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Cross Cultural Management: An International Journal
Cross-cultural management in China

Keyong Dong Ying Liu
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Cross-cultural management Cross-cultural

management
in China in China
Keyong Dong
School of Public Administration, Renmin University of China,
Beijing, China, and 223
Ying Liu
Institute of Organization and Human Resource, School of Public
Administration, Renmin University of China,
Beijing, China
Abstract
Purpose The purpose of this paper is to: summarize the major research that has been conducted
regarding cross-cultural issues in China; show the current practices on cross-cultural management in
Chinese organizations; and then identify future research needs on cross-cultural management in China.
Design/methodology/approach Meta-analysis was carried out to summarize research of cross-
cultural management in China.
Findings Empirical studies on cross-cultural management in China have been conducted since the
1990s, and numerous empirical studies have been done in the past two decades across different level
of constructs and practices (individual, group and organization). Among all the intercultural research
concerning China, there are mainly two common types: the first type focuses on foreign managers
and employees, center on their adjustment and performance in Chinese culture; and the second type
of study examines Chinese who work with these foreigners in the multinational management setting.
Furthermore, in recent years, emphases have been shifted from examining the effects of culture on
single variables to examining the relationships among same and different level of variables.
Research limitations/implications Systematic conceptual model development and assessment
of important topics are in great need. Although there is an increasing amount of comparative studies
being done in China, very few studies have been conducted to study Chinese firms that are doing
business abroad, which represents one of the most critical problems in the field of cross-cultural
management research in China. Most studies focus on cultural value identification and practical
issues in Western global companies, which is concerned with comparison between Eastern and
Western culture. Research should be conducted to study cultural differences among eastern countries,
for example, countries in Asia.
Practical implications Future cross-culture management practices in China should follow
several basic principles: be applicable, that is, build unique organizational culture that is embedded in
the host country; be practical, since there is no well-developed multinational culture in China, new
culture should be concerned with both sides; be systematic, cross-culture management practices
should have supporting system; be equal, no single culture is better than another; cultural
penetration, two different cultures have mutual impact; merit-based appointment and promotion, use
local personnel, not just talents from the home country. In Chinese settings, the most common cross-
cultural management interventions include: cross-cultural training, cross-cultural communication
system and unified organizational culture.
Originality/value This paper comprehensively reviews the research and practices on cross-
cultural management in China; identifies topics that have been studied in individual, group and
organizational level. Implications on cross-cultural selection, training are provided based research evidence.
Keywords Cross-cultural studies, Cross-cultural management, Research, China
Paper type Research paper
Cross Cultural Management: An
International Journal
Vol. 17 No. 3, 2010
Introduction pp. 223-243
Globalization is changing behavior, team composition and team dynamics in the # Emerald Group Publishing Limited
1352-7606
workplace. Businesses of all sizes are increasingly seeing the entirety of the world as a DOI 10.1108/13527601011068333
CCM source of business opportunities and one interconnected economy. Organizations
that remain domestic-only are already falling behind their multinational competitor
17,3 counterparts (Cullen, 2002). With the progressive globalization of the workforce,
businesses are more and more finding themselves working more often with culturally
diverse employees and business partners, an experience that has proven to be rewarding
and yet challenging. In fact, the impact of cultural diversity on team productivity and
organizational culture is not clear and yet doing so is becoming more the norm than it
224 is the exception. While in some cases, research suggests that teams characterized by
demographic heterogeneity have advantages over teams who are not demographically
diverse (e.g. added ideas, approaches, perspectives), other research indicates that the
multicultural aspect of a team creates potential for added conflict. Still further research
offers that conflict itself is not a problem as long as it is constructively handled. To at
least some extent, the notion of what constitutes constructive handling is subjective
and culturally sensitive. For example, the same silence or increase in personal space in
one context or culture may be seen as respectful and constructive, the same might be
viewed as non-participatory and disrespectful in another. Beyond very broad descriptors,
the contributors to effectiveness within a multicultural team appear to be contextual and
subjective. To this end, we focus on the Chinese culture and what the research reveals in
terms of findings and accompanying recommendations with regard to cross-cultural
teams and management.
Background
Culture acts as an external source of influence on employee behaviors on daily personal
lives which consequently influences each persons behavior within the organization,
since each person brings another piece of the outside world into the workplace.
Collectively, the impact of culture on each individual creates a change in the culture
of the organization itself. Trice and Beyer (1993) argued that organizational members
cope with uncertainties and ambiguities individually and collectively based on
attitudes and strategies that have been influenced by their culture. Managers from
different nations vary in their decision-making choices. Understanding culture is
important to multinational companies and managers to be prepared to compete with
firms from other countries.
Culture, as the collective programming of the mind, distinguishes one group or
category of people from another (Hofstede, 1993). The type of values and the importance
placed on those values varies from culture to culture and is greatly influenced by its
current and historical ecological and sociopolitical contexts. Cultural values play a
significant role in shaping customs and practices that occur within organizations.
Understanding cultural values is important in that it facilitates each team members
ability to properly identify, understand and response to differences in thinking, feeling
and acting of potential team members around the globe. For companies that include
members of varying cultures, knowledge and sensitivity of cultural values is a necessity
that must be addressed in management practices and training.
Adler (1997) wrote that managerial values affect every aspect of organizational
behavior, and that culture profoundly impacts managerial values. As such, a manager
with cross-cultural sensitivity and skills is in high demand in todays workforce.
Successful managers practice people skills as well as technical excellence (Elashmawi
and Harris, 1998). Keld Alstrup, Vice President of human resources for Volvo Cars of
North America, offers a strong, bottom-line rationale for companies to pay close
attention to the human side of doing business globally organizations spend more on
dissatisfied employees than on satisfied ones, and satisfied employees are more Cross-cultural
productive (Elashmawi and Harris, 1998).
The reform of the Chinese economy from heavy state intervention to market
management
orientation as well as membership in the World Trade Organization (WTO) has forced in China
China to become integrated into the global economy. Chinas continued rapid economic
development has also helped China establish dominant economic power in East Asia.
The interest in China is growing steadily and companies in Japan, the western
European countries, the USA and others view the Chinese market as one of the biggest 225
markets of all. In the past two decades, more and more international operations have
been widely adopted in China, whereas many Chinese firms have established new
business in other countries. In fact, China is the biggest investigator among all the
developing countries. National culture is widely viewed as a constraint on management
practice, which makes it an increased urge among organizations to improve their
knowledge about cultural differences across nations. Therefore, cross-cultural
management in the work settings has become an emerging issue in China both in the
academic and the practical field.
To promote innovation, the Chinese central government created and enforced several
talent recruitment programs geared toward recruiting personnel from other countries,
such as the ongoing Thousand People Plan in the past decade, which greatly
reinforced the importance, and challenges of cross-cultural management in all kinds of
organizations in China. Personnel who are competent in cross-cultural management have
recently received a lot of attention by the Chinese government and are listed among the
most important skill areas in the next ten years. Chinas central government has decided
to provide more support to the enterprises needed to obtain certain talents and, therefore,
many public policies have been set regarding discovering, motivating and developing
skills in the area of cross-cultural management.
Here, we report on our review of the literature and document the existing evidence
related to cross-cultural management. Through our review, we explored the evidence
that sets up the basis of Chinese culture; summarized the major research that has been
conducted regarding cross-cultural issues in China; showed the current practices
on cross-cultural management in Chinese organizations; and then identified future
research needs on cross-cultural management in China.
Research on cross-cultural management in China

