Cultural Framework of China and Australia - Coursework Example

Management Outline: Executive summary Introduction Cultural framework of China and Australia 2. Chinese organizational culture vs. foreign companies 2.1 Principle of hierarchy 2.2 Organizational structure through onion diagram 3. National culture at the business meeting 4. Basic cultural points at negotiations 5. Recommendations 6. Conclusion Executive Summary The paper is dedicated to peculiarities of work of Australian managers within Chinese cultural context. Managers of Australian Food Supermarket group must develop a successful decision-making strategy, based on Chinese culture. The paper includes introduction, five main section and conclusion. Hofstede’s cultural dimensions are chosen to compare Australian and Chinese managers. It will allow estimating their aspiration for cooperation in foreign cultural context. Further Chinese organizational culture is being discovered and compared with foreign one, because this is a target culture for Australians. Special attention is paid to organizational culture as a system of values and beliefs. In the next section impact of national culture on business etiquette is examined. There are main socio-cultural reasons for cooperation of Chinese and Australian companies. Cultural points of negotiations are especially valuable for Australian managers, because it will help them to modify their strategy and be more flexible. The last section contains practical recommendations for male managers, who are going to work within Chinese cultural context. Introduction Quick broadening of international market changes methods of cooperation, management styles, corporate culture and decision making models of the large enterprises and companies. Many joint ventures and programs are realized abroad due to proximity of energy and labor market resources, maintenance burden, or excessive expenses on transportation, processing or advertising. Success of any such project depends on preliminary decision-making model and negotiations to be carried on within socio-cultural context of the contracting parties. Advantages of particular cultural context, practical experience, flexibility and partnership allow shaping a successful decision-making strategy. Strategic goal of Australian Food Supermarket group is to create a stable and flexible Chinese-oriented management strategy to gain success on the negations. Tactical goal of the company is to consider Chinese partner’s demands as to management style and organization of negations and combine them with Australian cultural context. Management team should develop a Chinese-oriented decision making strategy, using basic principles and advantages of both cultures. 1. Cultural Framework of China and Australia Managers of Australian Food Supermarket group will work abroad for a long time. They will be within unknown cultural context, that’s why proper measures should be taken to sign the contract and prevent failure of the project. Thus, the first stage of the decision-making model is comparison of Chinese and Australian managers under Hofstede’s cultural dimensions. Chinese employees strictly follow corporate rules and will never exceed empowered obligations. They consider that power must be strictly distributed among officials, departments/managers under the influence of Confucian principle of hierarchy, current socio-political system and ideology. At the same time, Australians are individuals. They are less formal and claim for equality and self-realization. As for uncertainty avoidance, the Chinese try not to get into an unexpected trouble or make mistake at a business meeting. Any serious failure can be regarded as a stroke over business ceremony or company’s reputation. “Face is associated with honor, dignity, and a deep sense of pride. Causing someone to lose face, even if the offense was unintentional, could cause serious damage to a relationship.” (Fox, 2008) Thus, they will try to foresee meetings and negations in details. Australian managers, on the contrary, are easy-going and highly-sociable. Business meetings are often informal. All participants can argue with team leader and make their own propositions. Both China and Australia belong to collectivist, masculine group. This similar feature may make managers’ cooperation easier, though Australians tend to individualism and the Chinese to collectivism. Australian life style and individualistic attitude to business was formed under the impact of English-speaking countries. Thus, such values as assertiveness, competitiveness and material success are acceptable within Australian society. “Australians dislike uncertainty and arrogance, and when times get tough, people tend to work harder and faster, though not necessarily smarter.” (Spiller, 2001) Chinese managers of state-owned and private companies, on the contrary, aspire to general welfare and stability. According to Hofstede, passivity, cooperation and feelings are Chinese society values. The majority of their projects and contract have long-term orientation as sources for stable existence. The next step of the decision-making is to discover Chinese organizational culture as a target cultural context. Australian managers have to consider all demands of Chinese partner concerning membership of their delegation to avoid uncertainties and misconducts. An efficient decision making model should be based on such cultural advantages as persistence, mutual respect, cooperation and collective contribution. 