Cross-Cultural Planning for Opportune Communication: A Look Into Asian–American Business Issues Addressing Employee Relationships
Written by: Charles Gellman, Yurik L. Lozano, Sallie Makar, Kaylin Smallwood, Dustin Spieler.
Abstract
This article aims to solve the problems in the Wendy Peterson brief case by The Harvard Business School. Wendy Peterson, the youngest Vice President of AccountBack, managed 11 salespeople and three sales assistance. Upon further market opportunities, Peterson hired Fred Wu, a Chinese citizen, to undertake the fast growing service businesses of Chinese entrepreneurs. Management issues had risen between Peterson and Wu due to cultural misunderstandings. The issues presented in this article are Peterson’s failures to research the Chinese population to make better judgments. The lack of knowledge on guanxi—a social network used to ensure fairness to establish one is benevolent, trustworthy and reliable also played a pinnacle detriment to her leadership qualities; there are two labels Chinese businessmen may give, petty or junzi, both which aim to identify a detrimental person or a reliable person. Role fulfilment is also of organization importance for the Chinese; thus, Peterson should have researched how the Chinese view the roles of employees and managers. This article discusses high-context cultures and low-context cultures as related to the Chinese and American people. Saving face is a solution which Peterson could have understood—it is a thought process that denotes how one can either gain respect or lose it. It is important to show respect by creating positive interaction with the Chinese and acknowledge accomplishments. This article addressed the importance of cultural diversity in the workplace and its vitality for long-term growth. To fulfil this growth, Peterson should have invested her time in diversity training to implement a better understanding of the global market moral and value system. In conflict management, people are inherently more comfortable working with those they share similar values and attitudes with.
Keywords: high-context culture, low-context culture, Chinese culture, guanxi, petty, junzi, role fulfillment, cultural diversity, saving face, conflict management
Introduction
Maya Angelou may have said it best when she noted, “it is time for parents to teach young people early on that in diversity there is beauty and there is strength.” Assimilation can be described as an absorption and integration of people, ideas or culture into a wider society or culture (Oxford Dictionaries). Improper assimilation can oftentimes result in communication chaos, as one can see in Wendy Peterson, a brief case by the Harvard Business School, written by Linda A. Hill and Alisa Zalosh. Language barriers, as well as cultural standard norms, can produce tension and oftentimes discomfort in effective communication. This essay will analyze the case by Hill and Zalosh, and dissect the communication efforts between a Chinese gentleman and an American woman. Misunderstandings may cause social anxiety, which according to A First Look at Communication Theory by Em Griffin is the feeling of being uneasy, tense, worried, or apprehensive about what might happen. According to the case, Wendy Peterson, the Vice President of Sales for AccountBack, had been having managerial communication problems with Fred Wu, a Chinese staff member. Lack of knowledge on a specific culture can, in many cases, cause social strife and Wendy Peterson’s naivety regarding the Chinese culture caused business related drawbacks and plights. This essay will explore the differences between the American and Chinese culture, highlight the issues between Peterson and Wu, and provide solutions that could have alleviated unwanted discords and disagreements.
Background
Wendy Peterson is an Ivy League graduate who was promoted to Vice President of Sales for the Plano, Texas sales team after AccountBack went through major reorganization and repositioning due to financial strife. She was the youngest Vice President for the company and inherited 11 salespeople and three sales assistants—despite her lack of managerial experience. She is driven, creative and requires daily contact and consistency within her sales staff. Peterson who always found new ways to generate revenue, established that fast growing service businesses of Chinese entrepreneurs from mainland China were on the rise in Plano. She hired Fred Wu, a Chinese citizen who had spent two years studying in the United States, in order to respond to this potential sales market. He had very little hands-on experience; however, he had access to executives within AccountBack’s target companies.
Wu spent his first few months learning as much as possible about AccountBack’s products and services. He would come in early and stay late and take initiative to train employees on AccountBack’s sales management tool; needless to say, he quickly became a subject matter expert. However, Peterson was unable to connect with Wu on a personal level. Perceived performance issues began to develop as Wu spent more time engaging with his Chinese clients and less time in the office. According to Peterson, sales staff were expected to utilize the office for cold calls and administrative work. In addition, Wu missed meetings and did not utilize the sales management tool due to his hectic schedule with his prospects— he did not keep Peterson abreast of his activities. Moreover, Peterson had laid out a quarterly and sales revenue objective focused on short-term goals, but this conflicted with Wu’s lengthy process of acquiring accounts.