In this section, we organize cross-cultural management research in China into four
research domains. These are the essence of Chinese culture, effects of individual
characteristics on organizational outcomes in a cross-cultural setting, group process
issues in cross-cultural management and organizational-level issues on cross-cultural
management. The research we reviewed encompasses both international comparative
research and intercultural research in multinational organizations. Summaries of
literature are listed in Tables I and II, but only key variables are discussed in detail.
Essences of Chinese culture

Origins of Chinese culture. In China, a critical issue about culture is that there are
competing ideologies including traditional culture from the ancient past, ideologies from
the Communist/socialist era of the mid-twentieth century and the new ideology of market
socialism (Granrose et al., 2000). Traditional Chinese culture is highly influenced by the
principle of Confucianism, which emphasizes hierarchical interpersonal relationships.
The other leading belief is developed by Lao Zi, which emphasizes harmony in which
17,3
226
CCM
Table I.
research reviewed
Summary of cross-
cultural management
Keywords Topics Frequencies Citation
Guanxi Guanxi; personal relationships; 33 Chen and Francesco (2000), Chen (1995), Burt (1992), Luo (2000), Tsui and
power resource; indicators of Farh (1997), Xin and Pearce (1996), Chen et al. (2004), Tsui et al. (2000),
guanxi Tsui and Farh (1997), Luo (1997), Fu et al. (2006), Yang (1993), Fu and
Yukl (2000), So and Walker (2005), Xin and Pearce (1996), Farh et al.
(1998), Chen and Chen (2004), Chen et al. (2004), Bukley et al. (2006),
Earley (1997), Cheng (2000), Sue-Chan and Dasborough (2006), Wang et al.
(2005), Bozionelos and Wang (2006), Chan et al. (2002), Tung and Worm
(2001), Law et al. (2000), Fock and Woo (1998), Redding et al. (1993), Wong
et al. (2003), Wong and Chan (1999), Li et al. (1999), Pearce (2000)
OCB OCB items; dimensions of OCB 13 Kickul et al. (2004), Cheng et al. (2003), Farh et al. (2004), Cheng et al.
(2003), Lam et al. (1999), Hui et al. (1999), Blakely et al. (2005), Farh et al.
(2007), Farh et al. (1997), Hui et al. (2004a, 2004b), Farh et al. (2004), Begley
et al. (2002)
Commitment Organization commitment (OC); 12 Kickul et al. (2004), Walumbwa et al. (2005), Wang (2004), Cheng et al.
commitment to supervisor; (2003), Chen et al. (2000, 2003), Cheng and Stockdale (2003), Hui et al.
psychological contract; mutual (1999), Chen et al. (2002), King and Bu (2005), Lee et al. (2000), Hui et al.
obligations (2004b).
Conflict Conflict resolution; conflict 11 Friedman et al. (2006), Morris et al. (2004), Ling and Powell (2001), Aryee
avoidance; conflict management et al. (1999), Leong and Ward (2000), Leungs (1988), Morris et al. (1998),
Shi and Chen (2009), Yang (2006), Jin (1989), Tang and Lu (2005)
Justice Organization justice; procedural 11 Leung et al. (2001), Chen (1995), He et al. (2004), Lee et al. (2000), Lam et al.
justice; justice concerns; justice (2002), Farh et al. (1997), Begley et al. (2002), Brockner et al. (2001),Tyler
perceptions; distributive justice; et al. (2000), Begley et al. (2002), Brockner et al. (2000)
rewards allocation
Personality Type A personality; personality 10 Jamal (2005), Barry and Friedman (1998), Cheung and Leung (1998), Liu
traits; external locus of control; et al. (2005), Chan (1989), Costa and McCrae (1992), Lao et al. (1977), Hsieh
Chinese trait terms et al. (1969), Tseng (1972), Yang and Bond (1990)
Influence strategies Influence tactics; influence 9 Fu and Yukl (2000), Leong et al. (2006), Schermerhorn and Bond (1991), Fu
strategies; leader influence; et al. (2003), Farh et al. (2004), Van de Vliert et al. (2004), Schmidt and Yeh
perceived effectiveness of (1992), Yukl et al. (2003), Krone et al. (1997)
influence tactics; relational power
(continued)
Keywords Topics Frequencies Citation
Leadership Leadership style; transformational 9 Misumi and Peterson (1985), Smith et al. (1989), Cheung and Chan (2005),
leadership; paternalistic Peterson (1998), Walumbwa et al. (2005), Walumbwa and Lawler (2003),
leadership Wah (2004), Fellows et al. (2003), Walumbwa et al. (2005)
Expatriate Expatriate roles; expatriate 9 Leung et al. (2001), Tung (2008), Varma et al. (2006), Selmer (2005),
selection; cross-cultural training Hutchings (2003), Branine (2005), Leong and Ward (2000), Shen and
(CCT); expatriate adjustment Edwards (2004), Liu and Davis (2000)
Job satisfaction Levels of job satisfaction; 7 Kickul et al. (2004), Walumbwa et al. (2005), Walumbwa et al. (2005),
turnover intentions Cheng et al. (2003), Cheng and Stockdale (2003), Frone et al. (1992), Aryee