2. Chinese Organizational Culture vs. Foreign Companies 2.1 Principle of Hierarchy All Chinese companies are characterized with multi-ranking hierarchy, thus, there is a strict subordination before employees of higher ranks. Junior, senior managers and executives can not make serious decisions beyond their power. In this case, prior permission of an appropriate manager or executive of higher rank is required. “There are clear lines of authority. The work is organized and systematic. Bureaucratic organization is power oriented, regulated, procedural, and hierarchical.” (Chow, 2007) Employees’ relations are based upon respect, purposefulness and obedience. According to Wallach, tendency for bureaucracy was shaped under the influence of socio-political regime in People’s Republic of China. Multistage hierarchy of Chinese Communist party has been taken in business sphere, but at present it changes due to laws of international market (fields of cooperation: digital technologies, aircraft construction, semiconductors, food industry etc.) High-tech enterprises promote introduction of innovative and supportive types of culture (Subramaniam, 2001; Chow, 2007), favorable for creative, initiative managers and executives. Such features of corporate culture simplify relations with foreign companies. For instance, supportive culture is based on friendly business relations, trusting and encouragement, that is similar to corporate culture of European countries, the USA and Australia. 2.2 Organizational Structure through Onion Diagram Structure of national companies is shaped according to principle of onion with Chairman and Committee of Directors in the center. All key posts are traditionally employed by men. It is conditioned with centuries-old male domination in Chinese society. Almost all executives of various ranks are male, but percentage of female among General Managers and Chairmen is steadily growing. Gender discrimination in business structures decreases due to historical changes in China and Western influence. For example, percentage of top and senior rank female employees in Australia makes circa 25% (Warburton, 2001). Chinese organizational culture can be reconstructed according to onion cultural diagram – “symbols”, “heroes” and “rituals”. Symbols belong to official organizational culture, which are being represented to the publicity and foreign partners. They are an integral part of traditional Chinese culture such as tea ceremony, a tea lady, painting on silk etc. Evaluating level of the diagram includes “heroes”, “values” and “beliefs”. Government and party organizations - Youth League organizations, Women’s Federations and Workers’ Unions – support core values such as collectivism, long-term stability and national superiority in different spheres. “The most successful multinationals have started to embrace a socially responsible corporate citizenship model, where employees are encouraged to develop their talents to the full for the good of the whole corporate group and its surrounding community.” (Hawes, 2008) Foreign companies will come across this tendency both in state-controlled and private corporations. Their corporate values differ from Chinese ones, because marketing strategies are directed on short-term, temporary target. Chinese companies, on the contrary, attempt to provide employees with a “socially responsible corporate citizenship.” (Hawes, 2008) 3. National Culture at the Business Meeting Negotiations between Australian Food Supermarket group and its Chinese partner can be regarded as a mixture of low-context and high-context cultures. China has a centuries-old history with different customs, traditions and a strict social hierarchy. Though China had advanced industrial achievements (manufacturing of silk, paper; mariner’s compass; shipbuilding), it was diplomatically and culturally isolated until the end of 19th century. Within the next decades the Chinese eagerly borrowed technical innovations and methods of trade of Western colonizers, but their cultural context remained almost untouched. Communist regime was formed under support of Soviet Union, but it united a separated country after the end of World War II. Communist ideology strengthened principles of hierarchy, power authority and obedience. Concept of face (guanxi) as symbol of honor and dignity is important in all spheres of all, including business. “It is essential for foreign businesspeople to have a deep understanding of face, guanxi, and the more subtle aspects of Chinese culture when meeting with older Chinese colleagues”. (Fox, 2008) Concept of subtle communication and inadmissibility of humiliation also have been introduced into business etiquette under the impact of national culture. Leading negotiations foreign businessmen often require concrete answers and confirmations. The Chinese are very careful and avoid an uncertainty, that’s why they will never give positive and negative answer without prior discussion of any proposal. Proposal of Australian Food Supermarket group is attractive for Chinese company. Domestic manufacturing of biscuits, buns and rolls and other semi-prepared goods (Phillips, 2006) can be a profitable project for densely populated country. “Four main types of situations can be distinguished: the family setting, the business within the guanxi, the technology transfer, and the setting up of a joint venture between a Chinese and a foreign enterprise.” (Alon et. al, 2007, p. 87) This proposal can be referred to the fourth situation, indicated by the author. 