Introduction
Culture is an essential element in the operation of firms in different economic sectors. Consequently, business managers have an obligation to nurture and develop a strong organisational culture. Scholars have advanced different meanings of culture. Sun (2008) adopts the definition of culture by Geert Hofstede, which defines culture as “the collective programming of the mind, which distinguishes the members of one category of people from another” (p. 37).
Firms in the contemporary business environment are experiencing an increment in cases of issues associated with cultural diversity. One of the factors that explain this trend relates to the high rate of globalisation. Firms in different economic sectors in the United States are gradually integrating internationalisation in an effort to maximise their level of profitability. China is ranked amongst the most attractive foreign investment destinations across the world (Sun 2008).
Consequently, the majority of the United States’ investors are entering the Chinese market. The prevailing cultural differences between the two countries may present a major hindrance in a firm’s quest to succeed in the Chinese market. In a bid to survive in such a market, it is crucial for the American investors to conduct a broad analysis of the cultural differences between China and the United States.
One of the ways through which an organisation can understand the cultural differences between China and the United States is by applying the Hofstede model. This paper outlines the cultural differences between the two countries coupled with how the potential cross-cultural differences can be solved.
Comparison of cultural differences between China and the US
Business operations are affected by changes occurring in the external business environment. The socio-cultural environment is one of the environments that affect business operations. The high rate of globalisation has significant transformation in the society. Cooper and Burke (2011) argue that the labour market is becoming very diverse.
In their pursuit for the long run survival, it is imperative for HR managers to adopt effective human resource management practices. Cultural diversity is one of the issues that HR managers should take into account. Bono, Heijden, and Jones (2008) posit that cultural diversity refers to the differences amongst individuals with regard to their beliefs, values, and attitudes. The cultural differences have an impact on the effectiveness with which an organisation develops its organisational culture.
Alvesson (2002) argues, “Firms’ management teams face diverse cultural dimensions that have to e addressed” (p.1). Some of these dimensions relate to “power distance, uncertainty avoidance, individualism/collectivism, long-term orientation, and masculinity/feminity” (Abu-Jarad et al. 2010, p. 10), as illustrated below.
The United States and China are characterised by diverse cultural dimensions as discussed herein.
Power distance dimension
Abu-Jarad et al. (2010) emphasise that power distance dimension outlines the degree to which individuals in a particular organisation or society are characterised by a certain degree of inequality or equality. Power-distance also illustrates the attitude of a particular society with regard to the prevailing inequalities.
Furthermore, power-distance is used to depict the society’s perception with regard to power centralisation or decentralisation. China and the United States have a significant power distance, which is determined by the power distance index. China has a PDI of 80 while that of the US is 40 and this difference shows that the Chinese generally accept a large power distance between the superiors and the subordinates in the society.
The large PDI ranking also shows that the Chinese accept inequalities in the society. Moreover, there is no defence mechanism against abuse of power by the superiors. Hofstede (2001) asserts, “The Chinese are influence by formal authority and sanctions and are in general optimistic about peoples capacity for leadership and initiative” (p.11).
Uncertainty avoidance
This dimension is used in the determination of the degree to which individuals are sceptical or uncertain about the future. Most individuals are anxious about the future, and thus they tend to avoid such uncertain situations. However, the degree of anxiety varies across cultures. Both China and the United States have a relatively low uncertainty avoidance index (UAI) at 30 and 46 respectively. The low UAI in China means that the Chinese are generally comfortable with ambiguity.
The low UAI in China arises from the broad rules and regulations that make the Chinese confident about uncertain situations. Moreover, the low UAI amongst the Chinese is also evidenced by the entrepreneurial and adaptable characteristics of the Chinese, which have led to the establishment of a large number of small and medium sized enterprises.
It is estimated that approximately 70% to 80% of businesses in China are family-owned SMEs. In the organisation setting, uncertainty avoidance index is used to explain the degree to which managers are risk-takers, task-oriented, and are involved in strategy formulation, and the level of employee satisfaction (Sparrow 2010).