et al. (1999)
Values Chinese values; work-related 10 Bond (1988, 1996), Chong et al. (1983), Cragin (1986), Goodman (1995),
values Bond and Yang (1982), Hofstede (1980, 1991), Shenkar and Ronen (1987),
Liu and Davis (2000)
Power distance Power distance values, power 7 Brockner et al. (2001), Lee et al. (2000), Begley et al. (2002), Tyler et al.
distance as moderators (2000), Farh et al. (2007), Fu and Yukl (2000), Sun and Bond (2000)
Collectivism/individualism Collectivism; individualism; 15 Kickul et al. (2004), He et al. (2004), Hui (1984), Earley (1989), Earley
collectivistic; individualistic; (1993), Chen et al. (1998), Bailey et al. (1997), Aryee et al. (1999), Yang et al.
social loafing; role of collectivism (2000), Walumbwa and Lawler (2003), Walumbwa and Lawler (2003),
Brockner et al. (2000), Wharton and Blair-Loy (2002, 2006), Earley (1994)
Work-family conflict Work-family conflict (WFC); 6 Ling and Powell (2001), Aryee et al. (1999), Frone et al. (1992), Yang et al.
work-family interface; predictors (2000), Wharton and Blair-Loy (2002, 2006)
of WFC; long work hours
Managerial roles Expatriate control role; 2 Delios and Bjoerkman (2000), Cui et al. (2002)
knowledge-transfer role
Other topics Knowledge sharing; face; societal 9 Chow et al. (2000), Gabrenya and Hwang (1996), Earley (1997), Redding
systems; economic ownership (1980, 2002, 2005), Chiu (2002), Granrose et al. (2000), Brewster and
Mayrhofer (2008)
Table I.
management
in China
227
Cross-cultural
17,3
228
CCM
Table II.
cultural research
variables in cross-
Relationship among
Topics Frequencies Citation
Collectivism/individualism and procedural justice/ 14 Bond and Yang (1982), Morris et al. (2004), Chen and Francesco
OCB/influence tactics/managerial roles/expatriate (2000), Brockner et al. (2001), Tyler et al. (2000), Blakely and
adjustment/WFC (work-family conflict) Srivastava (2005), Wharton and Blair-Loy (2006), Yukl et al. (2003),
Chen et al. (1998), Fu et al. (2007), Liu et al. (2005), Cui et al. (2002),
Selmer (2005), Aryee et al. (1999)
OCB/employee outcomes/employee performance 8 Begley and Fang (2002), Jamal (2005), Cheng et al. (2003), Chen and
and work-related attitudes/organizational Francesco (2003), Chen et al. (2002), Lam et al. (2002), Hui et al.
commitment/psychological contract/personality/ (2004b), Farh et al. (2007)
justice
Leadership style/transformational leadership/ 4 Walumbwa et al. (2005), Walumbwa and Lawler (2003), Fellows et al.
paternalistic leadership and organizational (2003), Cheng et al. (2004)
commitment/work-related attitudes/power
relations/subordinate responses
Guanxi and HRM decisions/career success 3 Sue-Chan and Dasborough (2006), Bozionelos and Wang (2006),
Law et al. (2000)
Economic ownership and rewards-allocation/ 2 He et al. (2004), Chiu (2002)
organizational commitment
Power distance and organization justice 1 Lee and Pillutla (2000)
Race and gender and expatriate selection 1 Tung (2008)
leaders care for followers, respect tradition, exhibit morality and live in harmony. More Cross-cultural
recently, Chinese culture has been influenced by the political philosophies of socialism
and communism. The typical principle of this political philosophy is egalitarianism
management
rather than elitism. Under this culture, followers are expected to follow the decision of in China
leadership strictly, and leadership is more transactional. Traditional structure of Chinese
state-owned companies constrains a single leaders ability to change the organizational
culture and enlarges the scope of cultural change possible. The structure of the Chinese
organization consists of two systems: the business system and the Chinese Communist
229
Party (CCP) system. The business system is similar to the business operating system in
Western companies, and the CCP system exists to ensure that work is done according to
the central plan and performs a social control function. Current organizational change in
China grants more autonomy to organizational leaders of the business system, at the
same time, the role of top managers in leadership position is still enacted in a special
manner. China now emphasizes a market economy and the competitiveness of firms
(He et al., 2004), and the competitive echoes in contemporary China may override the
traditional value placed on equality and harmony within a group.
Comparative studies on cultural values. Chinese cultural values have been studied
extensively by both Chinese and Western researchers. Chinese from Hong Kong,
Taiwan and Singapore were included in Hofstedes (1980) original studies. Many
research studies concluded that Chinese people in Hong Kong, Singapore and Taiwan
