Cultural Analysis of China to Develop the Workforce

1. Problem Statement – The East meets the West

With the increase of migrants in today’s world, cultural diversity in workplace is not only encouraged, it is essential for businesses growth.  According to the World Bank (2006), increasing immigration by a margin equal to 3% of the workforce in developed countries would generate economic gains of $356 billion on a global scale. Some economists predict that if borders are nonexistence and workers have the freedom to choose where they go, it would produce gains topping $39 trillion for the world economy over 25 years (World Economic Forum 2018). In addition, the benefits individuals contribute from diverse backgrounds include creativity and innovations, insights and local knowledge; a diverse pool of talents that allows the organisation to offer a variety and competitive range of products and services (Martin 2014).

On the contrary, integration across cultural teams can be problematic in the face of prejudice or negative cultural stereotypes (Martin 2014). Communication can often be misinterpreted or be difficult to understand due to cultural differences and may lead to conflict. Ultimately this may result in a dysfunctional organisation laden with significant cost ramification.

When Sinopec purchased a majority stake of the Puffin oil field from AED Limited back in 2008 (Reuters 2008), five senior executives from China were assigned to Melbourne to manage the newly joint venture. The executives sent, each highly accomplished individuals in their own sector, were given the task of ensuring the success of this project.

When the executives met the local staff, neither of the parties had much knowledge of the other’s culture background and conflict soon arose. It appeared cultural differences were the primary cause of frictions within the team. Languages barriers posed the biggest hurdle. The inability to communicate effectively led to frustration amongst individuals as the project progress ceased on several occasions. The Chinese employees started isolating themselves, this meant discussing management decisions behind closed doors and relaying outcomes to the local managers and staff.  The local employees felt excluded and morale within the organisation plummeted. Eventually this led to employees disassociating with their tasks. Absenteeism and workplace deviance started to occur more frequently within the organisation. Some staff tried to voice their concerns but unfortunately it fell on deaf ears. The project eventually finished but the majority of the work was sent to Sinopec’s headquarters to be completed. Most of the Australians left the company disgruntled with a bad impression of Chinese culture.

This scenario is not uncommon, as many Chinese companies experience culture shock as they venture into foreign democracies (Denyer 2015). Cultural misunderstandings have led to numerous failures in cross-cultural mergers, acquisitions, and market penetration (Stahl & Javidan 2009). To consider the significance of culture differences, one should fully comprehend the recipient’s core values and the roles they play in the organisation as well as their national culture.

In this paper, I will draw upon the history of China through the cultural lens and diagnose how the culture values dictated the actions of the Chinese executive. I will also highlight the cultural friction points that exist between the Australians and Chinese cultures and develop some ideas on how these could be minimised to foster happier and more productive workplaces.

2. Critical Analysis – Putting on the cultural lens

Cultural theorists suggest that cultural background has an inescapable influence on individual’s decisions in all aspects of life. (House et al. 2004) Geert Hofstede (1988, p. 6) defines culture as “the collective programming of the mind that distinguishes the members of one category of people from those of another”. He argues, since the day an individual is born, the “mental programming” starts and continues throughout his or her lifetime that distinguish a society. It represents an individual’s underlying values which influence one’s perception and understanding of people’s attitudes and motivation as well as the reasoning behind his or her decisions and behaviour (Hofstede & Bond 1988).

Australia, synonymous with much of the Western countries, values equality, freedom and possess a spirit of egalitarianism that embraces mutual respect, tolerance, fair play and compassion for those in need and pursuit of the public good (Department of Home Affairs N.D.) Through these value statements, one can deduce some of the motivation and behavioural norms expected by the general Australian population.

China’s values, on the other hand, are traced back to the Han era (206 BC -AD 220) when Confucian ideology was so prominent that it became an irrefutable, unofficial but powerful system of moral, political  and social principles that governed nearly every facets of the Chinese life. (Wang et al. 2005) Confucian influence is so strong and deeply rooted in China’s society, it even expands and penetrates into many neighbouring countries such as Japan, Korea, Singapore and Vietnam (Emery 1999). The other era caused a deep impact on China’s culture is the Maoist era (1949 – 1976). In an attempt to create a communist utopia, the Chinese Communist Party (CCP) disembedded individuals from the traditional Confucian values of family, kinship and community and “reprogrammed” them to become a model citizen of the nation state (Yan 2010). These values etched through the history of China and passed down by many generations constitute the organisational and national culture of today. By understanding the origin of these cultural values, we can now draw the correlation back to the motivations and behaviours of the Chinese executives.

