Executive summary
Claytan Fine China (tableware) Sdn. Bhd (CFC) is the only surviving pioneer in Malaysia’s ceramic industry. CFC manufactures stoneware and fine china tableware which contributes part of tableware product line under Claytan Group. The company intends to invest in China as part of its international expansion project. The cultural distance between Malaysia and China is small. Based on Hofstede’s Value Dimensions Framework, China has almost similar cultural dimension compared with Malaysia. Malaysia is a collectivism society whose give priority to the goals of the group than personal goals. Besides that, there is high power distance between society members. Cultures that are relatively collectivistic generally have higher power distance. Both Malaysia and China has weak uncertainty avoidance. Collectivistic felt that uncertainty is a normal feature of life and each day is accepted as it comes.
CFC will expand the production plant to China as a wholly owned subsidiary under the CLAYTAN Group due to cost-reduction motive. The implementation of minimum wage rate system in Malaysia, lower transportation cost, and the form of China-ASEAN Free Trade Area (CAFTA) induce the company to expand its production plant to China.
China and Malaysia categorized under high context communication style. However, certain degree of adoption is still needed. In term of negotiation, collectivism society such as China and Malaysia are more concern about in-group. The high power distance of both countries prolongs the negotiation process. When it comes to decision making process, high power distance of China and Malaysia also prolongs the decision making process. Employees always have to refer back to their superior to make decision and give instructions.
CFC can control its’ subsidiary in China by output control. The culture distance between Malaysia and China is