Management Culture: China And United Kingdom

Introduction:

In this essay we are going to compare the Chinese and UK approaches to organization management culture. Taking into consideration recent phenomenon, rapid growth rate of businesses in China, expanding and growing investment portfolios have made noticeably Chinese businesses meaning, and foreign investors wanting to set a business in China. What’s interesting is the Chinese have different style, attitude and negotiation process towards employees and organisation as to the UK. The essay will state the differences between organizations in both countries and to look at the cultural dimension of both the East and the West, taking into account the different managerial styles and most importantly culture, whilst comparing both countries. The issue of globalization slides across as the process has made businesses able to connect worldwide. In order to get a closer look, case-studies will be examined looking at companies from a Chinese and UK business perspective. Despite the differences, complexity, similarities or disadvantage of one model to another, the Chinese way of operating is interesting especially seeing the importance and link between the country’s culture, relationships and positions in management. China has been a great country in terms of great power, which also is one of the second largest economic in the world after USA and their businesses have been booming extravagantly and expanding as well. However, China has the highest current currency reserved in the world today. Management culture in the china and in UK has been slowly integrated with one another. The Chinese management culture has undergone a period of flooded to the West and returning to the East. However we are going to examine the main dimension of culture, how they relates to businesses in China and UK. Different management researchers all over the continent have focused to the traditional Chinese management culture, whose ideal is in human orientation, and behavioural cultivation by self-displine.

This essay will consider the overall differences between the management cultures of China and the UK. In doing so the essay will consider both the general differences in cultural considerations as well as specific considerations and concepts which are present in Chinese management styles and cultures and how they relate or contrast to elements of the UK management culture.(Dongshui Su2001)

Culture:

In general terms it is accepted that there is a link between national cultures and management cultures (Handy 1999 p196-197). Hofstede (1980) considered a model of national cultures based upon the following four elements:

Individualist vs Collectivist

Low vs High power distance

Low vs High Uncertainty avoidance

Feminine vs Masculine traits

From a national cultural perspective Hofstede identified that those countries of the Anglo-Saxon block which include the UK tend to exhibit a profile based around individualistic behaviour, low power distance, middling uncertainty avoidance and a high degree of masculinity. In comparison Eastern cultures were seen as having a greater degree of collectivist behaviour, a middling power distance a high avoidance of uncertainty and a high level of masculinity. As such in comparing the two cultures one may consider that there is a general convergence in the ability of exhibiting masculine behaviour whist there is a much more distinct difference in attitudes on the scale of individualistic vs. collectivist style behaviour. Chinese managers strongly believe in order and traditional values. Thus, Chinese bosses precisely like to share task to teams or groups to work in collective effort to enhance Just In Time (JIT ), and help the employees to work together and learn from each other as well.

Although there are some disadvantages to work as team or group delays business project, in the sense that some individual would be sluggish on their own task, and when it’s time for promotion or bonuses equal reward would be given. In general terms whilst not as diametrically opposed Chinese culture may be seen as representing a much higher adversity to risk taking than that of the Anglo-Saxon countries. This may be seen as represented by the national differences in attitudes towards savings with Chinese citizens saving four times that of their Western counterparts (Graham and Lam 2003).

In considering the effects of individualist models against those of collectivist cultures this has an impact for the consideration of overall management culture for instance the manager in an individualistic culture such as the UK will have to consider getting the best out of those they manage by aligning the best interests of the employee and the company from the individualistic perspective of the employee. For instance a popular way of rewarding employees in the UK is through a bonus culture in which the individual stands to benefit personally by meeting the needs of the organisation a theory which is largely embodied by Vroom’s expectancy theory (Robbins 2007). In contrast management culture in a more collective society such as that of China may be seen as being able to appeal to the nature of employees to contribute towards the wider good of the organisation for which they have a greater sense of belonging to as a community than their UK counterparts. As such managers in such a culture may focus on giving praise and public recognition to employees with in the company before considering the need to use an extrinsic reward as a method of motivation.