One of the widely referenced approaches for analyzing the variances between cultures is the extensive research conducted by Hofstede and his research team. The six value dimensions (2018) of national culture provide insights into the cultural background of today’s China (Purple) and Australia (Blue).

Table 1:Data from Hofstede Insights website, scales are from 1 – 100 (highest)
Note: From Country Comparison Tool, February 2018 (Hofstede-Insights 2018)

Some of the notable discrepancies are power distance, individualism, long term orientation and indulgence.

The strong power distance in China is a product of the hierarchical system that has dominated the country for over 2,000 years, producing a strong sense of order and relations. These concepts still permeate all societies including businesses (Jacobs, Guopei & Herbig 1995). Confucius believed that by maintaining the established social order, where everyone behaves accordingly to their rank, social harmony can be achieved.  In the Puffin Project, when the Chinese decided to reduce one of the work scope to expedite the project schedule, what they failed to consider is the additional pressure put the site staff to finish the job. The site manager emphasized the implications on the safety of the workers, but Chinese staff felt that this was business as normal and viewed the concerns as dissent designed to challenge their authority. This friction quickly developed to suspicion and disruption in the organisation. Eventually, the Chinese executives choose to exert their power to push their decisions ahead and disregard the opinions of the staff. This action, led the Australian employees to believe that their core values on freedom of speech was refuted, resulting in a rise of frustration.

Another national culture that was influenced by the history of China is collectivism. During the Maoist era, socialism was practiced by the Chinese Communist Party (CCP), and one of the most active ideology promoted then was – national pride. (Steele & Lynch 2013). The CCP ultimate goal was to create a new type of socialist subjects, “Chairman Mao’s good soldiers”, who prioritise their loyalty to the party state over their family and individual interest (Yan 2010). It had a profound impact such that individuals in today’s society declared that they are happier when the party they support is in power (Di Tella & Macculloch 2005) and happiness in China’s general population can be found predominantly in collectivistic orientations—in particular in-group solidarity, religiosity, and national pride (Inglehart et al. 2008). Despite China government-initiative reforms on the 1980s to embrace individualism with the onset of Western influence, China is still generally considered to be a collectivist country (Moore 2005).

The five Chinese executives who were assigned to Australia took with them the pride of representing their organisation and country on foreign ground. Ensuring the success of this project is equivalent to earning the recognition from their organisation and country. Therefore, their in-group commitment lies with Sinopec and China, and not with the Joint Venture nor the Australian staff. Whereas, the individualist Australians felt disaggregated from the project when their individual values were revoke by the exclusion in the decision making. Unfortunately, they were not able to take this form of discrimination to the management, who is the ultimate perpetrator, thus deepening the discontent.

The scores on long term orientation, uncertainty avoidance and indulgence align with the pragmatic culture China holds strong with their traditions. The Chinese seek peace and security by clinging on to the past. They control the gratification of their desires and deem indulgence as immoral, this holds true especially in the older generation (The Chinese Culture 1987). Australia on the flip side, adopts a normative culture. They are willingly to realise their impulses to have fun and enjoy life (Hofstede-Insights 2018). Another piece of evidence to demonstrate the extremities of the two cultures.

The Global Leadership and Organisation Behaviour Effectiveness (GLOBE) framework built upon Hofstede’s research to cover 9 culture dimensions.

Table 2: GLOBE 2007 data, scale from 1 – 7 (highest). Mean scores for each country are shown above. The rank order is relative to the 61 countries participated. Note: The data from Column 1 – 8 are from Culture and Leadership, across the world: the GLOBE book of in-depth studies of 25 studies (Chhokar, Brodbeck & House 2007).

GLOBE’s data took a different approach in data collection and puts into perspective how each dimension fares across the 61 countries that participated (Shi & Wang 2011). Most of GLOBE’s results are in continuum with Hofstede’s findings.

Performance and humane orientation in GLOBE’s dimensions may not be in Hofstede’s research but they are in line with his Confucian work dynamism, in which hard work and diligence were highly praised and appreciated and preserving a harmonious environment is more important than getting a job done in time (Chhokar, Brodbeck & House 2007).

One of the interesting observation is the assertiveness of both countries. China’s low score on “As If” is an indicative behavioural norm from Confucian teachings of harmony within families and organisations. The “Should Be” score however, reflect participant’s strong aspirations to be more assertive in the society. This could be due to the growing confidence on the international stage during the recent years (Chen, Pu & Johnston 2014). Whereas Australia’s “As If” and “Should Be” score reflect the opposite as they strive to be less assertive.