are united in their high power distance, low individualism, low uncertainty avoidance
and medium masculinity ratings (Bond, 1996; Chong et al., 1983; Shenkar and Ronen,
1987; Cragin, 1986).
In addition, Goodman (1995) compared Americans and Chinese on several Western
and Eastern cultural values. Chinese received higher scores on dogmatism which
indicates a more rigid personality, and higher scores on external locus of control which
indicates a feeling of being controlled externally. Chinese received lower scores on
machiavellianism which is also a measure of preference to use power to meet a desired
goal, and lower scores on tolerance of ambiguity which shows a desire for more
certainty. Eastern characteristics include Confucian dynamism, human-heartedness,
integration and moral discipline. Confucian dynamism is a measure of long-term
orientation. Human-heartedness is a concept similar to masculinity (Hofstede, 1991).
Integration is a concept similar to power distance (Hofstede, 1991). Moral discipline is
similar to collectivism (Hofstede, 1991). Compared to Americans, Chinese are higher
in all of these values (Goodman, 1995). The study performed by the Chinese Culture
Connection (1987) shows that Chinese might be characterized as high on identification
with their various in-groups, which means Chinese tend to keep high harmony within
in-groups. Hofstedes IBM survey and Bonds Chinese value survey showed that
Chinese more than Americans are likely to choose long-term orientation decisions
rather than short-term orientation decisions (Hofstede, 1991).
Yang and Bond (1990) found five factors in Chinese trait terms. Chinese are chiefly
distinguished from Americans by their low extraversion scores. On agreeableness
items, Chinese score high on straightforwardness and compliance, low on altruism.
Chinese generally score within the average range on facets of the other domains (Costa
and McCrae, 1992), whereas in collectivist societies, harmony with in-group members
is a more central goal. In comparison to Americans, Chinese have a more external locus
of control (Chan, 1989; Hsieh et al., 1969; Lao et al., 1977; Tseng, 1972). Therefore, we
could conclude that among Americans, the more adaptive response to stress may
involve actively and effectually accruing and employing support resources. The
CCM Chinese, who expect self-discipline from those with high education and high social
status, may prescribe more self-directed coping strategies rather than seeking more
17,3 help. Researchers conducting cross-national generality of the Big Five factors failed to
find traits that match those found in China, but additional traits were identified:
relatedness (Cheung et al., 2003). Chinese are also found more particularistic than
Americans or other Westerners (Tsui et al., 2000).
Guanxi. According to Tsui and Farh (1997), the term guanxi is used to refer to
230 a special relationship that develops between members within a team. As many
researchers (e.g. Fock and Woo, 1998; Law et al., 2000; Pearce, 2000; Wong and Chan,
1999) have pointed out, guanxi is one of the most striking features of Chinese culture. It
is difficult to find an equivalent English word to accurately express the meaning of
guanxi. Redding et al. (1993) believe guanxi is a network of personally defined
reciprocal bonds. Guanxi is a special kind of relationship of both obligation and
reciprocity. In China, within a team or an organization, the distinction between the in-
group and the out-group is particularly important. In-group members are those with
whom one has strong guanxi (Li et al., 1999).
Guanxi links two individuals to enable a social interaction and exchange. For
example, when one person offers a favor to another, the recipient must do an even
bigger favor for him/her later. In continuing such a relationship, both people will
benefit, and if the reciprocal relationship goes on and on, guanxi between them will
be developed. Tsui and Farh (1997) argued: a basis for guanxi exists when shared
attributes, identity, or origin exist among people. In the Chinese context, Chen and
Francesco (2000) argued that employees with good guanxi would be promoted to
higher positions and hypothesized that position would be associated with higher
affective commitment. Wong et al. (2003) argued that the best indicators of guanxi are
the actual activities or behaviors that occur among people. Doing business in China is
greatly influenced by guanxi since Chinese managers use their personal guanxi more
widely to exchange information, negotiate with planning authorities and accelerate
decision-making processes than do managers from Western firms.
Effects of individual characteristics on organizational outcomes

