e-Learning China Business

Multinational corporations (MNCs) who acquire local Chinese companies often make two mistakes: they underestimate the challenges in communicating the business and social benefits of the acquisition, and they fail to successfully bridge cultural differences after the deal has been finalized. Now, as Chinese companies begin acquiring companies overseas, it’s a good opportunity to review the lessons MNCs have, hopefully, learned trying to bridge cultural differences here in China.

After 20 years of doing business in China, I am surprised by how often some fundamental issues crop up. The concept of “cultural differences” while often talked about, is seldom addressed operationally. Sure, the company may organize cross-cultural training sessions for senior management; they may even create a new corporate vision which is communicated from posters or in town-hall meetings. But in my experience, this is seldom enough.

The “mystification” of culture also tends to prevent managers from addressing fundamental business objectives. It is, of course, necessary to understand the background, mindset, expectations and agendas of all parties. But “cultural differences” must not be allowed to dictate the business agenda. Understanding and respecting the other party’s culture does not mean we can avoid everyday conflicts about business strategy and tactics.

It is only at the operational level that culture “comes alive” and starts to provide guidance for employees as they make day-to-day judgment calls and business decisions; we must bridge the gap from intellectual understanding (head) to embracing and believing in the new way of working (heart), and finally to “live” and promote the new culture in day-to-day operations (hands).

Managers need to involve the employees of both organizations in agenda-setting as well as decision-making. Here are a few ideas that have worked well for some of my clients:
Pay attention to language: Managers tend to underestimate the pure language issues in cross-cultural mergers. Even when both parties speak good English, neither may be native speakers. In my experience, the only way of achieving true translations of key concepts such as company values, vision and mission statements, advertising slogans, and the like is to set up cross-cultural teams who “massage” the texts back and forth in both languages.

Research: Every company has a corporate culture; often, however, this culture is implicit and takes the form of unwritten rules about “how we do things around here.” In order to address culture issues efficiently in a merger, both sides need to be understood explicitly and in-depth.

Cross-cultural task forces: Make sure that people receive active coaching when starting to work across old organizational borders. This allows them to work together practically while continuously discussing cultural issues. A useful trick is to set simple ground rules from the outset. In order to bridge the language barrier, for example, we can agree that “we don’t try to look ’smart’ – we always ask when we don’t understand” or “before we reply, we recap each other’s messages in our own words to ensure we have properly understood.” Set up “culture and vision” teams who identify and make explicit the desirable cultural traits that we want to retain from both organizations.

Address external as well as internal stakeholders: Employees read the media too. Only by continuously communicating the values, culture, vision and mission of the merged company can we ensure that all stakeholders get a clear, unified picture of what the new organization really stands for. Creating one consistent message to audiences in two home countries can be challenging: what is an “investment” in China becomes “slashing jobs” in the US or Europe. Managing cross-cultural merger communications from head office is a recipe for disaster.

Perhaps the most common error in addressing merger communications is to believe things can be achieved through a set of well-defined, short-term activities. Every merger goes through phases. Even if we do everything right, it takes months if not years for two organizations to fully merge; all the more so if they have their original roots in different national cultures.

• Highlights on what do we think about China and what China actually is.
• Comparison of Chinese and European way of thinking in business and social environment.
• Overview of what is important for you could mislead your Chinese partner and vice versa things offered by your Chinese partner can sound strange for you.

China-Europe Social culture/Business culture

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