From the above analysis, one can hypothesize the frictions generated between the Chinese and Australians are a consequence of the lack in cultural understanding and judgemental perception due to cultural disparities.

3. Solution & Implementation – Building the bridge

To create a productive workplace for people with different national cultures requires effort to build a common understanding, skills and commitment (Sunniva Heggertveit-Aoudia 2012).

One of the approach to mitigate cultural differences is cultural intelligence. Thomas et al. (2008) defined cultural intelligence as a structure of interacting knowledge (content and process) and skills (perception, relational and adaptive), linked with cultural metacognition (monitoring and regulation), that allows people to adapt to, select and shape the cultural values of their environment. For example, knowing the Chinese executives hold collectivist value orientation (content knowledge) and that orientation are what shaped their behaviours that influenced the preference in specific mode of behaviours and outcomes (process knowledge) (Thomas et al. 2008). The same can be applied for the Australian employees.

Therefore, the first step to bridge the cultural differences between the two parties is to increase cultural awareness by undertake cultural courses, team building or if finance permitting, a group tour of the organisation in country. These social interactions permit individuals to pay attention and appreciate the critical differences in culture and background between each other and foster open-mindedness, tolerance for uncertainty and non-judgmentalness (Hurn 2013). This endeavour hopes to alter the perception of one’s presumption of the others. Both parties will also need to utilise relational skills such as flexibility, sociability, empathy etc. coupled with adaptiveness to generate appropriate behaviour in the new cultural setting (Thomas et al. 2008). This is vital in developing and maintaining good interpersonal relationships with others that are culturally different.

The next step involves cultural metacognition, that is, (1) the ability to consciously and intentionally monitor one’s knowledge processes and cognitive and affective states and (2) regulate these processes and states to an objective (Flavell 1979). Deci and Ryan (1980) suggested metacognitive monitoring and regulating is valuable in facilitating the choice of behaviours that are consistent with one’s needs and values. Recognising the dynamic nature of cultural intelligence, continuous feedback during the process above should enhances the success of this implementation within the organisation.

The other element required for cultural intelligence to be implemented successfully is effective communication. Hall (1990) claims the essence of effective cross-cultural communication lies with exhibiting the ‘right’ response than with sending the ‘right’ messages. To achieve this, one must not only grip the meaning the speaker is communicating but also the meaning behind the meaning. This comprises repeating; to ensure one capture the meaning, paraphrasing; comprehending what the speaker is trying to convey and reflecting; giving feedback or comments (Hurn 2013).

Bear in mind not everyone accepts this change with open arms, especially employees with longer tenure or the Chinese with strong cultural values who are away from their home country. Respect, open-mindedness and patience serves as the best remedy for these situations (Jackson 2014). By understanding one another’s national culture and accommodating individual’s values with the others, the team can now work towards the final step of defining the organisation values (processes and practices) and ensure a person-organisation fit holds true for everyone.

4. Conclusion – All hope is not lost

As Nisbett and Nie (2004) mention, some country took thousands of years of history behind the development of cultures, it is simplistic to expect massive convergence in thinking within a few years.

More emphasis was put on China values due to the long history and the tightly it binds the values they have today

Find comfort in the data from GLOBE that there the Chinese wants to change

References

Chen, D, Pu, X & Johnston, AI 2014, ‘Debating China’s Assertiveness’, International Security, vol. 38, no. 3, pp. 176-183.

Chhokar, JS, Brodbeck, FC & House, RJ 2007, Culture and leadership, across the world : the GLOBE book of in-depth studies of 25 societies, Lawrence Erlbaum Associates, Mahaw, N.J.

Deci, EL & Ryan, RM 1980, ‘Self-determination Theory: When Mind Mediates Behavior’, The Journal of Mind and Behavior, vol. 1, no. 1, pp. 33-43.

Denyer, S 2015, Chinese companies face culture shock in countries that aren’t like China, Washington Post Available from: https://www.washingtonpost.com/world/chinese-companies-face-culture-shock-in-countries-that-arent-like-china/2015/08/14/a048eb64-3bbd-11e5-88d3-e62130acc975_story.html?utm_term=.6030e1510848. [8 February 2018].

Department of Home Affairs N.D., Australian Value Statement, Australian Government. Available from: https://www.homeaffairs.gov.au/trav/life/aust/living-in-australia-values-statement-long. [6 February 2018].

Di Tella, R & Macculloch, R 2005, ‘Partisan Social Happiness’, Review of Economic Studies, vol. 72, no. 2, pp. 367-393.