In addition the overall level of risk aversion within the national culture may be seen as translating into a model of management cultural and organisational behaviour. In many instances managers in the less risk averse countries of the Anglo-Saxon model are rewarded by shareholders for making what may be seen as risky short term profits and thus from the management culture perspective such a culture permeates every level of the organisation. On the other hand those operating in a more risk averse society such as that of China may be seen as being rewarded for acting in a way which is much more conservative with an emphasis on long term stability and profitability rather than short term share based performance. As such this adds to the general slower pace of business within Chinese cultures as personified by the general longer length of time taken in negotiations within China as opposed to between Western businesses (Ambler et al 2009). In a recent interview by Yi Min a director of Lenova Group in Carolina, he points out that collectivistic culture is less in China, since the late 1990’s when the ‘one child policy’ came into effect. These individuals born after 1980 ‘ba ling hou’ are much more individualistic than collectivistic.

Management styles and human behaviours:

In many ways it may be considered somewhat difficult to generalise on the differences between management styles in the UK and China given that management styles are not necessarily related to an individual national culture but further segmented down to the corporate level. For instance even solely within the UK there may be seen as a significant array of management styles and cultures from the more formal and hierarchical in public services and more traditional business through to the informal and flatter organisational behaviour exhibited in more contemporary business such as a management consultancy businesses or a software producer. As such this section will now consider specific differences which may be used to explain potential differences in management culture which are specific at the national level rather than the organisational.

Face

One key consideration which may be seen as affecting the overall management style between Chinese and UK businesses is the concept of face. Within the overall Chinese culture there is the need for relationships, transactions and events to portray those involved in a positive light. As such in Chinese management styles both the leader and the follower must consider carefully what impact their actions have on the reputation of those they are interacting with. This may lead to a generally much more formal style of management in which leaders and employees take particular care to respect the boundaries and roles of those involved. Graham and Lam (2003) note that transactions between Western and Chinese companies can often fail due to a lack of respect for such formalities in which the Western company often issues a “call me Mary” approach thus not respecting a seemingly small but significant cultural consideration. For the Chinese business this also presents significant problems internally, for instance there may be the need for a junior member of staff to point out an operational issue for which there is a ready solution however in brining the problem the attention of a superior this may be seen as providing a conflict for the employee who may consider whether or not such an action will make his supervisor lose face. The Chinese prefer a more structural form and hierarchy followed way although much of this comes from the Confucian culture, which stresses the importance of social hierarchy, groups and positions.

Empowerment:

Organisations in the UK and the West believe in empowering its employees contrary to the Chinese, whom believe that when the task is not done, their boss would blame them. Chinese people do not like to be blamed. They prefer to be responsible for the work they handle themselves rather than to be ’empowered’to take on something new because of the fear of failure. Furthermore, if the Chinese managers apply the system of empowering subordinates , middle workers keep getting cut in organisations and somebody has to take up the task that used to be done there. The key for leaders would be to look for the right balance between empowering and doing the work themselves.

As such a cultural concept can thus lead to a management style which encourages overall poorer organisational performance as performance suffers at the consideration of relationships. There is the consideration that in the UK’s culture such considerations do not feature so widely and as such managers and followers are able to be much more frank about operational issues without considering a criticism of process or procedure to be a personal affront against the person responsible for it..

Chinese family businesses

Another consideration in the concept of management style is that of the Chinese family business. Commentators highlight the fact that the structural form of a business will often have an impact on the cultural elements of the business (Johnson et 2008, Robins 2007) as such given the wide spread nature of the Chinese family business model this must be taken into account. Research suggests that to a large extent business in China is internalised into family groups a model which although suppressed under communism has re-emerged after the liberalisation from the smallest business to the largest conglomerate (Chen 2001). However the family business model goes beyond that of ownership as paraphrased by the consideration of the phrase “family first, business second” (Chen 2001 p20). This presents a key cultural difference between in cultural approaches to the running of a business between those in China and the UK. In the UK one may see that culture largely compartmentalises life bringing a clear separation between ones personal family interests and ones work or careers interests. On the other hand the Chinese family business model suggests that work and business life represent an extension of the family rather than a separate activity as in the UK model. This has major implications for management style and culture as one has to consider that under the Chinese family business model individual traits of families and their relationships will carry over into business practises as such Chinese businesses following the family business model may have a propensity to exhibit a greater level of paternalistic style of management as embodied in the family relationship than under UK models of business ownership.