Individualism dimension
This dimension is used to illustrate the extent to which individuals in a society are interdependent with each other. In the organisational setting, the individualism dimension is used to explain the organisation’s commitment in nurturing collective and interpersonal relationship. In an individualistic society, individuals are only concerned about their personal wellbeing.
Moreover, the values, norms, rules, and regulations in an individualistic society are focused towards promoting the individual status. On the other hand, a collectivist society operates as a group and promotes the welfare of the group rather than that of an individual. This aspect means that members of the society are concerned about the wellbeing of their colleagues. Wilbur (2013) asserts that a high individualism score depicts that an organisation values individualism.
China has an individualism index of 20 while that of the United States is 91. Therefore, China is largely a collectivist society while the United States is individualistic. In a bid to survive in a collectivist society, it is essential for firms to develop exceptional organisational culture, which can be achieved by taking into account the employees’ interests. Furthermore, organisational managers should promote the concept of teamwork and organisational identification (Majunder 2012).
Masculinity/feminity dimension
This dimension is used to explain the division of roles amongst the male and female genders. China and the United States are characterised by different masculinity/feminity index. China’s masculinity index is 66 while that of the United States is 62, which shows that most duties in China are allocated to male employees (Hofstede 2001).
The masculinity/feminity score is also used to explain the degree to which individuals in the society are motivated by success, achievement, and competition. A score of 66 in China and 62 in the United States shows that most individuals in the two countries are driven by success and are thus achievement-oriented. Wilbur (2013) asserts that the likelihood of conflict is higher amongst individuals from a society characterised by a high degree of masculinity as compared to a feminine society.
Wilbur (2013) emphasises, “Interactions with other masculine cultures are prone to unwarranted conflict if both sides are too assertive and try to dominate each other and the high masculinity index in China shows that the Chinese can sacrifice their leisure and family in order to work” (Para. 8).
Therefore, they attach minimal value to leisure time as compared to Americans. Wilbur (2013) notes that the likelihood of employees in a masculine society experiencing job-related stress is higher, as compared to feminine societies. According to Kerr and Slocum (2007), work is highly esteemed in masculine societies.
Long-term orientation
According to Wilbur (2013), the long-term versus the short-term cultural dimension refers the extent to which a particular society is concerned with adherence to values and the truth. A culture that has a strong long-term dimension is focused towards long-term gains rather than short-term gains.
Members in such a society can sacrifice a lot in order to achieve their desired goals. Furthermore, individuals in a long-term oriented culture depict a high level of flexibility.
Therefore, they can easily adjust to changes as situations dictate. On the other hand, short-term oriented cultures value immediate results, preservation of their prevailing level of stability, and rationality. Wilbur (2013) further emphasises that the short-term oriented cultures are more rigid to change and they are focused on short-term gains at the expense of long-term benefits.
China has long-term orientation index of 118 while that of the United States is 29. This aspect shows that the United States’ culture is focused on short-term goals while the Chinese culture is focused on long-term goals. The high LTO index in China illustrates the extent to which the Chinese are persistent. The Chinese can dedicate a substantial amount of their time in order to achieve the desired objective. The chart below illustrates a comparison of the Chinese and the United States’ culture based on the Hofstede five-dimension model.
Potential cross-cultural problems between China and the United States
Sun (2008) asserts, “Cultural differences greatly affect human thinking and behaviour, and thus business organisations in which people interact based on shared values” (p. 38). Consequently, doing business in China or with the Chinese can be challenging for most United States’ firms as illustrated by the cross-cultural differences between the two countries. Below is an analysis of the potential problems and the possible solutions that the United States’ firms can adopt in order to succeed.
Sun (2008) argues, “Power distance can lead to conflict amongst employees” (p. 40) and thus it is crucial for managers of companies that operate in a culturally diverse society to understand the diverse cultural practices and assumptions. This understanding will improve the effectiveness and efficiency with which the HR managers adjust their firms’ human resource management practices to the prevailing cultural circumstances.
Failure to understand the cultural differences may lead to employee conflict. China and the United States are characterised by a high power distance index. Thus, a Unite States’ firm operating in China may experience employee conflict emanating from the assertive nature of employees. The employees may not follow the directives given by their superiors. Moreover, the high power distance between China and the United States means that the Chinese may have a high degree of employee resistance (Clutterbuck 2003).
