umeå University's library. The key words this time was "qualitative research", "qualitative research design" and "semi-structured interview". Some searches were also made through search engines, such as Google, and web pages such as the Swedish bureau of statistics, to find relevant background information
2.6.1 Critique of Secondary Sources
When collecting data some criteria have to be taken considerations to, i.e. reliability and validity, which means that the data should be accessed through reliable sources, be related to the study and be accurate. To prevent the material from garble it should be presented as close as possible to its original form (Mason, 1996). To prevent reliability and validity problems we have tried to go to the original source and if that has not been possible we have critically perused the sources to determine if the they are authentic enough. It could also be difficult to have real control over the data quality when using secondary sources (Saunders et al. 2003). The sources we have used in this study are mostly peer reviewed articles and books that have been cited several times by others. We have as much as
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Theoretical Methodology possible tried to find the original source to prevent the misrepresentation that may occur when someone is referring to a source in another context. Furthermore, we have in our study used culture theories based on Hofstede´s work. These theories about culture can be hard contextualising from because Hofstede has in his findings generalized to a wide extent. The applicability of his theories can then be question and should be used with moderation. We are aware of this problem and when we have applied his theories we have done it where we see it fit and then used it with a good judgement.
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Theoretical Framework
3. THEORETICAL FRAMEWORK
Our theory chapter consists of two main parts where we in the first aims to give the reader the relevant theories about relationships and also show the differences between Relationship Marketing and Guanxi. This will give us a better understanding on how relationships in businessto-business situation can look like. In the second part we present theories concerning culture to be able to answer our second sub-purpose. There will be theories brought up concerning the cultural dimensions, Chinese culture, organizational culture and cultural clashes. FIGURE 3.1: The Study's Theoretical Framework
Relationship Marketing
Mental Programs
Uncertainty Power Distance Unvcoeidtai nnctey Ar Avoidance Individualism / Collectivism Cultural
Relationship
Guanxi
CommitmentTrust
Culture
Culture Clash
Dimensions
Masculinity / Femininity
Organizational Culture
Chinese Culture
Short- vs. Long-Term
Time
Face
3.1 Relationship
According to Daun (1998) the most important aspect of grasping and understanding what is Swedish mentality and not Swedish mentality occurs through social relationships, this is something that occurs between different groups of people like immigrants and natives or within social relationships across nations. Daun (1998) believes that culture will be formulated within joint relations. Therefore it is very important that we define and present the frameworks of our paper so it stands clear and also so we can avoid discrepancy. There are many definitions of a relationship and the word relationship will have a different significance depending on interpreting researcher. Håkansson and Snehota (1995, pp.25) defines a relationship as: A mutually oriented interaction between two reciprocally committed parties. This definition is easy to grasp but not very elaborative because it does not tell what kind of requirements that needs to be in play for a relationship to maintain. Morgan and Hunt (1994) further elaborate this by being more specific in their criterion of what actually constitute a successful relationship. Their criterion is: Trust and commitment are the central concepts to maintain a long term relationship between two parties.
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Theoretical Framework With this in mind, a successful relationship is built on mutual interest with foundations of trust and commitment. We shall also bear in mind that the authors here are defining and stating their opinion from a western societal perspective. This is important to remember because the Chinese might interpreter the word relationship differently from the western world. Morgan and Hunt (1994) also state that the success of the term Relationship Marketing depends on the presence of relationship commitment and trust. With this in mind we will now look further into what Relationship Marketing is.
3.1.1 Relationship Marketing
To understand Relationship Marketing (RM) it is important to understand how marketing has evolved. Gummesson et al. (1997) describes the term Relationship Marketing as a new, and yet something that represent an old phenomenon. If we go back in history, one can say that for the past 40 years marketing mix management has dominated our theories, research and practise. Focus has been on transactions in a short-time perspective but now it appears that a paradigm shift in marketing is leading us into what is referred to as Relationship Marketing (Grönroos, 1994). The difference between transactional marketing which is based on marketing mix and Relationship Marketing is tremendous. To understand what the difference is between the two terms we will apply a table that has been conducted by Grönroos (1991). This table is important because it shows both the disparities between the two terms, transactional marketing and Relationship Marketing but also give a specific picture of the two. TABLE 3.1: The Strategy Continuum - Transaction vs. Relationship
As suggested by the table above Grönroos (1991) concludes that other factors than the time perspective are also important to understand this paradigm shift. To name a few these are factors such as price elasticity (RM tend to be more tolerant towards changes in price), measurement of customers satisfaction (shifted towards a more direct approach), and customer information system (RM are more susceptible to what the customers think).
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Theoretical Framework According to Healy et al. (1998) both Nordic and US researchers have helped build the foundation and thereby been part of the development of Relationship Marketing. To answer one of our previous questions: What is Relationship Marketing? Based on the continuum above and further research Grönroos (1996 p. 11) definition is: "Relationship Marketing is to identify and establish, maintain and enhance relationships with customers and other stakeholders, at a profit. So that the objectives of all parties involved are met. This is achieved through mutual exchange and fulfilment of promises." To sum up, Relationship Marketing refers to identifying an object or a person within a business. Hypothetically let us picture a corporation in need of a new supplier for their end product. For arguments sake let us assume that these two companies have a desire to work in a long-term. If the corporation has a genuine interest in the supplier's goods then they will try to establish a relationship with either a sales manager or the chief executive producer of the supplying firm. After establishing a relationship with either one, the corporations will try to negotiate a deal that is profitable for them. The supplier will only sign up to sell their goods if it is profitable for them as well. The exchange can therefore have a mutual outcome by being profitable for both parts. The actual transaction can then be completed but since both companies aim to survive in a long-term perspective more can be gained by enhancing a relationship, for instance by upholding promises especially with a long-term costumer. If we relate this to how we defined a relationship it becomes clear that the fulfilment of promises requires that both trust and commitment are the pillars to maintain a long-term relationship in this business context and this brings us to the Commitment -trust theory. 3.1.1.1 The Commitment-Trust Theory Fascinated by what factors influences a successful business relationship Morgan and Hunt (1994) have created a theory for establishing it. According to them: "Commitment and trust are 'key' because they encourage marketers to: (1) work at preserving relationships investments by cooperating with exchange partners. (2) resist attractive short-term alternatives in favour of the expected long-term benefits of staying with existing partners, and (3) view potentially high-risk actions as being prudent because of the belief that their partners will not act opportunistically." To clarify, when both Commitment and Trust appears it leads to cooperative behaviours that constitutes the very foundation of what Morgan and Hunt (1994) believes Relationship Marketing success is built on. In such a situation it can promote productivity, efficiency, and effectiveness. To understand this theory it is important that it remains clear what is meant by commitment and trust. According to Morgan and Hunt (1994) Relationship Commitment is: "An exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it; that is, the committed party believes that the relationship is worth working on to ensure that it endures indefinitely." Their conceptualisation of Trust it is: "existing when one party has confidence in an exchange partner's reliability and integrity." This theory is very fundamental and simple but is also very limited and does not distinct different levels of Relationship Marketing. It is however, a very important base in order for us
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Theoretical Framework to understand the fundamental aspects of how western societies build relationships versus the Chinese way of building relationships. According to Johnson and Seines (in Zeithaml et al 2006) there are four stages of customer relationship; Strangers, Acquaintances, Friends and Partners. These different levels can be compared to a ladder where each step up, starting from a stranger, symbolises a gradual increased interaction with your customer. From a time horizon the Stranger step represents the start of a relationship whereas the ultimate step, the Partner step aims at an interaction with a long time horizon. This makes the Partner step correlated with previous Relationship Marketing theories we have shown above. What is important with this typology is that not every customer can reach the highest step, the Partner step. In order for a customer to reach the highest step he/she needs to be profitable for the corporation in order for the corporation to invest in him/her as a customer. It is in the Partner step that Trust and Commitment are necessary. It should not be forgotten that this is a process that takes time to develop (Johnson & Seines in Zeithaml et al. 2006).
3.1.2 Guanxi
According to Bjerke (1998) Guanxi can be translated to "relationships" or "connections", but it is not as simplistic in nature because the Chinese read more into it. In order to best describe this concept one needs to understand more about Chinese culture because Guanxi has had, and still has, a profound significance within the Chinese way of life. According to Geddie et al. (2005) Guanxi is more than conducting business because it applies to all other interaction between people. 3.1.2.1 Origin and Meaning Relationship building through Guanxi had a very important protective function in traditional China because there were no institutions to rely on for welfare on the individual level (Worm 1997). Basically to ensure the health and survival of your family individuals had to build networks with people with resources of some sort, people with whom you could exchange favours. In the traditional Chinese family a person or a family member is from a moral perspective expected to use his/her connections to improve the welfare for both family and relatives. It is a reciprocal obligation to aid and help any member of the family and this view is influenced by Confucianism. It is for this reason Guanxi is interpreted as one of the most significant cultural traits by the Chinese people. Normally Guanxi is built and established amongst people with shared common attributes. These can be commonalities like old friends, people from the same village and classmates. One of the reasons why Guanxi is so important even today is because China is not yet a free market economy and this hinders resource allocations of different market mechanisms (Fang 1997). This situation helps preserve Guanxi as an incentive for doing business and it is apparent that without Guanxi it is almost impossible to achieve something in contemporary China (Davies et al. 1995 in Fang 1997). One problem with Guanxi is that it goes back so long in history that it is hard determining what it actually stands for. In the study made by Geddie and DeFranco (2005) they reviewed over 70 similar definitions of Guanxi. The fact that Guanxi also has different connotations makes it even more equivocal and complex. To clear this ambiguity we will in our paper refer to Guanxi as: "A particularized and personalized relationship based on the reciprocal exchange of favours. Examples of favours include preferential treatment in dealings, preferential access to limited resources, and increased accessibility to controlled information (Lee et al. 2005)."
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Theoretical Framework Using this definition Guanxi refers to specialized relationships on a personal and not organizational level. According to Ordóñez de Pablos (2005) the advantages of Guanxi can be applicable for an organization but Guanxi still relies on a dyadic face to face relationship on an individual level. In other words a company can gain from one individual's Guanxi network. The exchanging favour part is based on the human obligation which we previously mentioned, and is the norm for interpersonal relationships which relies on reciprocity. This norm of reciprocal favours is called Renqing in Chinese (Lee et al. 2001). Here the reciprocity refers to people being able to make unlimited demands on each others and to give back is part of the rules of conduct in China. In cases where one individual refuses to reciprocate a favour he/she will automatically lose Face which can be linked to getting a bad reputation and feelings of shamefulness (Worm 1997). According to Hoon-Halbauer (1994) the phenomenon of losing Face is the worst thing that can happen to anyone in China (more about this concept later). In order for this system to function there is a need for a deep trust (Xinyong in Chinese) within the relationship, and good Guanxi is said to promote the growth of trust according to Ordóñez de Pablos (2005). 3.1.2.2 The Dimensions of Guanxi In addition Guanxi can be separated into three different dimensions. These dimensions are Expressive Ties, Mixed Ties and Instrumental Ties. For readers to get a holistic view of these different types of Guanxi we will present a table framework underneath. TABLE 3.2: The Dimensions of Guanxi
According to table 3.2 Expressive Ties refer to stable and permanent relationships which are based on norms of equality between all people. These Expressive Ties are characterized as being emotive and personalized which limits their usability to a family or relative base. The second Guanxi dimension, Mixed Ties can best be described as business relationships amongst strangers. Reciprocity of favours (Renqing) and saving Face are the two most important norms in this dimension. The third and last type of Guanxi is called Instrumental Ties. This dimension lack stability and is therefore more temporary which makes it more impersonal and practical. The relationship norm in Instrumental Ties is based on equity. This type of Guanxi is more similar to western transactional marketing because of its short time horizon. However, the boundaries between Mixed- and Instrumental Ties are transcendent which makes it possible for a person to go from an Instrumental Ties position to a Mixed Tie position or vice versa (Lee et al. 2005). In our paper we will from now on focus on Mixed Ties because this dimension coincides with the rest of our Guanxi theory. Expressive Ties are as already noted within the family which makes it uninteresting for our study and Instrumental Ties are too transactional in their state which also makes it irrelevant.
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Theoretical Framework Guanxi can be very useful and positive because it makes it easier to get limited information or resources, receive privileged treatment in negotiations, as well as providing protection from external menace. These factors are especially important in an establishing state for a company therefore Guanxi is most relevant in the initial state for a corporation. Negative aspects of Guanxi can, at least from a western perspective be the favouritism and nepotism aspects (Lee et al. 2005). These negative aspects are particular hard to comprehend in the west because western societies can have more developed welfare systems. In fact, in China nepotism is not always viewed as something negative because of the strong family ties. The autocratic traditions have also contributed to this view on nepotism (Worm 1997). 3.1.2.3 Disparities with Relationship Marketing According to Geddie et al. (2005) one distinction between Guanxi and Relationship Marketing is that Guanxi focuses more on the process of building a relationship before any transaction will be discussed. Then when a transaction occurs it is after a relationship is fully built and in this stage the people or corporations involved in the affair are seen as a cooperative unit. In Relationship Marketing the process is just the opposite since focus lie with negotiating and proceeding with a transaction and afterwards building a relationship. When applying this concept, two companies involved in an affair are seen as a partial set and will not reach a cooperative state (See figure 3.2). FIGURE 3.2: Comparison between Relationship Marketing and Guanxi
In sum, this theory from the Guanxi perspective emphasizes the need for time and patience as key factors when establishing a relationship. If there is time for the relationship to grow the interaction between two companies is believed to be stronger than the western Relationship Marketing theory, and the result will be a cooperative unit rather than a partial set of linked interactions between two companies. According to Lee et al. (2005) western corporation needs to limit their opportunistic behaviour and see the long term interest. As pointed out above the Chinese need to build a relationship before they can proceed with a transaction. It is a case of perspectives and just as Vanhonacher (2004 p .49) claims:
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Theoretical Framework "In the west relationships grows out of deals. In China deals grows out of relationships"
3.2 Culture
"Culture is generally invisible and, when visible, we usually see it as causing problems. " (Adler, 2002, pp. 108) In the second part of our theoretical framework we will now more thoroughly explore what culture is and how it can affect an organization. In organizations today, people rarely believe that cultural diversity is beneficial (Adler, 2002). However, we see the importance of being aware of the different aspects when companies become multinational. When studying culture the most referred authors were Hofstede and Trompenaars and Hampden-Turner. We will therefore mainly base our theories on these authors but will also use other authors who have reached interesting results in their studies. However notice should be taken to that both Hofstede's and Trompenaars and Hampden-Turner's research are made from a westernized perspective. Therefore, we also have a part concerning Chinese culture where other authors have a more developed research. The different parts that will be dealt with in this section are first theories concerning Mental Programs. This will give a foundation for the other theoretical parts to come which are; the Cultural Dimensions (i.e. Power Distance, Uncertainty Avoidance, Individualistic and Collectivistic, Masculinity and Femininity, and Long- versus Short-term Orientation), Chinese Culture (i.e. the concept of Face and Time), Organizational Culture, and finally Cultural Clashes.
3.2.1 Mental Programs
According to Hofstede (2001) we are all following certain Mental Programs that are shown through the assumptions of people behaving in similar ways in similar situations. These Mental Programs cannot be directly observed. The only parts that can be observed are the behaviour, words and deeds. To try to grasp the essence of what Mental Programs are it could be seen as constructs. A construct is an intangible that is a product of our imagination, supposed to help our understanding. Every person's mental programming is partly unique and partly shared with others. Making a broad distinction of the Mental Programs three levels are shown, i.e. the universal level, collective level and the individual level. The most basic is the universal level that is the biological operating system of the human body and is shared by almost all humankind. This level includes a range of expressive behaviour, such as weeping and laughing, aggressive and associative behaviours. The collective level is shared by some people but not all and it includes the language, the deference to elders, the physical distance from other people to feel comfortable, perceptions of general human activities such as eating and making love and the ceremonies surrounding them. The individual level of human programming is the unique part where no two people are programmed the same way. This level consists of the individual personality which provides a wide range of alternative behaviours within the collective culture. (Hofstede 2001)
3.2.2 Dimensions of Culture
There are several different definitions of culture and we will now look at some of them. Hofstede (2001, pp. 9) define culture as: "the collective programming of the mind that distinguishes the members of one group or category of people from another".
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Theoretical Framework According to Trompenaars and Hampden-Turner (1997) culture is something that no-one bothers to verbalise and is beneath our awareness. They state that: "Culture is the means by which people 'communicates, perpetuate, and develop their knowledge about attitudes towards life. Culture is the fabric of meaning in terms of which human beings interpret their experience and guide their action." (Geertz in Trompenaars & Hampden-Turner, 1997, pp. 24) To this Trompenaars and Hampden-Turner (1997) add that culture is a shared definition of a situation by a group. Brown (in Adler, 2002, pp. 16) elucidates the concept of culture further, where he states that culture is:
• "Something shared by all or almost all members of some social group • Something older members of a group try to pass on to younger members • Something (as in the case of morals, laws, and customs) that shapes behavior, or?
structures one's perception of the world" We see these three definitions as clarifications on each other and will therefore have all of them as reference when we continue our theoretical review. The three most common ways of describing culture manifestations are values; symbols, heroes and rituals. The symbols, such as words, gestures, pictures and objects, often carry complex meaning only recognized by the people who share the same culture. Heroes serve as models for the culture and are persons, alive or dead, real or imagined who possesses characteristics that are highly prized in a culture. Rituals are carried out only because of its own sake since they are collective activities that are unnecessary to the final achievement of desired ends, they are considered socially essential within the culture and are keeping the individuals bound within the norm of the collectivity. Another important aspect is the practice where an outsider can clearly observe the different categories however their cultural meaning are invisible and can only be interpreted by an insider (Hofstede 2001). Where Hofstede (2001) uses an onion as a metaphor to describe culture Trompenaars and Hampden-Turner (1997) are also talking about different layers of culture. They define them as the outer layer, the middle layer and the core. The outer layer consists of explicit products such as symbols and observable realities of a deeper level of culture (e.g. language, food, monuments, agriculture and fashions). In the middle layer the norms and values are reflecting deeper levels of individual groups. The norms are what a group believes are "right" or "wrong" while the values determines what is "good" or "bad". The core is the assumptions about existence where the most basic value is survival. Since different groups of people have developed in a wide range of different geographic regions, they have found the most effective problem- solving processes in order to survive. Changes in culture occur easiest when people realize that they have to solve problems in a new way when survival is at stake (Trompenaars &Hampden-Turner, 1997). The word culture is usually reserved for societies but can also be applied on any human category or collectivity; e.g. an organization, a profession, an age group, an entire gender, or a family (Hofstede 2001). To be able to identify and compare these different categories different frameworks have been set up to help understanding the cultural differences that have to be managed in international business. Kluckhohn and Strodtbeck (1961 in Trompenaars &Hampden-Turner, 1997) have identified five basic problems mankind faces where every culture has its own preferred value orientations (i.e. relational orientation, time orientation,
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Theoretical Framework activity orientation, man-nature orientation and human nature orientation). Hofstede (2001) has a different approach where he uses four dimensions to try to explain the characteristics of national culture> i.e. Power Distance, Uncertainty Avoidance, Individualism and Collectivism and Masculinity and Femininity. He has now also added a fifth dimension with a Long- versus Shortterm Orientation (Hofstede 2001; 2005). According to Hall and Hall (1990) each cultural world operates according to its own internal dynamics, principles and laws (both written and unwritten). They also argue that time and space is unique in each culture. Trompenaars and Hampden-Turner (1997 pp. 27) argues that it would be wrong to draw a strict line between the different categories since they believe the different value dimensions are " selforganizing in systems to generate new meanings". Trompenaars and Hampden- Turner (1997) imply that Hofstede's five dimensions are too static to describe a culture when one cultural category excludes another. We acknowledge these opinions and agree on the fact that Hofstede oversimplifies cultural differences in his study which makes the alienation to specific groups more difficult. However we will mainly base our analysis on Hofstede's dimensions when we find them most coherent with our empirical findings. Hence, our ambition is to use Hofstede's dimensions and make them more specific for our purpose. 3.2.2.1 Power Distance "The extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally." (Hofstede 2001, pp. 98) In the study by Hofstede (2001), he states that there are inequalities in every society and that they can occur in a variety of areas; such as physical and mental characteristics, social status and prestige, wealth, power, laws, rights and rules. Since social inequality is multidimensional the inequalities in these areas do not need to go together. This results in some individuals having more power, by the higher status and respect they possess, than others and could more easily influence other people's behaviour. Hofstede (2001) distinguishes two forces, status consistency versus overall equality that in every society battle for their existence. In Hofstede's research he is looking at the Power Distance between different countries, where the dependence of relationship is noticeable in each country. He state that in countries with high Power Distance the subordinates are very dependent on their boss but they are also normally the first to blame for anything wrong in the system. The emotional distance is often quite big between the subordinate and the boss in these cases and it is not likely that any disagreement will occur with the boss. China is an example with a high Power Distance in contrast to Sweden who has a very low Power Distance. In countries like Sweden, the subordinate's dependency on their boss is limited and instead is many times consulted which leads to a mutual dependence between the two. The emotional distance between the subordinate and the boss is then also rather small and the employee can disagree without any further consequences (Hofstede, 2001; 2005). 3.2.2.2 Uncertainty Avoidance "The extent to which the members of a culture feel threatened by uncertain or unknown situations." (Hofstede, 2001, pp. 161) Uncertainty Avoidance does not equal risk avoidance, according to Hofstede (2001). Risk avoidance is focused on something specific, e.g. an event, while Uncertainty Avoidance is a factor that can create anxiety when individuals are confronted with the fact that they do not know what will happen in the future. To prevent unbearable anxiety individuals have created ways to cope with the implicit uncertainty within the domains of technology, law and religion.
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Theoretical Framework Hofstede (2005) states that it would be wrong to claim that uncertainty feelings are only personal since he argues that they also can be shared by other members of the peoples' society. In an organization the technology, rules and rituals are used to cope with uncertainty and to measure possible anxiety and worries an employee may have over their work in the future Hofstede (2001) has considered several aspects. He observed the degree of nervousness and anxiety that employees feel towards their work. In the study he states that both Sweden and China are considered to be countries with low Uncertainty Avoidance, although China is seen to have a somewhat higher level. This means that the two countries have cultures where individuals feel secure about the future and believe that new circumstances are interesting with new and abnormal things in contrast to those with high Uncertainty Avoidance who find what the future holds danger (Hofstede, 2001; 2005). 3.2.2.3 Individualism and Collectivism "Individualism stands for a society in which the ties between individuals are loose: Everyone is expected to look after him/herself and her/his immediate family only. Collectivism stands for a society in which people from birth onwards are integrated into strong, cohesive in- groups, which throughout people's lifetime continue to protect them in exchange for unquestioning loyalty." (Hofstede, 2001, pp. 225) This dimension in Hofstede's study describes the relationship between the individual and collectivity that is applicable on a given society. Hofstede (2001) argues that the level of Individualism could be identified with the valued spare time, freedom and challenges since it emphasizes the employee's independence regarding the company. Within a collectivistic society, on the contrary, people are appreciating good education, good physical work conditions, full use of talents and competence in the company and are expecting a broad responsibility from the organization. In the result of Hofstede's study it is shown that a majority of the individualistic countries are rich while the majority of the collectivistic countries often are poor. The outcome could then be the reason to why people in collectivistic countries are appreciating for example education more than in individualistic countries when they take that for granted. Sweden is said to be a more individualistic country than China and that could be because Sweden is a richer country where the people have more space to develop their personal goals (Hofstede, 2001; 2005). 3.2.2.4 Masculinity and Femininity "Masculinity stands for a society in which social gender roles are clearly distinct: Men are supposed to be assertive, tough, and focused on material success; women are supposed to be more modest, tender, and concerned with the quality of life. Femininity stands for a society in which social gender roles overlap: Both men and women are supposed to be modest, tender, and concerned with the quality of life." (Hofstede, 2001, pp. 297) Different societies cope with the fundamental differences between the sexes in different ways pursuant to Hofstede (2001). He argues that almost universally there are tendencies showing that women attach more importance to social goals such as helping others, having a relationship and the physical environment while men attach more importance to ego goals such as money and careers. In Hofstede's research he found that the values of men and women in the same jobs differed less in lower-MAS (Masculinity Index) countries than in a higher-MAS countries. When a conflict arises the Masculinity-Femininity dimension is one core factor that affects the handling of the conflict at the workplace. In a masculine culture, like China, the conflict will be solved by a good battle. "May the best man win" is a motto
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Theoretical Framework they often use. On the contrary, conflicts in feminine cultures, like Sweden, are usually solved by negotiations and compromises (Hofstede, 2001; 2005). 3.2.2.5 Long- versus Short-Term Orientation "Long Term Orientation stands for the fostering of virtues oriented towards future rewards, in particular, perseverance and thrift. Its opposite pole, Short Term Orientation, stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of 'face' and fulfilling social obligations." (Hofstede, 2001, pp. 359) This fifth dimension is added by Hofstede (2001) after results from Michael Bond's Chinese Value Survey (CVS). One of the dimensions in the CVS was values based on the teachings of Confucius, which is without religious content but teaches in practical ethics. However, it would be wrong to claim that Hofstede's Long-Term Orientation Index (LTO) is equal to Confucianism, since many countries that do not perpetrate Confucianism also got high points on the LTO-dimension. In cultures with Long-term Orientation are family and work not separated, it is common with family businesses and the values of this pole foster entrepreneurship. Perseverance, hard work, respect for memorisation, honesty, openness for new ideas, responsibility taking, self-discipline and confidence are values that are high ranked in Long-term Oriented cultures. Values that are ranked highest in Short-term Oriented countries are; freedom of speech, personal freedom, selfconfidence, individual rights, hard work, personal target achievement and to master your own thoughts. China is one of the countries with highest score on the LTO-dimension which means that they are accustomed to working towards strong positions in their markets without expecting any immediate results. Managers in cultures like China are often allowed resources and time to make own contributions while managers in Short-term Oriented countries like Sweden constantly are judged by the results from the past period (month, quarter or year) (Hofstede 2001; 2005).
3.2.3 Chinese Culture
The Chinese people are part of a civilisation, that longer than any other in the world have kept their common culture and made it survive and develop through a 5000-year evolution. Certain elements have had an enormous impact on this development, such as the ideology of Confucianism. This philosophy has strongly influenced the moral code of Chinese society by its values of faithfulness, loyalty, friendship, righteousness and the importance of education (Pang et al. 1998). Confucianism consists of five cardinal relations (between sovereign and subject, father and son, husband and wife, elder brother and younger brother, and friend and friend) which prescribes a vertical relationship between superior and subordinate (Chan et al. 2007). Therefore we see the importance to look deeper into this culture to be able to understand it and make a correct analysis. The Chinese culture is summarized by Pang et al. (1998) as the Chinese Hallmark which includes; harmony, time and patience, flexibility, trust and collectivism, communication, the rule of Guanxi and the concept of face. In this study we will mainly focus on the concept of face and the concept of time since they are most relevant in this research. 3.2.3.1 The Concept of Face All over the world it is possible to detect the concern with social standing and self-esteem (Tang & Ward, 2003) but in China the character of "Face" has a much wider meaning than it normally has in the western countries. In collectivistic societies it stands for respectability, reputation and pride (Pang et al. 1998). In these societies it is found that identities are made from group rather than individual activities and that criticism of superiors are repressed due to the knowledge of one's place. In environments, like the Chinese, where people meet
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Theoretical Framework repeatedly the concept of face becomes even more important and great attention must be paid to avoid offending someone (Tang & Ward, 2003). When a Chinese has "Face" he or she is addressed by title and the person's status is distinguished among others. But the Chinese can also lose "Face" and that can occur when they are for instance humiliated, criticized, ridiculed or surmount in public for example (Pang et al. 1998). Even the word "no" could be interpreted to not give "Face" and many Chinese use moderate language or vague expressions when they are criticizing others (Tang & Ward, 2003). The concept of face has two dimensions: lian and mianzi. Lian refers to a person's honour and moralistic character while mianzi refers to prestige and a person's reputation. In this case the difference between the western and Asian cultures is that the western emphasizes guilt whereas the Asian emphasizes shame (Bjerke 1998). According to Worm (1997) if someone loses their lian, for instance by acting shameful, it then means that this person is without integrity. It is interpreted to be the worst social condemnation that can happen to an individual. If you are poor or rich do not matter, everyone has lian and it is something everyone can lose. Unlike mianzi, lost lian is more difficult to restore and you either posses it or not which makes it more canonical than mianzi. Lian does not only apply to an individual level but also a collective one which means that not only a person can lose lian, also a person's family or clan. In other words a person's Face can be affected by the actions of that person's family too. "Lian is the ethical basis for trust." (Worm, 1997, pp.149) Having lian can therefore be seen as personal virtue insurance and then less attention needs to be placed on formal agreements or contracts (Worm, 1997). If a person possesses mianzi it means that this person has performed or conducted business successfully. Mianzi can be taken or given from others and this makes it more transmittable than lian. Metaphorically speaking to get more mianzi can be seen as getting more prestige. Mianzi has a profound role in business contexts and partly regulates the interaction between two business parties because by acting aggressive towards your counterpart you can deprive them of their mianzi. They therefore avoid public emotional outbursts and conflicts in public (Worm, 1997). "Since Chinese do not want to lose face, they are reluctant to refuse something openly, or to say something that others may not wish to hear, which would cause the other party to lose face."(Worm, 1997, pp.150) As a result of this Worm (1997) claims that they often use middlemen in various situations in their society. 3.2.3.2 The Concept of Time Time is not an object but rather an idea and our conception of time is therefore strongly affected by culture. How we think about time have a big impact on how we organise our experience and activities with others. There are two major dimensions on how we view our time; it could either be seen as sequential or as synchronic. If time is conceived to be sequential it is seen as a line of series of passing events, and if the view is synchronic the past, present and future all interrelate which leads to that both the memories of the past and the ideas of the future shape the present actions (Trompenaars & Hampden-Turner, 1997). Hall and Hall (1990) have the same division as Trompenaars and Hampden-Turner (1997) but they call these dimensions monochronic and polychronic where the monochronic time system indicates that the person only do one thing at the time which may intensify some relationships at times while weaken others. Scandinavians are a good example of monochronic people. The polychronic time is on the other hand characterized by "the simultaneous occurrence of many things and by a great involvement with people" (Hall & Hall, 1990, pp. 14).
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Theoretical Framework
3.2.4 Organizational Culture
There is no standard definition for organizational culture but most people would, according to Hofstede (2005), describe it as follows: "Holistic, Historical determined, Related to the things the anthropologists are studying, Socially constructed, Sof t , Difficult to change". However, Hofstede's (2005) definition of organizational culture reads as: "the collective programming of the mind that distinguishes one organization's members from another organization's members". An organizations culture is not only established by its members but rather by everyone that interact with the organization (i.e. all the stakeholders), he continues. There could be both strong and weak organizational cultures but there have been argued that a strong culture not necessarily always preferable. The organizational culture is closely linked to the national culture and are therefore affected by the dimension mentioned above and could then contribute to the positioning of the organizational culture (Hofstede, 2005). TABLE 3.3: The Balance of Values versus Practices at the National, Occupational, and Organizational Levels Level
Nation Social Class Occupation Industry Organization
Source: Hofstede (2001, pp.394)
Place of socialisation
Family
Values
School
Practices
Workplace
When talking about culture it is easy to make the assumption that national culture and organizational culture are the same but there are differences especially when looking at the balance between the values and practices (see Table 3.3). In the study made by Hofstede (2001; 2005) it was found that there were considerable differences in values despite the similarities found among employees in similar jobs but in different national subsidiaries. This shows when people say that the national cultures are getting more and more alike in the modern world when we start to use the same words, dress the same and perform the same sports. These evidences they refer to are usually taken from the practice level (i.e. symbols, heroes, and rituals) and are many times taken for being all that culture is, overlooking the underlying values which moreover determine the meaning for people in their practices. Hofstede (2001) also claims that his research has contributed with the assessment on to what extent the founders' and other significant leaders' messages come across to the members in an organization. McGregor (1985, in Adler, 2002) also show the important correlation between the manager's values, believes and attitudes, their behaviour and the employee's behaviour.
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Theoretical Framework He state that the managers lead the way and are affecting the behaviour of their subordinates in the way they self are behaving. Effective collective practices are the reason to why multinational corporations manage to stay alive. Since they employ people from all over the world they can not presuppose that they all have the same values. By using practices, which are influenced by the corporation's origin but can be learned by all employees regardless of nationality, the corporation can coordinate and control its operations all over the world (Hofstede, 2005).
3.2.5 Cultural Clash
To be able to describe the concept of a cultural clash there are two aspects that need to be considered, both culture and identity, which are specifically shaped within social relationships. Through discourses people are able to identify who we are, but we use it ourselves as well to make meaning of a situation. A clash may occur when the image of how we identify ourselves collides with the expectations from others (Ngo, 2008). In other words there is a risk for conflicts to arise when communicating and this risk increase when individuals from different cultures communicate. Communication is said to fail when the sent message or response is not coherent with the received message or response, and this could be caused by several different variables (e.g. misperception, misinterpretation and misevaluation) but the core one is that the meaning does not come through only the words (Adler, 2002). A cultural clash could develop to a conflict of some sort which is a common part of organizational life. Conflict is considered to be a "natural process between people and, as such, is an inevitable aspect of a manager's job" (Markowich & Farber in Chan et al. 2007). When a conflict occurs and the manager is using a manager style which is focusing on satisfying both parties in the conflict situation, studies have shown (Chan et al. 2007) that trust and respect in the relationship tend to be built between the subordinate and the supervisor. This result in the belief that if the employees, in the conflict situation, think they are being valued and cared for by the supervisor a trusting relationship can be developed (Chan et al. 2007). These concepts could be drawn to our dilemma as well, i.e. how the different parties will act in a conflict due to cultural clash. When managing a conflict there are five different styles identified; Integrating, Obliging, Compromising, Dominating and Avoiding (Tang & Ward, 2003; Chan et al. 2007). The three first are in the Western societies seen to be the most effective management styles which focuses on high concern and respect for others. But according to Chan et al. (2007) the two latter can sometimes be effective in China due to its culture of high Power Distance and their belief that conflicts affect the harmony of interpersonal relationships and therefore tries to avoid them. Thomas (in Tang &Ward, 2003) came to a similar conclusion but his studies showed that Chinese managers favoured compromising and avoiding solutions. 3.2.5.1 Cultural Shock When an individual is moving to a new culture there are evidence that he or she follow the acculturation curve (see Table 3.4 on the next page). When first arriving to a new culture the person has the phase of euphoria, the honeymoon, which is dominated by the excitement of travelling and seeing new lands. When real life starts in the new environment there is normally a period of cultural shock. The phase sets in when the individual slowly has learned to function under the new conditions, has adopted some of the local practices, finds increased self-confidence and becomes integrated into the new society. There are three possible outcomes when the person reaches the stable face; the experience could still be negative
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Theoretical Framework compared to home (4a), it may be as good as before then the visitor could be considered to be bicultural adapted (4b), or he or she has "gone native" (4c). (Hofstede, 2001) TABLE 3.4: The Acculturation Curve
Positive + c Feelings b a Negative -
Phase
1 2 Euphoria Culture shock
3 Acculturation
4 Stable state
Time
Source: Hofstede, 2005, pp. 337
3.3 Summary of Theoretical Frame
In this chapter we have provided the readers to the essential theories concerning different relationship and cultural dimensions. In the first part we defined a relationship before immersing in Relationship Marketing theories and the Commitment-Trust theory. It is here shown that Relationship Marketing is used to establish, maintain and enhance relationships with customers and two of the core ingredients in such a bond is Commitment and Trust. However, Relationship Marketing is by many seen as a westernized approached and therefore we have contrasted it with the Chinese Guanxi theories where personalized relationships are based on reciprocal exchange of favours. When adapting to Guanxi the focus lies in building relationships and after conduct transactions. In the second part of the theoretical frame we immersed into culture and how norms and values are reflecting the deeper levels of individual groups. In order to examine how cultures differ we have presented the different dimensions of culture which are Power Distance, Uncertainty Avoidance, Individualism and Collectivism, Masculinity and Femininity, and Long- versus Shortterm orientation. As in the relationship part many of the theories are derived from western society and therefore we want to illuminate theories from the Chinese culture as well. Here focus has been on the concept of Face and the concept of Time. To be able to gain knowledge on how culture affects businesses we have also brought up theories concerning Organizational Culture. Additionally we have presented theories relating to Cultural Clashes to shed light on different aspects to consider.