As shown in Table I, numerous cross-cultural studies have been done on the
psychological characteristics and processes that link individuals to the organizations
and nations, more specifically, organizational commitment (OC), psychological
contract, organizational justice and organizational citizenship behavior (OCB).
Chen et al. (2002) developed a commitment to supervisor scale in Chinese, which
included identification with the supervisor, internalization of the supervisors values,
willingness to dedicate oneself to the supervisor, willingness to exert extra effort on
behalf of the supervisor and a desire to follow the supervisor. Jamal (2005) found that
job stress was negatively correlated with OC for Chinese. Cheng et al. (2003) showed
that Taiwanese employees commitment to their supervisor had a significant impact
not only on outcomes evaluated by the supervisor but also on those that are more
global. Wang (2004) found that Chinese state-owned enterprises (SOEs) had higher
levels of passive continuance commitment and lower levels of value commitment than
foreign-invested enterprises.
Only few cross-cultural research has been done on psychological contract using
Chinese samples. Kickul et al. (2004) tested the differences between the psychological
contracts operating in the USA and in Hong Kong, and confirmed that the Hong Kong
Chinese react more negatively to organizational outcome variables to breaches of the
extrinsic components of the psychological contract while the American workers react Cross-cultural
more negatively to breaches of the intrinsic components.
Quite a few cross-cultural studies have been on justice. For example, recent studies
management
have demonstrated that employees in Taiwan (Farh et al., 1997), Hong Kong (Lam et al., in China
2002) and mainland China (Begley et al., 2002; Tyler et al., 2000) are influenced
differently by justice perceptions from Western countries, depending on their value
orientation. Lam et al. (2002) also demonstrated stronger effects of procedural and
distributive justice on work performance among those Hong Kong and US employees
231
who endorsed more egalitarian values.