Wu signed the region’s largest account eight months after he was hired. The revenue from the account was increasing quarterly from add-on services—they were not approved by Peterson. Although the account services team would take over the account once a client was signed, Wu maintained a close relationship with his clients and insisted he be kept up-to-date on any activity related to them. The account services team felt this was hindering their efficiency, causing yet another point of frustration for Peterson, since Wu’s primary focus should have been on obtaining new clients, only. At Wu’s annual review, Peterson expressed her concerns with Wu and his performance. Wu assured Peterson all his hard work was about to pay off: he was going to sign three new clients from the Chinese market within the coming quarter. He then requested a personal assistant to help him complete administrative tasks due to his increasing schedule demands. After Peterson told him he was not ready for one, Wu threatened to leave Accountback and sign with a competitor. Peterson was left with a conflict and did not know what to do.
Issues
While Peterson was wise to seek out a Chinese national with American business experience to spearhead her venture, one of her greatest mistakes was failing to research and study her target—the local Chinese population. This failure consistently led her to misunderstand and react poorly to Wu’s office behavior and business methods. The greatest example of this was Peterson’s lack of knowledge on the concept and importance of guanxi in the Chinese culture. “Guanxi is variously understood as social networking, a web of interpersonal connections, a pervasive lubricant intended to increase the efficiency and effectiveness of business relations, and an essential informal governance method for ensuring fairness of treatment” (Moran, et al., 2014, p. 418). Guanxi relationships rely on trust, and they intend to bring about a mutual flow of interactions and benefits for both parties; this relationship forms through the demonstration of competence and long-term reliability (Moran, et al., 2014). Therefore, sufficient time and sincerity must be invested in the early stages of the relationship to build this strong bond.
The underlying reason for this bond is the Confucian concept of petty men and great men (junzi). A petty man seeks his own self-interests and the detriment of others, which leads to deceptive behavior (Moran, et al., 2014). On the other hand, a junzi is benevolent, trustworthy, and reliable (Moran, et al. 2014). Additionally, the Chinese assume humans are naturally self- interested, untrustworthy, or petty; therefore, the building of guanxi is a means to label a person as petty or junzi (Moran, et al., 2014).
When Wu began to court the local Chinese market, he invested his time and effort in establishing guanxi. He did this through constant business and social contact, proving his consistency and reliability, while prioritizing these relationships. Essentially, he was proving to his prospects he was a junzi, and they should have felt confident in conducting business with him. Since Peterson performed zero research on the Chinese culture, she could only compare Wu’s behavior to American business practices—specifically, the rest of her sales team as well as her own expectations. This caused her to consistently misunderstand and doubt Wu’s actions.
While Peterson was wise to hire someone with a native understanding of Chinese culture in order to break into the local Chinese market, her own ignorance of the Chinese culture and business practices led her to believe this could be achieved in her own American way. This lack of cultural knowledge also caused Peterson and her staff to fumble upon their relationship with Wu. In Chinese organizations, employees operate in a manner of fulfilling the role they are given (Moran, et al., 2014). In other words, no matter the role or title bestowed on them, a Chinese man or woman will figure out a way or learn how to get the job done. Typically, there are three key roles in Chinese organizations, two of which are relevant to the case at hand. Leaders concern themselves with broad issues, strategy, and overall organizational health; they usually leave the day-to-day implementation to business managers (Hafsi & Yan, 2007). Business managers are the conductors of the leaders’ strategy, and they are trusted to do what is best since they have greater knowledge and understanding of the situation in the field (Hafsi & Yan, 2007).
Due to her lack of knowledge and understanding of Chinese culture and business practices, Peterson hired and tasked Wu with the sole objective of breaking AccountBack into the local Chinese market. From Wu’s perspective, she perfectly fits the role of a leader providing an aim for a business manager and relying on their expertise to get the job done as they see fit. In China, this practice generates individual initiatives, new ideas and innovations (Hafsi & Yan, 2007). While Peterson consistently tried to micro-manage Wu and force him to fit into her cultural and managerial expectations, Wu was acting in the manner he felt was best to accomplish the task given to him. According to Hafsi & Yan (2007), “The Chinese tend to give a lot of attention to what makes success possible” (p. 21). This further explains Wu’s failure to comply with many of Peterson’s micro-managerial demands—he simply believed they were not relevant to the success of the mission.
In recent decades, American business culture has shifted greatly towards a more informal, casual office setting. However, the Chinese still embrace a formal business atmosphere with an emphasis on proper etiquette (Moran, et al., 2014). In comparison to their American counterparts, the Chinese are more reserved in their business interactions, which encompass larger speaking distances, avoidance of open displays of affection, and a polite and formal demeanor (Moran, et al., 2014). While Americans prefer their firm handshakes and slaps on the back, the Chinese generally do not appreciate such behavior (Moran, et al., 2014). They place a heavy emphasis on showing respect and deference to their superiors, and subordinates go to great lengths to avoid bothering them with what may be deemed unnecessary matters (Moran, et al., 2014). Often times, this behavior is misinterpreted by Western cultures as being aloof, uncaring, and disinterested (Moran, et al. 2014).