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Practical Methodology
4. PRACTICAL METHODOLOGY
In this chapter we discuss the data collection methods such as the creation of the interview guide, the sample selection and the practical aspects of the interviews. The purpose is to expressly describe the practical aspect of the data collection for this study which was performed through semi-structured interview with both Swedes and Chinese.
4.1 Semi-structured Interviews
When conducting a qualitative research design the most common method is to use interviews to collect the data. The interviews could either be structured, unstructured or have an intermediate position between the two former. When using a structured interview there is a strict list which is predetermined and the identical set of questions are asked to all the respondents. The unstructured interviews are normally used when the researcher wants to explore a subject in depth and are then not using any predetermined list of questions (Saunders et al. 2003). We have conducted semi-structured interviews where we used a list of themes which we saw as vital for this study. When using this method the researcher has the liberty to ask more questions if necessary and he/she does not need to cover the questions in a preordained order. This process is flexible and relies on how the interviewee understands the questions and believes they are of importance (Bryman & Bell, 2003). In the following sections we will further elaborate the process by explaining how the selection of participants was made, giving practical aspects of the interviews, stating criticism of the semi-structured interviews, and provide an account of how we present the analysis of the interviews.
4.1.1 Selection of Participants
Before conducting the interviews decisions have to be made on where to perform them and with whom. What has to be remembered is that it is not only the people that are being sampled, but also the settings, events and processes (Miles & Huberman in Maxwell, 2005). When talking about sampling in a qualitative research it creates problems since it implies that the purpose is to represent a sampled population. Hence, it is important to differentiate the purpose process when doing a quantitative and qualitative research, where the former has a bigger need to be able to generalize. When doing a qualitative research the main sampling method used is a purposeful selection, where persons, settings and activities are chosen deliberately to provide useful information that cannot be collected in another form of sampling (Maxwell, 2005). Due to the difficulties of setting up a selection frame we also used the snowball selection method were we used our existing contacts to find voluntary participants (Bryman & Bell, 2003). This type of method resulted however in that we only reached male participants. It was not our intent but we did not come in contact with any female persons with the experienced we were looking for. The only definite characteristic used to select our participants was that they should have experience of working in business-to-business situations towards or in China and vice versa for the Chinese participants. We were also convinced that a face-to-face based interview would be the best way to conduct the semi-structured interview compared with a telephone interview. There are some advantages using telephone interviews associated with access, speed and lower costs. However, since the subject we are studying could be perceived as personal sensitive questions we saw the importance of being able to establish personal contact with the participants to create trust and by that bigger access. Face-to-face interviews also gave us the possibility to witness and interpret the respondents' non-verbal behaviour (Saunders et al. 2003).
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Practical Methodology
We chose to interview both Swedes and Chinese to get both nationalities reflections on the subject studied. Originally we thought ten interviews would be necessary but after we had conducted seven interviews, where five were with Swedes and two were with Chinese, we felt we had reached satiation in our data collection. The Swedish participants came from different industries and positions in the firms and the two Chinese respondents were living in Umeå, Sweden, also from different industries and backgrounds.
4.1.3 Practical Aspects of Interview
In order to compile relevant data the interview guide was made based on the theoretical framework we had created in the earlier stage of this study. Through these theories we identified different themes we believed were significant and we used them as a framework for our interviews. We made two types of semi-structured interviews, almost identical, depending on if the respondents were Swedish or Chinese (see appendix A). During our sampling process there were no one who did not want to participate in our study, however, there were some persons who had to decline due to that they were in China for the moment and could not participate in person, which was one of our criteria. All the interviews were conducted in Swedish except one, due to the fact that this particular interviewee did not feel he mastered a good enough Swedish. That interview was therefore conducted in English. The first interview, the only one situated in Stockholm, was made by only one of the researchers and followed a quite structured approach. The second interview was conducted by the other researcher, while the first researcher only observed, and was a little bit more unstructured. After the first two interviews we revised our interviewing technique because we were not satisfied with the depth of the answers we had been given. Instead of one conducting the whole interview we then only decided who would make the introduction and after that both were active as interviewers. We also became more flexible by asking following up questions so the interviewees could specify what they meant. This resulted in us receiving more in-depth answers which was what we had looked for in the first place. The placement of the interviews varied between the different participants. As mentioned before took one place in Stockholm while the others were conducted in Umeå. We were very keen on finding a place that were calm and separate and where the interview would not be disturbed in any way (Bryman & Bell, 2003). ). The location for the interviews varied between the respondents and two were conducted in group rooms at Umeå Business School, one was conducted in the respondent's home in the kitchen, and the others were conducted in the conference rooms at the participants' offices. Each interview started with one of us presenting ourselves and the purpose with our study, we also made it clear for the interviewees that they would be treated anonymously throughout the study. During the interviews we mainly relied on the interview schedule, but when necessary we asked further questions in order to expand our understanding of their answers and redirect the discussion into areas relevant for our study. After the interviews we thanked the participants and offered to send them the final result when the whole study was made. It was a conscious decision not to let them review their material after we had transcribed it since we believed they could withdraw what they had said just because they could feel that their value loaded answers did not look good in written form.
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Practical Methodology
4.1.4 Criticism of Semi-structured Interview
During the interviews we felt that we got a good connection with the respondents, that they felt calm and that we had a good access, which could have been influenced by the fact that we already had some kind of relation to some of the participants before conducting the interviews. However, in one of the first interviews we felt that the access was not optimal which could be due to the interviewer's lack of experience and that it was not made clear enough that the data would be treated anonymously. Nevertheless, we believe that a lot of interesting aspects could be drawn from this interview as well. As mentioned before it is of great importance to conduct the interview in a calm environment where there are no disruptions from telephones or other people (Bryman & Bell, 2003). We managed to prevent such distractions in all our interviews but in one where the respondent seemed stressed and needed to run away in the middle of the interview and also received a phone call in the end. Once again we do not believe that this has affected our data in a severe way since he otherwise seemed very focused and eager to answer our questions in a well- reasoned way.
4.1.5 Presentation and Analysis of Interview
The transcription after each interview went well thanks to the good sound quality where we were able to write down what had been said under the interviews verbatim. After transcribing we coded the material in order to fracture the data and rearrange them into categories which facilitated the comparison between the different answers (Maxwell, 2005). We used the same themes as when conducting the interview guide which was based on the theoretical findings. When doing the thematic summaries everything that had been said during the interviews do not necessary have to be presented especially when making an interpretive reading of the data, as we did. This means that we constructed the empirical chapter after what we thought the data meant or represented (Mason, 1996). At the same time we also did translate the findings into English which could lead to some misinterpretations but we have carefully gone through the material several times and believe that the risk is minimal. The translation was made with help of dictionaries, and where exact words could not be found to describe the Swedish phrases or words we tried to describe the meaning instead. Finally, we changed the names of the respondents to protect their identities.
4.2 Truth Criteria
There exist several different truth criteria to estimate the value of a qualitative research. Bryman and Bell (2005) emphasize that a trustworthiness qualitative study can be determined through the evaluation of four characteristics, which are credibility, transferability, dependability and confirmability.
4.2.1 Credibility
According to Silverman (2006) the credibility criteria involve for the authors to everything they can to falsify all their initial assumptions about the data. This is done both by securing that the research has been done according to all the rules and to assure it to be credible from the perspective of the participants in the study. Since there exist several different descriptions of the social reality it is only they who can legitimately judge the credibility of the results (Bryman & Bell, 2005). In our study we conducted seven semi-structured interviews which all were recorded with a dictaphone so we could go back and hear the respondent's exact words. Before starting the
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Practical Methodology interviews we assured the participant about their anonymity and we did in addition explain how their answers would be treated. After answering potential further questions to clarify even more the interview started. By this we believe the credibility in our study to be very high.
4.2.2 Transferability
Transferability is related to how generalizable a qualitative study's inferences are. To improve the transferability the qualitative researchers are urged to produce "thick descriptions" (Geertz in Bryman & Bell, 2005) of the research context and the assumptions that were central in the research. If a person later wishes to transfer the results to a different context it is that person's responsibility to judge how sensible the transfer is (Guba & Lincoln in Bryman & Bell, 2005). It is our opinion that we have presented a wide theoretical base in our study in order to establish the context of the research. The interview respondents had a wide range of their experiences from business-to-business situations with Chinese counterparts. Moreover the suggestions provided are of a general nature and could therefore be applied to people in an extensive range of industries. Our results can also indicate on preferred behaviour when in interaction between the two cultures. However, it is always up to the person to decide in which way or to which extent he/she can apply the results.
4.2.3 Dependability
To determine the dependability of a qualitative research the authors should enact an auditing approach where they try to explain the study in a thorough manner in order to facilitate the proceeding in conducting the study once again and gain similar results (Bryman & Bell, 2005). Notice should be made upon the difficulties achieving the exact same environment for the respondents since it is not static. However, to reach a high dependability we have documented and explained the data collection process, so a similar study could be made using the same interview guide.
4.2.4 Confirmabilty
In social research it is impossible to be completely objective; however the most important aspect is then that the authors have proceeded in good faith and strived to eliminate bias (Bryman & Bell, 2005). This study inevitable entails elements of interpretation and therefore we have as thorough as possible tried to describe our preconceptions and experiences that could be relevant to this study. Nonetheless, our ambition has been to remain neutral during the process of collecting data and we tried to avoid influencing the respondents' answers during the interviews. When transcribing and analyzing the data we have also tried to stay unprejudiced.
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Empirical Presentation
5. EMPIRICAL PRESENTATION
This chapter presents the data obtained through the empirical research. The empirical research is based on seven different interviews whereas five of them were with Swedish businessmen and two of them were with Chinese businessmen. The interviews were between half an hour to one hour each. The interview respondents all had different background, age and worked in different types of industries. Noticeable all of them were men. The reason for this was that with our snowball sampling technique we did not come in contact with any women. In the table below it is shown in which industry the respondents were active and what position they had. In order to protect the participants' identities we have given them fictitious names. TABLE 5.1: Short presentation of the participants Name Martin Lars Eric Robert Kent Da Wei Yun-Fat Type of industry Communication M i ni ng Communication Innovations Communication Health Academic Position CEO Freelancer CEO Self-employed Engineer CEO Professor Time in Sweden/China Several times during last 8 years 2 years 1 vi s i t Several times during last 7 years Several times during 4 years 12 years 18 years
The empirical data from our semi-structured interviews are presented and discussed under five main themes; i.e. relations, business relations, culture, business culture and cultural clash. It is the same themes that we used during the interview which were formulated out from the theoretical research we did before starting our empirical research. We are then using sub- themes where we divide each theme in two in order to give the Chinese and Swedish view of the issues separately. The reason for this separation of themes is to create an ease in embracing the information, even though some of them are closely interlinked and similar subjects can be discussed in various themes. We have outlined our theme to start with a brief summary of the Swedish respondent's most common discussed aspects followed by their individual thoughts. After that the Chinese's common aspects are summarized, followed by their individual thoughts. All chapters also end with a joint Swedish -Chinese summery of each theme. In addition this chapter will end with a brief summery and table chart from all themes.
5.1 Relationship
5.1.1 The Swedish Perspective on Relationship
The most central mutual factor that was emphasized by our respondents was the importance of the relationship in China, and the participants claimed all businesses made in China are thanks to relationships and they take time to develop. All the respondents testified that much more hard work and effort have to be put down on this when entering the Chinese market, compared to the Swedish market. They all stated that it is necessary with at least a couple of meetings to get to know each other before any business negotiations can take place. Lars argued that everything is built upon relationships in China and you need to have contacts to be able to succeed in your business. He continued by saying: "you cannot just whip in to a Chinese and tell him that you have the world's best pumps and sell, you must always find a
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Empirical Presentation contact person who can introduce you to the client." [Writer's translation] According to Lars it is very important to continue to work on the relationship in China after a business deal has ended even though no new projects may arise for years. This differentiates from the Swedish traditions when the relationship could finish together with the business cooperation and then be brought to life again when a new project begins, according to Lars. Robert stated that building a relationship: "is a long process that goes on all the time" [Writer's translation] and he has realized that the Swedish people many times do not take enough time to sit down and have the long dinners that are necessary. He elucidated that these long dinners, with a lot of food and drinks, are used by the Chinese people to consort and bond with each other. Kent found that Chinese people work so much on the relationships in order to be able to trust one another. If you cannot build trust between each other there will not be any relationship and no future business, he stressed. Kent's experiences have been that most Chinese are very eager to understand westerners and they make efforts to develop good relationships. He has also acknowledged that the relationships to some extent become quite personal but never on any deeper level. He told us that: "sometimes with westerners that come from similar cultures you can experience that you sit in the pub talking about how you say different proverbs in different languages and you show pictures of your kids, but you rarely reach that level with a Chinese person." [Writer's translation] When Martin and his company decided to enter the Chinese market they put a lot of effort on building good relationships. He could not explain exactly why they did so since they had not studied the culture before going there. However this was a good approach and he stated: "the relationship we built in the beginning was incredible valuable when solving other issues." [Writer's translation] Martin said the goal was to visit China at least ones every quarter to nourish the relationship with the CEO of the collaborating company over there. He also pointed out the importance of trust which contributes to the long period of time needed when building a relationship. From earlier experiences Martin has learned not to move that fast when building relationships. This is due to that Swedes can be perceived, as he said; "to do business quite fast and hard and without any fuss" [Writer's translation] and if personal relationships is a result from doing business it comes afterwards. Martin believed that in China they do it the opposite way, i.e. personal relationships first and business later. Eric argued that one of the most important aspects, for the Chinese, in the relationship building is the concern of having meetings to be able to bond on a personal level. He stated that he will try to go to China at least two to three times per year but sometimes it is more. This is also due to the fact that he has realized the importance of being present because as he said: "when you are present a lot is happening but when we are not present it feels like everything stands still" [Writer's translation].
5.1.2 The Chinese Perspective on Relationship
The two Chinese respondents share the same perspective when it comes to building relationship in China, although they expressed it differently. Da Wei spoke about trust and commitment in the process and Yun-Fat emphasized commitment by showing consideration for others. Their other individual thoughts and perspectives of relationships will now follow. Da Wei thought it is difficult to collaborate or build relationships with Swedish people. He stressed that in Sweden there is a clear distinction between business and your private life,
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Empirical Presentation whilst in China he felt business is interlinked with your personal life and therefore more blended together. In China it is a requirement that you have a personal relationship with someone in order to collaborate with them and then the possibility for future business together might appear. In this case he experienced the Swedish people to be cold and it is therefore difficult to combine a personal relationship with a business relationship in Sweden. He told us that: "In China you become friends with the people you are doing business with and you are not simply doing business you are also part of the family." [Writer's translation] Da Wei further emphasized that when you are doing business in China you must have a good business relationship and then a mutual trust is then the most important factor. To be able to trust each other you need to be there for one another on a regular basis showing that you are reliable, according to him. In Sweden he believes this is different because Swedish business collaborations are more controlled by rules. He stressed that in China after you have built a relationship it is for life whilst in Sweden it is easier to break the bond. In fact he believed that Swedes concludes a relationship after a business transaction is finished. Da Wei claimed that within a relationship there are of course expenditures and it takes time to build bonds and it is important to have time and patience when doing so because as he said: "sincerity is subject to prove". [Writer's translation] He stressed that we all have a different background and it requires time and effort to build trust. He believed that in a relationship people need to commit to each others on several different occasions in order to develop a mutual trust. In his mind it does not matter how much money you have because in the end what really counts is the relationship or friendship. He said: "how can we meet and directly become friends? - It takes time building this up." [Writer's translation] In his opinion this was what Swedish people often do wrong when they come to China. Yun-Fats believed that relationships can be built when people have studied at the same university and therefore can help each other out. He claimed that many Chinese people have studied in Sweden and are currently working in Swedish corporations in China e.g. Ericsson and Volvo. He also emphasized the need to care not just about one another when building a relationship in China but also to care about the other person's family so that the future partner feel acknowledged. He believed that this is quite different in Sweden. Yun-Fat stressed that in China they do not have as much privacy as in Sweden and this results in people wanting to share more of their privacy with their friends than even their wives/husbands.
5.1.3 Summary of Relationship
There are several similarities of what both the Swedish and the Chinese participants have acknowledged as important when going to China to do business. The main elucidated part was that relationships have a bigger importance in China than in Sweden. Many of them also stressed that the timeframe differs between the two cultures where much more time to build up trust between the parties is needed in China. Both Da Wei and Yun-Fat argued that to be able to create a long lasting relationship it is necessary to not just have it on a business level but also on a personal level. This was however to some extent contradicted by Kent who claimed that a relationship normally does not get as personal as it can get with other western partners.
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Empirical Presentation
5.2 Business Relationship
5.2.1 The Swedish View on Business Relationships
All the Swedish respondents mentioned that the Chinese businessmen are very keen on building the business relationship based on personal bonds. To obtain a business relationship on that level it is very important that the relationship is built upon trust and credence according to the participants. Several of them also testified on how the Chinese use dinner parties as a method to develop relationships. Eric explained how he came to realize the importance of the social interaction for the Chinese business partners when they emphasized the importance of consort and through that became more personal in their relationship. He compared this with the Swedish businessmen who normally just meet to do business. According to him the Chinese associates often meet for dinner where the discussions mostly are focused around personal topics "but sometimes business discussions enter the conversation and then you talk about other things and then a business issue again."[Writer's translation] This contribute to that the Chinese do not separate business and pleasure to the same extent as we in Sweden do, Eric was acknowledging. He also stated that it is very important with trust in the relationship especially when the distance between the two countries is so considerable. He exemplified how the credence could take form by explaining that it is not uncommon that money has to be paid in advance which will be recollected during the years as partners. Eric and his company have managed to create such a profound relationship and are due to this not using a framework agreement, which they normally use, instead they just use the offer agreement. Martin runs a small company which normally builds personal relationships to do business. They decided to create relations with their current collaborating partner in China at as many levels as possible to minimize the risks. Martin explained how it took at least half a year, and four or five visits, for the different persons involved to get to know each other but it contributed to that Martin, the CEO, had established a good relationship with the Chinese CEO and the sales directors across the nations with each other and so forth. According to Martin it was proved that the relationship with the CEO helped them solve upcoming problems on different levels in the organisation. If problems in the production occurred Martin could just refer to that he could bring this up with the CEO, which often had the impact that the Chinese employee fast tried to correct the misunderstanding or problem in order to not lose his Face. Martin elucidated that he got a feeling that the other CEO "saw this small entrepreneurial firm with enthusiasm and put his guardian hand over us, which we noticed all around the organization." [Writer's translation] Martin also related to a business negotiation they had where a delegation came from China to Sweden. They were sitting in conference for two days discussing and negotiating and he said: "the last afternoon an old man that looked quite gorgonian and had been sitting in the back stepped up and were proved to be the chief." [Writer's translation] Martin stressed that he and the Swedes then believed the conference was over and the final element was just to sign the papers but that was not the case. Now the chief started to negotiate and had to obtain something to not lose Face in front of the other in the delegation. Martin believed that if the ambition is to create a long-term relationship there is an urge for a win-win situation and to obtain that it should be adequate bad or adequate good for both parties. However, Martin has acknowledged that the Chinese do not share his attitude, if they leave a negotiation winning more than the counterpart that is fine as well.
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Empirical Presentation According to Robert there is a significant difference between how Swedish and Chinese people build up business relationships. He asserted that in Sweden " we do business by just sitting down and negotiating" [Writer's translation] while the Chinese want something more, they want to get to know each other to take that step. Robert stressed that he did not fully understand the Chinese counterparts: "we can never go there with our pale faces because then the price is four times higher or more. But even if they just map out that we are a European company they sense that they can take a higher price." [Writer's translation] This makes the negotiations very hard according to Robert and consequently you need several options if one should not work. Lars has experienced that most active Swedish businessmen in China have learned or are really trying to adapt to the Chinese way of doing business by fostering the relationships. The relationship encouragement could, as some of the other respondents have said, be expressed by long dinners or lunches. Lars also told us when the organisation first came to China there were many "of the Chinese people that wanted to take advantage of and harness as much as possible from the westerners." [Writer's translation] Kent argued that many of the western organisations' main focus are money and that they want to find the cheapest manufacturers on the market where they rarely stay for a longer time. This is according to Kent contrasted by the Chinese way of doing business where they, also mentioned by the other participants, rely very much on the relationship. Kent stated that the Chinese people value very much that they are able to trust the other party. His experience was that the first couple of times you meet there are normal meetings but if they went well he said: "the relationship starts to change on the third or fourth meeting and they start to treat." [Writer's translation] It is not like here in Sweden were the seller should treat the customer, in China it is the other way around after a relationship has been developed according to him. However, Kent continued, the business relationship is not established until a first successful business transaction has been made. He stated that: "it is also important for them that you are honest and if a failure would occur you try to readjust that in the next business deal to be able to maintain the relationship and not lose any business deals." [Writer's translation]
5.2.2 The Chinese View on Business Relationships
Within this theme, there is one main commonality expressed by both our Chinese respondents. They both expressed the importance of Guanxi (networking) in China. Da Wei stated that Guanxi is more extensive in China than Sweden and Yun-Fat stressed that that the Guanxi is more developed in China than networking is in Sweden. Da Wei believed that Swedish people make a distinction in the business world where on one hand you have the business and on the other hand you are private. He stated that this is the same thing in China, both business and your private life go hand in hand. He stressed that networking, what is referred in China as Guanxi is more established and spread in China than Sweden. He pointed out that when you are buying something in China it is from someone you trust. In his opinion trust is the only criterion the Chinese have when purchasing something. He told us: "if you have two similar products, which one will you chose?" [Writer's translations] In such a case where you have two similar products with similar prices he believed that Swedes tend to look at other factors such as company background and for example ethics. In China this is easier, if you are friends with one of the two sellers you will naturally buy from the one you already know, according to Da Wei.
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Empirical Presentation He stated: "Chinese people does not deliberately build up businesses, we deliberately build relationships and then if you have a business opportunity well then you do business. We don't create a relationship to do business we create relationships to have a relation". [Writer's translation] Da Wei further stressed that when you have a good relationship with someone and a business opportunity comes up then you can do business and it might be a prosperous business. He also stressed that sometimes you have a relationship where you do not do business but you had a good time with a friend nevertheless. Metaphorically speaking Da Wei thought that western networking comes from the head and thoughts while the Chinese networking (Guanxi) comes from the soul but sometimes you cannot analyze a business proposal and then you have to turn to your gut feeling and not your soul and look at the man/woman and see if you have faith in him/her. He believed that the western societies are too based upon laws, sometimes you can circumvent these but then new laws are created that takes away the charm of doing business. He did not consider Swedish people to be good at relationships and market planning but that they are good internally. He stated: "many Swedes goes to China to do business and when they receive a warm welcoming they believe they have built a good relationship but it is not correct." [Writer's translation] According to Da Wei, eating and drinking is a courtesy that is part of the Chinese culture and compared to Sweden is more extensive in China. He further stressed that you need to live in China to do business there and it cannot be controlled from here. According to Da Wei Swedes believed that they could spend one month or so in China and then be under the impression that they knew how the consulting business worked there. In this case he believed the Swedish to be too opportunistic. He said: "I have lived in Sweden for 12 years and I have many Swedish friends and I run a business here but I still do not know how Swedes behave and how they work. How am I then supposed to run my business? I still feel I am ignorant, how is it then possible for a Swede?" [Writer's translation] Da Wei further stressed that he speaks Swedish and still studies it and also have read books about Swedish history but he still feels like he has not gotten the full picture. In addition Da Wei concluded that Swedes need to learn more about the Chinese language, their culture, and business culture because today China is Sweden's biggest business partner. Yun-Fat believed that it would have been impossible for the Swedish people that he has helped so far to do any kind of business in China without him. He stressed that most people in China cannot speak English, they might be able to read some English but they cannot speak it. He believed this causes a situation where the quality of the communications becomes poor because of the language problem. He asserted that in China a personal interaction is very important when doing business there. However, in Sweden he thought it is different and he felt that Swedes are more formal and lack the same extent of communication and interaction. He stated that this is where he comes into the picture, as a translator, because he knows the terminology. He further pointed out that he is Chinese but during the business trips he has attended, he has traveled as a member of the Swedish delegation. In these situations he expressed that he took a role as a middle man and not just as a dragoman. Yun-Fat further emphasized the need for creating personal relationships with companies. He said: "if you want to do business with me you should not only build a relationship with me but also my network. My network means my family which is extremely important. If my wife and partner also like you it is much easier". He believed that foreigners are in contrast with the Chinese and are too concerned with the transactions or business terms. He stressed that in
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Empirical Presentation business it is very important to have a trust where you can share privacy with your partner and this takes time to build but once it is built it can be very useful. This is something he felt foreigners have a hard time understanding. He emphasized his belief that Swedish people are reliable and do not cheat and are very honest, in fact sometimes too honest. This he believed to be one of the reasons why they have had problems doing really big business in tough environments. He also claimed that Swedish people can be quite quiet sometimes which he felt is terrible in the business world. He further pointed out that the Swedish businessman is too technical and well educated doing what it says in the book. He believes this makes them professional but compared to Chinese businessmen they lack a sure instinct. In this case he felt that the Chinese have a better instinctive feeling and are more careful and less rational than the Swedes. He elaborated that when you are working in a business-to-business situation with Chinese you must build relationships and learns from the culture or use help by other Chinese, agencies or other types of representatives.
5.2.3 Summary of Business Relationships
The core of building a business relationship starts with a social process according to all our respondents. They described it to take time and also something that cannot be built during just one occasion but during several meetings or events together. And as several of our respondents pointed out, this usually happens during long dinners where the possibility to consort exists. With five of our seven respondents there seem to be an underlying consensus that the element of trust is required in order to have a successful business relationship together. Both Martin and Robert contradicted this picture somewhat. In Martin's case he stressed that he is mainly interested in creating a win-win situation for both parties which is an interest he felt the Chinese people does not share to the same extent. In Roberts case there seem to be an absence of mutual trust because he was under the impression that he always got a higher price because of him being a foreigner. Both Eric and Da Wei commented the fact that there seem to be a distinction between business and pleasure in Sweden. According to the two there is no distinction between business and private life in China. In addition, both the Chinese respondents expressed a similar condition where they felt Swedes to be rigid and formal.
5.3 Culture
5.3.1 The Swedish Perspective on Culture
There was almost a unified fascination among the Swedish respondents, except for Kent, concerning the development that is taking place in China today. They talked about how fast everything is going and how new buildings and other complex is built every day that changes the skyline. Several of them were also fascinated by how China manages to combine the old and the new when the difference is so dramatic. Amongst all our respondents Robert was the one who most strongly believed that the Chinese culture is eroding. He stated: "you get surprised that there are not anything left of such a gigantic and great culture." [Writer's translation] He argued that this rapid development has resulted in a technological gap. According to him there is today not uncommon to see an old man with his donkey on a rice field talking in a mobile phone and "they do not know anything else, they do not see the gap, since they have not seen the telephone with a cord to the wall." [Writer's translation] Robert had experiences from this phenomenon by working in industries as well. He found that the Chinese had difficulties understanding some of the simplest things. For example, if you have a blue print the Chinese are often very good in following it but if something needs to be changed they have a hard time imagining how those modifications
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Empirical Presentation could look like. He said: "the history is gone so it is no wonder they do not know anything else." [Writer's translation] On a more individual level Robert argued that people are more concerned by the individuality than the group in China which also makes them very independent. He also brought up the fact that he perceived the Chinese people have difficulties to saying no. He told us: "they always say yes, yes they understand, but they have not understood at all." [Writer's translation] There is also huge difference in the food culture and there are unwritten laws, according to Robert, on what and how you eat in China. He said that "they eat exactly everything that have lived and everything you could find in all body parts but they have most of the time learned how to cook it so it could be really tasty." [Writer's translation] Robert also narrated about how he perceived the world's biggest movement of people which takes place during the Chinese New Year. He said that the farmers sell cabbage-heads the whole year, which they do not earn much from, but when the Chinese New Year comes they give away the money or use it to go home. He said: "they live on nothing and then they give all these money to their children." [Writer's translation] Robert claimed that this is totally different from us and they honour their elders to much bigger extent and place them on a pedestal. Robert concluded the interview by stating that it is important to be humble and said: "when in Rome do as the Romans." [Writer's translation] One of the principal differences Eric has experienced between the two cultures is that China has a much higher hierarchy than here in Sweden. He also stressed that the picture media is giving us is not very accurate because in today's China people do not only walk around on the rice fields with their pickaxes. He has seen the fast development and elucidated that the people there are eager to change the external picture of them and that they are working towards achieving our standard of lifestyle. On an individual level Eric explained that they are very friendly and want to take good care of you as foreigner but they are at the same time very afraid of doing things wrong. Like Eric, Martin elucidated the hierarchical difference between Sweden and China. He had noticed a huge difference in human dignity where in China the ones on the bottom of the hierarchy had their self to blame for being there. Martin reacted to this and could sometimes feel uncomfortable when for example waitresses came to serve them water, whilst his Chinese colleague treated them like air. He explained these feelings by saying: "I suppose it is the Swedish heritage." [Writer's translation] However, Martin has noticed a belief in the future that he found greater in China then here in Sweden. He believed this has its base in the fact that they every year see an intrinsic improvement of their situation. Nevertheless he claimed he had a hard time understanding how all this new and modern could be placed side by side with the old without any riots and bigger complications in the society. Lars described the Chinese people to be very proud over their culture and they "try as much as possible to perpetuate the old and emphasize it to the westerners as their own." [Writer's translation] His experience also included that they always claimed that everything, e.g. pasta and pizza, accumulated from China, to some extend Lars believed them to be right. He further stressed the rate of development, especially in cities and the outskirts of the cities he thinks the building rate is very hasty. At the same time he stressed that the development rate is hasty and vast but he also believed that the Chinese are anxious to preserve old parts. Another aspect of the culture Lars described in the interview was how the Chinese always elbowed their way through, which he explained was quite common in queues and in traffic. He stated
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Empirical Presentation "that it may be necessary to be very pushing to manage to come through a society like the Chinese." [Writer's translation] Kent believed the Chinese people to be a very giving people, especially when they have decided to develop a relationship. There is quite common, according to Kent, that you give different favours to your customers, however, they are also very sensitive to bribes in China. He told us: "on one hand is it very corrupt, a corrupted culture, but at the same time is it a delicate matter, so the favours you hand out as a businessman has to be on the businesslike level." [Writer's translation] Kent has found that even though many relationships could be developed on a very personal level it is not within the Chinese culture to invite someone to their home. He has also noticed that even though you could talk about almost anything with Chinese people there is one thing they stoutly avoid discussing, and that is politics.
5.3.2 The Chinese Perspective on Culture
Both Da Wei and Yun-Fat have stressed the width of the Chinese culture. They both agreed that the Swedish culture is in ways simpler and totally different. Da Wei believed that Swedish people are simple and sincere and Yun-Fat thought that Swedes are simple because their culture is simplistic in nature. One aspect within the Chinese culture that they both strongly stressed is the aspect of Face. There occurs to be an unspoken consensus between these two old countrymen about the concept of Face. They believe that it is of extreme importance to avoid someone from losing Face because it will terminate whatever relationship they have. If such an incident would occur there would be nothing anyone can do to mend the situation, they claimed. Hence that is why they avoid such situations. These are their main common thoughts and we will now focus on what they think on a personal level. Da Wei felt that the Swedish culture is different and that people also think differently over here in Sweden which makes it difficult for him to understand the Swedes. He believed westerners have more rules and perceived this as something cold. In general he believed that Swedish people have a good possibility to do well in cultures that are closer to their own. He said: "the Swedish people are down to earth, a simple people with a good faith in others but you lack knowledge about other cultures". He stressed that sometimes the Swedes can appear a bit self-righteously and not being aware of the knowledge that surrounds them. Da Wei continued by claiming that the Chinese have to be polite and that makes them hard to read. He stated: "if you have made a Chinese man to lose his face all respect ends and you cannot mend the situation". Another opinion of his was that westerners freezes the time and does not see the progress over time. In this sense he felt that Swedes are inflexible and that they believe that their values to be better. In his case he believed that he has adapted to Swedish culture and this makes it hard for him to reconvert to the Chinese culture. Yun-Fat claimed that foreign business people can use local representatives because these people know the local culture. He was under the impression that it takes time to adapt to a culture and it is not enough to visit as a tourist to get this insight. He stated: " People need to experience the culture, this through attending different events." After the language problem he believed that grasping a culture is the second largest problem. He felt that there is a difference between the Swedish and Chinese perspective of worth. Yun-Fat claimed Swedes to be more worried about the individual worth and Chinese to be more concerned with the collective worth. He stressed that in China a person's perceived behaviour is not only important in their own eyes but it is also important how they are perceived by others. He said: "it is important that you don't lose face because then it is over."
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Empirical Presentation
When comparing China and Sweden he emphasized how large China is compared to small Sweden. He believed that the people are too simplistic in Sweden and that everything is similar, for instance education and shopping habits. He said: "the same education in Umeå and Stockholm hardly differs and most people shop at Maxi for groceries." He claimed that this simplicity in Sweden makes it hard to understand the enormous China. He further stressed that in China it is much more depending on where you travel within the country since the culture differs. To exemplify Yun-Fat drew a chart which shows how a small country like Sweden with a fairly small population does not have a complex culture but China however, with a large country area and the biggest population in the world does. He stressed that this makes it more difficult to understand each other's cultures. He concluded this discussion by saying: "culture is not something you can learn from a book".
Culture complexity
Figure 5.1: Yun-Fat's Model over Culture Complexity
Population
S W E
C H I
W O R L D
5.3.3 Summary of Culture
The discussions we have had about cultures with our respondents have varied quite a bit. The Swedes and Chinese have emphasized different aspects of culture. For the Swedes most focus has been on how vast the development is and how hasty the building rate is coming along. The Swedish respondents have been somewhat contradictive in their statements about this. On one hand Robert is surprised that there seem to be nothing left of the old China, almost like China is drowning in everything new. Martin was in line with Robert's reasoning and questioned how everything new could be build without any riots or bigger complications. On the other hand, Lars view on this was totally different. He believed that this matter is dualistic, that they do have a vast new development but at the same time is anxious to preserve the old. Our Chinese respondents emphasized different aspects of culture. Yun-Fat stressed how complicated the Chinese culture is because of a big population and width in culture. Da Wei felt that Swedes are too ignorant about other cultures. Both the Chinese also stressed the importance of not losing Face. According to Da Wei it is part of the Chinese culture to act polite and this makes it hard to read the Chinese people and their intentions.
