Universal Journal of Management and Social Sciences
Vol. 3, No.9; September 2013
Research on the Effects of Culture Differences on Business Communication Between China
and U.S.
--A Case Study of Cross-cultural Management of Joint Venture Enterprise in China
Pan Mengyu, *Cai Li
International Business School, Dalian Nationalities University, Dalian, China
*
caili@dlnu.edu.cn
Abstract
Since China becomes much stronger in economy development, the communication and activities
between China and other countries is more frequent which makes intercultural communication play
an essential role in business activities. It is more important to deal with the obstacles in business
affairs caused by culture conflicts and differences. With the rapid expansion of Chinese economy,
communicators have played an important role in international business. This paper shows the cultural
differences which influence business activities and takes a joint venture enterprise in China as an
example and points out the policies to solve the problems of cross-cultural management.
Keyword: Intercultural communication, Culture differences, Business negotiation, Strategy
1 Introduction
With the rapid development of the world economy, the process of globalization is going faster. With
the improvement of technology and the decreasing cost of international communication, the distant
between people from different countries has been narrowed which causes the more frequent
intercultural communication. However the smaller distant doesn’t mean the gap between cultures
becomes smaller. On the contrary, people have to learn something new to adapt this new world and
deal with lots of new problems, such as some obstacles in business negotiation.
Following with the new century, every citizen of the “world village” is related to the wave of
globalization. However globalization doesn’t mean there is no difference, there are differences
between ethnic groups, nations or countries in the area of culture. In order to develop international
relations and enhance each country’s economic level, people need develop their intercultural
communication ability to meet the needs of this new century. That makes cross-culture
communication so important.
2 Effects of Cultural Differences on the Business Communication between China and U.S.
The scope of cultural differences is very broad, including the way of thinking, customs, morals, etc.
With the influence of cultural environment, there are diverse culture backgrounds. There are 56
nationalities in China, Chinese culture is shared and acknowledged by all citizens, while every culture
of every nationality also exists obvious differences. Here divide all countries into two forms:
low-context country such as U.S. that prefers verbal communication with features as explicit and
direct, and high-context country such as China that prefer nonverbal communication which is
character as indirect and allusive.
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2.1 Decision-making Differences
In intercultural business communication, whether communicators can achieve the objectives
depends largely on the way of decision-making. The culture that a negotiators belong to is an
important factor that affects business negotiation, even subtle differences among different cultural
backgrounds can make the negotiator to change the decision. Understanding different ways of
making decisions in different regional or countries helps business negotiations go smoothly. In
low-context country, decisions are based on ends, which means the companies focus on results.
While in high-context country, the companies aim to building relationships and try very hard to keep
harmony between business partners. And there are also differences between the decision makers. In
different cultures, decision maker is quite different. In North America the representatives of a
business negotiation can make the final decision, and decide whether to go on the negotiation or
not. However in China the one who make final decision must be in the top position of the company.
2.2 Problem Solving Differences
In addition to decision-making style, problem solving takes the same important role in intercultural
business negotiations. Low-context culture views conflict as a disagreement and a part of life, it’s
common and happens all the time, and the most important is that conflict is something outside
business relations, there is no harm to business relationships between two individuals or groups
even they have conflicts regularly. However the high-context culture holds the opposite view about
this kind of problems, they regard conflict a close connection with business relationship. People think
conflicts can be solved. If any conflict comes out, they just take it out in low-context country while
high-context countries try to avoid it and even will not mention it in order to avoid break harmony
between business partners.
2.3 Style of Negotiation Differences
Here focus on style of business negotiations in Chinese culture. First, Chinese take great importance
to face-saving. They pay attention to the relation of friends and also value the relationship between
the relatives, as well as value the system of reciprocity and mutual benefit. Unlike the Americans, in
China, even if one part takes one step back in negotiation, the other side who make profits does not
necessarily return the benefit to the partner at once. Someone help others solve some difficulties
today, however it will not necessary for him to repay at once, however one day he will pay back
finally. Second, Chinese people have a sense of collective responsibility. They are modest, good at
mutual cooperation. Consequently they are represented by one small group collectively. The small
group of people at high level can represent the whole company. Therefore in the process of business
negotiation, Chinese always look forward to drawing a conclusion of the negotiation, and then make
the final decision by the leader. Third, the Chinese negotiators prefer to first starting from the whole,
have a general outline and make sure that both parties are consistent with the overall interests and
principles, and then they proceed on a series of the negotiation with more details. If interests of
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both parties are different, there is no necessity of
Vol. 3, No.9; September 2013
further negotiations.
