An Analysis of the Business Cultural Issues Raised by the Article; Knowledge Transfer, Knowledge Replication, and Learning in Non-Equity Alliances: Operating Contractual Joint Ventures in China (wang, Y. Nicholas, S. 2005)

An Analysis of the Business Cultural Issues Raised by the Article; Knowledge Transfer, Knowledge Replication, and Learning in Non-equity Alliances: Operating Contractual Joint Ventures in China (Wang, Y. Nicholas, S. 2005)

Introduction

The objective of this report is to discuss the business culture that exists in China and Hong Kong, through the examination of the influence of the historical and philosophical developments of the two countries and hence evaluate the reasons for the successful development of business in these areas.

In order to fulfil this objective, firstly the business cultures of the areas will be described using the findings of research by Trompenaars, F. and Hampden-Turner, C. (1997) Riding the Waves of Culture. The histories of the nations will then be examined, with links being made between historical factors and the contribution to national cultural characteristics that they have made. This process will then be repeated for the philosophical factors of the countries before the findings are presented to examine the issues raised in the article Knowledge Transfer, Knowledge Replication, and Learning in Non-equity Alliances: Operating Contractual Joint Ventures in China (Wang, Y. Nicholas, S. 2005) through comparing and contrasting the business cultures of Hong-Kong and China along with other countries with opposing cultures.

Trompenaars and Hamden-Turner's Seven Dimensions

Trompenaars and Hampden-Turner's research was undertaken in order to identify and model how the national cultural characteristics of a country affected the corporate culture of that nation. They identified seven dimensions where the cultures of different countries would differentiate each other, each of which is described below:

1) Universalism vs. Particularism - This dimension considers the degree to which rules and procedures should be adhered. A highly universalist culture will expect rules and procedures to be followed at all times, and even if a situation is not governed by a specific procedure, the most relevant one may be implemented. This contrasts to a particularist culture, where each case is considered on its own merits and action taken in respect to this.

2) Specificity vs. Diffuseness - Relationships can be either diffuse or specific. In a diffuse culture, the authority of the manager would extend beyond the workplace, therefore, even in a social situation unconnected with work, the manager would still have authority over a subordinate. In a specific culture, the authority of the manager would only 'exist' in work. Apart from its role in relationships, this dimension also applies to the way in which work is organised, whether it is analysed into parts and orientated towards targets and numbers, or if these are integrated into diffuse patterns, relationships and wider contexts. (Hampden-Turner, C. Trompenaars, F. 2002)

3) Individualism vs. Communitarianism - Is the individual or the group of higher importance? In an individualist culture, the needs of the individual are of foremost importance, in contrast to a communitarianist culture where the advancement of the community as a whole is considered to be of grater value.

4) Inner vs. Outer Direction - In inner-directed nations, the views an opinions of those in the organisation determine the course of action taken, whereas in an outer-directed society, account is taken of the signals, demands and trends of the outside world when decisions are made.

5) Time as Sequence vs. Time as Synchronisation - Sequential cultures put emphasis on doing things as fast as possible, therefore working to deadlines and trying to outpace the competition. In synchronic cultures however, the time in which things are done becomes less important, with the emphasis being on synchronising efforts so things are co-ordinated and the success of the project outweighs the time it takes to be completed.

6) Achieved vs. Ascribed Status - In some cultures, status is given to those who have shown higher levels of performance, whether in performing tasks or through obtaining qualifications, in these cultures status is said to be by achievement. Other cultures, in which status is defined by the characteristics of an individual such as age, gender, education or strategic role can be said to have an ascribed status system.

7) Neutral vs. Emotional - This dimension concerns the way in which we interact with each other. Neutral nations believe that interactions with people should be detached emotionally, and to show emotion in this situation is taken as a weakness of character as it is believed that emotion clouds human judgement. Emotional cultures accept the open showing of emotion as it is considered a normal human characteristic which should not be avoided.

These seven dimensions, when applied to different nations, differentiate between them. There are both historical and philosophical reasons why this is the case. The history and religion of Hong Kong and China have many similarities, which is a contributing factor to the success of Joint Venture's (JV's) between the countries, but there are also significant differences between the two which have affected their culture. These will now be explored and contrasted with other cultures from around the world.

Historical and Philosophical Factors Affecting Culture in China

China is the world's oldest continuous major civilisation, with written records dating back 3,500 years (http://en.wikipedia.org). Because of this, there is a vast quantity of information about it's history and philosophy. For the purposes of this report, only those items which are considered to have had a substantial impact on the culture of China today will be investigated.

The first time period that will be looked at is the Spring and Autumn Period (722BC - 481BC), as it was in this period of Chinese History that movements such as Confucianism, Taoism and Legalism were founded. It was also in this period that the different feudal lords introduced the idea of vying for power without the threat of force, but instead using their relative size in order to dictate the terms of trade, a process which could be considered a primitive, and obviously biased form of JV.

The Confucian movement has had a huge effect on the cultural characteristics of China. Although it was not accepted in his lifetime, Confucian teachings were introduced as the state philosophy during the reign of Emperor Han Wu Di and continued to be the foremost philosophy of China until the rise of Communism in the 20th Century.

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