5.4 Business Culture
5.4.1 The Swedish View on Business Culture
When asked about business culture during the interview several of the Swedish respondents mentioned that there is a huge difference in the hierarchy levels. Where we in Sweden do not have that big difference between the one on the top and the one on the bottom, there is an enormous difference in China. One other issue mentioned by most of the participants was the long dinner parties, what they meant and how they were performed. A third area most of them
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Empirical Presentation went in to were the importance of knowing who the decision maker was, in order to prevent people from losing their Face and to prevent spending time and effort on the wrong person. Kent found it to be an odd experience to work as a seller in the Chinese market. He perceived the first meetings with a potential client to be quite slow but after a while he was always treated like a king as a seller. This treatment resulted in that there were no fast negotiations in China, after a whole day in the conference room where they have bought you both lunch and dinner someone from the Chinese team could suggest that you go out and do something afterwards as well, for example go to a massage club. Kent elucidated that they are very ethical so "there is no striptease but traditional Chinese massage, which is a nice ending to a tough day." [Writer's translation] He also added that it was "important to be adaptable and let them buy these bribe-dinners and we give favours back." [Writer's translation] However, he elucidated that the bribes and dinners should be at the business level. During the negotiations he found the Chinese businessmen to be very adaptable as well but he stated that "in the last stage they become bloody and will bargain a little bit more." [Writer's translation] Kent declared that it will always cost you to start a project in China but they are confirmed repurchase clients which gives the possibility to earn back what you lost in the beginning. He claimed that in China you always have at least two suppliers since you always are matched against other competitors. It is very important to be aware of whom in the Chinese organization that is making all the decisions and then become friends with that person if possible, according to Kent. Many times the decision maker bases his decisions on information coming from his subordinates then you become friends with them instead or as well. If you do not know who the decision maker is there is a great risk that it would lead to that someone loses his Face, Kent continued. However, he claimed that normally the westerners are more successful then the Americans in building solid relationships since Swedes according to him use an "elephant sales approach with a long trunk and big ears." [Writer's translation] He stressed that we are flexible and good listeners which are important attributes to be able to grasp the Chinese business culture. He also stressed that it is also important to make yourself surrounded by local people who understand the culture and that you trust. These consultants were very useful for information collecting and to feel signals of when to break up meetings. Breaking up a meeting can be necessary, pursuant to Kent, when trying to come to a final agreement. He claimed that in China you do not fight for your cause and then yield because then you lose Face. In his opinion if you take a break, discuss the issue with the chief or with the colleagues in the hallway for a couple of minutes it is then possible to come back with a changed opinion. Kent exemplified by narrating one business meeting where they had got stuck. He then wrote on a small note to his boss which said that the boss should go to the restroom. He said:"while my manager where at the restroom their president stood up and started to calculate on some advanced formula where he found that he could squeeze out more money on the deal. He erased the formula and told me not to say anything and when my manager came back we had reached an agreement on a final sum." [Writer's translation] In this case the CEO of the firm did not lose his Face, even though he discussed the matter with Kent, thanks to the fact that Kent had a lower position than him. These experiences made Kent to realize that in Sweden the individual has much more room to take personal responsibility. According to Kent the Chinese businessmen are very sincere in the conference rooms and they always state how much they are willing to pay and keep an open cost reasoning. According to Kent it is then up to the counterpart to motivate another price setting. Kent emphasized the importance of being as high up in the hierarchy as possible since "they have
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Empirical Presentation full control over the accounts while on a lower level they only have the budget to emanate from." [Writer's translation] If the person you are negotiating with cannot be flexible and starts saying; "I cannot come with this price to my boss because then I will lose face" [Writer's translation], then you know you are bargaining on the wrong level according to Kent. He stressed that on a management level you can much faster know where the final sum will land thanks to their openness and quite fast negotiations. Once again the importance of good relationships becomes valid and placed in the first room, in contrast to the western world where the money comes first and relationships after, pursuant to Kent. A final reflection made by Kent is the importance to control if the Chinese people fully have understood what has been said. This he has found a bit difficult since they always give affirmative answers. Kent solved this by using an assistant who were good at noticing if someone did not understand. Robert claimed that the Chinese are good businessmen and they know how to bargain for new prices, which leads to that it is very difficult to get a fixed price and stick to it. He asserted that if the Chinese businessmen just saw a glimpse of a white person the price directly went up, so you needed to have alternatives. Another reason to have alternatives, according to Robert, is the time aspect. He stated: "you sit down and make a plan over the whole process that he gets to sign, and on Monday it should be done, but that almost never coincide" [Writer's translation]. In Sweden we are good in saying what we mean, Robert stated, but it is different in China; "there will always be a new Monday." [Writer's translation] He continued to say that the quality assurance is also an issue when manufacturing in China. He stressed that it is due to the difficulties in keeping people; if the workers know they could get 50 cent more an hour somewhere else they go there and the factory have to find new workers. Another example Robert gave on their obsession of earning how ever small amount more was when he had an agreement with a manufacturer and they had made up all the direction on which material to use and so on. According to him there was no surprise when the team leader had been bribed to put in another component then what was agreed, which contributed to that the final product not being approved in the quality testing and were therefore not able to get sold. He said: "The Chinese worker does not understand the context, you earn some money by maybe paint a bit poorer and put in that part and he thinks he is extremely smart but in the final quality check-up they do not get any money at all." [Writer's translation] Eric told us about an incident he had experienced in China, which never would have happened in Sweden, where all the workers in a factory were fired because they did not seem motivated enough. As Eric saw it to be the reason why it could be perceived as "necessary to ignore the labour legislative rules is to make the development they do." [Writer's translation] Eric's standpoint concerning price negotiations differed from the others when he claimed that the Chinese businessmen always gave the best offer and therefore it is no place for bargaining, however suggestions for price changes could be made, but he was in line with the other respondents in the statement that the Chinese were not very independent. Another note he made was that most the businessmen were women, since it was mostly they who got the education in China according to him. When Lars first came to China he found it to be unsafe due to the risk of being cheated by the Chinese. It was mainly the ones on the management levels in the Joint Venture who tried to get all possible benefits, and Lars said that was a rough time. He had heard stories about Chinese businessmen who "get in contact with Swedish companies and trick them to China and let them pay for expensive dinners ones or twice and then they split the money with the restaurant" [Writer's translation] where no deal had been made. There is a huge difference after a good relationship has been established, according to Lars, then the Chinese can be
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Empirical Presentation valorous and are normally interested in starting the cooperation as soon as possible. In the mining industry Lars found the relationship with the Chinese counterparts to be dependent on recommendations, from for example consultants in design institutes who have approved the technical solutions. Another important part in the business culture is, pursuant to Lars, the dinners and lunches you have together. There are a lot of manners and habits during such an event. For example there is almost always one fish course and he said: "that it is placed in front of the guest of honour with the face towards the guest of honour and it is he who starts." [Writer's translation] Lars continued to describe that there normally are a lot of drinking involved in these events. Martin had a lot of prejudices the first time he visited the factory in China which later would take over his production. However he found a modern facility with a good and clean entourage. One thing he reacted to, though, was the motivation technique used there. He pointed out that over each worker there were space for an A3 paper and if someone had made an error so the line had to be stopped they wrote on that paper so everyone could see that the person had done something wrong. He elaborated by saying: "they get a red note if they make two failures and if they do a third one, well, then they do not stay." [Writer's translation] Martin found the business culture to be very hierarchical in China and the business climate to be much tougher where he says it is like: "-Shut up and do your work, and not like; -Now my little friend will I stimulate you so you can develop and become a good resource for the company." [Writer's translation] He also stated that there seems to be something in their culture which contributes to that full honesty is not necessary to do a successful business deal, but you should not delude. He continued by saying that if he could go in and get out more of the business deal he would do that in the same way that the Chinese are doing. Martin claimed that he had reacted to the Chinese decision making process where it could sometimes be difficult to be sure of that you spoke with the decision maker even though you spoke with the responsible in that certain area, this makes the process irritating and time consuming. This shows, according to Martin, the lack of independency and creativity they have, however, he found them very knowledgeable. Martin stated that "it is the leadership style that limits their ability to put their own knowledge into creative ideas." [Writer's translation] He was not that impressed by the Chinese people's ability to establish new connections. He said: "they were quite good but did it in a mechanical manner." [Writer's translation] Martin said it felt like, when sales or marketing people called, they were reading from a script and did not listen to the client, just "to be able to report on Friday that I called 22 and I talked to these persons" [Writer's translation], but they were not interested in the result. He also claimed that they appeared to be too controlled when meeting them in a group, so he always tried to have meetings one-on-one. This made it possible for him to access critical information or to get clarifications on things he had not fully understood.
5.4.2 The Chinese View on Business Culture
In this theme the two respondents have focused on different aspect of business culture. Da Wei mainly focused on Swedish aspects on business culture when Yun-Fat switched between the Swedish business behaviour and Chinese business structure and making contrasting statements about the two. In general they are both addressing one common aspect, the timeframe. Da Wei expressed that he felt Swedish businessmen was willing to learn about culture and business culture but does not know how. He believed Swedes need to put more time and effort into learning. Yun-Fat perspective of the timeframes in general was that Swedish people in contrast to Chinese are more case to case and Short-term Oriented in their process of building business relationships. More of their individual thoughts will now follow.
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Empirical Presentation
According to Da Wei Swedish businessmen are especially skilled at making business internally: within an organisation, within production and with quality assurance. He was under the belief that the Swedish organisational structure is horizontal and flat. He stressed that there is a need for Swedish businessmen to become more knowledgeable of cultures, and added that it is impossible to know a culture only after spending a week in foreign country attending various dinners. He said: "there are many Swedes with a strong will to understand and grasp, but they do not know how." [Writer's translations] He pointed out that when Swedish businessmen are selling something they often focuses on power point presentations which in China is interpreted as dull and is therefore not common. He further believed that it is wrong when Swedes go to China to build up a company and only hire Swedish people. One successful concept for him is to hire a Chinese CEO on location. Just like his opinion about Face in our culture part, Da Wei concluded that it is the same in business relationships; if someone loses their Face the business relationship is over and there is nothing you can do about it. Yun-Fat argued that in China everyone seeks benefits. According to him the Chinese mainly seeks far-reaching relationships and therefore take their time building a relationship whilst Swedish people are more short-term, and case to case, oriented. Yun-Fat pointed out that this results in a velocity difference between the Chinese and Swedish collaborations. He further stressed that in Sweden you rely more on teamwork while you in China focus more on the individual effort, this because China is hierarchic in nature and consequently the CEO solely makes the decisions there whereas in Sweden CEO decisions are jointly debated with colleagues. In addition Yun-Fat is under the belief that Swedish people are very friendly and nice to work with and also very professional. He told us: "Swedish businessmen they are true gentlemen that like doing business." He further pointed out that they are often highly educated but they can sometimes become too technical in their appearance and then lose some of their humanity and give a feeling of just being a system. He further compared this to China where he believed that there was not as many educated in China, in the old days, but they still knew how to make money. They were according to Yun-Fat smart and had a sense of good business but still uneducated, instead they had to learn from each other. He further pointed out that today most Chinese executive managers and CEO's are well educated having studied at international business schools and they too can become too technical and get problems with communications but when they enter a discussion they are good at making decisions.
5.4.3 Summary of Business Culture
One of the most important differences in business culture is according to the two Chinese respondents the timeframe, where Da Wei believed Swedes need to put more time into learning about other cultures and Yun-Fat separated the short-term Swedes from the long- term Chinese. Robert also experienced the time factor when he believed the Chinese having a hard time keeping agreements within the set timeframe. Several of the Swedish participants emphasized that hierarchy was the main difference; this went in line with Yun-Fat statement as well. It had also been acknowledged that the higher up in the Chinese hierarchy you come the easier it is to negotiate about price and other issues that need to be decided. They stated that it is very important to negotiate on the right level and with the correct method otherwise there is a risk that one of the parties will lose his/her Face. Some of the Swedish respondents experienced it to sometimes be hard to know who the decision maker was in a Chinese company, but as Yun-Fat declared it is the CEO who makes all the decisions. Several of the
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Empirical Presentation Swedes discussed how dinners were a part of the business culture in China, and all the manners and habits surrounding them, but as Da Wei elucidated you do not know a culture just because you have been in the country for a week or two and have had some dinners.
5.5 Cultural Clash
5.5.1 The Swedish View on Cultural Clashes
All the Swedish participants had experiences from cultural clashes, or as some of them rather related to as cultural misunderstandings. They contributed with a great variety of incidents which occurred due to cultural differences. We shall now look at their personal experiences. Eric told us that he had experienced a small misunderstanding between him and a Chinese manager. According to Eric what happened was that he told this Chinese manager what one of his employees had told him earlier that day that he would be enjoying a cold beer while Eric had to work. When Eric told the manager the story he became stunned and did not understand it because in his world an employee could never express something like that to their CEO or higher executive. Eric told us that he makes fun of his malicious portrait of the Chinese in front of them, e.g. that they have big rice fields where men go around with pickaxes. He told us that the Chinese are aware of this foreign malicious portrait and that they think it is a bit annoying. He also experienced a misunderstanding while he was having a meeting in a Chinese conference room when he suddenly received a call on his cell phone. The call was important so he had to step out and take it. According to him the Chinese then thought that he was dissatisfied with something and therefore went out from the room. He then had to push all the people back in the meeting room. Eric stressed that the Chinese does not have the same or as good humor as us Swedes but they do start to understand our humor after spending some time together. Eric believes that it was easier in general because they were dealing with Hong Kong Chinese which he feels are more adjusted to westerners because they are used to dealing with them. According to him this has resulted in fewer misconceptions. Martin felt that they had drawn a blank sometimes because of their German way of acting, which can bee seen as very direct. Martin told us he experienced an inability to make decisions in China. He said that there was a lot of frustration before they understood this indecisiveness and the process of which decisions were being made. He exemplified with a story about a Swedish entrepreneur that opened up his own factory in China. This entrepreneur had a Swedish way of delegating responsibility but it turned out to be inapplicable in China because it made his workers confused because they were used to having someone telling them exactly what to do. In addition Martin pointed out that the Chinese people cannot give negative information and this was something that took a while for Martin to understand. He said: "when there were delays and we did not understand why we had to call them but they claimed there where not any problems". [Writer's translation] Martin told us that eventually there was a Chinese person who wrote to them: "we will get back to you as soon as we have good news". According to him they could then understand how things worked over there. In the end he said they had to go up to the boss in order to get any information about delays and only then they would get the information of what kind of problems they had and how they intended to solve them. He stressed that going to the boss was something you had to take advantage of in order to get information. He further pointed out that they have been force to take initiative
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Empirical Presentation whenever there has been some kind of problem and he felt that the Chinese in this case lacked the ability to comply by not giving such information. The Chinese perspective of hierarchy versus the Swedish perspective of the matter has been mystical for Martin. He claimed that the Chinese thought that Martins employees were disrespectful towards him because his subordinates did not treat him as the Chinese treated their own boss. He pointed out that in the eyes of the Chinese he would not have any decision making authority because his subordinate lacked the proper respect for him. He stressed that it might be wise to be clearer about the hierarchic level when you are in different places so that people can feel comfortable and the boundaries remains unquestioned. He further said: "they even asked if I had authorization to sign a paper and if there were no one above me". [Writer's translation] He claimed that another Swede with extensive experience in China had to help him out and culture negotiate and explain how things worked in Sweden. He told us: "this thing with having a flat organizational structure makes it incomprehensible for them so therefore maybe I have to flex my muscles because I am the boss". [Writer's translation] In this sense Martin told us that he has changed his appearance when he is in China. Lars believes that main cultural clash that appears between Sweden and China were related to the extensive corruption in China. He stressed that he has received education from his company on several occasions about rules of conduct. He believed that the Chinese probably thought he was somewhat pending or drifting, which resulted in the Chinese taking the initiative and explained to him that this is how they go on in China. He also stated that he has always appeared according to his own head and thoughts. Kent believed that the biggest misunderstanding can be traced back to the Chinese language. He said: "you always have to be very observant because we usually claim that when a Chinese says YES it does not mean that they agree, it means that they HEAR what you are saying, then they say YES." [Writer's translation] He claims that this is why you always have to be very observant and in his case he had an assistant that helped him. He told us: "she pinched me in the side when I needed to clarify something and then I had to take another lap and take it slower because their cogwheels had stopped". [Writer's translation] He strongly stressed that you have to be at least two persons in such situations, just to have someone that can check that what is said is understood by your counterpart. This is why he believed that all fear of losing your Face is passed through the confusion of languages. He further claimed that the Chinese do not dare to tell you that they do not understand what has been said since they have been sent by their superior just because they are supposed be to good English speakers with the ability to have business talks with an English counterpart. Kent gave an example where he had been in a business meeting where a protocol from the meeting was written by both parts and when they then tried to compare these two protocols it looked like they two parties had been in different meetings. He claimed that they could not, even then, admit that they had not understood. Kent believed that this is the result of a combination of things such as the confusion of languages and the fear of being perceived weak or bad just because the chance of not understanding and having to ask for an explanation. He claimed that these representatives are often not good English speakers. He further pointed out that the Germanic languages and Chinese language are similar in how they express things. He stated: "there are nouns, there are verbs, and you connect these in the same way but nevertheless the differences between how our cultures see things are so deep and also our parables differ." [Writer's translation] Parables, he claimed, was one of the things that made the cogwheels stop for the Chinese and
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Empirical Presentation therefore there is a need to constantly keep a discrete level of what you say because according to him they have their parables and the Swedes have theirs and it can never coalesce. Kent told us he has been in negotiations when his staff has told him that they cannot pay the amount of money for the functionality they are getting from the Chinese manufacturers. In such cases the Chinese has responded by claiming that they can put for example 1800 engineers on solving a particular problem. Kent then went back to Sweden and later the Chinese called and told him that they have worked on a solution for a couple of weeks without solving anything, reasking how much Kent and his people wanted in the first place. In cases like this Kent emphasized the need to feel the atmosphere and to be sensitive. He said: "to understand what they want, is to understand where they are in their own understanding of what they want. When they finally have understood what it is they want, they quickly understand what complexity that results in and if they need help or not" [Writer's translation] Kent contributed with another incident which clearly testifies to the importance of a good relationship. He had during five years built up a well functioning relationship with a Chinese company. The business deal had a turnover of 100-150 millions each year and within 20 minutes they managed to lose all. It was a German manager that would take over the relationship after Kent and this man went in to the business meeting with a strong German attitude which was not appreciated by the Chinese counterparts so according to Kent: "that relationship he destroyed within 20 minutes and he came out with the head first." [Writer's translation] Normally when misunderstandings occur, Kent has experienced that it is important to contact a person in the other organisation that you trust and that have participated in the negotiation and tell him what went wrong. That gives the person time to pave the ground and try to turn things in the best way so that the two persons who have misunderstood each other can come to an agreement without any backwashes, he stressed. Robert believed that cultural clashes appear all the time and sometimes it is hard to tell at first. He stressed that you sometimes come to a gradually understanding afterwards. For instance, he claimed that the Chinese made promises of what they could produce or handle and then did not fulfill those promises. Other misconceptions that can occur are when the Chinese claims that they have understood something and it turns out they really have not. In such cases Robert believed you cannot just out of the blue tell them that they do no understand, instead he said you have to "run around and try to tell them in a nice way if you want to the relationship to maintain". [Writer's translations] He has experienced cases wherethe counterpart has not given a damn or has become angry. In such situations he claimed it is impossible to even negotiate with them even though they know that they would lose money if the deal would not go through. They still say "No" flat out regardless, according to him. Robert has felt he has adapted his behavior almost like a chameleon. He stated: "you have to do that, you must listen otherwise it will not work, this is how it always is." [Writer's translation]
5.5.2 The Chinese View on Cultural Clashes
Within this theme our two Chinese respondents differ in their examples and perspective. Da Wei is more focused on cultural clashes in business situation such as the Chinese courtesy which forces them to be polite and never say no. Yun-Fat on the other hand is more focused on clashes on an individual level. It is his belief that clashes today are more accepted and in this remark not problematic when they occur. In addition both Da Wei and Yun-Fat felt that they have adapted to Swedish society and culture.
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Empirical Presentation
Da Wei pointed out that cultural clashes can occur due to Swedish people rushes into the relationship building process. He stressed that other misconceptions or cultural clashes can come to happen because Chinese people have a hard time saying no, unlike the Swedish. Instead Da Wei points out that the Chinese are saying that they will consider it and look into it when they are not interested. In his experience when situations like this occur the Swedes will believe that the Chinese are interested and then a misconception has occurred. In such cases he claimed that it is difficult to interpret the Chinese intentions. Da Wei elaborated this with an example. He once knew a businessman that was one of the first Swedes to invest in China. This person was working for a big Swedish corporation on an executive position. He experienced problems in the beginning when he had meetings with Chinese companies and introduced his product since the Chinese always sat and listened to his word and gave the impression of being interested by being positive towards the Swedish businessman. When then this executive Swede went back to his company he was under the impression that a deal was starting to take shape. After a while, when he had not heard from any of the companies, he contacted them to follow up their business proposal. It then became clear to this man that the enthusiasm the Chinese had given to him was part of their courtesy to act polite and they had in fact no interest in his products whatsoever. According to Da Wei many people believe that China only produces low quality products. He pointed out that this is a misconception because of the broadness of demand it is required that they have different range of the quality for a product. Da Wei claimed that this is not required in Sweden because the difference between people in general is not so wide. He said: "in China we say that one crown buy's one crowns product and ten crowns buy's a ten crowns product." [Writer's translation] According to him when a Swede is trying to get a cheap product then they will buy a one crown product based on raw material with lower quality. He told us: "if you are interested in good stuff you must pay more." [Writer's translation] He stressed that this has caused a lot of problem in China but that there are products of really good quality and in fact the range of the same product is wide unlike in Sweden. In addition Da Wei expressed that he has adapted his behavior after moving to Sweden a little bit but he does not think about his behavior much because he feels no need to ponder about it. Lastly he pointed out that in order to prevent cultural clashes you must adapt to the society you live in. According to Yun-Fat most people are aware of cultural disparities and therefore when they occur they just shake their shoulders and move on. In his opinion it is more difficult for a Chinese person to understand and they might even be angry but they are starting to get more cultural influences via movies and language education. He pointed out that they as a result are getting a wider comprehension. One other misunderstanding he described was how Swedes tend to say Hello to each other's in the morning while Chinese people usually ask "How was your breakfast?" According to him this is their way of saying hello and also showing concern for one and another. He stressed that this is often difficult to understand or interpreted as funny and strange in the western world. Yun-Fat stressed that he too just like Da Wei has adapted to the Swedish culture.
5.5.3 Summary of Cultural Clash
The most substantial Culture Clash or occurring misconception between Sweden and China seems to be the inability to communicate because of language complications. Many of our respondents have pointed out that there often occur misunderstandings because the Swedes cannot interpret the intentions of the Chinese. According to Kent this happens because the Chinese have a habit of always saying yes as a means of hearing what their counterpart are
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Empirical Presentation saying rather than agreeing to something. Robert expressed that in such situations one needs to proceed very gentle and not tell them directly that they have not understood because that might lead to them loosing their Face. According to Da Wei it is part of the Chinese courtesy to act politely in front of others so when a Chinese is saying that they will consider something it might mean the opposite. Swedes are on the contrary more direct and German in their way of acting according to Martin. Both our Chinese and Swedes respondents have stressed the importance of adapting to current culture. As Da Wei pointed out it is a must in order to prevent cultural clashes. Another way of minimizing cultural clashes is to expose you to something unknown or new according to Eric. He stressed that the Hong Kong Chinese are more adjusted to Swedes because they are accustomed to them.
5.3 Summary of the Empirical Presentation
In this chapter we have presented the empirical findings that we have retrieved from the seven interviews conducted. It was fast made relevant by our respondents that relationship has a central part in China. The Swedes testified on how they needed to put more time and effort down to build these relationships then they normally do in Sweden. For the Chinese, who saw this as a natural element, relationship is built upon trust and commitment and is something that needs time and constant entertainment. These aspects were also acknowledged by the Swedish participants when talking about business culture while the Chinese were focusing on the importance of Guanxi, i.e. networking. When asking about their cultural experiences many of the Swedish respondents emphasized their astonishment on how the old and the new could coexist side by side without any major complications. The Chinese respondents stressed other aspects of culture like how the Chinese always have to be polite to prevent losing Face and Yun-Fat said he found Sweden to be very simplistic and it could be seen as a reason to why people here have a hard time grasping the Chinese culture. In the business culture it is stated that the main differences are the time aspect and the variance in hierarchy. Most cultural clashes seem to be due to misunderstandings and that one person cannot interpret the other person's intentions correctly. Key words representing the main aspects brought up by the respondents are presented in short on next page (table 5.2).
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Empirical Presentation
TABLE 5.2: Summary of the Empirical Findings for the Respondents Relationship Martin Lars Eric Robert Kent
Trust, Takes time Commitment
Business Relationship
Personal relationship, Takes time, Face Long dinners, Take advantage Business vs. pleasure, Trust Business vs. pleasure
Culture
Hierarchy
Business Culture
Hierarchy, Controlled Seek benefits, Recommendation, Dinners Fire staff, No bargain Price bargain, Keeping staff Treated like king, Bargainer, Face, Decision maker Face
Culture Clash
Indecisiveness, Affirmative answers, Respect Corruption
Patriotic, Elbowing Hierarchy, Eroding culture, Not say no, Dinners Giving, Not too personal
Commitment Long process, Long dinners Trust
Joke, Telephone call Say what they mean
Trust, Time
Not say no, Face, Language Not say no, Courtesy, Product quality Understanding
Da Wei
Yun-Fat
Business v. private, Trust, Commitment Care for network, Less privacy
Trust, Personal relationship
Face, Aspect of time
Personal interaction, Trust
Time to adapt, Face, Complex culture
Seek benefits, Time aspect, Hierarchy
In this table key words from each participant and theme are presented to give an overview of the empirical findings. The words concern the respondents view on how China differentiate from Sweden.
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Analysis
6. ANALYSIS
In this chapter we will investigate both our theoretical and empirical findings to explore what conclusions can be made from our study. The chapter consists of five parts which are correspondent to the themes in our empirical chapter. The data in each theme is first analyzed using the correlated theories and then discussed under each section. We will first analyze the data concerning relationship in a broader sense before immersing into business relationships. The same approach will be used in the part about culture which will be followed by analyzes and discussions concerning cultural clashes. Additionally we have a part were we present an analysis of our participants.
6.1 Relationships
Both the Swedish and Chinese respondents' interpretation of what constitutes a relationship does not differ. However, it has been pointed out that the importance of a relationship differs in China and Sweden. It is the commitment part, which is agreed upon by our respondent to be required to have a relationship, which is more extensive in China. This creates a situation where Swedes are forced to commit more to relationships in China than they are normally used to in Sweden. Håkansson and Snehota (1995, pp. 25) defines a relationship as: "a mutually oriented interaction between two reciprocally committed parties". Therefore from a Chinese perspective, the aspect of reciprocal commitment can be questioned because there is a dissonance between our two cultures where Swedes put less effort into the building process by committing less than the Chinese. This can implicitly be related to, just as Da Wei pointed out, that the distinction between a personal relationship and business relationship in China is insignificant, in contrast to Sweden where a clear distinction between business and pleasure exists. A Swede will therefore distinct between working friends and other friends where the Chinese will put less thought in separating the two. Da Wei also attests to this line of reasoning when he stated that the Swedes are colder and do not invest as much as the Chinese normally do in a relationship. According to Morgan and Hunt (1994) there needs to be more than commitment in a relationship for it to be profound. They also believe that the element of trust is part of the relationship core and from our empirics we have gathered that both our Swedish and Chinese respondents are in conjunction with Morgan and Hunts Commitment and Trust theory. Trust can therefore be seen as essential for both Swedes and Chinese. However, when our Swedish respondents have travelled to China it has been in business situations and as pointed out earlier the Swedes then have complications separating between business and pleasure, unlike in China where it more blends together. Just as Da Wei pointed out the Swedes have a tendency to rely on rules which contrasts them to the Chinese. In business situations between these two, the Chinese will try to create a friendship based on trust when the Swede is there to conduct business with a totally different approach. This does not mean that they do not aspire to have trust between friends but that they are there in a different context. The reason behind this will be elaborated later on in this chapter.
6.2 Business relationship
Several of the respondents have illuminated the difference in how Swedes and Chinese build relationship by stating that for the Chinese businessmen it is of greater importance to build a personal relationship than it is for the Swedish businessmen. In Sweden it is much more common that people only meet to do business, according to Eric. The Swedes on one hand act more objective and do not see a potential business partner as a potential friend when the
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Analysis Chinese on the contrary want to establish a friendship before proceeding with a business transaction. The Swedes way of conducting business then coincides with Relationship Marketing (Grönroos, 1996) where it is more focus on transactions than in Guanxi theory (Geddie et al. 2005). However, in China more focus is on developing the relationship by having long dinners to get to know each other, as Lars stated. This personalized development perspective of relationship can be correlated to Guanxi theory and is a way of life in China. One implication in this case is that Swedish and Chinese businessmen have different approaches even though both in the end aspire to conduct some sort of transaction. Several of our Swedish respondents have acknowledged that they are aware of the fact that building a business relationship with a Chinese is a process that takes more time than they are used to. On the other hand, Da Wei believed that Swedish businessmen are to opportunistic and spend too little time in China. Yun-Fat, who had helped Swedish companies when negotiating in China, even claimed that no business transactions between Swedes and Chinese had been made without him working on behalf of the Swedes. Despite awareness it still seems like we invest differently in business relationships and the timeframe is what separates our two countries the most. In our theory chapter we compared Guanxi to Relationship Marketing where it states that the Relationship Marketing approach starts with a transaction while the Guanxi approach starts with forming a relationship. Our respondents view can be said to coincide with both the aspects of Relationship Marketing and Guanxi (Geddie et al., 2005). Just as we wrote in the relationship part, business relationships in China also need to have elements of trust and commitment which is in line with our Guanxi theories but also to some extent coincides with Morgan and Hunt's (1994) Commitment-Trust theory. However, as both of our Chinese respondents pointed out western societies including Sweden are too focused on laws and regulations making the business relationships more formal. Also, as we wrote in our relationship analysis, there is a clear distinction between business and pleasure for the Swedes and this were also stressed by our two Chinese respondents about business relationships. This should be kept in mind because these two aspects can hinder the relationship process for Swedish and Chinese companies. On the other hand, most of the Swedes have acknowledged that relationships are more important when conducting business in China but they have not shown any signs to understand why it is more important there. This can also be negative and as a result cause a disfavoured situation. In Martins case it was the opposite because he managed to create a good relationship with the collaborating CEO in China but it did take half a year to build that relationship. Da Wei stated that the Chinese are networking and building relationships, though not deliberately to build business relationships but merely to have a relation with someone. If a business possibility then comes up between two friends you might do business together according to him. This can be traced back to what we wrote about Guanxi and its history. In lack of a good welfare system the Chinese had to and still have to build networks to ensure their families and themselves from menace and other difficult situations. By building good relationships they can reciprocally give and get favours from each other, which are called renqing according to Lee et al. (2005). This is part of Guanxi and works just as insurance in lack of a welfare system like the Swedish which is renowned to be extensive and just. This is one of the reasons why relationships are so important in China and as we wrote above is this difficult to understand for a Swede.
6.3 Culture
We have in our empirical findings found that most of the Swedish participants have had a similar attitude towards culture and the cultural differences between Sweden and China. These differences are in addition shared by our Chinese participants. However there were
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Analysis many of the beliefs that differed between the two nationalities as well and this can be linked to the different estate of the cultures. As Trompenaars and Hampden-Turner (1997) states culture is a shared definition of a situation by a group and the mental programming in our two respondent groups (Swedes and Chinese) are separated from each other but have an internal coherence (Hofstede, 2001; Brown in Adler, 2002). As stated by Hofstede (2001) rituals are essential elements in a culture to keep the individuals bound within the norm of the collectivity. Trompenaars and Hampden-Turner (1997) elucidate food as an explicit product of the outer layer of culture. The long dinners that the participants have talked about could then be considered as rituals in the Chinese culture. Even though our Swedish respondents have acknowledged these cultural rituals we believe the Chinese have a more profound meaning to these events since them as insiders are aware of the underlying connotation (Hofstede, 2001). Da Wei declared that Chinese have an unwritten obligation to be polite. Kent did also testify on that he believed the Chinese to be very giving in their approach. These two statements we derived from the Chinese values which determine what is "good" or "bad" (Trompenaars &HampdenTurner, 1997). To be polite and compliant could therefore be seen as "good" behaviour in the Chinese society. Another aspect, acknowledged by Lars, is how the Chinese always elbow their way through, for example when standing in line to buy tickets. This could be valued as bad behaviour by Swedes, although it could also be seen as a Chinese norm where they believe the behaviour to be the "right" way to do something (Trompenaars &Hampden-Turner, 1997). Below we will continue our analysis by looking at Hofstede's (2001; 2005) different dimensions and draw lines to the theories of Chinese culture.
6.3.1 The Dimensions of Culture
Three of the Swedish respondents mentioned hierarchical differences when talking about the two cultures. It is important to be aware of these differences within Power Distances when travelling and residing between the two cultures since it is easy to judge one way to be better than the other, even though we have not found any indications of that. However, the risk for judgement Martin illuminated for us when he said he felt uncomfortable when people from a lower class served him and his Chinese colleagues treated the person like air. Hence if he had been propagating for the lower Power Distance, as we have in Sweden, a conflict could have occurred. Hofstede (2001) have distinguished that these two forces, i.e. to preserve the status consistency versus to gravitate towards overall equality, exist not only as we argued between different cultures but also within them. Another reason to the much higher Power Distance in China is the Confucianism philosophy which strongly influences the country and has done so for thousands of years. The philosophy prescribes a vertical relationship between people which we believe have an enormous impact on the Chinese society and is the reason to the wide difference between people at the top and people at the bottom. Reflections that could be drawn from this is that if going to China it is important to be aware of and try to adapt to the Chinese way even if lower Power Distance probably is perceived as preferable by many Swedes. Hofstede (2001) claims that Uncertainty Avoidance is one of the factors that contribute to anxiety of not knowing what will happen in the future. In contradiction to Hofstede (2001; 2005) this indicates that the Chinese people then would have higher Uncertainty Avoidance than Swedes. The empirical findings have shown that Chinese people have difficulties saying no. From Eric's observation he claimed that the Chinese often seemed afraid of doing things wrong, which we also interlink with the Uncertainty Avoidance. As we see it the Chinese
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Analysis society does have unwritten rituals to make the people cope with uncertainty (Hofstede, 2005) and these make the people saying "yes" instead of "no". If they give negative answers they risk losing Face which is an anxiety they want to avoid. Da Wei claimed that in Sweden we have more rules that control us and make us cold. This could also be seen as a factor to help us prevent uncertainty (Hofstede, 2001). With this said it is possible that even if Hofstede (2001; 2005) state that both Sweden and China are countries with low Uncertainty Avoidance it is clear that both the countries have it to some extent. The Chinese concept of Face could also be drawn into this discussion. As Tang and Ward (2003) state the word "no" could cause a person to not give Face. Everyone can lose lian, one of the dimensions of Face, and then that person is without integrity according to Worm (1997). One aspect of why Chinese people often say "yes", even if they have not fully understood what has been said, could be to show respect for the other person and by that prevent him to lose Face. Our two Chinese participants made it clear for us how a relationship could be terminated if someone lose their Face and this goes in line with the Worm's (1997) statement that the lian is difficult to restore if it has been lost. The opinions of Robert and Yun-Fat did not coincide concerning if the Chinese are more individualistic or collectivistic. Yun-Fat believed that in Sweden the individual value were more in focus compared to in China where collective value had a bigger role. However Robert was stating that he perceived the Chinese to be more focused on individuality which contributed to them being very independent. This statement opposes Hofstede's (2001; 2005) findings that China as a less rich country and therefore should be collectivistic. Notice have to be made here that it is only one of our respondents who have found the Chinese to be individualistic, but also that Hofstede (2001; 2005) is generalizing very much and with a diverse country like China there could be parts which is more individualistic. The latest added dimension by Hofstede (2001; 2005), the Long- versus Short-term dimension was one aspect Da Wei had experienced in his meetings with Swedish people. He found them to be inflexible due to that they did not see the progress over time, they only saw one episode at the time, or with his words "you freeze time [?] and do not see the opulent relation" [Writer's translation]. Da Wei continued by stating that he found the Swedes to be self- righteous as well. Self-confidence and the right to freedom of speech are values people in Short-term Oriented countries value very high (Hoftstede 2001; 2005). Kent claimed that the Chinese was much opened and could talk about almost anything, except politics. This could be seen as a retrenchment of the freedom of speech. We believe that these examples clearly show that Sweden has a Short-term Orientation while China has a Long-term Orientation.
6.4 Business Culture
It is not just between countries distinctions could be made due to culture but also between different organizations or businesses (Hofstede, 2005). By this said it could be stated that differences within a national culture could be observed when investigating a variety of business cultures. To achieve that it would be necessary to make studies on a much more extensive level then we are doing here hence we will investigate the differences between the business cultures on a national level, i.e. for Sweden versus China. Martin believed the Chinese business culture to be much tougher than the Swedish one, where they in the latter works more on developing the employees to make them a good resource for the company, and in China he believed them to exploit the employees. Eric had also acknowledged this toughness when he arrived to a factory that just had fired the whole staff due to too little motivation according to the managers. This could be interlinked with
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Analysis McGregor's (in Adler, 2002) theory of how the managers' behaviour can be closely collaborated with the employees' behaviour. That means that the lack of motivation in Eric's narrated scenario could be due to the managers' leadership. Robert told us about a contrasting case where instead of being fired the workers personally decided to leave the factory due to too low salary. The reason they left could also be in combination with how the organizational culture was perceived by the employees. There is a close connection between the national culture and the organizational culture and both are affected by the cultural dimension (Hofstede, 2005). Below we will go deeper in to Hofstede's (2001; 2005) different cultural dimensions and correlate that with the other theories on Chinese culture and our empirical findings.