3 Case study of Cross-cultural Management of Joint Venture Enterprise in China
In April 2001, one of the world's leading car companies- Ford motor company established a joint
venture enterprise "Changan Ford Motor Co., LTD" with a Chinese automobile company Changan
Motor Co., LTD . which is located in Chongqing, China. In March 2006, Mazda automobile company
joined Changan Ford, and then the company officially changed its name to "Changan Ford Mazda
Automobile Co., LTD." The three parties’ stakes are the following: 50% by Changan, 35% by Ford and
15% by Mazda. On November 30, 2012, Changan Ford Mazda Automobile Co., LTD formally divided
into two joint venture companies "Changan Ford Motor Co., LTD." and "Changan Mazda Motor Co.,
LTD.". Stakes of Changan Ford are as following: 50% by Changan, 50% by Fords. Having been
founded for 11 years, Changan Ford has grown into an automobile enterprise with cross-regional
and multiple brands. The core values of Changan Ford's are: "our business motivation stems from
our focus on consumers, and our strength, wisdom and entrepreneurial spirit. We value everyone's
respect for differences and contributions, insist on good faith, actively contribute to the society, and
continuously improve everything we do." This kind of culture reflects the strong market awareness
and tolerance of different cultures.
3.1 Manifestations of Cross-cultural Conflicts in the Joint Venture Enterprise in China
3.1.1 Attitude towards Individualism and Collectivism
American social culture take the individual as the basic unit that is because the United States is an
immigrant country, the United States gathered those who stay on their own strength to farmland
with their bare hands, so they advocate individualism and independence. Different from American
culture, collectivism is an important factor that affects Chinese culture. This is because in Chinese
culture, group is the basic composition unit of the society, a person's identity is defined by the group
he belongs to. The Chinese have even moderate and compromise national character, particularly
about "harmony" and unity. Chinese is good at reaching balance and coordination to solve conflicts
and antagonism, attaches great importance to the ethics and morality, promotes collectivism and
the spirit of arduous struggle, despise the individualism and the attitude of pleasure-seeking. In
China, emotional feelings are often overweight truth, and highly value interpersonal relationships
and emotions. For example, during the meeting in Changan Ford company, generally it is American
who speak of the opposition, because in their opinion vending different opinion is something
healthy. While for most Chinese, “harmony”, which means maintain relationships is more significant.
Thus, it is the difference of the cultural values leading to both sides in the conflict and contradiction
of administration.
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Vol. 3, No.9; September 2013
3.1.2 Attitude towards Self and Anatman
In the Changan Ford Company, the idea about whether to announce the punishment to the
employees in public is entirely different between China and the United States. Chinese managers
think it appropriate that whatever it is praise or punishment to the employees, it is better to spread
the news in the whole company. While the American managers pay more attention to positive
incentives. Such as employee's birthday party, the human resources department should send
congratulation personally, and news of employee’s promotion and praise can be announced in the
whole company. However Americans does not advocate public criticism, they think such an
approach as invasion of privacy, and will cause harm to the person's self-esteem who made a
mistake. Such conflict of attitude towards the punishment results from the difference of
understanding of "self" concept. China is influenced by Confucianism, regard “Anatman" as noble
spirit realm and advocates obedience. American culture emphasizes on the center position of "ego"
in the value system and advocates autonomy, responsibility and pride. Therefore, American
managers think that public punishment is detrimental to "self", while the Chinese managers think it
quite the opposite.