Emery, G 1999, ‘Chinese business and Confucianism’, Moral Musings, vol. 3, no. 1.

Flavell, JH 1979, ‘Metacognition and Cognitive Monitoring: A New Area of Cognitive-Developmental Inquiry’, American Psychologist, vol. 34, no. 10, pp. 906-11.

Hall, ET 1990, Understanding cultural differences, Intercultural Press, Yarmouth, Me.

Hofstede-Insights 2018, Country Comparision Tool, 8 February 2018. Available from: https://www.hofstede-insights.com/country-comparison/australia,china/.

Hofstede, G & Bond, MH 1988, ‘The Confucius connection: From cultural roots to economic growth’, Organizational Dynamics, vol. 16, no. 4, pp. 5-21.

House, RJ, Hanges, PJ, Javidan, M, Dorfman, PW & Gupta, V 2004, Culture, leadership, and organizations: The GLOBE study of 62 societies, Sage publications.

Hurn, B 2013, Cross-Cultural Communication : Theory and Practice, Palgrave Macmillan UK, London.

Inglehart, R, Foa, R, Peterson, C & Welzel, C 2008, ‘Development, freedom, and rising happiness: A global perspective (1981–2007)’, Perspectives on psychological science, vol. 3, no. 4, pp. 264-285.

Jackson, J 2014, Introducing Language and Intercultural Communication, Taylor and Francis, Hoboken.

Jacobs, L, Guopei, G & Herbig, P 1995, ‘Confucian roots in China: a force for today’s business’, Management Decision, vol. 33, no. 9, p. 29.

Martin, GC 2014, ‘The effects of cultural diversity in the workplace’, Journal of Diversity Management (Online), vol. 9, no. 2, p. 89.

Moore, RL 2005, ‘Generation Ku: Individualism and China’s Millennial Youth’, Ethnology: An International Journal of Cultural and Social Anthropology, vol. 44, no. 4, pp. 357-76.

Nisbett, R & Nie, H 2004, The geography of thought: how Asians and Westerners think differently…and why, vol. 13, Brock University, St. Catharines, pp. 81-83.

Reuters 2008, AED Oil sells 60% stake to China’s Sinopec, The Sydney Morning Herald. Available from: http://www.smh.com.au/business/aed-oil-sells-60-stake-to-chinas-sinopec-20080307-1xur.html. [8 February 2018].

Shi, X & Wang, J 2011, ‘Interpreting Hofstede Model and GLOBE Model: Which Way to Go for Cross-Cultural Research?’, International Journal of Business and Management, vol. 6, no. 5.

Stahl, G & Javidan, M 2009, ‘Cross-cultural perspectives on international mergers and acquisitions’, Cambridge Handbook of Culture, Organizations, and Work, pp. 118-147.

Steele, L & Lynch, S 2013, ‘The Pursuit of Happiness in China: Individualism, Collectivism, and Subjective Well-Being During China’s Economic and Social Transformation’, Social Indicators Research, vol. 114, no. 2, pp. 441-451.

Sunniva Heggertveit-Aoudia 2012, Culture, Values and the impact at work Profiles in Diversity Journal Available from: http://www.diversityjournal.com/9823-culture-values-and-the-impact-at-work/. [9 February 2018].

The Chinese Culture, C 1987, ‘Chinese Values and the Search for Culture-Free Dimensions of Culture’, Journal of Cross-Cultural Psychology, vol. 18, no. 2, pp. 143-Cultural Psychology, 1987, Vol.18(2), p.143-64.

Thomas, DC, Elron, E, Stahl, G, Ekelund, BZ, Ravlin, EC, Cerdin, J-L, Poelmans, S, Brislin, R, Pekerti, A, Aycan, Z, Maznevski, M, Au, K & Lazarova, MB 2008, Cultural Intelligence, vol. 8, SAGE Publications, pp. 123-143.

Wang, J, Wang, GG, Ruona, WE & Rojewski, JW 2005, ‘Confucian values and the implications for international HRD’, Human resource development international, vol. 8, no. 3, pp. 311-326.

World Bank 2006, World Economic Prospect. Available from: http://documents.worldbank.org/curated/en/507301468142196936/841401968_2005103190201050/additional/343200GEP02006.pdf. [8 February 2018].

World Economic Forum 2018, How immigration has changed the world – for the better. Available from: https://www.weforum.org/agenda/2016/01/how-immigration-has-changed-the-world-for-the-better/.

Yan, Y 2010, ‘The Chinese path to individualization’, British Journal of Sociology, vol. 61, no. 3, pp. 489-512.