6.4.1 The Dimensions of Business Culture
When discussing business culture the Power Distance was emphasized by the respondents, as it was in the previous section about culture. Kent interlinked the hierarchical issue to the decision making process where he claimed that it is important to be as high up on the hierarchical ladder as possible when decisions have to be made. This shows a very high dependence on the top manager in Chinese businesses and do not give the subordinate very much room to be flexible. Martin did also discuss the decision making process, however, he were focusing more on the difficulties knowing if you had gone to the right person. When he tried to obtain decisions in certain questions he many times had to go above the responsible to get answers, which he found very irritating. Yun-Fat stated it is solely the CEO who makes all the decisions in a Chinese company which also could be seen as an aspect to why the emotional distance is higher in Chinese organizations. The emotional distance between a boss and an employee are then seen to be much smaller in Swedish organizations where decisions can be made in collaboration with the two (Hofstede 2001; 2005). The difficulties of giving negative replies for the Chinese could also be derived to the Uncertainty Avoidance theory (Hofstede 2001; 2005) as stated in the culture section. The Chinese people's anxiety of doing things wrong could contribute to the rituals of giving the affirmative answers Kent testified upon. When they are faced by a situation which they do not know where it would lead to, their uncertainty feelings make them behave in a way to try to prevent this anxiety. This ritual which influences the behaviour, is in this case to say "yes" instead of "no", and is many times shared by a group of people in let say an organization. According to Hofstede (2005) another way of coping with Uncertainty Avoidance is to set up rules within an organization. Lars experienced that in the mining industry in China they were very dependent on recommendations. The companies had established policies stating which consultants to trust when approving on technical solutions. These policies helped the organizations to prevent anxiety of making wrong decisions which could lead to an uncertain future. Yun-Fat expressed that in China they focus more on individual efforts while in Sweden they rely more on teamwork. According to this statement it would mean that Chinese businessmen have to take a bigger responsibility to their actions in comparison to their Swedishcounterpart. However Kent did stress that he believed the Swedish people to be allowed more personal responsibility. These opponent views could once again be derived to the hierarchical differences. Da Wei stated that in Sweden the organizations are more flat or horizontal and therefore the difference between the top manager and the other employees is not that big. The flat organization could also be seen to foster working in teams which then contributes to the lack of need for a broad responsibility from the top managers. In contrast people in a collectivistic society do expect responsibility from the organization (Hofstede 2001) which
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Analysis could be seen in Yun-Fat's experiences. Even though he stated that Chinese have a more individualistic approach it should be added that he also claimed that it only were the CEO's that made all the decisions and could by that be seen as the organizations' responsibility takers. Hofstede (2001) also state that in an individualistic country people value freedom and space to develop their personal goals and by Martin's experience it shows there is no room for such things in the Chinese way of doing business. According to Martin the Chinese most of the time come in groups and then they seem very controlled with no room for individualistic thinking. His way of coming around the problem was to separate them in meetings one by one. There are several elements in the Chinese culture which we see could be interlinked with the femininity (have a lower-MAS) in the Masculinity versus Femininity Dimension in Hofstede's (2001; 2005) theory. The first aspect is once again the Chinese inability to give negative response which has been stated by several of the respondents from both nationalities. This could be seen as a way of avoiding conflicts and then not go in line with Hofstede's (2001; 2005) findings which claim that China is a high-MAS country and by that solve conflicts with battles. Another tendency Hofstede (2001) relate to low-MAS countries is the social goal to build relationship which all our respondents have testified on, and analysed in earlier segments, to be an important part of doing business in China. As Kent declared when talking about business relationships westerners care much more about money than the Chinese which once again contrast Hofstede's (2001; 2005) theory. However these ego goals could be analysed on a more personal level as well and then our empirical findings go in line with Hofstede's (2001; 2005). Lars stated that under the start-up time, when he first came to China, he had a rough time with the Chinese businessmen who always wanted to gain all possible benefits in every situation. This coincides with Yun-Fat's affirmation that everyone in China seeks benefits. As mentioned earlier in this passage the conflict solving is a central part of the Masculinity versus Femininity theory. As we see it a bargaining could be seen as a conflict which could either be settled in a compromise or solved with a good battle according to Hofstede (2001; 2005). Both Kent and Robert testified that they believed the Chinese to be very good in bargaining and believed that they always could gain a little more for their own behalf. Kent's words "they become bloody" [Writer's translation] clearly shows that Hofstede (2001; 2005) may have come to the right conclusion about the Chinese people. However this opinion was not shared by all the respondents, Eric stated that he did not find it to be any room for bargaining since the Chinese always openly gave their best price. Yun-Fat claimed that Chinese are more Long-term Oriented than the Swedish people where one of the important values is, according to Hofstede (2001), responsibility taking. This is as mentioned earlier in this section contradicted by Kent who did not find the Chinese to be as responsibility taking as the Swedish businessmen. However Yun-Fat's opinion on how he saw the Swedes to take things case by case goes in line with Trompenaars and Hampden-Turner's (1997) and Hall and Hall's (1990) theories about the concept of Time. They state that if Time is seen as a series of passing events the person has a sequential or monochronic approach as Yun-Fat experienced. Robert had also acknowledged the Time aspect where he stated that Swedes were better in meaning what they are saying. The Chinese have according to him an attitude that there will always be another Monday. This could be interlinked with Hofstede's (2001; 2005) theory which claims that managers in China often have more time to their disposal and therefore they are not as stressed to finish a project at a predetermined time. This could be put in contrast with the Swedish managers who often are constricted by always achieving a certain result or profit according to Hofstede (2001; 2005).
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Analysis The concept of Face could also be derived from the decision making process. Kent gave an example when he had come to the wrong person to try to obtain a decision in a subject. The Chinese then answered that he risked losing his face if he came to his boss with that price. When an employee loses his face for his manager it once again shows the higher Power Distance there is in China but it also could be an expression of knowing one's place. In this case it could be related to the theory of mianzi (Worm, 1997). If the Chinese employee should have come with a much lower price than expected to his superior the latter could believe that the employee did not conduct the business successful enough. This could contribute to that the person loses prestige or in other words loses mianzi (Worm, 1997). There is however a difference between the two dimensions of Face, mianzi and lian, where mianzi deprive or award a person with prestige, lian is much harder to restore and could affect the person's network as well (Worm 1997). When Da Wei talked about face it was more in line with the latter dimension which could not be restored after losing it in a business relationship. According to him, if it is once lost there is nothing more you can do about it.
6.5 Cultural Clash
One of the recurring phenomena that several of our respondents have experienced was the hierarchic difference in Sweden and China. Their opinion that China is much more hierarchic than Sweden is shared by Hofstede (2001) who calls this Power Distance and states that China has a much higher Power Distance compared to Sweden which has a low Power Distance, which has been stated above. This has caused a couple of different Cultural Clashes for several of our respondents. A Cultural Clash is said to emerge when the perception of how we identify ourselves is in a conflict with the expectations we have from others (Ngo, 2008). This happened to Eric when he tried to tell a typical funny Swedish story involving one of his employees, to a Chinese manager. From this Chinese man's perspective the Swedish employee had in the story crossed the line of what was accepted in the interaction with his boss, Eric. Therefore instead of laughing the Chinese manger was perplexed and did not understand. Consequently this reaction is in line with how a Cultural Clash (Ngo, 2008) emerges because predicted roles and expectations were not met from the Chinese man's perspective. Martin experienced an even more severe situation because of his open Swedish interaction with his employees when visiting a potential collaborating company in China. When his subordinates did not act in a manner towards Martin that was considered to be proper for the Chinese, and Martin of course unwarily did not rebuke, they questioned Martin's authority and felt he did not have a decisive right. Once again a cultural clash (Ngo, 2008) emerged because the Chinese could not identify themselves with how Martin interacted with his employees and their expectation of the rules of conduct between a CEO and employees were not met according to the Chinese. What the Chinese really experienced was an interaction with a CEO and his employees that has a low Power Distance (Hofstede, 2001) which is the opposite from what they are used to and therefore incomprehensive for them resulting in a Cultural Clash (Ngo, 2008). The Power Distance theory (Hofstede, 2001) came up once again in the case where Martin's friend started a factory in China and had tremendous problems getting anything done. In this case this Swedish entrepreneur tried to delegate the responsibility to his employees, just like he would have done in Sweden. This caused a situation where the Chinese workers became confused because they were used to someone telling them exactly what do and when. To delegate responsibility can be seen as common in Swedish companies because they have a low Power Distance but not in a country like China with a high Power Distance and should
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Analysis therefore, which this particular entrepreneur experienced, be avoided there. Having a high Power Distance in these cases created an inability for employees to be decisive and restricted the creativity which several of our respondents experienced. The fact that the Chinese are avoiding saying "no" or give negative answers have been recurring and caused different situations for our respondents. Martin experienced how his collaborating Chinese company would not give negative information when there were delays. Both Robert and Kent experienced situations where the Chinese claimed to have understood what had been said but in fact did not. It was Kent's belief that the Chinese will not say "no" to you, but rather "yes" we hear what you are saying instead of "yes" we agree to what has been said. According to Da Wei it is part of their courtesy and manners to be attentive. It is also harder for them to understand because of the language barrier, according to Kent. By not showing signs of incomprehension they are avoiding an anxiety of losing Face and are a part of their implicit rules and rituals (Hofstede, 2001). Opposing these rituals and going out on a limp could in their case create a situation where they can act shamefully and then they will lose Face, lian, which is the worst thing that can happen to a person in China, and a person's integrity is then lost (Worm, 1997). Robert experienced a similar situation where he knew that his Chinese counterpart had not understood and then nicely tried to explain it to him resulting in the Chinese to give a definite "no" and hence the chance of a future collaboration vanished. Whether the Chinese in this situation experienced his actions to be shameful (loss of lian) or felt a loss in prestige (loss of mianzi) is unclear but nevertheless it is part of losing Face and after it has happened it is hard turning back (Worm 1997). Robert claimed to have been in situations where the Chinese have lost Face and then they have resolved and dropped any possible collaboration which is an action that coincides with an avoiding conflict management style which is common in Asia (Tang & Ward 2003; Chan et al. 2007). Our Swedish respondents have expressed that they are aware of the concept of Face and some of them has also pointed out that it needs to be avoided. In cases where the messages from the Swedes to the Chinese have not been understood and when the Swedes have acknowledged this there is no other way than to clarify. As Robert pointed out you have to tell them this very gently. It is when the message comes through to the Chinese that the aspect of losing Face can come into play and it depends on how the Chinese perceives the situation. A cultural clash can then emerge if the Chinese feels he has lost his Face in front of the Swede.
6.6 Authors' analysis of the respondents
The phases our respondents have gone through in their adaptation to the other culture have varied significantly and thus granted us a wider scope of which we have been able to contextualise from their different experiences. When people are living or working in a different culture, it is said they go through different stages in adapting towards that very culture. This is called acculturation (Hofstede, 2005) and is tangible for our respondents as well which is illustrated in the table 6.1 below. Our respondents have been placed in this acculturations curve based on their background in China and our perception of their acculturation process. What is noticeable is how both Robert and Kent have reached the third acculturation stage only by working in China for some time without actually living there for a longer duration compared to Lars who has been living there for two years and can be placed in the same stage. This due to that they have traveled a lot within China and also been sensitive towards disparities making them more susceptible. Our two Chinese respondents, Da Wei and Yun-Fat can both be placed in the final state, the stable state. They are pending between a positive and neutral view of Sweden and the insight they have brought to our paper has been profound. It is only natural that people with over a decades experience of living in a foreign country has a lot to say. We placed Martin in the culture shock stage because he
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Analysis emphasized many situations where he literally were in shock or stunned by different incidents. The fact that Eric does not have an extensive experience in China should not be seen as a problem. Although his experience was not as extensive as the others he still contributed with aspects that the others did not mention. TABLE 6.1: The Acculturation Curve
Positive +
E K R DY
b a c
Lars: L Robert: R Kent: K Martin: M Eric: E Da Wei: D Yun-Fat: Y
Feelings
Negative -
M
1 2 Euphoria Culture shock
L
3 Acculturation 4 Stable state
Phase
Time
Source: Hofstede, 2005, pp. 337
We believe it to be a great contribution to our study that the respondents fall in to all four different stages of this curve which have given us a more balanced picture of the reality. Thanks to their diverse experiences and time in China it has elucidated different aspects on how business is conducted there. The analysis and discussions made in this chapter are now bringing us to our conclusion which is followed in the next chapter. There we will answer our main purpose as well as our sub-purposes.
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Discussion and Conclusion
7. DISCUSSION and CONCLUSION
In this chapter we reintroduce the reader to the research question, which was; how Swedes can avoid incidents of cultural descent when developing business relationships with Chinese corporations? Our study had three sub-purposes in order to answer the main research question, and below we summarize the findings from the analyses presented in previous chapter. The main purpose, to comprehend how businessmen perceive cultural differences in business situations where relationships are essential and how they avoid such incidents, could in short be described as something that could be frustrating but a necessary bridge to cross in order to succeed with the business. This statement will be further developed in section 7.3 where we also provide the reader with some suggestions. Additionally, we give some proposals that could be relevant for further research.
7.1 Sub-purpose 1:
Gain a better understanding of how both Swedish and Chinese build relationships in business to business situations
It should now be clear that relationships and business relationships are more interlinked in the Chinese society which is quite the opposite in Sweden. We believe that this causes situations where Swedes have a tendency to commit less to the relationship than the Chinese do. If the Swedes could commit more then it is our belief that they can build a more profound relationship with the Chinese. Another complication in the interaction between the Swedes and Chinese are how they approach each other in a business situation. In the eyes of the Chinese the Swedes starts from the wrong angle when trying to conduct business first and become friends afterwards. We believe that this too can hinder the relationship development. These two complications need to be avoided and as cliché as it sounds: when in Rome do as the Romans, meaning that Swedes need to put at least the same amount of commitment into the relationship as the Chinese do and also approach the Chinese from a friendship angle to be able to build a strong business collaboration. This can be difficult for the Swedes if they are unaware of the reasons to why the Chinese have different values and behave differently in business contexts. To understand this it is crucial to learn more about the Chinese culture because it has a profound impact in the Chinese business society, in fact we are convinced that the Chinese culture have pervaded not just the daily life in China but also the business society. For instance our Swedish respondents all testified to China putting more focus on networking (Guanxi) but at the same time they were not aware of the underlying motives to why the Chinese establish more networks. Guanxi is something that goes back a long time in history and we believe that this type of networking in daily life or business context are their way of establishing a welfare system that can help them (individuals or families) in times of need. This is something we did not believe our Swedish respondents fully comprehended. In Sweden these are issues that the Swedish government is working to uphold but in China it is more complex because of their huge population and large country size. Therefore it is up to the individuals in China to create their own social safety nets. If Swedes can comprehend this they would be one step closer in understanding the Chinese's implicit motives of behaviour.
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Discussion and Conclusion
7.2 Sub-purpose 2:
Gain a better understanding of the differences in the Swedish and Chinese business culture.
It is evident through our study that the Swedish and Chinese culture differs in many ways. It is important to be aware of these differences to prevent misunderstandings or clashes from occurring. Hierarchy is one of the biggest differences between Swedish and Chinese culture. The Chinese hierarchy is vast and the Swedish insignificant which can lead to contrasting ways of making decisions in the two countries. Based on our empirics we believe that the Swedish non authoritarian leadership perspective has been subject to many emerged cultural clashes. These clashes could be because the Chinese have judged different Swedish interactions from their perspective, thus misinterpreting. In Sweden teamwork are applied to a greater extent than in China which has had the affect that here in Sweden several persons can take their own personal responsibility and decide in different questions, whereas in China it is only the CEO or the top managers who have that authority. One way of avoiding misinterpretations of this kind is for the Swedish CEO's to be over explicit in their role when dealing with a Chinese counterpart so that they can get a distinct comprehension of the CEO and not question his authority. The Swedish way of conducting business can be very practical and direct, in fact one Swedish respondent even claimed it to be very German (direct and brusque). The Chinese are on the other hand very courteous and respectful towards guests and they often have difficulties giving negative responses which also make them acting ambiguously. This has caused a lot of problems since the Swedish businesspeople often misinterpret the Chinese courtesy for showing interest in their business proposals. This is a clear case where lack of cultural knowledge causes the Swedes to misinterpret a situation. Instead they should celebrate the non-existing deal they and bond and nourish the relationship with the host so that future collaborations can happen. Through this research it has also been shown that the aspect of time differs between the two cultures. In Sweden we are more Short-term Oriented and are very monochronic in our approach which many times could collide with the Long-term Oriented China. In China they see how the future and past interrelate and are therefore not as driven as the Swedes to accomplish everything under a strict timeframe. Hence, like Robert stated; "there will always be new Monday!" [Writer's translation] In the eyes of the Chinese the Swedes have a habit of rushing into business transactions and therefore they get the impression that Swedish businessmen are opportunistic. In the Swedish eyes the slow paste that the Chinese are applying is seen as wasting money. To be able to conduct business in China we believe the Swedes need to respect the lower paste by changing towards the Chinese perspective and becoming more patient. Instead of saying "no" the Chinese often say "yes", this as mean of acknowledging that they are listening and not that they agree to what has been said. We believe this phenomenon appears because of two reasons. Firstly because the Chinese are afraid of doing anything wrong that also could damage their prestige and lead to lose Face. The concept of Face is strongly influencing the Chinese culture which contributes even more to the anxiety of offending someone or getting deprived of their own prestige. Secondly because it is part of the Chinese culture to be attentive and courteous and not oppose someone and risking losing Face. The anxiety for future drawbacks due to this could be dealt with affirmative answers as an Uncertainty Avoidance implementation.
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Discussion and Conclusion
For instance if it appears that a Chinese man has not understood what has been said he will not ask for an explanation, instead he will let the Swede presume that what he has said has been understood by the Chinese. In the end this causes a situation where the Swede has to decide whether to proceed and not mention it or politely try to re-explain. It is our belief that these situations best can be avoided by knowing how courteous the Chinese are and to know that they will act ambiguously. The Swedes also need to deliver their message in a way so no ambiguity appears, in short, sound and clear and be sensitive. The better the relationship is the more sincere the dialogues will be. This situation when you lose Face is very complex and there are no universal answers to solve the matters. As our respondents said; once you have crossed that line where the Chinese feels he has lost Face there is no turning back.
7.3 Sub-purpose 3:
Provide suggestions for Swedish businessmen on how to become more aware of the cultural gaps when entering the Chinese market
During the process of the research we have found several incidents experienced by our respondent which could have been prevented in different ways. They have been analyzed and discussed in previous chapter to result in proposals of solutions to other Swedish businessmen that could find themselves in a similar situation. These proposals are found under "Our Suggestions" in the following part.
7.4 Conclusion and Suggestions
How can Swedes avoid incidents of cultural descent when developing business relationships with Chinese corporations?
The main purpose of this study was to get a better comprehension on how businessmen perceive cultural differences in business situations where relationships are essential and how they avoid such incidents. Our research has shown that there is no single answer to this question however, as stated above; many of the businessmen do perceive it as irritating but natural obstacles. It is evident that when doing business between different cultures there will always be clashes or misunderstanding that can delay or hinder an agreement but it is then best to take a step back, be patient, and be attentive to the counterparts reactions. The better knowledge a person have about his/her counterpart and about the context they are in the easier it is to be flexible and create good relationships. When going to China the Swedish busines- men should try to adapt to the Chinese way of building relationship and that is best done by creating a profound knowledge about the Chinese culture and business culture. Since culture is not anything that could be learned by reading a book but need to be lived to learn we advocate that time should be deposit to build up a profound network before rushing into a business deal. In the following section we will now give some suggestions for those going to China.
Our Suggestions
Our suggestions to Swedish businessmen going to China in business is firstly to learn and try to comprehend as much as possible about the country and its culture. It has been shown that Swedish businessmen many times do not spend enough time in China. The best way to be able to comprehend the culture is to live there however that might not be an option for some. By spending time in China a person will acculturate and see how for instance Guanxi is interlinked to culture and society. When gained this knowledge the person can build more
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Discussion and Conclusion relationships and networks applying Guanxi, which could make the relationships built today later become potential future business partners. If a business proposal should arise, the person should have patience and let the Chinese slow paste reign to not disrespect them. In this case it is important to create a bond rather than proceeding with business, which is normal in the Swedish way of conducting business. Cultural clashes will always emerge and it is important then to remember that values that are valid in Sweden do not necessary be valid in China and vice versa. Therefore should these misunderstandings not be rejected but rather embraced with an open mind and a will to solve them. One solution to prevent misunderstandings to occur could be to always be more then one in negotiations, from the Swedish delegation, so one could have as a purpose to read the counterparts in order to make sure everyone have understood what have been said. We would like to conclude this study with something Kent said during our interview with him that readers should take a minute to think about and that is: "To understand what they want, is to understand where they are in their own understanding of what they want. When they finally have understood what it is they want, they quickly understand what complexity that results in and if they need help or not" [Writer's translation] Now imaging yourself, where do you understand yourself to be in your process. Once you realize that you will know where to go from there.
7.5 Further Research
We believe one suggestion for future research could be to write a similar study written on behalf of a company. This because a company can be more specific in what kind of research questions and requirements that are important for them in their process of understanding for example differences in Swedish and Chinese business culture. A paper like this could then develop more depth in their research of a particular field than we have. Secondly it would also be of interest to conduct a similar study where women where addressed on how they perceive similar situations. A study like this might lead to other interesting findings that are important to elucidate. Unfortunately in our case we did not come across any women in these positions. Third and lastly we would like to see more research on Swedish culture and how Swedish businessmen are being perceived internationally. We feel that this is an area that is somewhat unexplored. Just like our study it could shed light to foreigner how we Swedes interact in business situations and therefore help future collaborations.
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APPENDIX A1 Semi-structured interview (Swedish)
Bakgrundsinformation
Kan du berätta lite om dig själv? o (Namn, ålder, arbetsroll, tid vid företaget, erfarenheter av utlandsjobb osv.) Hur länge har du bott i/arbetat mot Kina/Sverige? Var du påläst om kinesisk/svensk kultur innan du for dit?
Fördjupningsfrågor
1. Relationer
Kan du beskriva hur du bygger/byggde affärsrelationer med de du samarbetat med? o Några framgångsrika exempel? Har du kontakt med dem efter att affären är avslutad? Hur ser den kontakten ut?
2. Affärsrelationer
Vilka skillnader kan du se på hur svenskar och kineser bygger affärsrelationer? Kan du beskriva din bild av hur kineser/svenskar arbetar i B2B situationer?
3. Kultur
Hur upplever du den kinesiska/svenska kulturen? Vad skiljer den från den svenska/kinesiska? Kan du dra dig till minnes några kulturella skillnader som du sett?
4. Företagskultur
Kan du beskriva din bild av den typiskt kinesiska/svenska affärskulturen? Hur upplever du kinesiska/svenska affärsmän? o (Samarbetsförmåga, självständighet, förmåga att knyta nya kontakter osv.)
5. Kulturkrockar
Har du upplevt kulturkrockar i affärssammanhang? Hur har ni (båda parter) löst de situationerna? Fanns det någon skillnad på hur kinesen/svensken löste situationen jämfört med hur du skulle ha löst den och vice versa? Kan du nämna några kulturella missuppfattningar du har råkat ut för? Har du reflekterat över hur ditt eget beteende uppfattas av kineser/svenskar? Har du ändrat ditt beteende med det i åtanke?
APPENDIX A2 Semi-structured Interview (English)
Background questions
Could you briefly present yourself? o (Name, age, position, time at the company, experiences from working abroad...) How long have you worked with/stayed in China/Sweden? Had you prepared yourself somehow, concerning the Chinese/Swedish culture, before going there?
Specialized questions
1. Relationship
Can you describe how you built the relationship with the ones you have worked together with? o Any successful examples? Do you keep contact with them after a business deal is completed? How does that contact look like?
2. Business relationships
What differences can you see on how Swedes and Chinese build business relationships? Can you describe your opinion on how Chinese/Swedes work in B2B situations?
3. Culture
How do you experience the Chinese/Swedish culture? What differentiate it from the Swedish/Chinese? Do you recall any cultural differences you have seen?
4. Business culture
Can you describe your picture of the typical Chinese/Swedish business culture? How do you experience Chinese/Swedish business men? o (Ability to co-operate, independence, ability to establish connections?)
5. Cultural clashes
Have you experienced any cultural clashes in business situations? How have you solved those situations? Where the any differences in how the Chinese/Swedes solved the situation compared with your behaviour? Can you mention any cultural misunderstandings you have experienced? Have you reflected upon how your behaviour is perceived by Chinese/Swedes? Have you changed your behaviour due to this?
doc_522841909.docx
Business Process expert role, a precise definition of the term "business process" is never established. The term has been around for so many years and is used by so many people that everyone assumes a common understanding.
STUDY REPORTS OF SWEDISH AND CHINESE BUSINESS PERSPECTIVES
Summery
If you look out the window today you can observe influences from all over the world. It seems like the world has shrunken and accessibility has gotten a bigger impact. We are talking about globalization and it can be said to diminish the boarders and unite people all over and contribute to more interactions between different countries and cultures, which in turn will lead to new challenges for companies. More companies can therefore meet in different contexts and for instance a company from Sweden where production costs are comparatively high will be attracted to markets like the Chinese because of their comparatively low production costs. The culture differences between these two nations are wide and will therefore cause implications like cultural clashes or misunderstandings. This is where our interest of the subject grew and hence our research question is: "How can Swedes avoid incidents of a cultural descent when developing business relations with Chinese corporations?" The main purpose of this study is to get a better comprehension on how businessmen perceive cultural differences in situations where business relationships are essential and how they avoid such incidents. In addition we have in this study divided the main purpose into three subpurposes. These are: to gain a better understanding on how both Swedes and Chinese build relationships in business-to-business situations, to gain a better understanding of the differences in the Swedish and Chinese business culture, and to provide suggestions for Swedish entrepreneurs in becoming more aware of cultural gaps when entering the Chinese market. Our study is based on an hermeneutic approach. We have used an qualitative research strategy where our empirics are based upon seven semi-structured interviews with businessmen today resided in Sweden but have experience from Chinese business interaction. In addition both Swedish and Chinese businessmen have been interviewed to obtain a more balanced data. The contextualization we have made is aligned towards an individual perspective. Our theoretical frameworks consist of a wide range of theories such as: business relationships theories, relationship marketing theories, Guanxi theories, cultural theories, and culture clash theories. Based on our empirics we have been able to interlink many aspects to conclusions. These have mainly been differences in the two cultures, such as; difference in hierarchy level and how this has caused implications for Swedish businessmen. It was also showed that there are differences in approaching potential business proposals, where the Swedes tended to be direct in contrast to the Chinese who preferred a slower paste. In addition this study showed that what is referred to as Guanxi is far more linked to the Chinese culture than networking is in Sweden. For a Swedish business man these findings can help prevent incident of diversifying range but raise awareness of other cultural aspects that needs to be considered before going to China in business purposes.
Table of Contents
1. INTRODUCTION............................................................................................................................. 1 1.1 Background ....................................................................................................................................... 1 1.2 Research Problem.............................................................................................................................. 2 1.3 Purpose .............................................................................................................................................. 2 1.4 Limitations ........................................................................................................................................ 2 2. THEORETICAL METHODOLOGY ............................................................................................. 3 2.1 Choice of Subject .............................................................................................................................. 3 2.2 The Authors' Preconception.............................................................................................................. 3 2.2.1 Common Preconception............................................................................................................. 3 2.2.2 Theoretical Preconception.......................................................................................................... 4 2.2.3 Epistemological Approach......................................................................................................... 4 2.3 Perspective of the Thesis................................................................................................................... 5 2.4 Research Strategy .............................................................................................................................. 5 2.4.1 Qualitative Strategy.................................................................................................................... 5 2.4.2 Critique of Qualitative Strategy ................................................................................................. 6 2.5 Iterative Approach............................................................................................................................. 6 2.6 Secondary Sources ............................................................................................................................ 7 2.6.1 Critique of Secondary Sources................................................................................................... 7 3. THEORETICAL FRAMEWORK .................................................................................................. 9 3.1 Relationship....................................................................................................................................... 9 3.1.1 Relationship Marketing............................................................................................................ 10 3.1.1.1 The Commitment-Trust Theory........................................................................................ 11 3.1.2 Guanxi...................................................................................................................................... 12 3.1.2.1 Origin and Meaning.......................................................................................................... 12 3.1.2.2 The Dimensions of Guanxi............................................................................................... 13 3.1.2.3 Disparities with Relationship Marketing .......................................................................... 14 3.2 Culture............................................................................................................................................. 15 3.2.1 Mental Programs ...................................................................................................................... 15 3.2.2 Dimensions of Culture ............................................................................................................. 15 3.2.2.1 Power Distance ................................................................................................................. 17 3.2.2.2 Uncertainty Avoidance ..................................................................................................... 17 3.2.2.3 Individualism and Collectivism........................................................................................ 18 3.2.2.4 Masculinity and Femininity.............................................................................................. 18 3.2.2.5 Long- versus Short-Term Orientation............................................................................... 19 3.2.3 Chinese Culture........................................................................................................................ 19 3.2.3.1 The Concept of Face......................................................................................................... 19 3.2.3.2 The Concept of Time ........................................................................................................ 20 3.2.4 Organizational Culture............................................................................................................. 21 3.2.5 Cultural Clash .......................................................................................................................... 22 3.2.5.1 Cultural Shock .................................................................................................................. 22 3.3 Summary of Theoretical Frame....................................................................................................... 23 4. PRACTICAL METHODOLOGY ................................................................................................. 24 4.1 Semi-structured Interviews.............................................................................................................. 24 4.1.1 Selection of Participants........................................................................................................... 24 4.1.3 Practical Aspects of Interview ................................................................................................. 25 4.1.4 Criticism of Semi-structured Interview.................................................................................... 26 4.1.5 Presentation and Analysis of Interview.................................................................................... 26 4.2 Truth Criteria................................................................................................................................... 26
4.2.1 Credibility ................................................................................................................................ 26 4.2.2 Transferability.......................................................................................................................... 27 4.2.3 Dependability........................................................................................................................... 27 4.2.4 Confirmabilty........................................................................................................................... 27 5. EMPIRICAL PRESENTATION ................................................................................................... 28 5.1 Relationship..................................................................................................................................... 28 5.1.1 The Swedish Perspective on Relationship ............................................................................... 28 5.1.2 The Chinese Perspective on Relationship................................................................................ 29 5.1.3 Summary of Relationship......................................................................................................... 30 5.2 Business Relationship...................................................................................................................... 31 5.2.1 The Swedish View on Business Relationships ........................................................................ 31 5.2.2 The Chinese View on Business Relationships ......................................................................... 32 5.2.3 Summary of Business Relationships........................................................................................ 34 5.3 Culture............................................................................................................................................. 34 5.3.1 The Swedish Perspective on Culture........................................................................................ 34 5.3.2 The Chinese Perspective on Culture ........................................................................................ 36 5.3.3 Summary of Culture................................................................................................................. 37 5.4 Business Culture.............................................................................................................................. 37 5.4.1 The Swedish View on Business Culture .................................................................................. 37 5.4.2 The Chinese View on Business Culture................................................................................... 40 5.4.3 Summary of Business Culture.................................................................................................. 41 5.5 Cultural Clash.................................................................................................................................. 42 5.5.1 The Swedish View on Cultural Clashes................................................................................... 42 5.5.2 The Chinese View on Cultural Clashes ................................................................................... 44 5.5.3 Summary of Cultural Clash...................................................................................................... 45 5.3 Summary of the Empirical Presentation.......................................................................................... 46 6. ANALYSIS....................................................................................................................................... 48 6.1 Relationships ................................................................................................................................... 48 6.2 Business relationship....................................................................................................................... 48 6.3 Culture............................................................................................................................................. 49 6.3.1 The Dimensions of Culture ...................................................................................................... 50 6.4 Business Culture.............................................................................................................................. 51 6.4.1 The Dimensions of Business Culture....................................................................................... 52 6.5 Cultural Clash.................................................................................................................................. 54 6.6 Authors' analysis of the respondents............................................................................................... 55 7. DISCUSSION and CONCLUSION ............................................................................................... 57 7.1 Sub-purpose 1:................................................................................................................................. 57 Gain a better understanding of how both Swedish and Chinese build relationships in business to business situations............................................................................................................................. 57 7.2 Sub-purpose 2:................................................................................................................................. 58 Gain a better understanding of the differences in the Swedish and Chinese business culture.......... 58 7.3 Sub-purpose 3:................................................................................................................................. 59 Provide suggestions for Swedish businessmen on how to become more aware of the cultural gaps when entering the Chinese market .................................................................................................... 59 7.4 Conclusion and Suggestions............................................................................................................ 59 How can Swedes avoid incidents of cultural descent when developing business relationships with Chinese corporations?....................................................................................................................... 59 Our Suggestions ................................................................................................................................ 59 7.5 Further Research.............................................................................................................................. 60 REFERENCES APPENDIX A
Introduction
1. INTRODUCTION
This chapter provides an overview of the history of change in China, with a focus on globalization which leads to cultures coming closer together. The overview leads to a currently existing knowledge gap i.e. how Swedes could avoid incidents of cultural descent when doing business with China. Below the research problem is presented which has been derived from the existing knowledge gap. We additionally provide the readers with limitations in our study.
1.1 Background
Since 6,000 B.C. there has been a non-stop record of China's history. As one of the few civilizations to have survived this long, China has both seen days of glory and tougher days. During the last hundred years China has had a dramatic makeover going from having an emperor to becoming a socialist republic under Mao Zedong till today is being run by the Communist Party. But during the last 40 years China has made several reforms in the economic area and has started to be more industrialized (Tikka, 1999) and today it seems, wherever you turn, China is stealing the limelight everywhere because of their ongoing economic boom. Today we are living in an age strongly influenced by ongoing globalization, where the world has become smaller, we have better communication systems, and we have more availability of standardized products due to the ascendance of global corporations and global marketing activities (Potter et al., 2004). When the world is shrinking it will contribute to more interaction between different countries and cultures which could lead to new challenges for the companies. They would have to change their methods they use for the domestic markets due to the different cultural norms, competitive dynamics, and demographics that exist in the market abroad (Javalgi & Martin, 2007). Undoubtedly, there are both possibilities and risks to do business, not just across borders, but most importantly in different business-cultures. One of the most attractive factors for foreign corporations is the low production costs they currently have in China. More and more corporations want to establish their production or outsource to China. One way to illustrate that many multinational corporations today have production in China is just to look at how many of your clothes have the famous "made in China" tag. According to a Swedish trade report from 2006 Sweden has steadily increased both their investments and number of employees in China. There is also another trend currently taking place where small Swedish companies are moving to China and targeting the Chinese market (Swedish Trade, 2008). The fact that the interaction between Sweden and China also has grown becomes apparent when looking at the import/export statistics between the two countries. The exports to China have increased by 26% and imports increased by 22% last year (Statistics Sweden, 2008). When a firm is becoming a multinational company there are aspects that need to be identified in the host country that could impact the commitment to internationalization. Such factors are cultural distance, political, economic, technological, and market factors (Javalga & Martin, 2007). It is also important that the managers have a global mindset, i.e. that they acknowledge the interdependence of their company with the global economy. A global mindset is characterized by openness to an awareness of cultural diversity and market (Gupta &Govindarajan in Javalga & Martin, 2007), persons possessing this attribute are open minded and viewing the world from a broad perspective according to Arora et al. (in Javalga &Martin, 2007). -1-
Introduction
There are many complications that can occur when a company is trying to expand their business to another country. The managers then have to operate with a wide range of assumptions which vary in the different countries' culture. Trompenaars and Hampden- Turner (1997), state that it is important for corporations to gain an understanding to these premises in order to achieve their corporate goals. According to Usunier (2000), Swedish businessmen need to create personal relationships with important business contacts in China, in order to be successful. This type of networking is called Guanxi and is a part of the business culture in China and therefore is very important for a foreigner to understand (Worm 1997). There is a wide range of differences between cultures, e.g. Power Distance, Uncertainty Avoidance, Individualism/Collectivism to mention a few, and it is important that we recognize them and learn to use them for our advantage (Adler, 2002). Several studies have been made in order to help entrepreneurs who want to enter the Chinese market. However, they have mostly focusing on one aspect like Guanxi or problems for a specific organization. We then see the opportunity to contribute with a more complete information base for businessmen who are going to enter the Chinese market.
1.2 Research Problem
How can Swedes avoid incidents of cultural descent when developing business relationships with Chinese corporations?
1.3 Purpose
The main purpose of this study is to get a better comprehension of how businessmen perceive cultural differences in business situations where relationships are essential and how they avoid such incidents. To be able to achieve that we have divided our purpose in three different sub-purposes, which now will follow: Our first sub-purpose is to gain a better understanding of how both Swedes and Chinese build relationships in business-to-business situations. Our second sub-purpose is to gain a better understanding of the differences in the Swedish and Chinese business culture. Our third sub-purpose is to provide suggestions for Swedish businessmen on how to become more aware of the cultural gaps when entering the Chinese market.