4. Basic Cultural Points at Negotiations Working with Australian managers, Chinese employees strive for stability and respect. Both partners are supposed to cooperate with national company on mutually beneficial conditions. Business reputation of Chinese company and must be perfect. Negotiations under discussion will be conducted under the influence of the following cultural points: Chinese business etiquette (exchanging and examination of visiting cards, their proper arrangement; correct greeting; shaking hands; tea ceremony; attentive listening of speaker; absence of interruptions); Subtle communication (indirect communication style; absence of definite answer for key points; non-verbal communication, understanding of face); Sense of national pride (foreigners must not show lack of respect to Chinese government, national policy, culture, way of life). Australian managers should base their decision-making model on these points. They will work in the foreign country and have to accept its cultural context. Basic points of Chinese cultural context must be turned into advantageous. For example, guanxi “conveys the idea of a relational web, a traditional system of acquaintances linked by mutual obligations that provide protection, help, and support in dealing with the broader society and the state.” (Alon et. al, 2007, p. 88) The same refers to geomancy (feng shui) that stipulates opening of the ceremony, participants’ beliefs, moon or sun compass. To prevent inconveniences foreign representatives must be aware of Chinese numerology (“4” and “14” mean death) and range of colors (violet, yellow). Marketing and management strategies of Australian Food Supermarket group must be built according to similar scheme to be more flexible. “The new managerialist thinking argues for more flexibility and innovation in the management of the public sector and has been developed from both public choice theory and management theory.” (Bradley, 2001) In case of misconduct, a number of face-saving reasons must be prepared. Australian delegation should include at least one employee, who has been working in China earlier. He will acquaint the rest of the team with Chinese business etiquette. 5. Recommendations Negotiations between two groups can last for a long time. Australian managers must be ready for sudden changes and have several trump cards. If the situation stalls, blocks of new information should be prepared to animate and relaunch negotiations. Considering differences between socio-political regimes of two countries, a proper ideological-political treatment should be developed (Alon et. al, 2007). If values of the decision-making model coincide with governmental policy and official ideology, trust of Chinese company will be gained. A number of issues for discussion must be regulated before the negotiations beginning. All issues and related information should be subdivided into several blocks. Australian managers must not sharply transit to another block, because the Chinese do no make quick decisions. The issue may require further improvement and discussion at the next meeting. A “focal point put forward” strategy, which indicates common values and goals for both negotiating parties, will also help to find the way-out in the complex situation. Managers of Australian Food Supermarket group must be ready for compromises to gain in some other spheres. Though Australians are cheerful, open-hearted and talkative, they must be tactful and polity with Chinese managers. Open confrontations and dissatisfaction must be avoided. Only careful and flexible behavior models will help to achieve success in the process of negotiations. 6. Conclusion Decision-making model of Australian managers should be developed on Chinese cultural context. To achieve strategic and tactical goals, Food Supermarket group must develop special cultural program to acquaint its employees with Chinese culture and history. This program must include detailed information of national business etiquette and methods of negotiations. A brief training and roll games can be conducted. Special attention should be paid to differences of Australian and Chinese countries such as hierarchy, communication styles, understanding of face. Chinese corporate culture is a “pragmatic process of adaptation and accommodation by various corporate stakeholders, including the CCP, corporate managers and employees, and reveals a uniquely Chinese idea of the business corporation, as a hybrid economic-political-cultural organization dedicated to national and individual improvement and renewal.” (Hawes, 2008) So, Australian managers should prepare innovative strategies to predict various situations at the negotiations. Bibliography 1. Alon, Ilan. (2003). 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