Begley et al. (2002) found that greater power distance was associated with a strong
positive relationship between procedural justice and OCB. Brockner et al. (2000)
showed the effect of procedural justice in various experiments was stronger among
Chinese employees.
Farh et al. (2004) argued that the construct of OCB is not entirely conceptually
or structurally equivalent across China and the USA. They also presented strong
evidence that the national culture could condition the nature, meaning and important
of various forms of OCB to the effectiveness of organizations. Begley et al. (2002)
indicated that helping colleagues in personal life situations and social welfare
participation have emerged as Chinese context-specific OCB dimensions. Blakely et al.
(2005) compared 116 Chinese managers of SOEs in mainland China with 109 US
managers and found that the Chinese were more likely than their US counterparts
to define OCB as part of their job. Farh et al. (2007) tested the moderating effects of
cultural values on POS-OCB relationships with Chinese samples, and found that
power distance had a stronger and more consistent moderating effect on POS-OCB
relationships than did Chinese traditionality.
Group process issues in cross-cultural management

As shown in Tables I and II, some empirical studies have been conducted on issues
of interpersonal and group process. More than ten studies concerned leadership. For
example, Wah (2004) identified Chinese Chief Executive Officers transformational
leadership, such as good moral character, belief in relationships and a naturalistic
approach (e.g. allowing things to unfold themselves and playing a facilitator role in
relationship). Walumbwa and Lawler (2003) showed that transformational leadership
was more strongly related to satisfaction with coworkers and commitment in the high
collectivist like China. Walumbwa et al. (2005) also found that both collective efficacy
and self-efficacy moderated the relationship between transformational leadership and
commitment and job satisfaction across their Chinese, Indian and American samples.
Cheng et al. (2004) showed that paternalistic leadership are positively associated with
subordinate responses in China, including feelings of gratitude and repayment to the
leader, identification with the leader and compliance with the leaders wishes.
Studies have indicated that team members in individualistic and collectivistic
national cultures react differently to some organizational practices, such as team
members attitude and behaviors (Halevy and Sagiv, 2008). Earley (1989) found that
managers from collectivistic cultures worked better in a group, but did not perform
any better than managers from individualistic cultures. Chen et al. (1998) found that the
Chinese who learned that they had performed better than their in-group maintained
their positive evaluations of fellow in-group members to protect their groups image.
Ho (2000) found, for example, that Chinese managers shared significantly less
knowledge with recipients outside their in-group compared with US managers. Gibson
CCM (1999) argued that Hong Kong students are more likely to consider group efficacy
as being meaningful. Liu and Davis (2006) developed a team performance model of
17,3 Chinese setting by examining the relationships among 11 team process variables.
Organizational-level issues on cross-cultural management

Shi and Chen (2009) concluded that the most important factors that influence
international business are cultural environment, strategies of the organization,
232 economic conditions of the host country and the labor market of the host country. Shi
and Chen (2009) identified four major factors affecting cross-cultural management:
cultural difference, interventions concerning future contingencies, communication as
well as adjustment on back-cultural shock.
Researchers tried to speculate about factors influencing cross-cultural conflicts and
management. For, example, Chen et al. (2004) found that cross-cultural conflicts prevail
in management norms of the organization, behavioral style of the foreign managers,
respect for the culture, human resource development and power distance. They further
advised that multinational firms in Chinese communities should be concerned with
culture integration, and try to build the third culture, use a norm-based management
system with consideration of patriarch-based Management style. Yang (2006)
suggested using environment pressure, organization competence and leaders
competence to analyze cross-cultural conflicts, among which leaders ability to manage
cross-culturally is the most important factor. Jin (1989) concluded that to avoid cross-
cultural conflicts, expatriates need to:
. be prepared for a different culture;
. learn the form and conventions of communication in different cultures;
. participate in social activities with people from different cultures;
. be able to learn from others and take risks;
. develop cultural sensitivities;
. recognize cultural complexity;
. consider themselves as culture messenger;
. be patient and understanding;
. have realistic expectations; and
. have the courage to experience culture shock.
Friedman et al. (2006) found that Chinese were more likely to avoid a conflict than were
Americans. Both types of comparison may be compromised by non-equivalence across
national cultures.
Leung et al. (1996) found that in the early 1990s, locals within international firms in
China regard high salaries of expatriates as fair; however, in the late 1990s, Chinese
employees perceived a high degree of injustice about the differences between their salaries
and those of their expatriate counterparts. Delios and Bjoerkman (2000) used the survey
and archival data of 797 Japanese multlinational enterprises in China and the USA, and
found that the controlling function of being a manager was emphasized more in China
than the USA. Delios and Bjoerkman (2000) also noted that knowledge transfer was more
significant in technology and market-intensive industries in China than the USA.
Song and Li (2006) compared Chinese and Western employees by collecting data
from an international university in China, and suggested that Chinese employees
should be more direct and efficient, and should be prepared with enough data before Cross-cultural
meetings including negotiation. Tang and Lu (2005) proposed a diamond model for
cross-cultural management, which include trust, cooperation, goals/objectives and
management
integrating-innovation. They demonstrated their managerial strategies on cross- in China
cultural management using the diamond model and argued that facilitating cross-
cultural communication, building management systems concerning cross-culture and
developing human resources that have cross-cultural management skills.
Cultural distance between the home and host country can have significant influence 233
on selection, training and performance management system. Liu and Davis (2000)
compared Chinese and Americans using Hofstede and Trompenaars cultural values
and found there were effects of culture on cross-cultural human resource management
practices. Shen and Edwards (2004) found that Chinese multinational companies
emphasize attributes such as education, past performance, management or technical
skills, language ability and willingness to undertake expatriates assignments. Many
managers distribute expatriate assignments based on their guanxi with relevant
employees. Chinese individuals are found to respond better to group rather than
individually focused training and feedback (Early, 1994; Van de Vliert et al., 2004).
Chinese subordinates were anticipated to have a more difficult time accepting direct
and public feedback especially negative feedback.
Implications for cross-cultural management in China