1.4 Limitations
We have limited this study to only investigate how relationships and culture influences the cooperation between Swedish and Chinese corporations. Hence all the Swedish respondents in the empirical research mainly have experiences from doing business in China and the Chinese respondents all have experiences from conducting business with Swedes. Furthermore all out respondents were male, which is a result of our sampling method, and could therefore be seen as a limitation of the study.
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Theoretical Methodology
2. THEORETICAL METHODOLOGY
In this chapter we will first discuss the choice of the subject and which common theoretical preconceptions we as authors had before starting the research which might have affected the course of the study. The thesis has an individual perspective and we have used a qualitative research in order to conduct, interpret and analyze the data. Since we have gone back and revised the data several time during the study an iterative approach has been used.
2.1 Choice of Subject
Prior to writing this thesis both of us studied Service Marketing and Marketing Ethics together. During that time an interest for marketing arose for both of us which led our thoughts to coincide for a possible future paper. The idea of culture entered our minds after a discussion about how globalization links different cultures through business exchanges. With this in mind we wanted to combine parts of the marketing concept with culture and especially a culture with multitude differences from what we are already familiar with in our Swedish culture. Since one of us had extensive experience about China the subject of this paper quickly became obvious for us.
2.2 The Authors' Preconception
The research questions of a study are based on the writers' preconception of the reality that surround them but also how the writers' personally perceive their reality. Therefore to conduct any research without any preconception in that certain field can be virtually impossible (Bjereld et al. (2002). People relate to the reality differently and this is called a frame of reference. The frame of reference is part of everything we do because it limits what we see, how we think and ultimately how we as human beings act (Lundahl & Skärvad, 1992). With this in mind it is apparent that our frame of reference will influence the result of this study therefore is our preconception and views prior to this study important to disclose. The concept of preconception is a general term that has three dimensions which are: common preconception, the theoretical preconception and last but not least the epistemological approach (Johansson Lindfors, 1993). We will now present these in the same order starting with the common preconception.
2.2.1 Common Preconception
A person's common preconception is the same as firsthand preconception and refers to what an individual has gone through in his/her life, for instance his/her personal experience, societal influences, and education (Johansson Lindfors, 1993). In this section we share with our readers our firsthand preconception since it is of importance that we elucidate the factors that may have subconsciously affected our work. Let us start with our shared commonalities from our different backgrounds. We are both in our mid-twenties, have Swedish parents, have studied and lived for at least two semesters abroad (one of us has studied in China for a year and the other one year in France), and we have both been brought up in Sweden. Because both of us have studied abroad, and therefore have been in contact with other cultures for a longer period of time, we feel that we are in a position were we both can reflect upon our own Swedish culture and mentality but also how we are perceived by other cultures. This is very important given the purpose of our paper. One of us has both worked and studied in China for a duration of more than a year. The author has had an internship with a Chinese-American joint venture company for almost half
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Theoretical Methodology a year where he experienced the Chinese business culture up close. The other author has worked when studying in France in a project group with people situated in France and Chinese situated in Hong Kong. This has given her some experience of which obstacles that may arise working with the Chinese culture. One of the risks with a person having much extensive experience of China is that the objectivity can be questioned. However, this knowledge has not limited the depth or width of this paper because both culture and business are two concepts that go beyond this empirical knowledge. Also the theories used within these two fields require a more analytical insight which had made both of us to view it from a different perspective. With this in mind we have tried to find a balance between the two of us to prevent subjectivity as far as possible.
2.2.2 Theoretical Preconception
The theoretical preconception is also called second-hand preconception and refers to the experience we obtain about theories or viewpoints in textbooks, scientific reports or lectures (Johansson Lindfors, 1994). According to Gummesson (1985) humans need help obtaining experience of things which we have not yet any knowledge of. When knowledge is not possible to obtain on a first hand base we will require help by learning about other people's descriptions and interpretations. We have obtained our theoretical preconceptions mainly by studying at the Umeå school of Business where we both have studied Marketing at an undergraduate level. This has given us an insight of marketing which we have been able to apply here and it has therefore contributed to our paper. These theoretical preconceptions are wider than a basic knowledge but we do not feel it has clouded our judgment and affected our paper in a certain direction.
2.2.3 Epistemological Approach
As mentioned above, the third and last dimension of preconception is the epistemological approach. Epistemology can be explained as the nature of knowledge (Fisher, 2004), and as a branch within scientific theories, deals with our preconceptions about obtaining knowledge about the world (Svensson & Teorell, 2007). Two of the most common approaches today within this field are positivism and hermeneutics (Johansson Lindfors, 1993). Andersson (1979) describes positivism and hermeneutics as two diametrically opposite approaches or outlooks of life. Positivism has its origin from natural science and the researchers' goal has been to formulate laws to account for physical phenomenon. The predecessor for natural science researchers has been mathematics because it is built on absolute universality (Andersson, 1979). In the positivistic approach the most important way to reach knowledge is through observing the reality in natural situations or through experiments from an objective position (Hartman, 2004). Hermeneutics have on the contrary a more holistic view of reality where these pieces need to be understood in their context (Johansson Lindfors, 1993). Hermeneutics has its origin from medieval interpretations of the bible. These interpretations were used as a means to clarify the bibles view of our creation (Hartman, 2004). With time, hermeneutics developed from just being applicable on bible transcripts to a common methodology for human science (Patel & Davidsson, 2003). Unlike positivism, hermeneutics does not try to explain how the world is but rather how the world is perceived by its people. This conception cannot be measured; instead the behaviour of mankind needs to be interpreted in order to reach comprehension (Hartman, 2004). Today hermeneutics stands for a scientific approach where one studies, interpret and tries to understand the very foundation of human existence (Patel &Davidsson, 2003).
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Theoretical Methodology
In our paper we are studying how incidents of cultural descent can be avoided for Swedes in business to business cases when dealing with the Chinese. We will conduct several semistructured interviews of which the gathered information will be interpreted from its context. This aligns our paper with a hermeneutic approach because of the interpretative context. Metaphorically speaking; instead of asking why something exist we want to understand the how the existence is perceived. This is unlikely to discover when using a positivistic approach instead it needs to be interpreted from a social science perspective just like the hermeneutic is based upon. In addition we can identify our paper with a hermeneutic spiral which stands for a symbol of the interpretation and comprehension process. This basically means that phenomena will be subject to interpretations and re-interpretations so that it can be placed in a bigger picture making the knowledge more intrusive (Johansson Lindfors, 1993). It should not be forgotten that we as researchers will be approaching our research objects, i.e. our respondents, subjectively. Our preconceptions, our impressions, our thoughts, our emotions and knowledge should not be seen as an obstacle but rather a possibility in the interpretative process for understanding our respondent (Johansson Lindfors, 1993).
2.3 Perspective of the Thesis
Our thesis was written from an individual perspective and the purpose of the paper was not to elucidate gaps between the Chinese and Swedish business and culture, on an organizational level, but rather emphasizing these differences on behalf of an individual level, to avoid incidents. From this perspective contextual factors could be drawn and they are very important to investigate in order to understand business situations where cultural aspects are vital. This reasoning was also in line with how we have built our research question. A more thorough explanation on our research strategy will now follow.
2.4 Research Strategy
Research strategies can broadly be divided into two categorise; qualitative and quantitative. The latter one is characterized by the usage of quantitative measures in the collection and interpretation of data and has normally a deductive approach. This type of approach is employed when theories are to be tested. The qualitative strategy, on the other hand, emphasizes the use of discourse as a mean to collect and analyse the data. The approach is normally inductive and stresses the emergence of theory through research. Since qualitative strategy is associated with hermeneutic approach and constructivist view to knowledge the social reality is seen as constantly changing and is emerging through the construction of the social individual actor (Bryman & Bell, 2005). The purpose of this study was to develop a better understanding of how Swedes can avoid incidents of cultural descent that can occur when building business relations in China to provide Swedish companies with suggestions on how to prepare them for the cross-cultural interaction. We believed that this purpose was best fulfilled using a qualitative research strategy. Below we discuss the choice and implications more in detail.
2.4.1 Qualitative Strategy
Our researched problem in this study was, "How can Swedes avoid incidents of cultural descent when developing business relations with Chinese corporations? " Through this research we aimed to gain a better comprehension of how both Swedish and Chinese businessmen perceive cultural differences in business situations where relationships are essential. When this is fulfilled we can provide Swedish managers suggestions on how to -5-
Theoretical Methodology prepare for launching their business in China. The focus was to understand both parties and therefore was an in-depth study necessary and as Blomer (in Berg, 2001, pp. 8) suggests; meaning is derived from "social processes of people or groups of people interacting". In this study we wanted to acknowledge people's behaviour to understand the cultural settings that have consequences on their relations. It was our opinion that a quantitative method would not be able to capture the nuances of people's beliefs and actions. Our wish was to congregate unique responses from people from different background and experiences from working with Chinese or Swedish counterparts. We believed that they could help us identify the cultural gaps that need to be dealt with in these kinds of business situations. When using a qualitative design with a constructivist view the concern lies with how the interview participants actively create meaning. It is important to remember that you, as a researcher, are seen as an important research tool when it comes to collecting qualitative data, i.e. that the qualitative data not are restricted to any certain method to provide the collection. This means that anything you see or hear through which-ever feasible data-gathering (such as observations, casual conversation or a formulated interview) could be valid (Maxwell, 2005). Since we wanted to get knowledge of people's behaviour it was important to us to understandnot only how they act but also why they act the way they do. To gain such understanding we had to build a good relationship with the participants in order to get sufficient access to answer our research question (Maxwell, 2005). The method we chose to use, within the qualitative research strategy, was semi-structured interviews where we were able to pose open-ended questions and be flexible in the order of questioning and also be able to add additional questions (Saunders et al., 2003). It was the informal atmosphere we wanted to create in the semi-structured interview, which we believed would allow us to get to know the respondents and through that understand from which context they draw their opinions (Bryman & Bell, 2005).
2.4.2 Critique of Qualitative Strategy
Even though there are many advantages to use a qualitative research strategy, however, we also had to identify the constraints and disadvantages. For example many quantitative researchers are arguing that qualitative researchers often risk being biased, i.e. subjective in their research, when bringing in their beliefs and perceptions in the study (Maxwell, 2005). A quantitative method could also make a broader generalization thanks to its larger sample collection. It is very difficult to draw generalizations from a small sample like the one we have. Sometimes in qualitative studies it could be a lack of transparency where it is difficult to get an insight in how decisions on the study's set-up and choices regarding the interviewees have been made (Bryman & Bell, 2005). We have tried to alleviate these problems by attempting to be as neutral and transparent as possible.
2.5 Iterative Approach
As mentioned before, qualitative research strategy is usually associated with an inductive nature, which significates that generalized conclusions are drawn on observations. However, this paper follows an iterative approach when it carries aspects from both inductive and deductive design. After following out the phase of theoretical reflection on a set of data, the researcher may need to collect further information to be able to establish the conditions in which the theory will and will not hold (Bryman &Bell, 2005).
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Theoretical Methodology We started our study with an inductive approach by searching for relevant theories for our research problem and then narrowed it down when conducting our interview guide. Based on our theoretical findings we were able to extract five themes that we used both for the interview guide and our analysis. When formulating the interview guide we took a deductive approach. After the data was collected we turned back to the theories we had and added theories that had not been covered earlier and withdraw parts that were less relevant in relations to the collected results. In the analysis passage we discussed which theories that were strengthened and which did not fully correspond to our empirical study. Our reason for this was to provide evidence for existing theories and also to see if some did not apply. Furthermore, we wanted to keep our study open to new concepts and ideas that could come forth in the collection of data and add them as we went along, by constantly developing and refer back to our theoretical framework.
2.6 Secondary Sources
In our study we were using both primary and secondary sources. The former we obtained through our interviews and the latter we obtained from already existing information, such as books, articles and information on the internet, which could be either theories or secondary data (Bryman & Bell, 2005). In our research we have only used other theories as secondary sources. Some argue that it is preferable to use primary data to the greatest extent possible but consideration should be made to the time and money the researcher are able to put in. There are also many secondary sources which have a high standard and therefore could be more useful to use than doing the study oneself (Bryman & Bell, 2005). In our information gathering we used research articles, books and some electronic sources. The search for information was conducted mainly through the Umeå University's library. The books we used have been found through ALBUM and the articles mainly through the databases Emerald and Business Source Premier. In the databases we used search words such as; "relationship", "business relations", "Relationship Marketing", "Guanxi", "culture", "business culture", "culture clash", "face" etc to find relevant material to use in the theoretical framework. Many of these were categorized after title and words shown in the abstract and gave a variety of hits, but most of the searches yielded in at least one or two relevant matches. When searching for literature which included information concerning qualitative research methods we also mainly used ALBUM through Umeå University's library. The key words this time was "qualitative research", "qualitative research design" and "semi-structured interview". Some searches were also made through search engines, such as Google, and web pages such as the Swedish bureau of statistics, to find relevant background information
2.6.1 Critique of Secondary Sources
When collecting data some criteria have to be taken considerations to, i.e. reliability and validity, which means that the data should be accessed through reliable sources, be related to the study and be accurate. To prevent the material from garble it should be presented as close as possible to its original form (Mason, 1996). To prevent reliability and validity problems we have tried to go to the original source and if that has not been possible we have critically perused the sources to determine if the they are authentic enough. It could also be difficult to have real control over the data quality when using secondary sources (Saunders et al. 2003). The sources we have used in this study are mostly peer reviewed articles and books that have been cited several times by others. We have as much as
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Theoretical Methodology possible tried to find the original source to prevent the misrepresentation that may occur when someone is referring to a source in another context. Furthermore, we have in our study used culture theories based on Hofstede´s work. These theories about culture can be hard contextualising from because Hofstede has in his findings generalized to a wide extent. The applicability of his theories can then be question and should be used with moderation. We are aware of this problem and when we have applied his theories we have done it where we see it fit and then used it with a good judgement.
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Theoretical Framework
3. THEORETICAL FRAMEWORK
Our theory chapter consists of two main parts where we in the first aims to give the reader the relevant theories about relationships and also show the differences between Relationship Marketing and Guanxi. This will give us a better understanding on how relationships in businessto-business situation can look like. In the second part we present theories concerning culture to be able to answer our second sub-purpose. There will be theories brought up concerning the cultural dimensions, Chinese culture, organizational culture and cultural clashes. FIGURE 3.1: The Study's Theoretical Framework
Relationship Marketing
Mental Programs
Uncertainty Power Distance Unvcoeidtai nnctey Ar Avoidance Individualism / Collectivism Cultural
Relationship
Guanxi
CommitmentTrust
Culture
Culture Clash
Dimensions
Masculinity / Femininity
Organizational Culture
Chinese Culture
Short- vs. Long-Term
Time
Face
3.1 Relationship
According to Daun (1998) the most important aspect of grasping and understanding what is Swedish mentality and not Swedish mentality occurs through social relationships, this is something that occurs between different groups of people like immigrants and natives or within social relationships across nations. Daun (1998) believes that culture will be formulated within joint relations. Therefore it is very important that we define and present the frameworks of our paper so it stands clear and also so we can avoid discrepancy. There are many definitions of a relationship and the word relationship will have a different significance depending on interpreting researcher. Håkansson and Snehota (1995, pp.25) defines a relationship as: A mutually oriented interaction between two reciprocally committed parties. This definition is easy to grasp but not very elaborative because it does not tell what kind of requirements that needs to be in play for a relationship to maintain. Morgan and Hunt (1994) further elaborate this by being more specific in their criterion of what actually constitute a successful relationship. Their criterion is: Trust and commitment are the central concepts to maintain a long term relationship between two parties.
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Theoretical Framework With this in mind, a successful relationship is built on mutual interest with foundations of trust and commitment. We shall also bear in mind that the authors here are defining and stating their opinion from a western societal perspective. This is important to remember because the Chinese might interpreter the word relationship differently from the western world. Morgan and Hunt (1994) also state that the success of the term Relationship Marketing depends on the presence of relationship commitment and trust. With this in mind we will now look further into what Relationship Marketing is.
3.1.1 Relationship Marketing
To understand Relationship Marketing (RM) it is important to understand how marketing has evolved. Gummesson et al. (1997) describes the term Relationship Marketing as a new, and yet something that represent an old phenomenon. If we go back in history, one can say that for the past 40 years marketing mix management has dominated our theories, research and practise. Focus has been on transactions in a short-time perspective but now it appears that a paradigm shift in marketing is leading us into what is referred to as Relationship Marketing (Grönroos, 1994). The difference between transactional marketing which is based on marketing mix and Relationship Marketing is tremendous. To understand what the difference is between the two terms we will apply a table that has been conducted by Grönroos (1991). This table is important because it shows both the disparities between the two terms, transactional marketing and Relationship Marketing but also give a specific picture of the two. TABLE 3.1: The Strategy Continuum - Transaction vs. Relationship
As suggested by the table above Grönroos (1991) concludes that other factors than the time perspective are also important to understand this paradigm shift. To name a few these are factors such as price elasticity (RM tend to be more tolerant towards changes in price), measurement of customers satisfaction (shifted towards a more direct approach), and customer information system (RM are more susceptible to what the customers think).
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Theoretical Framework According to Healy et al. (1998) both Nordic and US researchers have helped build the foundation and thereby been part of the development of Relationship Marketing. To answer one of our previous questions: What is Relationship Marketing? Based on the continuum above and further research Grönroos (1996 p. 11) definition is: "Relationship Marketing is to identify and establish, maintain and enhance relationships with customers and other stakeholders, at a profit. So that the objectives of all parties involved are met. This is achieved through mutual exchange and fulfilment of promises." To sum up, Relationship Marketing refers to identifying an object or a person within a business. Hypothetically let us picture a corporation in need of a new supplier for their end product. For arguments sake let us assume that these two companies have a desire to work in a long-term. If the corporation has a genuine interest in the supplier's goods then they will try to establish a relationship with either a sales manager or the chief executive producer of the supplying firm. After establishing a relationship with either one, the corporations will try to negotiate a deal that is profitable for them. The supplier will only sign up to sell their goods if it is profitable for them as well. The exchange can therefore have a mutual outcome by being profitable for both parts. The actual transaction can then be completed but since both companies aim to survive in a long-term perspective more can be gained by enhancing a relationship, for instance by upholding promises especially with a long-term costumer. If we relate this to how we defined a relationship it becomes clear that the fulfilment of promises requires that both trust and commitment are the pillars to maintain a long-term relationship in this business context and this brings us to the Commitment -trust theory. 3.1.1.1 The Commitment-Trust Theory Fascinated by what factors influences a successful business relationship Morgan and Hunt (1994) have created a theory for establishing it. According to them: "Commitment and trust are 'key' because they encourage marketers to: (1) work at preserving relationships investments by cooperating with exchange partners. (2) resist attractive short-term alternatives in favour of the expected long-term benefits of staying with existing partners, and (3) view potentially high-risk actions as being prudent because of the belief that their partners will not act opportunistically." To clarify, when both Commitment and Trust appears it leads to cooperative behaviours that constitutes the very foundation of what Morgan and Hunt (1994) believes Relationship Marketing success is built on. In such a situation it can promote productivity, efficiency, and effectiveness. To understand this theory it is important that it remains clear what is meant by commitment and trust. According to Morgan and Hunt (1994) Relationship Commitment is: "An exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it; that is, the committed party believes that the relationship is worth working on to ensure that it endures indefinitely." Their conceptualisation of Trust it is: "existing when one party has confidence in an exchange partner's reliability and integrity." This theory is very fundamental and simple but is also very limited and does not distinct different levels of Relationship Marketing. It is however, a very important base in order for us
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Theoretical Framework to understand the fundamental aspects of how western societies build relationships versus the Chinese way of building relationships. According to Johnson and Seines (in Zeithaml et al 2006) there are four stages of customer relationship; Strangers, Acquaintances, Friends and Partners. These different levels can be compared to a ladder where each step up, starting from a stranger, symbolises a gradual increased interaction with your customer. From a time horizon the Stranger step represents the start of a relationship whereas the ultimate step, the Partner step aims at an interaction with a long time horizon. This makes the Partner step correlated with previous Relationship Marketing theories we have shown above. What is important with this typology is that not every customer can reach the highest step, the Partner step. In order for a customer to reach the highest step he/she needs to be profitable for the corporation in order for the corporation to invest in him/her as a customer. It is in the Partner step that Trust and Commitment are necessary. It should not be forgotten that this is a process that takes time to develop (Johnson & Seines in Zeithaml et al. 2006).
3.1.2 Guanxi
According to Bjerke (1998) Guanxi can be translated to "relationships" or "connections", but it is not as simplistic in nature because the Chinese read more into it. In order to best describe this concept one needs to understand more about Chinese culture because Guanxi has had, and still has, a profound significance within the Chinese way of life. According to Geddie et al. (2005) Guanxi is more than conducting business because it applies to all other interaction between people. 3.1.2.1 Origin and Meaning Relationship building through Guanxi had a very important protective function in traditional China because there were no institutions to rely on for welfare on the individual level (Worm 1997). Basically to ensure the health and survival of your family individuals had to build networks with people with resources of some sort, people with whom you could exchange favours. In the traditional Chinese family a person or a family member is from a moral perspective expected to use his/her connections to improve the welfare for both family and relatives. It is a reciprocal obligation to aid and help any member of the family and this view is influenced by Confucianism. It is for this reason Guanxi is interpreted as one of the most significant cultural traits by the Chinese people. Normally Guanxi is built and established amongst people with shared common attributes. These can be commonalities like old friends, people from the same village and classmates. One of the reasons why Guanxi is so important even today is because China is not yet a free market economy and this hinders resource allocations of different market mechanisms (Fang 1997). This situation helps preserve Guanxi as an incentive for doing business and it is apparent that without Guanxi it is almost impossible to achieve something in contemporary China (Davies et al. 1995 in Fang 1997). One problem with Guanxi is that it goes back so long in history that it is hard determining what it actually stands for. In the study made by Geddie and DeFranco (2005) they reviewed over 70 similar definitions of Guanxi. The fact that Guanxi also has different connotations makes it even more equivocal and complex. To clear this ambiguity we will in our paper refer to Guanxi as: "A particularized and personalized relationship based on the reciprocal exchange of favours. Examples of favours include preferential treatment in dealings, preferential access to limited resources, and increased accessibility to controlled information (Lee et al. 2005)."
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Theoretical Framework Using this definition Guanxi refers to specialized relationships on a personal and not organizational level. According to Ordóñez de Pablos (2005) the advantages of Guanxi can be applicable for an organization but Guanxi still relies on a dyadic face to face relationship on an individual level. In other words a company can gain from one individual's Guanxi network. The exchanging favour part is based on the human obligation which we previously mentioned, and is the norm for interpersonal relationships which relies on reciprocity. This norm of reciprocal favours is called Renqing in Chinese (Lee et al. 2001). Here the reciprocity refers to people being able to make unlimited demands on each others and to give back is part of the rules of conduct in China. In cases where one individual refuses to reciprocate a favour he/she will automatically lose Face which can be linked to getting a bad reputation and feelings of shamefulness (Worm 1997). According to Hoon-Halbauer (1994) the phenomenon of losing Face is the worst thing that can happen to anyone in China (more about this concept later). In order for this system to function there is a need for a deep trust (Xinyong in Chinese) within the relationship, and good Guanxi is said to promote the growth of trust according to Ordóñez de Pablos (2005). 3.1.2.2 The Dimensions of Guanxi In addition Guanxi can be separated into three different dimensions. These dimensions are Expressive Ties, Mixed Ties and Instrumental Ties. For readers to get a holistic view of these different types of Guanxi we will present a table framework underneath. TABLE 3.2: The Dimensions of Guanxi
According to table 3.2 Expressive Ties refer to stable and permanent relationships which are based on norms of equality between all people. These Expressive Ties are characterized as being emotive and personalized which limits their usability to a family or relative base. The second Guanxi dimension, Mixed Ties can best be described as business relationships amongst strangers. Reciprocity of favours (Renqing) and saving Face are the two most important norms in this dimension. The third and last type of Guanxi is called Instrumental Ties. This dimension lack stability and is therefore more temporary which makes it more impersonal and practical. The relationship norm in Instrumental Ties is based on equity. This type of Guanxi is more similar to western transactional marketing because of its short time horizon. However, the boundaries between Mixed- and Instrumental Ties are transcendent which makes it possible for a person to go from an Instrumental Ties position to a Mixed Tie position or vice versa (Lee et al. 2005). In our paper we will from now on focus on Mixed Ties because this dimension coincides with the rest of our Guanxi theory. Expressive Ties are as already noted within the family which makes it uninteresting for our study and Instrumental Ties are too transactional in their state which also makes it irrelevant.
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Theoretical Framework Guanxi can be very useful and positive because it makes it easier to get limited information or resources, receive privileged treatment in negotiations, as well as providing protection from external menace. These factors are especially important in an establishing state for a company therefore Guanxi is most relevant in the initial state for a corporation. Negative aspects of Guanxi can, at least from a western perspective be the favouritism and nepotism aspects (Lee et al. 2005). These negative aspects are particular hard to comprehend in the west because western societies can have more developed welfare systems. In fact, in China nepotism is not always viewed as something negative because of the strong family ties. The autocratic traditions have also contributed to this view on nepotism (Worm 1997). 3.1.2.3 Disparities with Relationship Marketing According to Geddie et al. (2005) one distinction between Guanxi and Relationship Marketing is that Guanxi focuses more on the process of building a relationship before any transaction will be discussed. Then when a transaction occurs it is after a relationship is fully built and in this stage the people or corporations involved in the affair are seen as a cooperative unit. In Relationship Marketing the process is just the opposite since focus lie with negotiating and proceeding with a transaction and afterwards building a relationship. When applying this concept, two companies involved in an affair are seen as a partial set and will not reach a cooperative state (See figure 3.2). FIGURE 3.2: Comparison between Relationship Marketing and Guanxi
In sum, this theory from the Guanxi perspective emphasizes the need for time and patience as key factors when establishing a relationship. If there is time for the relationship to grow the interaction between two companies is believed to be stronger than the western Relationship Marketing theory, and the result will be a cooperative unit rather than a partial set of linked interactions between two companies. According to Lee et al. (2005) western corporation needs to limit their opportunistic behaviour and see the long term interest. As pointed out above the Chinese need to build a relationship before they can proceed with a transaction. It is a case of perspectives and just as Vanhonacher (2004 p .49) claims:
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Theoretical Framework "In the west relationships grows out of deals. In China deals grows out of relationships"
3.2 Culture
"Culture is generally invisible and, when visible, we usually see it as causing problems. " (Adler, 2002, pp. 108) In the second part of our theoretical framework we will now more thoroughly explore what culture is and how it can affect an organization. In organizations today, people rarely believe that cultural diversity is beneficial (Adler, 2002). However, we see the importance of being aware of the different aspects when companies become multinational. When studying culture the most referred authors were Hofstede and Trompenaars and Hampden-Turner. We will therefore mainly base our theories on these authors but will also use other authors who have reached interesting results in their studies. However notice should be taken to that both Hofstede's and Trompenaars and Hampden-Turner's research are made from a westernized perspective. Therefore, we also have a part concerning Chinese culture where other authors have a more developed research. The different parts that will be dealt with in this section are first theories concerning Mental Programs. This will give a foundation for the other theoretical parts to come which are; the Cultural Dimensions (i.e. Power Distance, Uncertainty Avoidance, Individualistic and Collectivistic, Masculinity and Femininity, and Long- versus Short-term Orientation), Chinese Culture (i.e. the concept of Face and Time), Organizational Culture, and finally Cultural Clashes.
3.2.1 Mental Programs
According to Hofstede (2001) we are all following certain Mental Programs that are shown through the assumptions of people behaving in similar ways in similar situations. These Mental Programs cannot be directly observed. The only parts that can be observed are the behaviour, words and deeds. To try to grasp the essence of what Mental Programs are it could be seen as constructs. A construct is an intangible that is a product of our imagination, supposed to help our understanding. Every person's mental programming is partly unique and partly shared with others. Making a broad distinction of the Mental Programs three levels are shown, i.e. the universal level, collective level and the individual level. The most basic is the universal level that is the biological operating system of the human body and is shared by almost all humankind. This level includes a range of expressive behaviour, such as weeping and laughing, aggressive and associative behaviours. The collective level is shared by some people but not all and it includes the language, the deference to elders, the physical distance from other people to feel comfortable, perceptions of general human activities such as eating and making love and the ceremonies surrounding them. The individual level of human programming is the unique part where no two people are programmed the same way. This level consists of the individual personality which provides a wide range of alternative behaviours within the collective culture. (Hofstede 2001)
3.2.2 Dimensions of Culture
There are several different definitions of culture and we will now look at some of them. Hofstede (2001, pp. 9) define culture as: "the collective programming of the mind that distinguishes the members of one group or category of people from another".
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Theoretical Framework According to Trompenaars and Hampden-Turner (1997) culture is something that no-one bothers to verbalise and is beneath our awareness. They state that: "Culture is the means by which people 'communicates, perpetuate, and develop their knowledge about attitudes towards life. Culture is the fabric of meaning in terms of which human beings interpret their experience and guide their action." (Geertz in Trompenaars & Hampden-Turner, 1997, pp. 24) To this Trompenaars and Hampden-Turner (1997) add that culture is a shared definition of a situation by a group. Brown (in Adler, 2002, pp. 16) elucidates the concept of culture further, where he states that culture is:
• "Something shared by all or almost all members of some social group • Something older members of a group try to pass on to younger members • Something (as in the case of morals, laws, and customs) that shapes behavior, or?
structures one's perception of the world" We see these three definitions as clarifications on each other and will therefore have all of them as reference when we continue our theoretical review. The three most common ways of describing culture manifestations are values; symbols, heroes and rituals. The symbols, such as words, gestures, pictures and objects, often carry complex meaning only recognized by the people who share the same culture. Heroes serve as models for the culture and are persons, alive or dead, real or imagined who possesses characteristics that are highly prized in a culture. Rituals are carried out only because of its own sake since they are collective activities that are unnecessary to the final achievement of desired ends, they are considered socially essential within the culture and are keeping the individuals bound within the norm of the collectivity. Another important aspect is the practice where an outsider can clearly observe the different categories however their cultural meaning are invisible and can only be interpreted by an insider (Hofstede 2001). Where Hofstede (2001) uses an onion as a metaphor to describe culture Trompenaars and Hampden-Turner (1997) are also talking about different layers of culture. They define them as the outer layer, the middle layer and the core. The outer layer consists of explicit products such as symbols and observable realities of a deeper level of culture (e.g. language, food, monuments, agriculture and fashions). In the middle layer the norms and values are reflecting deeper levels of individual groups. The norms are what a group believes are "right" or "wrong" while the values determines what is "good" or "bad". The core is the assumptions about existence where the most basic value is survival. Since different groups of people have developed in a wide range of different geographic regions, they have found the most effective problem- solving processes in order to survive. Changes in culture occur easiest when people realize that they have to solve problems in a new way when survival is at stake (Trompenaars &Hampden-Turner, 1997). The word culture is usually reserved for societies but can also be applied on any human category or collectivity; e.g. an organization, a profession, an age group, an entire gender, or a family (Hofstede 2001). To be able to identify and compare these different categories different frameworks have been set up to help understanding the cultural differences that have to be managed in international business. Kluckhohn and Strodtbeck (1961 in Trompenaars &Hampden-Turner, 1997) have identified five basic problems mankind faces where every culture has its own preferred value orientations (i.e. relational orientation, time orientation,
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Theoretical Framework activity orientation, man-nature orientation and human nature orientation). Hofstede (2001) has a different approach where he uses four dimensions to try to explain the characteristics of national culture> i.e. Power Distance, Uncertainty Avoidance, Individualism and Collectivism and Masculinity and Femininity. He has now also added a fifth dimension with a Long- versus Shortterm Orientation (Hofstede 2001; 2005). According to Hall and Hall (1990) each cultural world operates according to its own internal dynamics, principles and laws (both written and unwritten). They also argue that time and space is unique in each culture. Trompenaars and Hampden-Turner (1997 pp. 27) argues that it would be wrong to draw a strict line between the different categories since they believe the different value dimensions are " selforganizing in systems to generate new meanings". Trompenaars and Hampden- Turner (1997) imply that Hofstede's five dimensions are too static to describe a culture when one cultural category excludes another. We acknowledge these opinions and agree on the fact that Hofstede oversimplifies cultural differences in his study which makes the alienation to specific groups more difficult. However we will mainly base our analysis on Hofstede's dimensions when we find them most coherent with our empirical findings. Hence, our ambition is to use Hofstede's dimensions and make them more specific for our purpose. 3.2.2.1 Power Distance "The extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally." (Hofstede 2001, pp. 98) In the study by Hofstede (2001), he states that there are inequalities in every society and that they can occur in a variety of areas; such as physical and mental characteristics, social status and prestige, wealth, power, laws, rights and rules. Since social inequality is multidimensional the inequalities in these areas do not need to go together. This results in some individuals having more power, by the higher status and respect they possess, than others and could more easily influence other people's behaviour. Hofstede (2001) distinguishes two forces, status consistency versus overall equality that in every society battle for their existence. In Hofstede's research he is looking at the Power Distance between different countries, where the dependence of relationship is noticeable in each country. He state that in countries with high Power Distance the subordinates are very dependent on their boss but they are also normally the first to blame for anything wrong in the system. The emotional distance is often quite big between the subordinate and the boss in these cases and it is not likely that any disagreement will occur with the boss. China is an example with a high Power Distance in contrast to Sweden who has a very low Power Distance. In countries like Sweden, the subordinate's dependency on their boss is limited and instead is many times consulted which leads to a mutual dependence between the two. The emotional distance between the subordinate and the boss is then also rather small and the employee can disagree without any further consequences (Hofstede, 2001; 2005). 3.2.2.2 Uncertainty Avoidance "The extent to which the members of a culture feel threatened by uncertain or unknown situations." (Hofstede, 2001, pp. 161) Uncertainty Avoidance does not equal risk avoidance, according to Hofstede (2001). Risk avoidance is focused on something specific, e.g. an event, while Uncertainty Avoidance is a factor that can create anxiety when individuals are confronted with the fact that they do not know what will happen in the future. To prevent unbearable anxiety individuals have created ways to cope with the implicit uncertainty within the domains of technology, law and religion.
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Theoretical Framework Hofstede (2005) states that it would be wrong to claim that uncertainty feelings are only personal since he argues that they also can be shared by other members of the peoples' society. In an organization the technology, rules and rituals are used to cope with uncertainty and to measure possible anxiety and worries an employee may have over their work in the future Hofstede (2001) has considered several aspects. He observed the degree of nervousness and anxiety that employees feel towards their work. In the study he states that both Sweden and China are considered to be countries with low Uncertainty Avoidance, although China is seen to have a somewhat higher level. This means that the two countries have cultures where individuals feel secure about the future and believe that new circumstances are interesting with new and abnormal things in contrast to those with high Uncertainty Avoidance who find what the future holds danger (Hofstede, 2001; 2005). 3.2.2.3 Individualism and Collectivism "Individualism stands for a society in which the ties between individuals are loose: Everyone is expected to look after him/herself and her/his immediate family only. Collectivism stands for a society in which people from birth onwards are integrated into strong, cohesive in- groups, which throughout people's lifetime continue to protect them in exchange for unquestioning loyalty." (Hofstede, 2001, pp. 225) This dimension in Hofstede's study describes the relationship between the individual and collectivity that is applicable on a given society. Hofstede (2001) argues that the level of Individualism could be identified with the valued spare time, freedom and challenges since it emphasizes the employee's independence regarding the company. Within a collectivistic society, on the contrary, people are appreciating good education, good physical work conditions, full use of talents and competence in the company and are expecting a broad responsibility from the organization. In the result of Hofstede's study it is shown that a majority of the individualistic countries are rich while the majority of the collectivistic countries often are poor. The outcome could then be the reason to why people in collectivistic countries are appreciating for example education more than in individualistic countries when they take that for granted. Sweden is said to be a more individualistic country than China and that could be because Sweden is a richer country where the people have more space to develop their personal goals (Hofstede, 2001; 2005). 3.2.2.4 Masculinity and Femininity "Masculinity stands for a society in which social gender roles are clearly distinct: Men are supposed to be assertive, tough, and focused on material success; women are supposed to be more modest, tender, and concerned with the quality of life. Femininity stands for a society in which social gender roles overlap: Both men and women are supposed to be modest, tender, and concerned with the quality of life." (Hofstede, 2001, pp. 297) Different societies cope with the fundamental differences between the sexes in different ways pursuant to Hofstede (2001). He argues that almost universally there are tendencies showing that women attach more importance to social goals such as helping others, having a relationship and the physical environment while men attach more importance to ego goals such as money and careers. In Hofstede's research he found that the values of men and women in the same jobs differed less in lower-MAS (Masculinity Index) countries than in a higher-MAS countries. When a conflict arises the Masculinity-Femininity dimension is one core factor that affects the handling of the conflict at the workplace. In a masculine culture, like China, the conflict will be solved by a good battle. "May the best man win" is a motto
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Theoretical Framework they often use. On the contrary, conflicts in feminine cultures, like Sweden, are usually solved by negotiations and compromises (Hofstede, 2001; 2005). 3.2.2.5 Long- versus Short-Term Orientation "Long Term Orientation stands for the fostering of virtues oriented towards future rewards, in particular, perseverance and thrift. Its opposite pole, Short Term Orientation, stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of 'face' and fulfilling social obligations." (Hofstede, 2001, pp. 359) This fifth dimension is added by Hofstede (2001) after results from Michael Bond's Chinese Value Survey (CVS). One of the dimensions in the CVS was values based on the teachings of Confucius, which is without religious content but teaches in practical ethics. However, it would be wrong to claim that Hofstede's Long-Term Orientation Index (LTO) is equal to Confucianism, since many countries that do not perpetrate Confucianism also got high points on the LTO-dimension. In cultures with Long-term Orientation are family and work not separated, it is common with family businesses and the values of this pole foster entrepreneurship. Perseverance, hard work, respect for memorisation, honesty, openness for new ideas, responsibility taking, self-discipline and confidence are values that are high ranked in Long-term Oriented cultures. Values that are ranked highest in Short-term Oriented countries are; freedom of speech, personal freedom, selfconfidence, individual rights, hard work, personal target achievement and to master your own thoughts. China is one of the countries with highest score on the LTO-dimension which means that they are accustomed to working towards strong positions in their markets without expecting any immediate results. Managers in cultures like China are often allowed resources and time to make own contributions while managers in Short-term Oriented countries like Sweden constantly are judged by the results from the past period (month, quarter or year) (Hofstede 2001; 2005).