Process

Another consideration is that there is a fundamental cultural difference between Chinese and UK cultures in regard to what is important when considering the issues of process and results. UK culture and human behaviour may be seen as to a large extent as steeped in the utilitarian philosophy in which the overall focus has become that of the result. Ultimately the utilitarian philosophy states that the only consideration is that of result and that process or how one gets to that result is completely immaterial (Graafland 2007 p149-155, Velasquez 1998 p73). This is in stark contrast to Chinese culture which built upon the cultural values of Confucianism amongst other philosophies emphasises the importance of process rather than results (Graham and Lam 2003). Although these are cultural considerations the impact upon management styles is quite formidable, as such Western approaches towards management tend to focus on results and speed of transactions were as Chinese approaches tend to focus the overall quality of the experience. As such UK management culture many be seen as focusing on contracts and short term transactional results whilst Chinese management cultures may be seen ad focusing largely on the building of longer term relationships over a much longer period of time.

Negotiations:

Negotiations may be seen as one of the most important measures of difference between Chinese and UK management styles given that the negotiation between a company from each country will highlight the exact differences in cultural terms. This section will now consider a number of specific elements which may be seen as having various degrees of difference between the styles and cultures of both nations. Negotiation in the china is seen as very frustrating and complicated because of the Chinese business culture, the Western businessmen see it as vast different. When comparing to UK businessmen who are very direct and straight forward when negotiating with foreign investors or internal businessmen. when negotiating with the West, both parties would come to agreement, so that the goals are met in a shorter time. It’s much more different in China, before doing a business you need to have a middleman ‘Zhong Yong’ someone in the middle that would put you through during the negotiation with the people involved. Having a middle man is idealist in China and comes at a great advantage, the Zhong Yong helps to facilitate the business activity and might act as a sign or guarantee of confidence from the eastern negotiator

Time scales

In general terms having considered the cultural considerations in the previous section time scales would seem to be a significant area of cultural difference between UK and Chinese companies. In general terms UK companies and negotiators may be seen as placing a high value on speed of negotiation and getting a final contract signed representing a results based approach. Chinese culture on the other hand may be seen as fuelling an approach in which time is much less valued with negotiations taking much longer over a larger number of meeting in which the process and quality of the negotiating experience is considered as more important than the actual result in the form of a contract.

The barriers to entry and business start up in developing countries like China could have a fringe on its management technique and negotiation. Barriers like high level of government intervention, cost, taxes, policies, regulations. In respect to time, a good comparison is shown by a World Bank business survey on how long it takes to start a business in China and in the West. It goes on to show that starting a business in China could take up to 35days and in the UK would take up to 7 days. These barriers to entry ‘shy way ‘foreign investors and migrant (labour).Making it increasingly difficult to work, understand and adapt to another environment. Although things are changing in China with the influence of globalisation.

Another key factor for the Western negotiator is communication, if for example the people involved are of different cultures, there is likely to be some language barrier in their method of communication. In the case when two people communicate they rarely talk about the same subject, but different meaning is laid out by each person’s own due to culture Herbig,(1997). In negotiating in China, the Western businessmen need to know that conflict might occur where an individual does not know how to behave in the meeting. For example Chinese people read meaning to human behaviour a lot; They sit upright when sitting in chair with both feet on the floor and find it rude to point out your feet at another person.

Trust:

A concept and perception that last with the Chinese Culture, the importance of trust when doing business in China is highly regarded. Chinese negotiators look out for this in the Western negotiator for example if you did not attend the same school with the person, you just do not know them enough for them to build strong trust right away. They believe ‘first make friend and then do business” . The Westerns usually operate in a different manner and are more direct and straight forward, willing to accept your word.(Europe Asia Company Directory 1998)