When it came to assisting his co-workers with business related issues, Wu was always willing to do what he could to help. However, Peterson and the staff never understood Wu’s social behavior. Wu always wore a suit, never spoke about topics unrelated to work, and did not participate in informal office gatherings. As mentioned previously, Peterson perceived this behavior as being unfriendly and aloof. She never considered Wu was following normal Chinese business etiquette. As his friend came to visit him, Peterson believed Wu acted rudely by not introducing her to him and the team. From Wu’s perspective, this was a personal visit that interrupted his superior’s time and would be considered bothersome by the team, which is why he apologized to her.
Understanding diversity and conflict management are imperative for leadership success. Peterson had the foresight to see diversity as a competitive advantage, however she did not take the time to fully understand what that entailed, including integrating Wu with either herself or the team. This left Peterson and the team confused about Wu and his actions and intentions.
According to Managing Cultural Differences, “Diversity increases the forces of divergence and disagreement, potentially resulting in greater levels of conflict and lower social integration” (Moran, et al., 2014, p. 171). People are inherently more comfortable working with those who share similar values and attitudes. Peterson had a hard time connecting with Wu and expected him to conform to her values without attempting to understand his, which eventually led to frustration and conflict: “through refusing to comprehend, acknowledge, and appreciate the perspective of another, while holding on to stereotypical assumptions of the other party, conflict behavior is almost an assured outcome” (Moran, p. 183).
Solutions
The most important solution to the issues encountered in this case is for there be a full understanding by Wendy Peterson of the Chinese culture and the different components that factor into that. When a manager is considering hiring someone of another culture, such as the case of Peterson hiring Wu, they should do extensive research on the country’s national character. “In the definition of national character, there are three assumptions: (1) all people belonging to a certain culture are alike in some respects; (2) they are somewhat different from other cultures in the same respects; and (3) the characteristics ascribed to them are in some way related to the fact that they are citizens of a given country” (Moran, p.80). Had Peterson spent time doing such research, she would have a better understanding of Wu and the Chinese market, therefore adjusting her approach when dealing with each one.
Another component of Chinese culture that should have been explored by Peterson is the communication style of the Chinese, as it is completely different than how Americans communicate. Simultaneously, Wu should have been required to understand the communication styles of Americans. The Chinese communicate in a high-context manner, versus the United States which communicates in a low-context manner. As a high-context culture, the Chinese tend to use vaguer forms of communications. “Information either understood to be in the physical context or internalized in the person so that less has to be communicated in the explicit words or messages” (Moran, et al., 2014, p. 45). This differs from the West where communication tends to be more low-context: “low-context culture employs more direct forms of communications. It is assumed that receivers need the context around the communication and so most information is contained in explicit codes, such as words” (Moran, p. 45). This understanding of each culture’s communication style would help them develop a stronger relationship and reduce misunderstandings. In addition, this would have helped Peterson communicate properly with future Chinese clients. In addition to understanding the Chinese communication style, it is also necessary for Peterson to understand the Chinese concept of saving face. To the Chinese, in every circumstance, one is either gaining face or losing it. It is important to show respect by acknowledging accomplishments, being complimentary and positive in ones interactions with the Chinese. “China is a culture that values harmony in interpersonal interactions. Perceived conflict is easily interpreted as loss of ‘face,’ or disrespectful. Chinese are not comfortable making recommendations or suggestions publicly. By using one-on-one communication and understanding nonverbal signals, one can usually determine the true meaning in conversation over time” (Moran, p. 416).
Chinese business meetings are conducted in a much different way than American meetings. Peterson, prior to hiring Wu and meeting with his Chinese clients should have been fully aware of how Chinese business meetings are conducted and what the proper protocol is. This includes understanding the importance of guanxi in the Chinese business world. As mentioned in the Issues section of this essay, Chinese cultural negotiating involves guanxi— they value strong relationships with their partners. The Chinese tend to invest a lot of time in building a relationship before considering doing business with their partners. During business meetings, they like to spend a short period of time chit-chatting and getting to know the person in front of them. To further elaborate on the Issues section, Managing Cultural Intelligence denotes the Chinese practice of guanxi is the Chinese version of social media. They emphasize friendship (Moran, p.81). One can now further understand why Wu was spending so much time trying to get to know his clients. He was trying to establish a mutual relationship founded on trust. “Chinese negotiators hope to build initial relationships with their Western counterparts and do not want to discuss business until they take the measure of those they are dealing with. Westerners should allow time for these processes to take place” (Moran, p. 425). Had Peterson fully researched this business practice and incorporated it into her meeting with the Chinese business man, it would not have been cut short but instead would have yielded a favorable outcome.