3.2.3 Chinese Culture
The Chinese people are part of a civilisation, that longer than any other in the world have kept their common culture and made it survive and develop through a 5000-year evolution. Certain elements have had an enormous impact on this development, such as the ideology of Confucianism. This philosophy has strongly influenced the moral code of Chinese society by its values of faithfulness, loyalty, friendship, righteousness and the importance of education (Pang et al. 1998). Confucianism consists of five cardinal relations (between sovereign and subject, father and son, husband and wife, elder brother and younger brother, and friend and friend) which prescribes a vertical relationship between superior and subordinate (Chan et al. 2007). Therefore we see the importance to look deeper into this culture to be able to understand it and make a correct analysis. The Chinese culture is summarized by Pang et al. (1998) as the Chinese Hallmark which includes; harmony, time and patience, flexibility, trust and collectivism, communication, the rule of Guanxi and the concept of face. In this study we will mainly focus on the concept of face and the concept of time since they are most relevant in this research. 3.2.3.1 The Concept of Face All over the world it is possible to detect the concern with social standing and self-esteem (Tang & Ward, 2003) but in China the character of "Face" has a much wider meaning than it normally has in the western countries. In collectivistic societies it stands for respectability, reputation and pride (Pang et al. 1998). In these societies it is found that identities are made from group rather than individual activities and that criticism of superiors are repressed due to the knowledge of one's place. In environments, like the Chinese, where people meet
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Theoretical Framework repeatedly the concept of face becomes even more important and great attention must be paid to avoid offending someone (Tang & Ward, 2003). When a Chinese has "Face" he or she is addressed by title and the person's status is distinguished among others. But the Chinese can also lose "Face" and that can occur when they are for instance humiliated, criticized, ridiculed or surmount in public for example (Pang et al. 1998). Even the word "no" could be interpreted to not give "Face" and many Chinese use moderate language or vague expressions when they are criticizing others (Tang & Ward, 2003). The concept of face has two dimensions: lian and mianzi. Lian refers to a person's honour and moralistic character while mianzi refers to prestige and a person's reputation. In this case the difference between the western and Asian cultures is that the western emphasizes guilt whereas the Asian emphasizes shame (Bjerke 1998). According to Worm (1997) if someone loses their lian, for instance by acting shameful, it then means that this person is without integrity. It is interpreted to be the worst social condemnation that can happen to an individual. If you are poor or rich do not matter, everyone has lian and it is something everyone can lose. Unlike mianzi, lost lian is more difficult to restore and you either posses it or not which makes it more canonical than mianzi. Lian does not only apply to an individual level but also a collective one which means that not only a person can lose lian, also a person's family or clan. In other words a person's Face can be affected by the actions of that person's family too. "Lian is the ethical basis for trust." (Worm, 1997, pp.149) Having lian can therefore be seen as personal virtue insurance and then less attention needs to be placed on formal agreements or contracts (Worm, 1997). If a person possesses mianzi it means that this person has performed or conducted business successfully. Mianzi can be taken or given from others and this makes it more transmittable than lian. Metaphorically speaking to get more mianzi can be seen as getting more prestige. Mianzi has a profound role in business contexts and partly regulates the interaction between two business parties because by acting aggressive towards your counterpart you can deprive them of their mianzi. They therefore avoid public emotional outbursts and conflicts in public (Worm, 1997). "Since Chinese do not want to lose face, they are reluctant to refuse something openly, or to say something that others may not wish to hear, which would cause the other party to lose face."(Worm, 1997, pp.150) As a result of this Worm (1997) claims that they often use middlemen in various situations in their society. 3.2.3.2 The Concept of Time Time is not an object but rather an idea and our conception of time is therefore strongly affected by culture. How we think about time have a big impact on how we organise our experience and activities with others. There are two major dimensions on how we view our time; it could either be seen as sequential or as synchronic. If time is conceived to be sequential it is seen as a line of series of passing events, and if the view is synchronic the past, present and future all interrelate which leads to that both the memories of the past and the ideas of the future shape the present actions (Trompenaars & Hampden-Turner, 1997). Hall and Hall (1990) have the same division as Trompenaars and Hampden-Turner (1997) but they call these dimensions monochronic and polychronic where the monochronic time system indicates that the person only do one thing at the time which may intensify some relationships at times while weaken others. Scandinavians are a good example of monochronic people. The polychronic time is on the other hand characterized by "the simultaneous occurrence of many things and by a great involvement with people" (Hall & Hall, 1990, pp. 14).
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Theoretical Framework
3.2.4 Organizational Culture
There is no standard definition for organizational culture but most people would, according to Hofstede (2005), describe it as follows: "Holistic, Historical determined, Related to the things the anthropologists are studying, Socially constructed, Sof t , Difficult to change". However, Hofstede's (2005) definition of organizational culture reads as: "the collective programming of the mind that distinguishes one organization's members from another organization's members". An organizations culture is not only established by its members but rather by everyone that interact with the organization (i.e. all the stakeholders), he continues. There could be both strong and weak organizational cultures but there have been argued that a strong culture not necessarily always preferable. The organizational culture is closely linked to the national culture and are therefore affected by the dimension mentioned above and could then contribute to the positioning of the organizational culture (Hofstede, 2005). TABLE 3.3: The Balance of Values versus Practices at the National, Occupational, and Organizational Levels Level
Nation Social Class Occupation Industry Organization
Source: Hofstede (2001, pp.394)
Place of socialisation
Family
Values
School
Practices
Workplace
When talking about culture it is easy to make the assumption that national culture and organizational culture are the same but there are differences especially when looking at the balance between the values and practices (see Table 3.3). In the study made by Hofstede (2001; 2005) it was found that there were considerable differences in values despite the similarities found among employees in similar jobs but in different national subsidiaries. This shows when people say that the national cultures are getting more and more alike in the modern world when we start to use the same words, dress the same and perform the same sports. These evidences they refer to are usually taken from the practice level (i.e. symbols, heroes, and rituals) and are many times taken for being all that culture is, overlooking the underlying values which moreover determine the meaning for people in their practices. Hofstede (2001) also claims that his research has contributed with the assessment on to what extent the founders' and other significant leaders' messages come across to the members in an organization. McGregor (1985, in Adler, 2002) also show the important correlation between the manager's values, believes and attitudes, their behaviour and the employee's behaviour.
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Theoretical Framework He state that the managers lead the way and are affecting the behaviour of their subordinates in the way they self are behaving. Effective collective practices are the reason to why multinational corporations manage to stay alive. Since they employ people from all over the world they can not presuppose that they all have the same values. By using practices, which are influenced by the corporation's origin but can be learned by all employees regardless of nationality, the corporation can coordinate and control its operations all over the world (Hofstede, 2005).
3.2.5 Cultural Clash
To be able to describe the concept of a cultural clash there are two aspects that need to be considered, both culture and identity, which are specifically shaped within social relationships. Through discourses people are able to identify who we are, but we use it ourselves as well to make meaning of a situation. A clash may occur when the image of how we identify ourselves collides with the expectations from others (Ngo, 2008). In other words there is a risk for conflicts to arise when communicating and this risk increase when individuals from different cultures communicate. Communication is said to fail when the sent message or response is not coherent with the received message or response, and this could be caused by several different variables (e.g. misperception, misinterpretation and misevaluation) but the core one is that the meaning does not come through only the words (Adler, 2002). A cultural clash could develop to a conflict of some sort which is a common part of organizational life. Conflict is considered to be a "natural process between people and, as such, is an inevitable aspect of a manager's job" (Markowich & Farber in Chan et al. 2007). When a conflict occurs and the manager is using a manager style which is focusing on satisfying both parties in the conflict situation, studies have shown (Chan et al. 2007) that trust and respect in the relationship tend to be built between the subordinate and the supervisor. This result in the belief that if the employees, in the conflict situation, think they are being valued and cared for by the supervisor a trusting relationship can be developed (Chan et al. 2007). These concepts could be drawn to our dilemma as well, i.e. how the different parties will act in a conflict due to cultural clash. When managing a conflict there are five different styles identified; Integrating, Obliging, Compromising, Dominating and Avoiding (Tang & Ward, 2003; Chan et al. 2007). The three first are in the Western societies seen to be the most effective management styles which focuses on high concern and respect for others. But according to Chan et al. (2007) the two latter can sometimes be effective in China due to its culture of high Power Distance and their belief that conflicts affect the harmony of interpersonal relationships and therefore tries to avoid them. Thomas (in Tang &Ward, 2003) came to a similar conclusion but his studies showed that Chinese managers favoured compromising and avoiding solutions. 3.2.5.1 Cultural Shock When an individual is moving to a new culture there are evidence that he or she follow the acculturation curve (see Table 3.4 on the next page). When first arriving to a new culture the person has the phase of euphoria, the honeymoon, which is dominated by the excitement of travelling and seeing new lands. When real life starts in the new environment there is normally a period of cultural shock. The phase sets in when the individual slowly has learned to function under the new conditions, has adopted some of the local practices, finds increased self-confidence and becomes integrated into the new society. There are three possible outcomes when the person reaches the stable face; the experience could still be negative
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Theoretical Framework compared to home (4a), it may be as good as before then the visitor could be considered to be bicultural adapted (4b), or he or she has "gone native" (4c). (Hofstede, 2001) TABLE 3.4: The Acculturation Curve
Positive + c Feelings b a Negative -
Phase
1 2 Euphoria Culture shock
3 Acculturation
4 Stable state
Time
Source: Hofstede, 2005, pp. 337
3.3 Summary of Theoretical Frame
In this chapter we have provided the readers to the essential theories concerning different relationship and cultural dimensions. In the first part we defined a relationship before immersing in Relationship Marketing theories and the Commitment-Trust theory. It is here shown that Relationship Marketing is used to establish, maintain and enhance relationships with customers and two of the core ingredients in such a bond is Commitment and Trust. However, Relationship Marketing is by many seen as a westernized approached and therefore we have contrasted it with the Chinese Guanxi theories where personalized relationships are based on reciprocal exchange of favours. When adapting to Guanxi the focus lies in building relationships and after conduct transactions. In the second part of the theoretical frame we immersed into culture and how norms and values are reflecting the deeper levels of individual groups. In order to examine how cultures differ we have presented the different dimensions of culture which are Power Distance, Uncertainty Avoidance, Individualism and Collectivism, Masculinity and Femininity, and Long- versus Shortterm orientation. As in the relationship part many of the theories are derived from western society and therefore we want to illuminate theories from the Chinese culture as well. Here focus has been on the concept of Face and the concept of Time. To be able to gain knowledge on how culture affects businesses we have also brought up theories concerning Organizational Culture. Additionally we have presented theories relating to Cultural Clashes to shed light on different aspects to consider.
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Practical Methodology
4. PRACTICAL METHODOLOGY
In this chapter we discuss the data collection methods such as the creation of the interview guide, the sample selection and the practical aspects of the interviews. The purpose is to expressly describe the practical aspect of the data collection for this study which was performed through semi-structured interview with both Swedes and Chinese.
4.1 Semi-structured Interviews
When conducting a qualitative research design the most common method is to use interviews to collect the data. The interviews could either be structured, unstructured or have an intermediate position between the two former. When using a structured interview there is a strict list which is predetermined and the identical set of questions are asked to all the respondents. The unstructured interviews are normally used when the researcher wants to explore a subject in depth and are then not using any predetermined list of questions (Saunders et al. 2003). We have conducted semi-structured interviews where we used a list of themes which we saw as vital for this study. When using this method the researcher has the liberty to ask more questions if necessary and he/she does not need to cover the questions in a preordained order. This process is flexible and relies on how the interviewee understands the questions and believes they are of importance (Bryman & Bell, 2003). In the following sections we will further elaborate the process by explaining how the selection of participants was made, giving practical aspects of the interviews, stating criticism of the semi-structured interviews, and provide an account of how we present the analysis of the interviews.
4.1.1 Selection of Participants
Before conducting the interviews decisions have to be made on where to perform them and with whom. What has to be remembered is that it is not only the people that are being sampled, but also the settings, events and processes (Miles & Huberman in Maxwell, 2005). When talking about sampling in a qualitative research it creates problems since it implies that the purpose is to represent a sampled population. Hence, it is important to differentiate the purpose process when doing a quantitative and qualitative research, where the former has a bigger need to be able to generalize. When doing a qualitative research the main sampling method used is a purposeful selection, where persons, settings and activities are chosen deliberately to provide useful information that cannot be collected in another form of sampling (Maxwell, 2005). Due to the difficulties of setting up a selection frame we also used the snowball selection method were we used our existing contacts to find voluntary participants (Bryman & Bell, 2003). This type of method resulted however in that we only reached male participants. It was not our intent but we did not come in contact with any female persons with the experienced we were looking for. The only definite characteristic used to select our participants was that they should have experience of working in business-to-business situations towards or in China and vice versa for the Chinese participants. We were also convinced that a face-to-face based interview would be the best way to conduct the semi-structured interview compared with a telephone interview. There are some advantages using telephone interviews associated with access, speed and lower costs. However, since the subject we are studying could be perceived as personal sensitive questions we saw the importance of being able to establish personal contact with the participants to create trust and by that bigger access. Face-to-face interviews also gave us the possibility to witness and interpret the respondents' non-verbal behaviour (Saunders et al. 2003).
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Practical Methodology
We chose to interview both Swedes and Chinese to get both nationalities reflections on the subject studied. Originally we thought ten interviews would be necessary but after we had conducted seven interviews, where five were with Swedes and two were with Chinese, we felt we had reached satiation in our data collection. The Swedish participants came from different industries and positions in the firms and the two Chinese respondents were living in Umeå, Sweden, also from different industries and backgrounds.
4.1.3 Practical Aspects of Interview
In order to compile relevant data the interview guide was made based on the theoretical framework we had created in the earlier stage of this study. Through these theories we identified different themes we believed were significant and we used them as a framework for our interviews. We made two types of semi-structured interviews, almost identical, depending on if the respondents were Swedish or Chinese (see appendix A). During our sampling process there were no one who did not want to participate in our study, however, there were some persons who had to decline due to that they were in China for the moment and could not participate in person, which was one of our criteria. All the interviews were conducted in Swedish except one, due to the fact that this particular interviewee did not feel he mastered a good enough Swedish. That interview was therefore conducted in English. The first interview, the only one situated in Stockholm, was made by only one of the researchers and followed a quite structured approach. The second interview was conducted by the other researcher, while the first researcher only observed, and was a little bit more unstructured. After the first two interviews we revised our interviewing technique because we were not satisfied with the depth of the answers we had been given. Instead of one conducting the whole interview we then only decided who would make the introduction and after that both were active as interviewers. We also became more flexible by asking following up questions so the interviewees could specify what they meant. This resulted in us receiving more in-depth answers which was what we had looked for in the first place. The placement of the interviews varied between the different participants. As mentioned before took one place in Stockholm while the others were conducted in Umeå. We were very keen on finding a place that were calm and separate and where the interview would not be disturbed in any way (Bryman & Bell, 2003). ). The location for the interviews varied between the respondents and two were conducted in group rooms at Umeå Business School, one was conducted in the respondent's home in the kitchen, and the others were conducted in the conference rooms at the participants' offices. Each interview started with one of us presenting ourselves and the purpose with our study, we also made it clear for the interviewees that they would be treated anonymously throughout the study. During the interviews we mainly relied on the interview schedule, but when necessary we asked further questions in order to expand our understanding of their answers and redirect the discussion into areas relevant for our study. After the interviews we thanked the participants and offered to send them the final result when the whole study was made. It was a conscious decision not to let them review their material after we had transcribed it since we believed they could withdraw what they had said just because they could feel that their value loaded answers did not look good in written form.
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Practical Methodology
4.1.4 Criticism of Semi-structured Interview
During the interviews we felt that we got a good connection with the respondents, that they felt calm and that we had a good access, which could have been influenced by the fact that we already had some kind of relation to some of the participants before conducting the interviews. However, in one of the first interviews we felt that the access was not optimal which could be due to the interviewer's lack of experience and that it was not made clear enough that the data would be treated anonymously. Nevertheless, we believe that a lot of interesting aspects could be drawn from this interview as well. As mentioned before it is of great importance to conduct the interview in a calm environment where there are no disruptions from telephones or other people (Bryman & Bell, 2003). We managed to prevent such distractions in all our interviews but in one where the respondent seemed stressed and needed to run away in the middle of the interview and also received a phone call in the end. Once again we do not believe that this has affected our data in a severe way since he otherwise seemed very focused and eager to answer our questions in a well- reasoned way.
4.1.5 Presentation and Analysis of Interview
The transcription after each interview went well thanks to the good sound quality where we were able to write down what had been said under the interviews verbatim. After transcribing we coded the material in order to fracture the data and rearrange them into categories which facilitated the comparison between the different answers (Maxwell, 2005). We used the same themes as when conducting the interview guide which was based on the theoretical findings. When doing the thematic summaries everything that had been said during the interviews do not necessary have to be presented especially when making an interpretive reading of the data, as we did. This means that we constructed the empirical chapter after what we thought the data meant or represented (Mason, 1996). At the same time we also did translate the findings into English which could lead to some misinterpretations but we have carefully gone through the material several times and believe that the risk is minimal. The translation was made with help of dictionaries, and where exact words could not be found to describe the Swedish phrases or words we tried to describe the meaning instead. Finally, we changed the names of the respondents to protect their identities.
4.2 Truth Criteria
There exist several different truth criteria to estimate the value of a qualitative research. Bryman and Bell (2005) emphasize that a trustworthiness qualitative study can be determined through the evaluation of four characteristics, which are credibility, transferability, dependability and confirmability.
4.2.1 Credibility
According to Silverman (2006) the credibility criteria involve for the authors to everything they can to falsify all their initial assumptions about the data. This is done both by securing that the research has been done according to all the rules and to assure it to be credible from the perspective of the participants in the study. Since there exist several different descriptions of the social reality it is only they who can legitimately judge the credibility of the results (Bryman & Bell, 2005). In our study we conducted seven semi-structured interviews which all were recorded with a dictaphone so we could go back and hear the respondent's exact words. Before starting the
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Practical Methodology interviews we assured the participant about their anonymity and we did in addition explain how their answers would be treated. After answering potential further questions to clarify even more the interview started. By this we believe the credibility in our study to be very high.
4.2.2 Transferability
Transferability is related to how generalizable a qualitative study's inferences are. To improve the transferability the qualitative researchers are urged to produce "thick descriptions" (Geertz in Bryman & Bell, 2005) of the research context and the assumptions that were central in the research. If a person later wishes to transfer the results to a different context it is that person's responsibility to judge how sensible the transfer is (Guba & Lincoln in Bryman & Bell, 2005). It is our opinion that we have presented a wide theoretical base in our study in order to establish the context of the research. The interview respondents had a wide range of their experiences from business-to-business situations with Chinese counterparts. Moreover the suggestions provided are of a general nature and could therefore be applied to people in an extensive range of industries. Our results can also indicate on preferred behaviour when in interaction between the two cultures. However, it is always up to the person to decide in which way or to which extent he/she can apply the results.
4.2.3 Dependability
To determine the dependability of a qualitative research the authors should enact an auditing approach where they try to explain the study in a thorough manner in order to facilitate the proceeding in conducting the study once again and gain similar results (Bryman & Bell, 2005). Notice should be made upon the difficulties achieving the exact same environment for the respondents since it is not static. However, to reach a high dependability we have documented and explained the data collection process, so a similar study could be made using the same interview guide.
4.2.4 Confirmabilty
In social research it is impossible to be completely objective; however the most important aspect is then that the authors have proceeded in good faith and strived to eliminate bias (Bryman & Bell, 2005). This study inevitable entails elements of interpretation and therefore we have as thorough as possible tried to describe our preconceptions and experiences that could be relevant to this study. Nonetheless, our ambition has been to remain neutral during the process of collecting data and we tried to avoid influencing the respondents' answers during the interviews. When transcribing and analyzing the data we have also tried to stay unprejudiced.
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Empirical Presentation
5. EMPIRICAL PRESENTATION
This chapter presents the data obtained through the empirical research. The empirical research is based on seven different interviews whereas five of them were with Swedish businessmen and two of them were with Chinese businessmen. The interviews were between half an hour to one hour each. The interview respondents all had different background, age and worked in different types of industries. Noticeable all of them were men. The reason for this was that with our snowball sampling technique we did not come in contact with any women. In the table below it is shown in which industry the respondents were active and what position they had. In order to protect the participants' identities we have given them fictitious names. TABLE 5.1: Short presentation of the participants Name Martin Lars Eric Robert Kent Da Wei Yun-Fat Type of industry Communication M i ni ng Communication Innovations Communication Health Academic Position CEO Freelancer CEO Self-employed Engineer CEO Professor Time in Sweden/China Several times during last 8 years 2 years 1 vi s i t Several times during last 7 years Several times during 4 years 12 years 18 years
The empirical data from our semi-structured interviews are presented and discussed under five main themes; i.e. relations, business relations, culture, business culture and cultural clash. It is the same themes that we used during the interview which were formulated out from the theoretical research we did before starting our empirical research. We are then using sub- themes where we divide each theme in two in order to give the Chinese and Swedish view of the issues separately. The reason for this separation of themes is to create an ease in embracing the information, even though some of them are closely interlinked and similar subjects can be discussed in various themes. We have outlined our theme to start with a brief summary of the Swedish respondent's most common discussed aspects followed by their individual thoughts. After that the Chinese's common aspects are summarized, followed by their individual thoughts. All chapters also end with a joint Swedish -Chinese summery of each theme. In addition this chapter will end with a brief summery and table chart from all themes.
5.1 Relationship
5.1.1 The Swedish Perspective on Relationship
The most central mutual factor that was emphasized by our respondents was the importance of the relationship in China, and the participants claimed all businesses made in China are thanks to relationships and they take time to develop. All the respondents testified that much more hard work and effort have to be put down on this when entering the Chinese market, compared to the Swedish market. They all stated that it is necessary with at least a couple of meetings to get to know each other before any business negotiations can take place. Lars argued that everything is built upon relationships in China and you need to have contacts to be able to succeed in your business. He continued by saying: "you cannot just whip in to a Chinese and tell him that you have the world's best pumps and sell, you must always find a
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Empirical Presentation contact person who can introduce you to the client." [Writer's translation] According to Lars it is very important to continue to work on the relationship in China after a business deal has ended even though no new projects may arise for years. This differentiates from the Swedish traditions when the relationship could finish together with the business cooperation and then be brought to life again when a new project begins, according to Lars. Robert stated that building a relationship: "is a long process that goes on all the time" [Writer's translation] and he has realized that the Swedish people many times do not take enough time to sit down and have the long dinners that are necessary. He elucidated that these long dinners, with a lot of food and drinks, are used by the Chinese people to consort and bond with each other. Kent found that Chinese people work so much on the relationships in order to be able to trust one another. If you cannot build trust between each other there will not be any relationship and no future business, he stressed. Kent's experiences have been that most Chinese are very eager to understand westerners and they make efforts to develop good relationships. He has also acknowledged that the relationships to some extent become quite personal but never on any deeper level. He told us that: "sometimes with westerners that come from similar cultures you can experience that you sit in the pub talking about how you say different proverbs in different languages and you show pictures of your kids, but you rarely reach that level with a Chinese person." [Writer's translation] When Martin and his company decided to enter the Chinese market they put a lot of effort on building good relationships. He could not explain exactly why they did so since they had not studied the culture before going there. However this was a good approach and he stated: "the relationship we built in the beginning was incredible valuable when solving other issues." [Writer's translation] Martin said the goal was to visit China at least ones every quarter to nourish the relationship with the CEO of the collaborating company over there. He also pointed out the importance of trust which contributes to the long period of time needed when building a relationship. From earlier experiences Martin has learned not to move that fast when building relationships. This is due to that Swedes can be perceived, as he said; "to do business quite fast and hard and without any fuss" [Writer's translation] and if personal relationships is a result from doing business it comes afterwards. Martin believed that in China they do it the opposite way, i.e. personal relationships first and business later. Eric argued that one of the most important aspects, for the Chinese, in the relationship building is the concern of having meetings to be able to bond on a personal level. He stated that he will try to go to China at least two to three times per year but sometimes it is more. This is also due to the fact that he has realized the importance of being present because as he said: "when you are present a lot is happening but when we are not present it feels like everything stands still" [Writer's translation].
5.1.2 The Chinese Perspective on Relationship
The two Chinese respondents share the same perspective when it comes to building relationship in China, although they expressed it differently. Da Wei spoke about trust and commitment in the process and Yun-Fat emphasized commitment by showing consideration for others. Their other individual thoughts and perspectives of relationships will now follow. Da Wei thought it is difficult to collaborate or build relationships with Swedish people. He stressed that in Sweden there is a clear distinction between business and your private life,
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Empirical Presentation whilst in China he felt business is interlinked with your personal life and therefore more blended together. In China it is a requirement that you have a personal relationship with someone in order to collaborate with them and then the possibility for future business together might appear. In this case he experienced the Swedish people to be cold and it is therefore difficult to combine a personal relationship with a business relationship in Sweden. He told us that: "In China you become friends with the people you are doing business with and you are not simply doing business you are also part of the family." [Writer's translation] Da Wei further emphasized that when you are doing business in China you must have a good business relationship and then a mutual trust is then the most important factor. To be able to trust each other you need to be there for one another on a regular basis showing that you are reliable, according to him. In Sweden he believes this is different because Swedish business collaborations are more controlled by rules. He stressed that in China after you have built a relationship it is for life whilst in Sweden it is easier to break the bond. In fact he believed that Swedes concludes a relationship after a business transaction is finished. Da Wei claimed that within a relationship there are of course expenditures and it takes time to build bonds and it is important to have time and patience when doing so because as he said: "sincerity is subject to prove". [Writer's translation] He stressed that we all have a different background and it requires time and effort to build trust. He believed that in a relationship people need to commit to each others on several different occasions in order to develop a mutual trust. In his mind it does not matter how much money you have because in the end what really counts is the relationship or friendship. He said: "how can we meet and directly become friends? - It takes time building this up." [Writer's translation] In his opinion this was what Swedish people often do wrong when they come to China. Yun-Fats believed that relationships can be built when people have studied at the same university and therefore can help each other out. He claimed that many Chinese people have studied in Sweden and are currently working in Swedish corporations in China e.g. Ericsson and Volvo. He also emphasized the need to care not just about one another when building a relationship in China but also to care about the other person's family so that the future partner feel acknowledged. He believed that this is quite different in Sweden. Yun-Fat stressed that in China they do not have as much privacy as in Sweden and this results in people wanting to share more of their privacy with their friends than even their wives/husbands.
5.1.3 Summary of Relationship
There are several similarities of what both the Swedish and the Chinese participants have acknowledged as important when going to China to do business. The main elucidated part was that relationships have a bigger importance in China than in Sweden. Many of them also stressed that the timeframe differs between the two cultures where much more time to build up trust between the parties is needed in China. Both Da Wei and Yun-Fat argued that to be able to create a long lasting relationship it is necessary to not just have it on a business level but also on a personal level. This was however to some extent contradicted by Kent who claimed that a relationship normally does not get as personal as it can get with other western partners.
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Empirical Presentation
5.2 Business Relationship
5.2.1 The Swedish View on Business Relationships
All the Swedish respondents mentioned that the Chinese businessmen are very keen on building the business relationship based on personal bonds. To obtain a business relationship on that level it is very important that the relationship is built upon trust and credence according to the participants. Several of them also testified on how the Chinese use dinner parties as a method to develop relationships. Eric explained how he came to realize the importance of the social interaction for the Chinese business partners when they emphasized the importance of consort and through that became more personal in their relationship. He compared this with the Swedish businessmen who normally just meet to do business. According to him the Chinese associates often meet for dinner where the discussions mostly are focused around personal topics "but sometimes business discussions enter the conversation and then you talk about other things and then a business issue again."[Writer's translation] This contribute to that the Chinese do not separate business and pleasure to the same extent as we in Sweden do, Eric was acknowledging. He also stated that it is very important with trust in the relationship especially when the distance between the two countries is so considerable. He exemplified how the credence could take form by explaining that it is not uncommon that money has to be paid in advance which will be recollected during the years as partners. Eric and his company have managed to create such a profound relationship and are due to this not using a framework agreement, which they normally use, instead they just use the offer agreement. Martin runs a small company which normally builds personal relationships to do business. They decided to create relations with their current collaborating partner in China at as many levels as possible to minimize the risks. Martin explained how it took at least half a year, and four or five visits, for the different persons involved to get to know each other but it contributed to that Martin, the CEO, had established a good relationship with the Chinese CEO and the sales directors across the nations with each other and so forth. According to Martin it was proved that the relationship with the CEO helped them solve upcoming problems on different levels in the organisation. If problems in the production occurred Martin could just refer to that he could bring this up with the CEO, which often had the impact that the Chinese employee fast tried to correct the misunderstanding or problem in order to not lose his Face. Martin elucidated that he got a feeling that the other CEO "saw this small entrepreneurial firm with enthusiasm and put his guardian hand over us, which we noticed all around the organization." [Writer's translation] Martin also related to a business negotiation they had where a delegation came from China to Sweden. They were sitting in conference for two days discussing and negotiating and he said: "the last afternoon an old man that looked quite gorgonian and had been sitting in the back stepped up and were proved to be the chief." [Writer's translation] Martin stressed that he and the Swedes then believed the conference was over and the final element was just to sign the papers but that was not the case. Now the chief started to negotiate and had to obtain something to not lose Face in front of the other in the delegation. Martin believed that if the ambition is to create a long-term relationship there is an urge for a win-win situation and to obtain that it should be adequate bad or adequate good for both parties. However, Martin has acknowledged that the Chinese do not share his attitude, if they leave a negotiation winning more than the counterpart that is fine as well.
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Empirical Presentation According to Robert there is a significant difference between how Swedish and Chinese people build up business relationships. He asserted that in Sweden " we do business by just sitting down and negotiating" [Writer's translation] while the Chinese want something more, they want to get to know each other to take that step. Robert stressed that he did not fully understand the Chinese counterparts: "we can never go there with our pale faces because then the price is four times higher or more. But even if they just map out that we are a European company they sense that they can take a higher price." [Writer's translation] This makes the negotiations very hard according to Robert and consequently you need several options if one should not work. Lars has experienced that most active Swedish businessmen in China have learned or are really trying to adapt to the Chinese way of doing business by fostering the relationships. The relationship encouragement could, as some of the other respondents have said, be expressed by long dinners or lunches. Lars also told us when the organisation first came to China there were many "of the Chinese people that wanted to take advantage of and harness as much as possible from the westerners." [Writer's translation] Kent argued that many of the western organisations' main focus are money and that they want to find the cheapest manufacturers on the market where they rarely stay for a longer time. This is according to Kent contrasted by the Chinese way of doing business where they, also mentioned by the other participants, rely very much on the relationship. Kent stated that the Chinese people value very much that they are able to trust the other party. His experience was that the first couple of times you meet there are normal meetings but if they went well he said: "the relationship starts to change on the third or fourth meeting and they start to treat." [Writer's translation] It is not like here in Sweden were the seller should treat the customer, in China it is the other way around after a relationship has been developed according to him. However, Kent continued, the business relationship is not established until a first successful business transaction has been made. He stated that: "it is also important for them that you are honest and if a failure would occur you try to readjust that in the next business deal to be able to maintain the relationship and not lose any business deals." [Writer's translation]
5.2.2 The Chinese View on Business Relationships
Within this theme, there is one main commonality expressed by both our Chinese respondents. They both expressed the importance of Guanxi (networking) in China. Da Wei stated that Guanxi is more extensive in China than Sweden and Yun-Fat stressed that that the Guanxi is more developed in China than networking is in Sweden. Da Wei believed that Swedish people make a distinction in the business world where on one hand you have the business and on the other hand you are private. He stated that this is the same thing in China, both business and your private life go hand in hand. He stressed that networking, what is referred in China as Guanxi is more established and spread in China than Sweden. He pointed out that when you are buying something in China it is from someone you trust. In his opinion trust is the only criterion the Chinese have when purchasing something. He told us: "if you have two similar products, which one will you chose?" [Writer's translations] In such a case where you have two similar products with similar prices he believed that Swedes tend to look at other factors such as company background and for example ethics. In China this is easier, if you are friends with one of the two sellers you will naturally buy from the one you already know, according to Da Wei.
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Empirical Presentation He stated: "Chinese people does not deliberately build up businesses, we deliberately build relationships and then if you have a business opportunity well then you do business. We don't create a relationship to do business we create relationships to have a relation". [Writer's translation] Da Wei further stressed that when you have a good relationship with someone and a business opportunity comes up then you can do business and it might be a prosperous business. He also stressed that sometimes you have a relationship where you do not do business but you had a good time with a friend nevertheless. Metaphorically speaking Da Wei thought that western networking comes from the head and thoughts while the Chinese networking (Guanxi) comes from the soul but sometimes you cannot analyze a business proposal and then you have to turn to your gut feeling and not your soul and look at the man/woman and see if you have faith in him/her. He believed that the western societies are too based upon laws, sometimes you can circumvent these but then new laws are created that takes away the charm of doing business. He did not consider Swedish people to be good at relationships and market planning but that they are good internally. He stated: "many Swedes goes to China to do business and when they receive a warm welcoming they believe they have built a good relationship but it is not correct." [Writer's translation] According to Da Wei, eating and drinking is a courtesy that is part of the Chinese culture and compared to Sweden is more extensive in China. He further stressed that you need to live in China to do business there and it cannot be controlled from here. According to Da Wei Swedes believed that they could spend one month or so in China and then be under the impression that they knew how the consulting business worked there. In this case he believed the Swedish to be too opportunistic. He said: "I have lived in Sweden for 12 years and I have many Swedish friends and I run a business here but I still do not know how Swedes behave and how they work. How am I then supposed to run my business? I still feel I am ignorant, how is it then possible for a Swede?" [Writer's translation] Da Wei further stressed that he speaks Swedish and still studies it and also have read books about Swedish history but he still feels like he has not gotten the full picture. In addition Da Wei concluded that Swedes need to learn more about the Chinese language, their culture, and business culture because today China is Sweden's biggest business partner. Yun-Fat believed that it would have been impossible for the Swedish people that he has helped so far to do any kind of business in China without him. He stressed that most people in China cannot speak English, they might be able to read some English but they cannot speak it. He believed this causes a situation where the quality of the communications becomes poor because of the language problem. He asserted that in China a personal interaction is very important when doing business there. However, in Sweden he thought it is different and he felt that Swedes are more formal and lack the same extent of communication and interaction. He stated that this is where he comes into the picture, as a translator, because he knows the terminology. He further pointed out that he is Chinese but during the business trips he has attended, he has traveled as a member of the Swedish delegation. In these situations he expressed that he took a role as a middle man and not just as a dragoman. Yun-Fat further emphasized the need for creating personal relationships with companies. He said: "if you want to do business with me you should not only build a relationship with me but also my network. My network means my family which is extremely important. If my wife and partner also like you it is much easier". He believed that foreigners are in contrast with the Chinese and are too concerned with the transactions or business terms. He stressed that in
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Empirical Presentation business it is very important to have a trust where you can share privacy with your partner and this takes time to build but once it is built it can be very useful. This is something he felt foreigners have a hard time understanding. He emphasized his belief that Swedish people are reliable and do not cheat and are very honest, in fact sometimes too honest. This he believed to be one of the reasons why they have had problems doing really big business in tough environments. He also claimed that Swedish people can be quite quiet sometimes which he felt is terrible in the business world. He further pointed out that the Swedish businessman is too technical and well educated doing what it says in the book. He believes this makes them professional but compared to Chinese businessmen they lack a sure instinct. In this case he felt that the Chinese have a better instinctive feeling and are more careful and less rational than the Swedes. He elaborated that when you are working in a business-to-business situation with Chinese you must build relationships and learns from the culture or use help by other Chinese, agencies or other types of representatives.