3.1.3 Attitude towards Decision-making
Due to the collectivism of Chinese culture and high risk aversion tendencies, when making important
decisions Chinese supervisors of Changan Ford must consult the opinions of others, also will consider
factors that maintain harmony and reduce the conflict within the company. While American culture
typically respects individualism with low risk aversion tendency. In the model of decision-making of
Chinese enterprises, decisions are often made by collective, and the collective undertake the
responsibility as well as the achievement. Americans are used to making decision individually and
individuals take the ultimate responsibility for decision making. Corresponding to this, enterprises in
the United States tend to focus on diversification of decision-making, while the Chinese enterprises
tend to emphasis on the centralization of the decision. In Changan Ford, Chinese managers are used
to concentrated decision-making, very detailed plan must be drafted before final decisions are make
and then circulate it to all members of the company. While the U.S. managers emphasis on clear
responsibilities and rights of decentralized decision-making, implementation of independent
determination and personal responsibility. These different attitude makes U.S. manager often
complain about the slow decision making process, because every decision has to be discussed twice
or three times.
3.1.4 Attitude towards the Elderly Emplyees
On the perceptions of employee’s age, managers from different cultural backgrounds hold the
different cultural values. Chinese culture attaches great importance to respect for the elderly, they
regard seniors as representatives of qualities and virtues such as knowledge, experience,
competence and authority and so on. Thus the Chinese representative of Changan Ford is still
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affected by the restriction of "seniority" model on the policy of employment. While American culture
doesn’t care about that so much, Americans emphasizes the respect for youth and adherence to the
"capacity".
3.2 Recommended Measures for Solving Problems of Cross-cultural Management
3.2.1 Respecting Cultural Differences
Business negotiators must be aware that different cultural backgrounds influence the ways of
thinking and the negotiation styles. Sometimes even the same behavior also represents different
meaning under the different cultures. Because of cultural differences are objective, communicators
can't change this kind of difference, what communicators can do only is to try best to adapt to it and
to be integrated with different cultures and try to comprehend how and why the business partners
have form this kind of culture, and finally accept this culture with the most sincere attitude to make
the partners feel the understanding of their culture and embracement, rather than simply to
tolerate and ignore.
3.2.2 Improving Cross-cultural Understanding
In order to solve the problems of cross-cultural management, the first is to understand business
partner’s culture. In order to promote the mutual understanding and communication of cultures of
United States and China, one of the most effective measures is to solve cultural conflicts by
cross-cultural training program. The main content of the cross-cultural training program can cover:
the introduction of the essence of Chinese culture and the original corporate culture, intercultural
communication skills training, cross-cultural conflict processing ability training and language training.
In this way, employees can understand cultural differences, so as to correctly treat this kind of
difference of cultures to achieve internal harmony in one company. As an employee in a
cross-cultural multinational company, it is not enough to understand and respect other countries'
culture, and for better and effective business activities, employees must master the foreign language
and culture of their business partners.
3.2.3 Establishing the Unified Enterprise Culture
After realizing the above two steps, which are the basic knowledge of cultural differences, the next
step is to establish a common enterprise culture, gradually reduce the cultural friction and improve
the integration to make the employees to associate themselves with the company to guarantee
efficient and long-term stable business operation. Changan Ford Company’s culture, for example, is
the mutual concerned about staff and managers. Only in this way, can a company establish the
punishment and reward system that both employees and managers feel feasible.
4 Conclusion
Every culture corresponds to the different world view, values, and also corresponds to the different
thoughts and behaviors. International business communication is a complex international activity
which is closely related to cultural differences. Therefore, in order to do business in a successful way,
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Vol. 3, No.9; September 2013
communicators must understand the cultural differences.
After the analysis of the differences between cultures, and what kind of obstacles might be
with culture differences in business communication, people should regard cultural difference as
objective existence. What communicators or negotiators need to do is to try to reduce the negative
effects brought by the cultural differences and minimum the negative effects. Only to promote
understanding of both sides and create an environment that suitable for both, can communicators
or negotiators achieve the goal of mutual benefits in business communications.
Acknowledgement
This research is supported by Sun Bird research project of students of Dalian Nationalities University.
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