Summary of current research
Empirical studies on cross-cultural management in China have been conducted since the
1990s, and numerous empirical studies have been done in the past two decades across
different level of constructs and practices (individual, group and organization). Among
all the intercultural research concerning China, there are mainly two common types: the
first type focuses on foreign managers and employees, center on their adjustment and
performance in Chinese culture; and the second type of study examines Chinese who
work with these foreigners in the multinational management setting. And in recent
years, emphases have been shifted from examining the effects of culture on single
variables to examine the relationships among same and different level of variables. Many
important topics and relationships were tested in cross-cultural settings.
Research shortcomings include the following: insufficient systematic conceptual
model development and assessment of important topics, such as teamwork, leadership,
motivation, communication, as well as satisfaction in cross-cultural environment.
Although there is an increasing amount of comparative studies being done in China
(Brewster and Mayrhofer, 2008), very few studies have been conducted to study
Chinese firms that are doing business abroad, which represents one of the most critical
problems in the field of cross-cultural management research in China. Most studies
focus on cultural value identification and practical issues in Western global companies,
which is concerned with comparison between Eastern and Western culture. Not much
research has been conducted to study cultural differences among eastern countries, for
example, countries in Asia.
Implications for practices and future research

Companies have found cross-cultural teamwork to be both rewarding and challenging.
It has only been relatively recently that the workforce been evolving to adapt to
research and first-hand experience about individual differences, the addition of culture
as a factor on top of individual differences can be overwhelming and yet necessary.
CCM Cross-cultural conflicts pose the biggest challenge for international business in any
country, and China is no exception. Especially when the strategy of the organization is
17,3 not correctly executed, cross-cultural conflicts would heat up and create fatal problems.
Yue (2008) argued that it is the inspiring, passionate and capable leader who is the
most important culture carrier. Chinese employees who work for foreign firms or joint-
ventures tend to like leaders who are tolerant and professional, and who respect and
listen to the concerns of employees. Yue (2008) provided suggestions to resolve cultural
234 conflicts for Chinese international firms including cultural difference recognition,
studies of other culture, cross-cultural training, as well as setting up a unique