5.2.3 Summary of Business Relationships
The core of building a business relationship starts with a social process according to all our respondents. They described it to take time and also something that cannot be built during just one occasion but during several meetings or events together. And as several of our respondents pointed out, this usually happens during long dinners where the possibility to consort exists. With five of our seven respondents there seem to be an underlying consensus that the element of trust is required in order to have a successful business relationship together. Both Martin and Robert contradicted this picture somewhat. In Martin's case he stressed that he is mainly interested in creating a win-win situation for both parties which is an interest he felt the Chinese people does not share to the same extent. In Roberts case there seem to be an absence of mutual trust because he was under the impression that he always got a higher price because of him being a foreigner. Both Eric and Da Wei commented the fact that there seem to be a distinction between business and pleasure in Sweden. According to the two there is no distinction between business and private life in China. In addition, both the Chinese respondents expressed a similar condition where they felt Swedes to be rigid and formal.
5.3 Culture
5.3.1 The Swedish Perspective on Culture
There was almost a unified fascination among the Swedish respondents, except for Kent, concerning the development that is taking place in China today. They talked about how fast everything is going and how new buildings and other complex is built every day that changes the skyline. Several of them were also fascinated by how China manages to combine the old and the new when the difference is so dramatic. Amongst all our respondents Robert was the one who most strongly believed that the Chinese culture is eroding. He stated: "you get surprised that there are not anything left of such a gigantic and great culture." [Writer's translation] He argued that this rapid development has resulted in a technological gap. According to him there is today not uncommon to see an old man with his donkey on a rice field talking in a mobile phone and "they do not know anything else, they do not see the gap, since they have not seen the telephone with a cord to the wall." [Writer's translation] Robert had experiences from this phenomenon by working in industries as well. He found that the Chinese had difficulties understanding some of the simplest things. For example, if you have a blue print the Chinese are often very good in following it but if something needs to be changed they have a hard time imagining how those modifications
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Empirical Presentation could look like. He said: "the history is gone so it is no wonder they do not know anything else." [Writer's translation] On a more individual level Robert argued that people are more concerned by the individuality than the group in China which also makes them very independent. He also brought up the fact that he perceived the Chinese people have difficulties to saying no. He told us: "they always say yes, yes they understand, but they have not understood at all." [Writer's translation] There is also huge difference in the food culture and there are unwritten laws, according to Robert, on what and how you eat in China. He said that "they eat exactly everything that have lived and everything you could find in all body parts but they have most of the time learned how to cook it so it could be really tasty." [Writer's translation] Robert also narrated about how he perceived the world's biggest movement of people which takes place during the Chinese New Year. He said that the farmers sell cabbage-heads the whole year, which they do not earn much from, but when the Chinese New Year comes they give away the money or use it to go home. He said: "they live on nothing and then they give all these money to their children." [Writer's translation] Robert claimed that this is totally different from us and they honour their elders to much bigger extent and place them on a pedestal. Robert concluded the interview by stating that it is important to be humble and said: "when in Rome do as the Romans." [Writer's translation] One of the principal differences Eric has experienced between the two cultures is that China has a much higher hierarchy than here in Sweden. He also stressed that the picture media is giving us is not very accurate because in today's China people do not only walk around on the rice fields with their pickaxes. He has seen the fast development and elucidated that the people there are eager to change the external picture of them and that they are working towards achieving our standard of lifestyle. On an individual level Eric explained that they are very friendly and want to take good care of you as foreigner but they are at the same time very afraid of doing things wrong. Like Eric, Martin elucidated the hierarchical difference between Sweden and China. He had noticed a huge difference in human dignity where in China the ones on the bottom of the hierarchy had their self to blame for being there. Martin reacted to this and could sometimes feel uncomfortable when for example waitresses came to serve them water, whilst his Chinese colleague treated them like air. He explained these feelings by saying: "I suppose it is the Swedish heritage." [Writer's translation] However, Martin has noticed a belief in the future that he found greater in China then here in Sweden. He believed this has its base in the fact that they every year see an intrinsic improvement of their situation. Nevertheless he claimed he had a hard time understanding how all this new and modern could be placed side by side with the old without any riots and bigger complications in the society. Lars described the Chinese people to be very proud over their culture and they "try as much as possible to perpetuate the old and emphasize it to the westerners as their own." [Writer's translation] His experience also included that they always claimed that everything, e.g. pasta and pizza, accumulated from China, to some extend Lars believed them to be right. He further stressed the rate of development, especially in cities and the outskirts of the cities he thinks the building rate is very hasty. At the same time he stressed that the development rate is hasty and vast but he also believed that the Chinese are anxious to preserve old parts. Another aspect of the culture Lars described in the interview was how the Chinese always elbowed their way through, which he explained was quite common in queues and in traffic. He stated
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Empirical Presentation "that it may be necessary to be very pushing to manage to come through a society like the Chinese." [Writer's translation] Kent believed the Chinese people to be a very giving people, especially when they have decided to develop a relationship. There is quite common, according to Kent, that you give different favours to your customers, however, they are also very sensitive to bribes in China. He told us: "on one hand is it very corrupt, a corrupted culture, but at the same time is it a delicate matter, so the favours you hand out as a businessman has to be on the businesslike level." [Writer's translation] Kent has found that even though many relationships could be developed on a very personal level it is not within the Chinese culture to invite someone to their home. He has also noticed that even though you could talk about almost anything with Chinese people there is one thing they stoutly avoid discussing, and that is politics.
5.3.2 The Chinese Perspective on Culture
Both Da Wei and Yun-Fat have stressed the width of the Chinese culture. They both agreed that the Swedish culture is in ways simpler and totally different. Da Wei believed that Swedish people are simple and sincere and Yun-Fat thought that Swedes are simple because their culture is simplistic in nature. One aspect within the Chinese culture that they both strongly stressed is the aspect of Face. There occurs to be an unspoken consensus between these two old countrymen about the concept of Face. They believe that it is of extreme importance to avoid someone from losing Face because it will terminate whatever relationship they have. If such an incident would occur there would be nothing anyone can do to mend the situation, they claimed. Hence that is why they avoid such situations. These are their main common thoughts and we will now focus on what they think on a personal level. Da Wei felt that the Swedish culture is different and that people also think differently over here in Sweden which makes it difficult for him to understand the Swedes. He believed westerners have more rules and perceived this as something cold. In general he believed that Swedish people have a good possibility to do well in cultures that are closer to their own. He said: "the Swedish people are down to earth, a simple people with a good faith in others but you lack knowledge about other cultures". He stressed that sometimes the Swedes can appear a bit self-righteously and not being aware of the knowledge that surrounds them. Da Wei continued by claiming that the Chinese have to be polite and that makes them hard to read. He stated: "if you have made a Chinese man to lose his face all respect ends and you cannot mend the situation". Another opinion of his was that westerners freezes the time and does not see the progress over time. In this sense he felt that Swedes are inflexible and that they believe that their values to be better. In his case he believed that he has adapted to Swedish culture and this makes it hard for him to reconvert to the Chinese culture. Yun-Fat claimed that foreign business people can use local representatives because these people know the local culture. He was under the impression that it takes time to adapt to a culture and it is not enough to visit as a tourist to get this insight. He stated: " People need to experience the culture, this through attending different events." After the language problem he believed that grasping a culture is the second largest problem. He felt that there is a difference between the Swedish and Chinese perspective of worth. Yun-Fat claimed Swedes to be more worried about the individual worth and Chinese to be more concerned with the collective worth. He stressed that in China a person's perceived behaviour is not only important in their own eyes but it is also important how they are perceived by others. He said: "it is important that you don't lose face because then it is over."
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Empirical Presentation
When comparing China and Sweden he emphasized how large China is compared to small Sweden. He believed that the people are too simplistic in Sweden and that everything is similar, for instance education and shopping habits. He said: "the same education in Umeå and Stockholm hardly differs and most people shop at Maxi for groceries." He claimed that this simplicity in Sweden makes it hard to understand the enormous China. He further stressed that in China it is much more depending on where you travel within the country since the culture differs. To exemplify Yun-Fat drew a chart which shows how a small country like Sweden with a fairly small population does not have a complex culture but China however, with a large country area and the biggest population in the world does. He stressed that this makes it more difficult to understand each other's cultures. He concluded this discussion by saying: "culture is not something you can learn from a book".
Culture complexity
Figure 5.1: Yun-Fat's Model over Culture Complexity
Population
S W E
C H I
W O R L D
5.3.3 Summary of Culture
The discussions we have had about cultures with our respondents have varied quite a bit. The Swedes and Chinese have emphasized different aspects of culture. For the Swedes most focus has been on how vast the development is and how hasty the building rate is coming along. The Swedish respondents have been somewhat contradictive in their statements about this. On one hand Robert is surprised that there seem to be nothing left of the old China, almost like China is drowning in everything new. Martin was in line with Robert's reasoning and questioned how everything new could be build without any riots or bigger complications. On the other hand, Lars view on this was totally different. He believed that this matter is dualistic, that they do have a vast new development but at the same time is anxious to preserve the old. Our Chinese respondents emphasized different aspects of culture. Yun-Fat stressed how complicated the Chinese culture is because of a big population and width in culture. Da Wei felt that Swedes are too ignorant about other cultures. Both the Chinese also stressed the importance of not losing Face. According to Da Wei it is part of the Chinese culture to act polite and this makes it hard to read the Chinese people and their intentions.
5.4 Business Culture
5.4.1 The Swedish View on Business Culture
When asked about business culture during the interview several of the Swedish respondents mentioned that there is a huge difference in the hierarchy levels. Where we in Sweden do not have that big difference between the one on the top and the one on the bottom, there is an enormous difference in China. One other issue mentioned by most of the participants was the long dinner parties, what they meant and how they were performed. A third area most of them
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Empirical Presentation went in to were the importance of knowing who the decision maker was, in order to prevent people from losing their Face and to prevent spending time and effort on the wrong person. Kent found it to be an odd experience to work as a seller in the Chinese market. He perceived the first meetings with a potential client to be quite slow but after a while he was always treated like a king as a seller. This treatment resulted in that there were no fast negotiations in China, after a whole day in the conference room where they have bought you both lunch and dinner someone from the Chinese team could suggest that you go out and do something afterwards as well, for example go to a massage club. Kent elucidated that they are very ethical so "there is no striptease but traditional Chinese massage, which is a nice ending to a tough day." [Writer's translation] He also added that it was "important to be adaptable and let them buy these bribe-dinners and we give favours back." [Writer's translation] However, he elucidated that the bribes and dinners should be at the business level. During the negotiations he found the Chinese businessmen to be very adaptable as well but he stated that "in the last stage they become bloody and will bargain a little bit more." [Writer's translation] Kent declared that it will always cost you to start a project in China but they are confirmed repurchase clients which gives the possibility to earn back what you lost in the beginning. He claimed that in China you always have at least two suppliers since you always are matched against other competitors. It is very important to be aware of whom in the Chinese organization that is making all the decisions and then become friends with that person if possible, according to Kent. Many times the decision maker bases his decisions on information coming from his subordinates then you become friends with them instead or as well. If you do not know who the decision maker is there is a great risk that it would lead to that someone loses his Face, Kent continued. However, he claimed that normally the westerners are more successful then the Americans in building solid relationships since Swedes according to him use an "elephant sales approach with a long trunk and big ears." [Writer's translation] He stressed that we are flexible and good listeners which are important attributes to be able to grasp the Chinese business culture. He also stressed that it is also important to make yourself surrounded by local people who understand the culture and that you trust. These consultants were very useful for information collecting and to feel signals of when to break up meetings. Breaking up a meeting can be necessary, pursuant to Kent, when trying to come to a final agreement. He claimed that in China you do not fight for your cause and then yield because then you lose Face. In his opinion if you take a break, discuss the issue with the chief or with the colleagues in the hallway for a couple of minutes it is then possible to come back with a changed opinion. Kent exemplified by narrating one business meeting where they had got stuck. He then wrote on a small note to his boss which said that the boss should go to the restroom. He said:"while my manager where at the restroom their president stood up and started to calculate on some advanced formula where he found that he could squeeze out more money on the deal. He erased the formula and told me not to say anything and when my manager came back we had reached an agreement on a final sum." [Writer's translation] In this case the CEO of the firm did not lose his Face, even though he discussed the matter with Kent, thanks to the fact that Kent had a lower position than him. These experiences made Kent to realize that in Sweden the individual has much more room to take personal responsibility. According to Kent the Chinese businessmen are very sincere in the conference rooms and they always state how much they are willing to pay and keep an open cost reasoning. According to Kent it is then up to the counterpart to motivate another price setting. Kent emphasized the importance of being as high up in the hierarchy as possible since "they have
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Empirical Presentation full control over the accounts while on a lower level they only have the budget to emanate from." [Writer's translation] If the person you are negotiating with cannot be flexible and starts saying; "I cannot come with this price to my boss because then I will lose face" [Writer's translation], then you know you are bargaining on the wrong level according to Kent. He stressed that on a management level you can much faster know where the final sum will land thanks to their openness and quite fast negotiations. Once again the importance of good relationships becomes valid and placed in the first room, in contrast to the western world where the money comes first and relationships after, pursuant to Kent. A final reflection made by Kent is the importance to control if the Chinese people fully have understood what has been said. This he has found a bit difficult since they always give affirmative answers. Kent solved this by using an assistant who were good at noticing if someone did not understand. Robert claimed that the Chinese are good businessmen and they know how to bargain for new prices, which leads to that it is very difficult to get a fixed price and stick to it. He asserted that if the Chinese businessmen just saw a glimpse of a white person the price directly went up, so you needed to have alternatives. Another reason to have alternatives, according to Robert, is the time aspect. He stated: "you sit down and make a plan over the whole process that he gets to sign, and on Monday it should be done, but that almost never coincide" [Writer's translation]. In Sweden we are good in saying what we mean, Robert stated, but it is different in China; "there will always be a new Monday." [Writer's translation] He continued to say that the quality assurance is also an issue when manufacturing in China. He stressed that it is due to the difficulties in keeping people; if the workers know they could get 50 cent more an hour somewhere else they go there and the factory have to find new workers. Another example Robert gave on their obsession of earning how ever small amount more was when he had an agreement with a manufacturer and they had made up all the direction on which material to use and so on. According to him there was no surprise when the team leader had been bribed to put in another component then what was agreed, which contributed to that the final product not being approved in the quality testing and were therefore not able to get sold. He said: "The Chinese worker does not understand the context, you earn some money by maybe paint a bit poorer and put in that part and he thinks he is extremely smart but in the final quality check-up they do not get any money at all." [Writer's translation] Eric told us about an incident he had experienced in China, which never would have happened in Sweden, where all the workers in a factory were fired because they did not seem motivated enough. As Eric saw it to be the reason why it could be perceived as "necessary to ignore the labour legislative rules is to make the development they do." [Writer's translation] Eric's standpoint concerning price negotiations differed from the others when he claimed that the Chinese businessmen always gave the best offer and therefore it is no place for bargaining, however suggestions for price changes could be made, but he was in line with the other respondents in the statement that the Chinese were not very independent. Another note he made was that most the businessmen were women, since it was mostly they who got the education in China according to him. When Lars first came to China he found it to be unsafe due to the risk of being cheated by the Chinese. It was mainly the ones on the management levels in the Joint Venture who tried to get all possible benefits, and Lars said that was a rough time. He had heard stories about Chinese businessmen who "get in contact with Swedish companies and trick them to China and let them pay for expensive dinners ones or twice and then they split the money with the restaurant" [Writer's translation] where no deal had been made. There is a huge difference after a good relationship has been established, according to Lars, then the Chinese can be
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Empirical Presentation valorous and are normally interested in starting the cooperation as soon as possible. In the mining industry Lars found the relationship with the Chinese counterparts to be dependent on recommendations, from for example consultants in design institutes who have approved the technical solutions. Another important part in the business culture is, pursuant to Lars, the dinners and lunches you have together. There are a lot of manners and habits during such an event. For example there is almost always one fish course and he said: "that it is placed in front of the guest of honour with the face towards the guest of honour and it is he who starts." [Writer's translation] Lars continued to describe that there normally are a lot of drinking involved in these events. Martin had a lot of prejudices the first time he visited the factory in China which later would take over his production. However he found a modern facility with a good and clean entourage. One thing he reacted to, though, was the motivation technique used there. He pointed out that over each worker there were space for an A3 paper and if someone had made an error so the line had to be stopped they wrote on that paper so everyone could see that the person had done something wrong. He elaborated by saying: "they get a red note if they make two failures and if they do a third one, well, then they do not stay." [Writer's translation] Martin found the business culture to be very hierarchical in China and the business climate to be much tougher where he says it is like: "-Shut up and do your work, and not like; -Now my little friend will I stimulate you so you can develop and become a good resource for the company." [Writer's translation] He also stated that there seems to be something in their culture which contributes to that full honesty is not necessary to do a successful business deal, but you should not delude. He continued by saying that if he could go in and get out more of the business deal he would do that in the same way that the Chinese are doing. Martin claimed that he had reacted to the Chinese decision making process where it could sometimes be difficult to be sure of that you spoke with the decision maker even though you spoke with the responsible in that certain area, this makes the process irritating and time consuming. This shows, according to Martin, the lack of independency and creativity they have, however, he found them very knowledgeable. Martin stated that "it is the leadership style that limits their ability to put their own knowledge into creative ideas." [Writer's translation] He was not that impressed by the Chinese people's ability to establish new connections. He said: "they were quite good but did it in a mechanical manner." [Writer's translation] Martin said it felt like, when sales or marketing people called, they were reading from a script and did not listen to the client, just "to be able to report on Friday that I called 22 and I talked to these persons" [Writer's translation], but they were not interested in the result. He also claimed that they appeared to be too controlled when meeting them in a group, so he always tried to have meetings one-on-one. This made it possible for him to access critical information or to get clarifications on things he had not fully understood.
5.4.2 The Chinese View on Business Culture
In this theme the two respondents have focused on different aspect of business culture. Da Wei mainly focused on Swedish aspects on business culture when Yun-Fat switched between the Swedish business behaviour and Chinese business structure and making contrasting statements about the two. In general they are both addressing one common aspect, the timeframe. Da Wei expressed that he felt Swedish businessmen was willing to learn about culture and business culture but does not know how. He believed Swedes need to put more time and effort into learning. Yun-Fat perspective of the timeframes in general was that Swedish people in contrast to Chinese are more case to case and Short-term Oriented in their process of building business relationships. More of their individual thoughts will now follow.
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Empirical Presentation
According to Da Wei Swedish businessmen are especially skilled at making business internally: within an organisation, within production and with quality assurance. He was under the belief that the Swedish organisational structure is horizontal and flat. He stressed that there is a need for Swedish businessmen to become more knowledgeable of cultures, and added that it is impossible to know a culture only after spending a week in foreign country attending various dinners. He said: "there are many Swedes with a strong will to understand and grasp, but they do not know how." [Writer's translations] He pointed out that when Swedish businessmen are selling something they often focuses on power point presentations which in China is interpreted as dull and is therefore not common. He further believed that it is wrong when Swedes go to China to build up a company and only hire Swedish people. One successful concept for him is to hire a Chinese CEO on location. Just like his opinion about Face in our culture part, Da Wei concluded that it is the same in business relationships; if someone loses their Face the business relationship is over and there is nothing you can do about it. Yun-Fat argued that in China everyone seeks benefits. According to him the Chinese mainly seeks far-reaching relationships and therefore take their time building a relationship whilst Swedish people are more short-term, and case to case, oriented. Yun-Fat pointed out that this results in a velocity difference between the Chinese and Swedish collaborations. He further stressed that in Sweden you rely more on teamwork while you in China focus more on the individual effort, this because China is hierarchic in nature and consequently the CEO solely makes the decisions there whereas in Sweden CEO decisions are jointly debated with colleagues. In addition Yun-Fat is under the belief that Swedish people are very friendly and nice to work with and also very professional. He told us: "Swedish businessmen they are true gentlemen that like doing business." He further pointed out that they are often highly educated but they can sometimes become too technical in their appearance and then lose some of their humanity and give a feeling of just being a system. He further compared this to China where he believed that there was not as many educated in China, in the old days, but they still knew how to make money. They were according to Yun-Fat smart and had a sense of good business but still uneducated, instead they had to learn from each other. He further pointed out that today most Chinese executive managers and CEO's are well educated having studied at international business schools and they too can become too technical and get problems with communications but when they enter a discussion they are good at making decisions.
5.4.3 Summary of Business Culture
One of the most important differences in business culture is according to the two Chinese respondents the timeframe, where Da Wei believed Swedes need to put more time into learning about other cultures and Yun-Fat separated the short-term Swedes from the long- term Chinese. Robert also experienced the time factor when he believed the Chinese having a hard time keeping agreements within the set timeframe. Several of the Swedish participants emphasized that hierarchy was the main difference; this went in line with Yun-Fat statement as well. It had also been acknowledged that the higher up in the Chinese hierarchy you come the easier it is to negotiate about price and other issues that need to be decided. They stated that it is very important to negotiate on the right level and with the correct method otherwise there is a risk that one of the parties will lose his/her Face. Some of the Swedish respondents experienced it to sometimes be hard to know who the decision maker was in a Chinese company, but as Yun-Fat declared it is the CEO who makes all the decisions. Several of the
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Empirical Presentation Swedes discussed how dinners were a part of the business culture in China, and all the manners and habits surrounding them, but as Da Wei elucidated you do not know a culture just because you have been in the country for a week or two and have had some dinners.
5.5 Cultural Clash
5.5.1 The Swedish View on Cultural Clashes
All the Swedish participants had experiences from cultural clashes, or as some of them rather related to as cultural misunderstandings. They contributed with a great variety of incidents which occurred due to cultural differences. We shall now look at their personal experiences. Eric told us that he had experienced a small misunderstanding between him and a Chinese manager. According to Eric what happened was that he told this Chinese manager what one of his employees had told him earlier that day that he would be enjoying a cold beer while Eric had to work. When Eric told the manager the story he became stunned and did not understand it because in his world an employee could never express something like that to their CEO or higher executive. Eric told us that he makes fun of his malicious portrait of the Chinese in front of them, e.g. that they have big rice fields where men go around with pickaxes. He told us that the Chinese are aware of this foreign malicious portrait and that they think it is a bit annoying. He also experienced a misunderstanding while he was having a meeting in a Chinese conference room when he suddenly received a call on his cell phone. The call was important so he had to step out and take it. According to him the Chinese then thought that he was dissatisfied with something and therefore went out from the room. He then had to push all the people back in the meeting room. Eric stressed that the Chinese does not have the same or as good humor as us Swedes but they do start to understand our humor after spending some time together. Eric believes that it was easier in general because they were dealing with Hong Kong Chinese which he feels are more adjusted to westerners because they are used to dealing with them. According to him this has resulted in fewer misconceptions. Martin felt that they had drawn a blank sometimes because of their German way of acting, which can bee seen as very direct. Martin told us he experienced an inability to make decisions in China. He said that there was a lot of frustration before they understood this indecisiveness and the process of which decisions were being made. He exemplified with a story about a Swedish entrepreneur that opened up his own factory in China. This entrepreneur had a Swedish way of delegating responsibility but it turned out to be inapplicable in China because it made his workers confused because they were used to having someone telling them exactly what to do. In addition Martin pointed out that the Chinese people cannot give negative information and this was something that took a while for Martin to understand. He said: "when there were delays and we did not understand why we had to call them but they claimed there where not any problems". [Writer's translation] Martin told us that eventually there was a Chinese person who wrote to them: "we will get back to you as soon as we have good news". According to him they could then understand how things worked over there. In the end he said they had to go up to the boss in order to get any information about delays and only then they would get the information of what kind of problems they had and how they intended to solve them. He stressed that going to the boss was something you had to take advantage of in order to get information. He further pointed out that they have been force to take initiative
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Empirical Presentation whenever there has been some kind of problem and he felt that the Chinese in this case lacked the ability to comply by not giving such information. The Chinese perspective of hierarchy versus the Swedish perspective of the matter has been mystical for Martin. He claimed that the Chinese thought that Martins employees were disrespectful towards him because his subordinates did not treat him as the Chinese treated their own boss. He pointed out that in the eyes of the Chinese he would not have any decision making authority because his subordinate lacked the proper respect for him. He stressed that it might be wise to be clearer about the hierarchic level when you are in different places so that people can feel comfortable and the boundaries remains unquestioned. He further said: "they even asked if I had authorization to sign a paper and if there were no one above me". [Writer's translation] He claimed that another Swede with extensive experience in China had to help him out and culture negotiate and explain how things worked in Sweden. He told us: "this thing with having a flat organizational structure makes it incomprehensible for them so therefore maybe I have to flex my muscles because I am the boss". [Writer's translation] In this sense Martin told us that he has changed his appearance when he is in China. Lars believes that main cultural clash that appears between Sweden and China were related to the extensive corruption in China. He stressed that he has received education from his company on several occasions about rules of conduct. He believed that the Chinese probably thought he was somewhat pending or drifting, which resulted in the Chinese taking the initiative and explained to him that this is how they go on in China. He also stated that he has always appeared according to his own head and thoughts. Kent believed that the biggest misunderstanding can be traced back to the Chinese language. He said: "you always have to be very observant because we usually claim that when a Chinese says YES it does not mean that they agree, it means that they HEAR what you are saying, then they say YES." [Writer's translation] He claims that this is why you always have to be very observant and in his case he had an assistant that helped him. He told us: "she pinched me in the side when I needed to clarify something and then I had to take another lap and take it slower because their cogwheels had stopped". [Writer's translation] He strongly stressed that you have to be at least two persons in such situations, just to have someone that can check that what is said is understood by your counterpart. This is why he believed that all fear of losing your Face is passed through the confusion of languages. He further claimed that the Chinese do not dare to tell you that they do not understand what has been said since they have been sent by their superior just because they are supposed be to good English speakers with the ability to have business talks with an English counterpart. Kent gave an example where he had been in a business meeting where a protocol from the meeting was written by both parts and when they then tried to compare these two protocols it looked like they two parties had been in different meetings. He claimed that they could not, even then, admit that they had not understood. Kent believed that this is the result of a combination of things such as the confusion of languages and the fear of being perceived weak or bad just because the chance of not understanding and having to ask for an explanation. He claimed that these representatives are often not good English speakers. He further pointed out that the Germanic languages and Chinese language are similar in how they express things. He stated: "there are nouns, there are verbs, and you connect these in the same way but nevertheless the differences between how our cultures see things are so deep and also our parables differ." [Writer's translation] Parables, he claimed, was one of the things that made the cogwheels stop for the Chinese and
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Empirical Presentation therefore there is a need to constantly keep a discrete level of what you say because according to him they have their parables and the Swedes have theirs and it can never coalesce. Kent told us he has been in negotiations when his staff has told him that they cannot pay the amount of money for the functionality they are getting from the Chinese manufacturers. In such cases the Chinese has responded by claiming that they can put for example 1800 engineers on solving a particular problem. Kent then went back to Sweden and later the Chinese called and told him that they have worked on a solution for a couple of weeks without solving anything, reasking how much Kent and his people wanted in the first place. In cases like this Kent emphasized the need to feel the atmosphere and to be sensitive. He said: "to understand what they want, is to understand where they are in their own understanding of what they want. When they finally have understood what it is they want, they quickly understand what complexity that results in and if they need help or not" [Writer's translation] Kent contributed with another incident which clearly testifies to the importance of a good relationship. He had during five years built up a well functioning relationship with a Chinese company. The business deal had a turnover of 100-150 millions each year and within 20 minutes they managed to lose all. It was a German manager that would take over the relationship after Kent and this man went in to the business meeting with a strong German attitude which was not appreciated by the Chinese counterparts so according to Kent: "that relationship he destroyed within 20 minutes and he came out with the head first." [Writer's translation] Normally when misunderstandings occur, Kent has experienced that it is important to contact a person in the other organisation that you trust and that have participated in the negotiation and tell him what went wrong. That gives the person time to pave the ground and try to turn things in the best way so that the two persons who have misunderstood each other can come to an agreement without any backwashes, he stressed. Robert believed that cultural clashes appear all the time and sometimes it is hard to tell at first. He stressed that you sometimes come to a gradually understanding afterwards. For instance, he claimed that the Chinese made promises of what they could produce or handle and then did not fulfill those promises. Other misconceptions that can occur are when the Chinese claims that they have understood something and it turns out they really have not. In such cases Robert believed you cannot just out of the blue tell them that they do no understand, instead he said you have to "run around and try to tell them in a nice way if you want to the relationship to maintain". [Writer's translations] He has experienced cases wherethe counterpart has not given a damn or has become angry. In such situations he claimed it is impossible to even negotiate with them even though they know that they would lose money if the deal would not go through. They still say "No" flat out regardless, according to him. Robert has felt he has adapted his behavior almost like a chameleon. He stated: "you have to do that, you must listen otherwise it will not work, this is how it always is." [Writer's translation]
5.5.2 The Chinese View on Cultural Clashes
Within this theme our two Chinese respondents differ in their examples and perspective. Da Wei is more focused on cultural clashes in business situation such as the Chinese courtesy which forces them to be polite and never say no. Yun-Fat on the other hand is more focused on clashes on an individual level. It is his belief that clashes today are more accepted and in this remark not problematic when they occur. In addition both Da Wei and Yun-Fat felt that they have adapted to Swedish society and culture.
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Empirical Presentation
Da Wei pointed out that cultural clashes can occur due to Swedish people rushes into the relationship building process. He stressed that other misconceptions or cultural clashes can come to happen because Chinese people have a hard time saying no, unlike the Swedish. Instead Da Wei points out that the Chinese are saying that they will consider it and look into it when they are not interested. In his experience when situations like this occur the Swedes will believe that the Chinese are interested and then a misconception has occurred. In such cases he claimed that it is difficult to interpret the Chinese intentions. Da Wei elaborated this with an example. He once knew a businessman that was one of the first Swedes to invest in China. This person was working for a big Swedish corporation on an executive position. He experienced problems in the beginning when he had meetings with Chinese companies and introduced his product since the Chinese always sat and listened to his word and gave the impression of being interested by being positive towards the Swedish businessman. When then this executive Swede went back to his company he was under the impression that a deal was starting to take shape. After a while, when he had not heard from any of the companies, he contacted them to follow up their business proposal. It then became clear to this man that the enthusiasm the Chinese had given to him was part of their courtesy to act polite and they had in fact no interest in his products whatsoever. According to Da Wei many people believe that China only produces low quality products. He pointed out that this is a misconception because of the broadness of demand it is required that they have different range of the quality for a product. Da Wei claimed that this is not required in Sweden because the difference between people in general is not so wide. He said: "in China we say that one crown buy's one crowns product and ten crowns buy's a ten crowns product." [Writer's translation] According to him when a Swede is trying to get a cheap product then they will buy a one crown product based on raw material with lower quality. He told us: "if you are interested in good stuff you must pay more." [Writer's translation] He stressed that this has caused a lot of problem in China but that there are products of really good quality and in fact the range of the same product is wide unlike in Sweden. In addition Da Wei expressed that he has adapted his behavior after moving to Sweden a little bit but he does not think about his behavior much because he feels no need to ponder about it. Lastly he pointed out that in order to prevent cultural clashes you must adapt to the society you live in. According to Yun-Fat most people are aware of cultural disparities and therefore when they occur they just shake their shoulders and move on. In his opinion it is more difficult for a Chinese person to understand and they might even be angry but they are starting to get more cultural influences via movies and language education. He pointed out that they as a result are getting a wider comprehension. One other misunderstanding he described was how Swedes tend to say Hello to each other's in the morning while Chinese people usually ask "How was your breakfast?" According to him this is their way of saying hello and also showing concern for one and another. He stressed that this is often difficult to understand or interpreted as funny and strange in the western world. Yun-Fat stressed that he too just like Da Wei has adapted to the Swedish culture.
5.5.3 Summary of Cultural Clash
The most substantial Culture Clash or occurring misconception between Sweden and China seems to be the inability to communicate because of language complications. Many of our respondents have pointed out that there often occur misunderstandings because the Swedes cannot interpret the intentions of the Chinese. According to Kent this happens because the Chinese have a habit of always saying yes as a means of hearing what their counterpart are
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Empirical Presentation saying rather than agreeing to something. Robert expressed that in such situations one needs to proceed very gentle and not tell them directly that they have not understood because that might lead to them loosing their Face. According to Da Wei it is part of the Chinese courtesy to act politely in front of others so when a Chinese is saying that they will consider something it might mean the opposite. Swedes are on the contrary more direct and German in their way of acting according to Martin. Both our Chinese and Swedes respondents have stressed the importance of adapting to current culture. As Da Wei pointed out it is a must in order to prevent cultural clashes. Another way of minimizing cultural clashes is to expose you to something unknown or new according to Eric. He stressed that the Hong Kong Chinese are more adjusted to Swedes because they are accustomed to them.
5.3 Summary of the Empirical Presentation
In this chapter we have presented the empirical findings that we have retrieved from the seven interviews conducted. It was fast made relevant by our respondents that relationship has a central part in China. The Swedes testified on how they needed to put more time and effort down to build these relationships then they normally do in Sweden. For the Chinese, who saw this as a natural element, relationship is built upon trust and commitment and is something that needs time and constant entertainment. These aspects were also acknowledged by the Swedish participants when talking about business culture while the Chinese were focusing on the importance of Guanxi, i.e. networking. When asking about their cultural experiences many of the Swedish respondents emphasized their astonishment on how the old and the new could coexist side by side without any major complications. The Chinese respondents stressed other aspects of culture like how the Chinese always have to be polite to prevent losing Face and Yun-Fat said he found Sweden to be very simplistic and it could be seen as a reason to why people here have a hard time grasping the Chinese culture. In the business culture it is stated that the main differences are the time aspect and the variance in hierarchy. Most cultural clashes seem to be due to misunderstandings and that one person cannot interpret the other person's intentions correctly. Key words representing the main aspects brought up by the respondents are presented in short on next page (table 5.2).
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Empirical Presentation
TABLE 5.2: Summary of the Empirical Findings for the Respondents Relationship Martin Lars Eric Robert Kent
Trust, Takes time Commitment
Business Relationship
Personal relationship, Takes time, Face Long dinners, Take advantage Business vs. pleasure, Trust Business vs. pleasure
Culture
Hierarchy
Business Culture
Hierarchy, Controlled Seek benefits, Recommendation, Dinners Fire staff, No bargain Price bargain, Keeping staff Treated like king, Bargainer, Face, Decision maker Face
Culture Clash
Indecisiveness, Affirmative answers, Respect Corruption
Patriotic, Elbowing Hierarchy, Eroding culture, Not say no, Dinners Giving, Not too personal
Commitment Long process, Long dinners Trust
Joke, Telephone call Say what they mean
Trust, Time
Not say no, Face, Language Not say no, Courtesy, Product quality Understanding
Da Wei
Yun-Fat
Business v. private, Trust, Commitment Care for network, Less privacy
Trust, Personal relationship
Face, Aspect of time
Personal interaction, Trust
Time to adapt, Face, Complex culture
Seek benefits, Time aspect, Hierarchy
In this table key words from each participant and theme are presented to give an overview of the empirical findings. The words concern the respondents view on how China differentiate from Sweden.