Guanxi

One of the key elements to consider in the process of negotiation with Chinese entities is the concept of Guanxi, in general terms Guanxi represents the element of “personal connections” (Graham and Lam 2003 p39). The concept may be likened largely to that of the Western concept of networking however there a number of fundamental differences in that UK networks often focus on immediate transactions between those in the network and the benefits of such a network are often expected to be honoured at the time such as in reciprocal trading agreements, X offers Y and expects Z to immediately respond with a reciprocal benefit. In the Chinese negotiation process there is the consideration that such networks are based upon much longer term considerations and that a party will give or receive a benefit but may not return or receive the benefit for a long period of time to come. For the Western negotiator this may present a confusing evaluation, on the one hand a negotiation may seem a poor one from a single transaction perspective however in reality the negotiator may have “banked” a significant level of capital for future use. On the other hand a negotiator may have got what they consider a good deal however the ignoring of reciprocating such a deal in the favour of the other party in future could leave the company in a position of significant difficulty further down the line.

Globalisation:

The increased level of economic integration or globalisation may be seen as the overall justification for the research into the subject of the differences between Chinese and Western approaches to management and organisational behaviour. Globalisation in the context of Chinese and UK cultures may be seen as coming from three key driving forces, firstly the consideration that many companies since China’s integration into the wider economy have seen China as a key source of resources be this in form of cheap labour or commodities such as oil and minerals. Secondly there is the consideration that many businesses see China as not a source of materials for export but a market for further development of sales. Finally there is the consideration that China does not simply represent a market and supplier for Western companies but also that China also has its own companies which wish to trade with the West for the same reasons. As such all of these drivers of globalisation bring together a need for those involved to understand and negotiate with what at times may be seen as quite opposing sets of cultures.

The process of globalisation may be seen as largely a two way process in regard to the changing and acceptance of management cultures. On the one hand those businesses that have undertaken ventures in China have had to adapt to local customs and cultures with those companies such as GM who have localised their management styles and cultures doing significantly better than those such as Ford who had moved into the Chinese market using standardised models (Graham and Lam 2003, Hutchings 2001). However China in its economic integration with the wider world has also had to make concessions which have had a large impact on cultural elements. For instance as part of China’s ascension to the WTO the Chinese government has had to significantly make recognition of such elements as contracts and intellectual property. Given the unimportance of contracts within the Chinese business culture this may be seen as a key way in which Chinese culture has began to adapt to Western cultural models as much as Western companies have had to adapt to Chinese cultural models.

A final consideration in that of the globalisation process is the role of the overseas Chinese, a natural characteristic of the Chinese psyche may be seen as the suspicion of foreigners (Graham and Lam 2003). As such the overseas Chinese populations often provide a useful set of intermediaries between two sets of differing cultures in which the on the Chinese side of the supply chain gain the ability to trade with a trusted individual whilst the Western side of the supply chain has an asset in the form of a person who understands the intricacies of both the UK and Chinese cultures.

Conclusions:

There are many conclusions that can be drawn from the research which has been carried out, in the first instance one can see a direct link between the elements of national culture and management culture for both the Chinese and UK models of management and organisation culture. This has a distinct positive implication for these who may be seen as being able to bridge the gap between these cultures such as the overseas Chinese who on the one hand do not generate the initial suspicion of foreigners which is endemic to the Chinese culture but on the other hand have a deeper understanding of the national culture and thus management culture of the country for which they have settled in, the UK in this case. Other conclusions are that despite the high level of differences between UK and Chinese cultural models there are many elements which although not exactly matching have to a greater or lesser extent a general fit for example the Chinese concept of Guanxi may whist not exactly fitting with the Western concept of networking dose none the less have a resonance which allows Western managers to adapt the model to understand the Chinese version.

Finally one must consider the distinct difference between UK and Western models of management culture in relation to Chinese models, whist the essay has often used the Western and UK concepts of culture interchangeably given that the UK may be seen as representing the West there are subtle differences when specifically considering the UK in comparison especially with the US version of the concepts considered. In many respects UK management culture may be seen as having a greater chance of success in adapting to Chinese models of management culture than that of the US for reasons which may be seen as owing to historical cultural considerations. For example whist there has been a link draw between the concept of networking and Guanxi the British concept of “the old boys network” may be seen as even more aligned to the concept than that of the original networking consideration. In addition the general British concept of gentlemanly conduct and a slower pace of life may also be seen as providing a greater resonance between Chinese and UK management cultures in comparison to the wider concept of Western comparisons.