organizational culture that integrates national culture from both sides.
Although the Chinese government continues to proactively seek personnel with cross-
cultural management skills, recruitment and training in cross-cultural management is
significantly lacking. Key competencies of multinational managers would not only
include competing with firms from other countries but it is also challenging to collaborate
with companies and people from those countries. Current recruitment of cross-cultural
managers has focused more so on the initial hurdle of language, rather than the
differences in approaches/customs and values in that culture. Although courses on culture
are provided, few training systems that convey cultural differences and implications
have been designed and developed. Theoretical models need to be developed to set the
foundation for training on dealing with diversity management, developing cultural
sensitivity, as well as the skills necessary to succeed as multinational managers.
Now that many organizations are doing business internationally, few have the
competitive advantage of cultural sensitivity to peoples needs and the appropriateness
of interventions. Practicing managerial functions effectively is challenging in a ones
own country and culture, but doing so in a foreign environment with a unique
combination of political and economic imperatives, traditions, work ethics and culture
is a totally new ballgame for managers. Foreign companies have been facing great
challenges when doing business in China, and most Chinese companies who have been
working to make investments abroad have failed.
In general, foreign companies doing business in China are expected to progress
through three stages of cross-cultural management (Cao, 2008). First, the company
receives information geared toward providing an orientation to the norms and
practices of foreign culture; however, this information is often authored by their own
staff as opposed to being authored by the staff of the foreign company. Second, the
company is expected to immerse themselves in the foreign culture and in the third
phase, the company seeks to integrate itself into the foreign culture. Most multinational
firms are in the second stage, and the characteristics are as follows: First, the culture
from the host country will be transferred into local culture. Usually multinational firms
appoint Chinese natives who were extensively trained in the respective home country.
Second, foreign firms use the combined strategy of rule of law and the rule of man,
that is, employees are provided with a benefit package and long-term contract. Third,
culture-related training is provided to new employees. Finally, an effort is made to
strengthen cross-cultural management with a supporting system, such as career and
performance management plans.
Companies that hire culturally diverse employees or who wish to engage in business
interactions with employees or companies of another culture would be best served to
provide a training curriculum that covers the categories above. Hiring practices should
place added value on applicants who have experience working for and within
culturally diverse teams; should be cognizant of interview questions that are culturally
insensitive and/or illegal; and should be aware that some cultures do not ask questions Cross-cultural
during training/lectures.
Based on cross-cultural research, cross-cultural training should include personal
management
space (whether someone is close of distant from you when talking); terminology/ in China
language differences (and tone of voice); body language/mannerisms/gestures;
hierarchy of leadership; physical dress/wardrobe; determination of leadership;
personality characteristics; providing positive and negative feedback (how, when, and
is it done publicly or privately). 235
Future cross-culture management research and practices in China should follow

several basic principles: be applicable, that is, build unique organizational culture that is
embedded in the host country; be practical, since there is no well-developed multinational
culture in China, new culture should be concerned with both sides; be systematic, cross-
culture management practices should have supporting system; be equal, no single culture
is better than another; cultural penetration, two different culture have mutual impact;
merit-based appointment and promotion, use local personnel, not just talents from the
home country. In Chinese settings, the most common cross-cultural management
interventions include cross-cultural training, cross-cultural communication system and
unified organizational culture (Zhang, 2009). Zhao and Mao (1993) argued that the most
important strategies of cross-culture management in China are development of cross-
cultural management human resources; propaganda of Chinese culture; and cross-cultural
communication through exchange.
Conclusion
In this paper, we have attempted to summarize cross-cultural management research
and practices in China. Lack of research on model development makes it hard for cross-
cultural management practices. Human resources skilled in cross-cultural management
are in great need in China. Another noteworthy concern worth to mention is that China
now emphasizes a market economy, new cultural values may stand out to override the
traditional values. New research and practices are required to study cross-culture
management issues in contemporary China.
It is a fact that cross-cultural management practices will benefit greatly from cross-
cultural communication and cross-cultural training. To build effective training system,
careful training needs analysis should be done to ensure clear objective and content of
training. In addition, the context of cross-cultural interactions, individual difference
among trainees and the evaluation of the training should also be taken into consideration.
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About the authors

Keyong Dong, PhD, is Professor and Dean of School of Public Administration, Renmin
University of China. He is a well-known scholar in the field of human resource management,
labor and social security policy and social security theory. He served as the principal investigator
on numerous research projects, including the China National Science Foundation and China
National Social Science Foundation.
Ying Liu, PhD, is Assistant Professor of School of Public Administration, Renmin University
of China. She got her Masters and PhD in Industrial/Organizational Psychology. Her research
interests are teamwork, leadership development and job stress. Ying Liu is the corresponding
author and can be contacted at: lylw.liu@gmail.com
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Cross Cultural Management: An International Journal

Cross-cultural management in China

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Cross-cultural management Cross-cultural

Research on cross-cultural management in China

Essences of Chinese culture

Keywords Topics Frequencies Citation

Effects of individual characteristics on organizational outcomes

who endorsed more egalitarian values.

Group process issues in cross-cultural management

Organizational-level issues on cross-cultural management

Implications for cross-cultural management in China

Implications for practices and future research

studies of other culture, cross-cultural training, as well as setting up a unique

Future cross-culture management research and practices in China should follow

variable impact of questionnaire language on Chinese bilinguals from Hong Kong,

Organizational Psychology, Vol. 75, pp. 339-56.

across cultures, Administrative Science Quarterly, Vol. 39, pp. 89-117.

About the authors

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