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Analysis
6. ANALYSIS
In this chapter we will investigate both our theoretical and empirical findings to explore what conclusions can be made from our study. The chapter consists of five parts which are correspondent to the themes in our empirical chapter. The data in each theme is first analyzed using the correlated theories and then discussed under each section. We will first analyze the data concerning relationship in a broader sense before immersing into business relationships. The same approach will be used in the part about culture which will be followed by analyzes and discussions concerning cultural clashes. Additionally we have a part were we present an analysis of our participants.
6.1 Relationships
Both the Swedish and Chinese respondents' interpretation of what constitutes a relationship does not differ. However, it has been pointed out that the importance of a relationship differs in China and Sweden. It is the commitment part, which is agreed upon by our respondent to be required to have a relationship, which is more extensive in China. This creates a situation where Swedes are forced to commit more to relationships in China than they are normally used to in Sweden. Håkansson and Snehota (1995, pp. 25) defines a relationship as: "a mutually oriented interaction between two reciprocally committed parties". Therefore from a Chinese perspective, the aspect of reciprocal commitment can be questioned because there is a dissonance between our two cultures where Swedes put less effort into the building process by committing less than the Chinese. This can implicitly be related to, just as Da Wei pointed out, that the distinction between a personal relationship and business relationship in China is insignificant, in contrast to Sweden where a clear distinction between business and pleasure exists. A Swede will therefore distinct between working friends and other friends where the Chinese will put less thought in separating the two. Da Wei also attests to this line of reasoning when he stated that the Swedes are colder and do not invest as much as the Chinese normally do in a relationship. According to Morgan and Hunt (1994) there needs to be more than commitment in a relationship for it to be profound. They also believe that the element of trust is part of the relationship core and from our empirics we have gathered that both our Swedish and Chinese respondents are in conjunction with Morgan and Hunts Commitment and Trust theory. Trust can therefore be seen as essential for both Swedes and Chinese. However, when our Swedish respondents have travelled to China it has been in business situations and as pointed out earlier the Swedes then have complications separating between business and pleasure, unlike in China where it more blends together. Just as Da Wei pointed out the Swedes have a tendency to rely on rules which contrasts them to the Chinese. In business situations between these two, the Chinese will try to create a friendship based on trust when the Swede is there to conduct business with a totally different approach. This does not mean that they do not aspire to have trust between friends but that they are there in a different context. The reason behind this will be elaborated later on in this chapter.
6.2 Business relationship
Several of the respondents have illuminated the difference in how Swedes and Chinese build relationship by stating that for the Chinese businessmen it is of greater importance to build a personal relationship than it is for the Swedish businessmen. In Sweden it is much more common that people only meet to do business, according to Eric. The Swedes on one hand act more objective and do not see a potential business partner as a potential friend when the
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Analysis Chinese on the contrary want to establish a friendship before proceeding with a business transaction. The Swedes way of conducting business then coincides with Relationship Marketing (Grönroos, 1996) where it is more focus on transactions than in Guanxi theory (Geddie et al. 2005). However, in China more focus is on developing the relationship by having long dinners to get to know each other, as Lars stated. This personalized development perspective of relationship can be correlated to Guanxi theory and is a way of life in China. One implication in this case is that Swedish and Chinese businessmen have different approaches even though both in the end aspire to conduct some sort of transaction. Several of our Swedish respondents have acknowledged that they are aware of the fact that building a business relationship with a Chinese is a process that takes more time than they are used to. On the other hand, Da Wei believed that Swedish businessmen are to opportunistic and spend too little time in China. Yun-Fat, who had helped Swedish companies when negotiating in China, even claimed that no business transactions between Swedes and Chinese had been made without him working on behalf of the Swedes. Despite awareness it still seems like we invest differently in business relationships and the timeframe is what separates our two countries the most. In our theory chapter we compared Guanxi to Relationship Marketing where it states that the Relationship Marketing approach starts with a transaction while the Guanxi approach starts with forming a relationship. Our respondents view can be said to coincide with both the aspects of Relationship Marketing and Guanxi (Geddie et al., 2005). Just as we wrote in the relationship part, business relationships in China also need to have elements of trust and commitment which is in line with our Guanxi theories but also to some extent coincides with Morgan and Hunt's (1994) Commitment-Trust theory. However, as both of our Chinese respondents pointed out western societies including Sweden are too focused on laws and regulations making the business relationships more formal. Also, as we wrote in our relationship analysis, there is a clear distinction between business and pleasure for the Swedes and this were also stressed by our two Chinese respondents about business relationships. This should be kept in mind because these two aspects can hinder the relationship process for Swedish and Chinese companies. On the other hand, most of the Swedes have acknowledged that relationships are more important when conducting business in China but they have not shown any signs to understand why it is more important there. This can also be negative and as a result cause a disfavoured situation. In Martins case it was the opposite because he managed to create a good relationship with the collaborating CEO in China but it did take half a year to build that relationship. Da Wei stated that the Chinese are networking and building relationships, though not deliberately to build business relationships but merely to have a relation with someone. If a business possibility then comes up between two friends you might do business together according to him. This can be traced back to what we wrote about Guanxi and its history. In lack of a good welfare system the Chinese had to and still have to build networks to ensure their families and themselves from menace and other difficult situations. By building good relationships they can reciprocally give and get favours from each other, which are called renqing according to Lee et al. (2005). This is part of Guanxi and works just as insurance in lack of a welfare system like the Swedish which is renowned to be extensive and just. This is one of the reasons why relationships are so important in China and as we wrote above is this difficult to understand for a Swede.
6.3 Culture
We have in our empirical findings found that most of the Swedish participants have had a similar attitude towards culture and the cultural differences between Sweden and China. These differences are in addition shared by our Chinese participants. However there were
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Analysis many of the beliefs that differed between the two nationalities as well and this can be linked to the different estate of the cultures. As Trompenaars and Hampden-Turner (1997) states culture is a shared definition of a situation by a group and the mental programming in our two respondent groups (Swedes and Chinese) are separated from each other but have an internal coherence (Hofstede, 2001; Brown in Adler, 2002). As stated by Hofstede (2001) rituals are essential elements in a culture to keep the individuals bound within the norm of the collectivity. Trompenaars and Hampden-Turner (1997) elucidate food as an explicit product of the outer layer of culture. The long dinners that the participants have talked about could then be considered as rituals in the Chinese culture. Even though our Swedish respondents have acknowledged these cultural rituals we believe the Chinese have a more profound meaning to these events since them as insiders are aware of the underlying connotation (Hofstede, 2001). Da Wei declared that Chinese have an unwritten obligation to be polite. Kent did also testify on that he believed the Chinese to be very giving in their approach. These two statements we derived from the Chinese values which determine what is "good" or "bad" (Trompenaars &HampdenTurner, 1997). To be polite and compliant could therefore be seen as "good" behaviour in the Chinese society. Another aspect, acknowledged by Lars, is how the Chinese always elbow their way through, for example when standing in line to buy tickets. This could be valued as bad behaviour by Swedes, although it could also be seen as a Chinese norm where they believe the behaviour to be the "right" way to do something (Trompenaars &Hampden-Turner, 1997). Below we will continue our analysis by looking at Hofstede's (2001; 2005) different dimensions and draw lines to the theories of Chinese culture.
6.3.1 The Dimensions of Culture
Three of the Swedish respondents mentioned hierarchical differences when talking about the two cultures. It is important to be aware of these differences within Power Distances when travelling and residing between the two cultures since it is easy to judge one way to be better than the other, even though we have not found any indications of that. However, the risk for judgement Martin illuminated for us when he said he felt uncomfortable when people from a lower class served him and his Chinese colleagues treated the person like air. Hence if he had been propagating for the lower Power Distance, as we have in Sweden, a conflict could have occurred. Hofstede (2001) have distinguished that these two forces, i.e. to preserve the status consistency versus to gravitate towards overall equality, exist not only as we argued between different cultures but also within them. Another reason to the much higher Power Distance in China is the Confucianism philosophy which strongly influences the country and has done so for thousands of years. The philosophy prescribes a vertical relationship between people which we believe have an enormous impact on the Chinese society and is the reason to the wide difference between people at the top and people at the bottom. Reflections that could be drawn from this is that if going to China it is important to be aware of and try to adapt to the Chinese way even if lower Power Distance probably is perceived as preferable by many Swedes. Hofstede (2001) claims that Uncertainty Avoidance is one of the factors that contribute to anxiety of not knowing what will happen in the future. In contradiction to Hofstede (2001; 2005) this indicates that the Chinese people then would have higher Uncertainty Avoidance than Swedes. The empirical findings have shown that Chinese people have difficulties saying no. From Eric's observation he claimed that the Chinese often seemed afraid of doing things wrong, which we also interlink with the Uncertainty Avoidance. As we see it the Chinese
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Analysis society does have unwritten rituals to make the people cope with uncertainty (Hofstede, 2005) and these make the people saying "yes" instead of "no". If they give negative answers they risk losing Face which is an anxiety they want to avoid. Da Wei claimed that in Sweden we have more rules that control us and make us cold. This could also be seen as a factor to help us prevent uncertainty (Hofstede, 2001). With this said it is possible that even if Hofstede (2001; 2005) state that both Sweden and China are countries with low Uncertainty Avoidance it is clear that both the countries have it to some extent. The Chinese concept of Face could also be drawn into this discussion. As Tang and Ward (2003) state the word "no" could cause a person to not give Face. Everyone can lose lian, one of the dimensions of Face, and then that person is without integrity according to Worm (1997). One aspect of why Chinese people often say "yes", even if they have not fully understood what has been said, could be to show respect for the other person and by that prevent him to lose Face. Our two Chinese participants made it clear for us how a relationship could be terminated if someone lose their Face and this goes in line with the Worm's (1997) statement that the lian is difficult to restore if it has been lost. The opinions of Robert and Yun-Fat did not coincide concerning if the Chinese are more individualistic or collectivistic. Yun-Fat believed that in Sweden the individual value were more in focus compared to in China where collective value had a bigger role. However Robert was stating that he perceived the Chinese to be more focused on individuality which contributed to them being very independent. This statement opposes Hofstede's (2001; 2005) findings that China as a less rich country and therefore should be collectivistic. Notice have to be made here that it is only one of our respondents who have found the Chinese to be individualistic, but also that Hofstede (2001; 2005) is generalizing very much and with a diverse country like China there could be parts which is more individualistic. The latest added dimension by Hofstede (2001; 2005), the Long- versus Short-term dimension was one aspect Da Wei had experienced in his meetings with Swedish people. He found them to be inflexible due to that they did not see the progress over time, they only saw one episode at the time, or with his words "you freeze time [?] and do not see the opulent relation" [Writer's translation]. Da Wei continued by stating that he found the Swedes to be self- righteous as well. Self-confidence and the right to freedom of speech are values people in Short-term Oriented countries value very high (Hoftstede 2001; 2005). Kent claimed that the Chinese was much opened and could talk about almost anything, except politics. This could be seen as a retrenchment of the freedom of speech. We believe that these examples clearly show that Sweden has a Short-term Orientation while China has a Long-term Orientation.
6.4 Business Culture
It is not just between countries distinctions could be made due to culture but also between different organizations or businesses (Hofstede, 2005). By this said it could be stated that differences within a national culture could be observed when investigating a variety of business cultures. To achieve that it would be necessary to make studies on a much more extensive level then we are doing here hence we will investigate the differences between the business cultures on a national level, i.e. for Sweden versus China. Martin believed the Chinese business culture to be much tougher than the Swedish one, where they in the latter works more on developing the employees to make them a good resource for the company, and in China he believed them to exploit the employees. Eric had also acknowledged this toughness when he arrived to a factory that just had fired the whole staff due to too little motivation according to the managers. This could be interlinked with
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Analysis McGregor's (in Adler, 2002) theory of how the managers' behaviour can be closely collaborated with the employees' behaviour. That means that the lack of motivation in Eric's narrated scenario could be due to the managers' leadership. Robert told us about a contrasting case where instead of being fired the workers personally decided to leave the factory due to too low salary. The reason they left could also be in combination with how the organizational culture was perceived by the employees. There is a close connection between the national culture and the organizational culture and both are affected by the cultural dimension (Hofstede, 2005). Below we will go deeper in to Hofstede's (2001; 2005) different cultural dimensions and correlate that with the other theories on Chinese culture and our empirical findings.
6.4.1 The Dimensions of Business Culture
When discussing business culture the Power Distance was emphasized by the respondents, as it was in the previous section about culture. Kent interlinked the hierarchical issue to the decision making process where he claimed that it is important to be as high up on the hierarchical ladder as possible when decisions have to be made. This shows a very high dependence on the top manager in Chinese businesses and do not give the subordinate very much room to be flexible. Martin did also discuss the decision making process, however, he were focusing more on the difficulties knowing if you had gone to the right person. When he tried to obtain decisions in certain questions he many times had to go above the responsible to get answers, which he found very irritating. Yun-Fat stated it is solely the CEO who makes all the decisions in a Chinese company which also could be seen as an aspect to why the emotional distance is higher in Chinese organizations. The emotional distance between a boss and an employee are then seen to be much smaller in Swedish organizations where decisions can be made in collaboration with the two (Hofstede 2001; 2005). The difficulties of giving negative replies for the Chinese could also be derived to the Uncertainty Avoidance theory (Hofstede 2001; 2005) as stated in the culture section. The Chinese people's anxiety of doing things wrong could contribute to the rituals of giving the affirmative answers Kent testified upon. When they are faced by a situation which they do not know where it would lead to, their uncertainty feelings make them behave in a way to try to prevent this anxiety. This ritual which influences the behaviour, is in this case to say "yes" instead of "no", and is many times shared by a group of people in let say an organization. According to Hofstede (2005) another way of coping with Uncertainty Avoidance is to set up rules within an organization. Lars experienced that in the mining industry in China they were very dependent on recommendations. The companies had established policies stating which consultants to trust when approving on technical solutions. These policies helped the organizations to prevent anxiety of making wrong decisions which could lead to an uncertain future. Yun-Fat expressed that in China they focus more on individual efforts while in Sweden they rely more on teamwork. According to this statement it would mean that Chinese businessmen have to take a bigger responsibility to their actions in comparison to their Swedishcounterpart. However Kent did stress that he believed the Swedish people to be allowed more personal responsibility. These opponent views could once again be derived to the hierarchical differences. Da Wei stated that in Sweden the organizations are more flat or horizontal and therefore the difference between the top manager and the other employees is not that big. The flat organization could also be seen to foster working in teams which then contributes to the lack of need for a broad responsibility from the top managers. In contrast people in a collectivistic society do expect responsibility from the organization (Hofstede 2001) which
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Analysis could be seen in Yun-Fat's experiences. Even though he stated that Chinese have a more individualistic approach it should be added that he also claimed that it only were the CEO's that made all the decisions and could by that be seen as the organizations' responsibility takers. Hofstede (2001) also state that in an individualistic country people value freedom and space to develop their personal goals and by Martin's experience it shows there is no room for such things in the Chinese way of doing business. According to Martin the Chinese most of the time come in groups and then they seem very controlled with no room for individualistic thinking. His way of coming around the problem was to separate them in meetings one by one. There are several elements in the Chinese culture which we see could be interlinked with the femininity (have a lower-MAS) in the Masculinity versus Femininity Dimension in Hofstede's (2001; 2005) theory. The first aspect is once again the Chinese inability to give negative response which has been stated by several of the respondents from both nationalities. This could be seen as a way of avoiding conflicts and then not go in line with Hofstede's (2001; 2005) findings which claim that China is a high-MAS country and by that solve conflicts with battles. Another tendency Hofstede (2001) relate to low-MAS countries is the social goal to build relationship which all our respondents have testified on, and analysed in earlier segments, to be an important part of doing business in China. As Kent declared when talking about business relationships westerners care much more about money than the Chinese which once again contrast Hofstede's (2001; 2005) theory. However these ego goals could be analysed on a more personal level as well and then our empirical findings go in line with Hofstede's (2001; 2005). Lars stated that under the start-up time, when he first came to China, he had a rough time with the Chinese businessmen who always wanted to gain all possible benefits in every situation. This coincides with Yun-Fat's affirmation that everyone in China seeks benefits. As mentioned earlier in this passage the conflict solving is a central part of the Masculinity versus Femininity theory. As we see it a bargaining could be seen as a conflict which could either be settled in a compromise or solved with a good battle according to Hofstede (2001; 2005). Both Kent and Robert testified that they believed the Chinese to be very good in bargaining and believed that they always could gain a little more for their own behalf. Kent's words "they become bloody" [Writer's translation] clearly shows that Hofstede (2001; 2005) may have come to the right conclusion about the Chinese people. However this opinion was not shared by all the respondents, Eric stated that he did not find it to be any room for bargaining since the Chinese always openly gave their best price. Yun-Fat claimed that Chinese are more Long-term Oriented than the Swedish people where one of the important values is, according to Hofstede (2001), responsibility taking. This is as mentioned earlier in this section contradicted by Kent who did not find the Chinese to be as responsibility taking as the Swedish businessmen. However Yun-Fat's opinion on how he saw the Swedes to take things case by case goes in line with Trompenaars and Hampden-Turner's (1997) and Hall and Hall's (1990) theories about the concept of Time. They state that if Time is seen as a series of passing events the person has a sequential or monochronic approach as Yun-Fat experienced. Robert had also acknowledged the Time aspect where he stated that Swedes were better in meaning what they are saying. The Chinese have according to him an attitude that there will always be another Monday. This could be interlinked with Hofstede's (2001; 2005) theory which claims that managers in China often have more time to their disposal and therefore they are not as stressed to finish a project at a predetermined time. This could be put in contrast with the Swedish managers who often are constricted by always achieving a certain result or profit according to Hofstede (2001; 2005).
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Analysis The concept of Face could also be derived from the decision making process. Kent gave an example when he had come to the wrong person to try to obtain a decision in a subject. The Chinese then answered that he risked losing his face if he came to his boss with that price. When an employee loses his face for his manager it once again shows the higher Power Distance there is in China but it also could be an expression of knowing one's place. In this case it could be related to the theory of mianzi (Worm, 1997). If the Chinese employee should have come with a much lower price than expected to his superior the latter could believe that the employee did not conduct the business successful enough. This could contribute to that the person loses prestige or in other words loses mianzi (Worm, 1997). There is however a difference between the two dimensions of Face, mianzi and lian, where mianzi deprive or award a person with prestige, lian is much harder to restore and could affect the person's network as well (Worm 1997). When Da Wei talked about face it was more in line with the latter dimension which could not be restored after losing it in a business relationship. According to him, if it is once lost there is nothing more you can do about it.
6.5 Cultural Clash
One of the recurring phenomena that several of our respondents have experienced was the hierarchic difference in Sweden and China. Their opinion that China is much more hierarchic than Sweden is shared by Hofstede (2001) who calls this Power Distance and states that China has a much higher Power Distance compared to Sweden which has a low Power Distance, which has been stated above. This has caused a couple of different Cultural Clashes for several of our respondents. A Cultural Clash is said to emerge when the perception of how we identify ourselves is in a conflict with the expectations we have from others (Ngo, 2008). This happened to Eric when he tried to tell a typical funny Swedish story involving one of his employees, to a Chinese manager. From this Chinese man's perspective the Swedish employee had in the story crossed the line of what was accepted in the interaction with his boss, Eric. Therefore instead of laughing the Chinese manger was perplexed and did not understand. Consequently this reaction is in line with how a Cultural Clash (Ngo, 2008) emerges because predicted roles and expectations were not met from the Chinese man's perspective. Martin experienced an even more severe situation because of his open Swedish interaction with his employees when visiting a potential collaborating company in China. When his subordinates did not act in a manner towards Martin that was considered to be proper for the Chinese, and Martin of course unwarily did not rebuke, they questioned Martin's authority and felt he did not have a decisive right. Once again a cultural clash (Ngo, 2008) emerged because the Chinese could not identify themselves with how Martin interacted with his employees and their expectation of the rules of conduct between a CEO and employees were not met according to the Chinese. What the Chinese really experienced was an interaction with a CEO and his employees that has a low Power Distance (Hofstede, 2001) which is the opposite from what they are used to and therefore incomprehensive for them resulting in a Cultural Clash (Ngo, 2008). The Power Distance theory (Hofstede, 2001) came up once again in the case where Martin's friend started a factory in China and had tremendous problems getting anything done. In this case this Swedish entrepreneur tried to delegate the responsibility to his employees, just like he would have done in Sweden. This caused a situation where the Chinese workers became confused because they were used to someone telling them exactly what do and when. To delegate responsibility can be seen as common in Swedish companies because they have a low Power Distance but not in a country like China with a high Power Distance and should
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Analysis therefore, which this particular entrepreneur experienced, be avoided there. Having a high Power Distance in these cases created an inability for employees to be decisive and restricted the creativity which several of our respondents experienced. The fact that the Chinese are avoiding saying "no" or give negative answers have been recurring and caused different situations for our respondents. Martin experienced how his collaborating Chinese company would not give negative information when there were delays. Both Robert and Kent experienced situations where the Chinese claimed to have understood what had been said but in fact did not. It was Kent's belief that the Chinese will not say "no" to you, but rather "yes" we hear what you are saying instead of "yes" we agree to what has been said. According to Da Wei it is part of their courtesy and manners to be attentive. It is also harder for them to understand because of the language barrier, according to Kent. By not showing signs of incomprehension they are avoiding an anxiety of losing Face and are a part of their implicit rules and rituals (Hofstede, 2001). Opposing these rituals and going out on a limp could in their case create a situation where they can act shamefully and then they will lose Face, lian, which is the worst thing that can happen to a person in China, and a person's integrity is then lost (Worm, 1997). Robert experienced a similar situation where he knew that his Chinese counterpart had not understood and then nicely tried to explain it to him resulting in the Chinese to give a definite "no" and hence the chance of a future collaboration vanished. Whether the Chinese in this situation experienced his actions to be shameful (loss of lian) or felt a loss in prestige (loss of mianzi) is unclear but nevertheless it is part of losing Face and after it has happened it is hard turning back (Worm 1997). Robert claimed to have been in situations where the Chinese have lost Face and then they have resolved and dropped any possible collaboration which is an action that coincides with an avoiding conflict management style which is common in Asia (Tang & Ward 2003; Chan et al. 2007). Our Swedish respondents have expressed that they are aware of the concept of Face and some of them has also pointed out that it needs to be avoided. In cases where the messages from the Swedes to the Chinese have not been understood and when the Swedes have acknowledged this there is no other way than to clarify. As Robert pointed out you have to tell them this very gently. It is when the message comes through to the Chinese that the aspect of losing Face can come into play and it depends on how the Chinese perceives the situation. A cultural clash can then emerge if the Chinese feels he has lost his Face in front of the Swede.
6.6 Authors' analysis of the respondents
The phases our respondents have gone through in their adaptation to the other culture have varied significantly and thus granted us a wider scope of which we have been able to contextualise from their different experiences. When people are living or working in a different culture, it is said they go through different stages in adapting towards that very culture. This is called acculturation (Hofstede, 2005) and is tangible for our respondents as well which is illustrated in the table 6.1 below. Our respondents have been placed in this acculturations curve based on their background in China and our perception of their acculturation process. What is noticeable is how both Robert and Kent have reached the third acculturation stage only by working in China for some time without actually living there for a longer duration compared to Lars who has been living there for two years and can be placed in the same stage. This due to that they have traveled a lot within China and also been sensitive towards disparities making them more susceptible. Our two Chinese respondents, Da Wei and Yun-Fat can both be placed in the final state, the stable state. They are pending between a positive and neutral view of Sweden and the insight they have brought to our paper has been profound. It is only natural that people with over a decades experience of living in a foreign country has a lot to say. We placed Martin in the culture shock stage because he
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Analysis emphasized many situations where he literally were in shock or stunned by different incidents. The fact that Eric does not have an extensive experience in China should not be seen as a problem. Although his experience was not as extensive as the others he still contributed with aspects that the others did not mention. TABLE 6.1: The Acculturation Curve
Positive +
E K R DY
b a c
Lars: L Robert: R Kent: K Martin: M Eric: E Da Wei: D Yun-Fat: Y
Feelings
Negative -
M
1 2 Euphoria Culture shock
L
3 Acculturation 4 Stable state
Phase
Time
Source: Hofstede, 2005, pp. 337
We believe it to be a great contribution to our study that the respondents fall in to all four different stages of this curve which have given us a more balanced picture of the reality. Thanks to their diverse experiences and time in China it has elucidated different aspects on how business is conducted there. The analysis and discussions made in this chapter are now bringing us to our conclusion which is followed in the next chapter. There we will answer our main purpose as well as our sub-purposes.
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Discussion and Conclusion
7. DISCUSSION and CONCLUSION
In this chapter we reintroduce the reader to the research question, which was; how Swedes can avoid incidents of cultural descent when developing business relationships with Chinese corporations? Our study had three sub-purposes in order to answer the main research question, and below we summarize the findings from the analyses presented in previous chapter. The main purpose, to comprehend how businessmen perceive cultural differences in business situations where relationships are essential and how they avoid such incidents, could in short be described as something that could be frustrating but a necessary bridge to cross in order to succeed with the business. This statement will be further developed in section 7.3 where we also provide the reader with some suggestions. Additionally, we give some proposals that could be relevant for further research.
7.1 Sub-purpose 1:
Gain a better understanding of how both Swedish and Chinese build relationships in business to business situations
It should now be clear that relationships and business relationships are more interlinked in the Chinese society which is quite the opposite in Sweden. We believe that this causes situations where Swedes have a tendency to commit less to the relationship than the Chinese do. If the Swedes could commit more then it is our belief that they can build a more profound relationship with the Chinese. Another complication in the interaction between the Swedes and Chinese are how they approach each other in a business situation. In the eyes of the Chinese the Swedes starts from the wrong angle when trying to conduct business first and become friends afterwards. We believe that this too can hinder the relationship development. These two complications need to be avoided and as cliché as it sounds: when in Rome do as the Romans, meaning that Swedes need to put at least the same amount of commitment into the relationship as the Chinese do and also approach the Chinese from a friendship angle to be able to build a strong business collaboration. This can be difficult for the Swedes if they are unaware of the reasons to why the Chinese have different values and behave differently in business contexts. To understand this it is crucial to learn more about the Chinese culture because it has a profound impact in the Chinese business society, in fact we are convinced that the Chinese culture have pervaded not just the daily life in China but also the business society. For instance our Swedish respondents all testified to China putting more focus on networking (Guanxi) but at the same time they were not aware of the underlying motives to why the Chinese establish more networks. Guanxi is something that goes back a long time in history and we believe that this type of networking in daily life or business context are their way of establishing a welfare system that can help them (individuals or families) in times of need. This is something we did not believe our Swedish respondents fully comprehended. In Sweden these are issues that the Swedish government is working to uphold but in China it is more complex because of their huge population and large country size. Therefore it is up to the individuals in China to create their own social safety nets. If Swedes can comprehend this they would be one step closer in understanding the Chinese's implicit motives of behaviour.
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Discussion and Conclusion
7.2 Sub-purpose 2:
Gain a better understanding of the differences in the Swedish and Chinese business culture.
It is evident through our study that the Swedish and Chinese culture differs in many ways. It is important to be aware of these differences to prevent misunderstandings or clashes from occurring. Hierarchy is one of the biggest differences between Swedish and Chinese culture. The Chinese hierarchy is vast and the Swedish insignificant which can lead to contrasting ways of making decisions in the two countries. Based on our empirics we believe that the Swedish non authoritarian leadership perspective has been subject to many emerged cultural clashes. These clashes could be because the Chinese have judged different Swedish interactions from their perspective, thus misinterpreting. In Sweden teamwork are applied to a greater extent than in China which has had the affect that here in Sweden several persons can take their own personal responsibility and decide in different questions, whereas in China it is only the CEO or the top managers who have that authority. One way of avoiding misinterpretations of this kind is for the Swedish CEO's to be over explicit in their role when dealing with a Chinese counterpart so that they can get a distinct comprehension of the CEO and not question his authority. The Swedish way of conducting business can be very practical and direct, in fact one Swedish respondent even claimed it to be very German (direct and brusque). The Chinese are on the other hand very courteous and respectful towards guests and they often have difficulties giving negative responses which also make them acting ambiguously. This has caused a lot of problems since the Swedish businesspeople often misinterpret the Chinese courtesy for showing interest in their business proposals. This is a clear case where lack of cultural knowledge causes the Swedes to misinterpret a situation. Instead they should celebrate the non-existing deal they and bond and nourish the relationship with the host so that future collaborations can happen. Through this research it has also been shown that the aspect of time differs between the two cultures. In Sweden we are more Short-term Oriented and are very monochronic in our approach which many times could collide with the Long-term Oriented China. In China they see how the future and past interrelate and are therefore not as driven as the Swedes to accomplish everything under a strict timeframe. Hence, like Robert stated; "there will always be new Monday!" [Writer's translation] In the eyes of the Chinese the Swedes have a habit of rushing into business transactions and therefore they get the impression that Swedish businessmen are opportunistic. In the Swedish eyes the slow paste that the Chinese are applying is seen as wasting money. To be able to conduct business in China we believe the Swedes need to respect the lower paste by changing towards the Chinese perspective and becoming more patient. Instead of saying "no" the Chinese often say "yes", this as mean of acknowledging that they are listening and not that they agree to what has been said. We believe this phenomenon appears because of two reasons. Firstly because the Chinese are afraid of doing anything wrong that also could damage their prestige and lead to lose Face. The concept of Face is strongly influencing the Chinese culture which contributes even more to the anxiety of offending someone or getting deprived of their own prestige. Secondly because it is part of the Chinese culture to be attentive and courteous and not oppose someone and risking losing Face. The anxiety for future drawbacks due to this could be dealt with affirmative answers as an Uncertainty Avoidance implementation.
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Discussion and Conclusion
For instance if it appears that a Chinese man has not understood what has been said he will not ask for an explanation, instead he will let the Swede presume that what he has said has been understood by the Chinese. In the end this causes a situation where the Swede has to decide whether to proceed and not mention it or politely try to re-explain. It is our belief that these situations best can be avoided by knowing how courteous the Chinese are and to know that they will act ambiguously. The Swedes also need to deliver their message in a way so no ambiguity appears, in short, sound and clear and be sensitive. The better the relationship is the more sincere the dialogues will be. This situation when you lose Face is very complex and there are no universal answers to solve the matters. As our respondents said; once you have crossed that line where the Chinese feels he has lost Face there is no turning back.
7.3 Sub-purpose 3:
Provide suggestions for Swedish businessmen on how to become more aware of the cultural gaps when entering the Chinese market
During the process of the research we have found several incidents experienced by our respondent which could have been prevented in different ways. They have been analyzed and discussed in previous chapter to result in proposals of solutions to other Swedish businessmen that could find themselves in a similar situation. These proposals are found under "Our Suggestions" in the following part.
7.4 Conclusion and Suggestions
How can Swedes avoid incidents of cultural descent when developing business relationships with Chinese corporations?
The main purpose of this study was to get a better comprehension on how businessmen perceive cultural differences in business situations where relationships are essential and how they avoid such incidents. Our research has shown that there is no single answer to this question however, as stated above; many of the businessmen do perceive it as irritating but natural obstacles. It is evident that when doing business between different cultures there will always be clashes or misunderstanding that can delay or hinder an agreement but it is then best to take a step back, be patient, and be attentive to the counterparts reactions. The better knowledge a person have about his/her counterpart and about the context they are in the easier it is to be flexible and create good relationships. When going to China the Swedish busines- men should try to adapt to the Chinese way of building relationship and that is best done by creating a profound knowledge about the Chinese culture and business culture. Since culture is not anything that could be learned by reading a book but need to be lived to learn we advocate that time should be deposit to build up a profound network before rushing into a business deal. In the following section we will now give some suggestions for those going to China.
Our Suggestions
Our suggestions to Swedish businessmen going to China in business is firstly to learn and try to comprehend as much as possible about the country and its culture. It has been shown that Swedish businessmen many times do not spend enough time in China. The best way to be able to comprehend the culture is to live there however that might not be an option for some. By spending time in China a person will acculturate and see how for instance Guanxi is interlinked to culture and society. When gained this knowledge the person can build more
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Discussion and Conclusion relationships and networks applying Guanxi, which could make the relationships built today later become potential future business partners. If a business proposal should arise, the person should have patience and let the Chinese slow paste reign to not disrespect them. In this case it is important to create a bond rather than proceeding with business, which is normal in the Swedish way of conducting business. Cultural clashes will always emerge and it is important then to remember that values that are valid in Sweden do not necessary be valid in China and vice versa. Therefore should these misunderstandings not be rejected but rather embraced with an open mind and a will to solve them. One solution to prevent misunderstandings to occur could be to always be more then one in negotiations, from the Swedish delegation, so one could have as a purpose to read the counterparts in order to make sure everyone have understood what have been said. We would like to conclude this study with something Kent said during our interview with him that readers should take a minute to think about and that is: "To understand what they want, is to understand where they are in their own understanding of what they want. When they finally have understood what it is they want, they quickly understand what complexity that results in and if they need help or not" [Writer's translation] Now imaging yourself, where do you understand yourself to be in your process. Once you realize that you will know where to go from there.
7.5 Further Research
We believe one suggestion for future research could be to write a similar study written on behalf of a company. This because a company can be more specific in what kind of research questions and requirements that are important for them in their process of understanding for example differences in Swedish and Chinese business culture. A paper like this could then develop more depth in their research of a particular field than we have. Secondly it would also be of interest to conduct a similar study where women where addressed on how they perceive similar situations. A study like this might lead to other interesting findings that are important to elucidate. Unfortunately in our case we did not come across any women in these positions. Third and lastly we would like to see more research on Swedish culture and how Swedish businessmen are being perceived internationally. We feel that this is an area that is somewhat unexplored. Just like our study it could shed light to foreigner how we Swedes interact in business situations and therefore help future collaborations.
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APPENDIX A1 Semi-structured interview (Swedish)
Bakgrundsinformation
Kan du berätta lite om dig själv? o (Namn, ålder, arbetsroll, tid vid företaget, erfarenheter av utlandsjobb osv.) Hur länge har du bott i/arbetat mot Kina/Sverige? Var du påläst om kinesisk/svensk kultur innan du for dit?
Fördjupningsfrågor
1. Relationer
Kan du beskriva hur du bygger/byggde affärsrelationer med de du samarbetat med? o Några framgångsrika exempel? Har du kontakt med dem efter att affären är avslutad? Hur ser den kontakten ut?
2. Affärsrelationer
Vilka skillnader kan du se på hur svenskar och kineser bygger affärsrelationer? Kan du beskriva din bild av hur kineser/svenskar arbetar i B2B situationer?
3. Kultur
Hur upplever du den kinesiska/svenska kulturen? Vad skiljer den från den svenska/kinesiska? Kan du dra dig till minnes några kulturella skillnader som du sett?
4. Företagskultur
Kan du beskriva din bild av den typiskt kinesiska/svenska affärskulturen? Hur upplever du kinesiska/svenska affärsmän? o (Samarbetsförmåga, självständighet, förmåga att knyta nya kontakter osv.)
5. Kulturkrockar
Har du upplevt kulturkrockar i affärssammanhang? Hur har ni (båda parter) löst de situationerna? Fanns det någon skillnad på hur kinesen/svensken löste situationen jämfört med hur du skulle ha löst den och vice versa? Kan du nämna några kulturella missuppfattningar du har råkat ut för? Har du reflekterat över hur ditt eget beteende uppfattas av kineser/svenskar? Har du ändrat ditt beteende med det i åtanke?
APPENDIX A2 Semi-structured Interview (English)
Background questions
Could you briefly present yourself? o (Name, age, position, time at the company, experiences from working abroad...) How long have you worked with/stayed in China/Sweden? Had you prepared yourself somehow, concerning the Chinese/Swedish culture, before going there?
Specialized questions
1. Relationship
Can you describe how you built the relationship with the ones you have worked together with? o Any successful examples? Do you keep contact with them after a business deal is completed? How does that contact look like?
2. Business relationships
What differences can you see on how Swedes and Chinese build business relationships? Can you describe your opinion on how Chinese/Swedes work in B2B situations?
3. Culture
How do you experience the Chinese/Swedish culture? What differentiate it from the Swedish/Chinese? Do you recall any cultural differences you have seen?
4. Business culture
Can you describe your picture of the typical Chinese/Swedish business culture? How do you experience Chinese/Swedish business men? o (Ability to co-operate, independence, ability to establish connections?)
5. Cultural clashes
Have you experienced any cultural clashes in business situations? How have you solved those situations? Where the any differences in how the Chinese/Swedes solved the situation compared with your behaviour? Can you mention any cultural misunderstandings you have experienced? Have you reflected upon how your behaviour is perceived by Chinese/Swedes? Have you changed your behaviour due to this?
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