Another aspect of Chinese cultural research Peterson should have researched is understanding the Chinese view on roles of employees and managers. While recruiting Wu for the role, Peterson should have clearly defined Wu’s role and responsibilities. Based on what one can now understand through Chinese communication styles, Peterson would have recognized that Wu had a different view on roles than Westerners do. “Chinese tend to think in terms of ‘role fulfillment’: give me a role or title and I will perform the job…however, the Western assumption is ‘prove that you can do your job well and more responsibility will be added.’ Western managers can misconstrue this difference as a lack of initiative on the part of the Chinese. The Chinese usually have a ‘role expectation’ for their bosses and maintain a certain distance with them” (Moran, p. 415). By understanding the way the Chinese view their individual roles and their managers roles within an organization, they could have avoided tension, misunderstandings; and the idea of Wu requesting an assistant may have possibly been easily digestible by Peterson. Cultural diversity is vital to competing in a globalized marketplace for long-term growth.
In addition to understanding the Chinese culture, it’s important that any organization going global implements adequate diversity training for their staff. Peterson, being a new manager with little or no experience was stuck with a daunting task to be successful given the stress, pressures to hit sales expectations and managing a large team. As demographics rapidly change within the United States, leveraging people whom are bilingual and understand cultural customs, norms and acceptable business techniques are critical. In order for an organization to become geocentric, their mentality needs to change so that integrating the cultural and functioning diversity exists in order to produce the best possible outcomes (Moran, p.189). A diversity training program would have helped Peterson and the rest of the team understand and find ways to best integrate Wu and future Chinese employees as well as give them the tools on how to successfully compete in the Chinese market. Additionally, there should have been similar training offered to Wu (and other future foreign employees) to help him better acclimate to American culture and American business etiquette. This would mitigate any misunderstandings and relief any sense of resentment. Components of diversity training, as outlined in Managing Cultural Differences should include: “a cultural general section. A section that emphasizes mastering cross-cultural communication. A section that teaches cultural self-awareness. A section that teaches specifics related to other cultures. A section that teaches how to resolve conflict in culturally appropriate ways. A section that focuses on developing cross- cultural skills. A section that addresses specific (and current) employee-requested concerns” (Moran, p. 190).
As AccountBack is becoming more diverse, another solution would have been to enhance the reward and training system to respond to this change in corporate culture. The Chinese are highly motivated by monetary rewards, personal development and growth. AccountBack currently has a compensation plan that includes bonuses based on clients they close; this is much easier to attain for sales people who have clients in the United States. Wu, on the other hand, has a much lengthier process with his Chinese clients. Therefore, Peterson should consider short-term rewards to help keep Wu motivated. “In any bonus plan or performance award system, consider both team and individual performance. A detailed and clear reward system is important to such workers” (Moran, p. 416).
Being a highly effective manager involves a specific set of characteristics that foster mentorship, building trusting relationships and providing feedback (Personal Selling Power ). The ability to communicate with all people on the sales team is difficult, and without the prior understanding of Chinese business culture it would make the task nearly impossible. Assessing the existing talent and experience of team members is something to never overlook. If a particular salesperson has been a constant quota performer they must be given some job freedom as they are accomplished at the sales role. Situational leadership due to maturity assessment and basic awareness of cultural differences is necessary. Peterson had the tools necessary to have integrated Wu, she could have fostered goodwill among the team and focused her efforts on driving new business by supporting proven outcomes—but, she did not. Additionally, had she done this, it would have given Wu a sense of empowerment. According to Moran, empowerment “is often a hallmark of the geocentric mindset. It is expressed through an Integrated leadership style that works to include all potentially relevant diversity in an MNE, and integrate it to achieve the best possible result both globally and locally” (Moran, p. 191). When one believes in their employee’s abilities and empowers them, they can continue to persist in their efforts.
Conclusion
Having an understanding of other cultures has proven to facilitate business relationships. Guanxi plays a pinnacle role in understanding how the Chinese enjoy doing business. Guangxi touches on one’s expectations of their relationships with their clients as well as their expectation of managers and their employees. Through diversity training, monetary rewards, and employee work freedom, Peterson will be successful in working in American-Chinese cross-cultural business.
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