Solutions to the cultural problems
In a bid to succeed in China, it is imperative for the United States’ firms to integrate effective human resource management practices. Below is an illustration of some of the strategies that the firm can consider.
Teamwork and communication
The existence of cross-cultural differences between China and the United States may lead to intergroup conflict. The United States’ expatriates into China may experience a challenge in their effort to interact and cooperate with the Chinese due to cultural differences such as beliefs, attitude, and values.
This aspect may culminate in competition amongst the team members. Moreover, some employees may be focused on short-term goals and others on long-term goals. Such competition may hinder the effectiveness and efficiency with which an organisation achieves the desired goal. Therefore, it is imperative for organisational managers from the United States intending to venture into China to integrate the concept of teamwork.
One of the aspects that such firms should consider in the process of forming teams is by appreciating the prevailing cultural diversity. The team members should be comprised of both the US and the Chinese employees. The firm should ensure that employees understand the predetermined organisational goal.
This move will limit the likelihood of personal interests overshadowing organisational goals. It is imperative for the United States businesses operating in China to ensure that the respective team roles and responsibilities are defined clearly. Integrating an effective internal communication mechanism is also paramount in the success of cross-cultural teams. Effective communication will enable firms to develop team cohesion.
Moreover, communication will also enable firms to deal with the high degree of uncertainty avoidance in China. For example, communication will ensure that employees are adequately informed on the changes that the firm intends to undertake. Therefore, their morale will not be affected by such changes. Furthermore, the likelihood of employee conflict and resistance will be minimised.
The success of the team will also be subject to the type of leadership style adopted. Despite the view that China is characterised by a high power distance, it is important for the United States’ firms to consider the probability of developing a feeling of inclusion. This goal can be achieved by adopting democratic leadership style, and thus, employees will feel being part of the organisation.
Organisational culture, training, and development
Kandula (2007) asserts that firms should also focus on developing a strong organisational culture. One of the aspects that the HR managers should focus on relates to cultural diversity. Firms should ensure that their employees are conversant with the Chinese culture. Consequently, formulating and implementing a comprehensive employee-training program is paramount. Employees should be trained on different cultural issues in China such as values, norms, attitudes, and beliefs.
This aspect will improve the effectiveness with which firms venturing in the Chinese market deal with cultural issues that emanate in the firm’s operational processes (O’Reilly & Pfeffer 2000).
It is also imperative for firms’ venturing in the Chinese market to consider developing a high level of organisational identification, which will ensure that employees are focused towards achieving the set organisational goals. Moreover, organisational identification will stimulate the level of employee morale and commitment, hence achieving long-term success.
International recruitment
The success of the United States firms in China will also be determined by the quality of their human capital. In a bid to survive in China, the United States firms should consider integrating the concepts of international recruitment. Scullion (2006) asserts that international recruitment plays a fundamental role in promoting competitiveness of international firms.
The core motive of firms in their internationalisation process is to maximise their level of profitability, which can only be achieved if an organisation has a strong human capital base. The firms should consider integrating the concept of international recruitment, which entails recruiting from the international labour market.
The firms may adopt different international recruitment approaches such as ethnographic, polycentric, and geocentric approaches. Pravin (2008) defines ethnocentric approach as the process of recruiting and selecting employees from the parent country to work in a foreign country.
On the other hand, polycentric approach entails recruiting employees from the host country’s labour market. With regard to ethnographic recruitment, the firms should ensure that they select employees who are conversant with the Chinese culture. Integrating international recruitment strategies will minimise the likelihood of business failure due to cultural differences.
Conclusion
This analysis shows that different countries are characterised by varying cultural differences. For example, China and the United States are characterised by different cultures as illustrated by the Hofstede model. Such differences may affect the success of firms intending to venture into the international market.
Therefore, in a bid to survive in China, it is imperative for the United States firms to conduct an analysis of the prevailing cultural differences. This move will aid in the formulation and adoption of effective human resource management strategies and practices, hence increasing the likelihood of success.
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