1. Provide a brief description of your company, its origins and its operations (Size, industry, products, etc.) and give reasons for your decision to go international 2. Decide on an appropriate country in which to operate and give your rationale for this 3. Give a precise cultural profile of the local area you will be operating in abroad. What are the workers going to be like? What kind of reception do you anticipate? How does this profile differ to your own and what do you have to be especially careful about? 4. Elaborate on which cultural variables will influence the communication process the most between employees from your home and host country. Explain how you plan to overcome them. 5. Which differences in non-­‐verbal behavior do you have to be conscious of in your international venture? 6. Draw up an organizational chart showing the company and its overseas operations and describe why you have chosen this structure. Also explain the HQ – subsidiary control form you will implement. 7. Decide on the staffing policy you will use throughout the organization abroad and give your rationale for this policy 8. Identify the concerns of the host country regarding your operations there. What plans do you have to deal with these and to ensure a productive long term relationship? 9. When negotiating, elaborate on the three pillars of intercultual negotiations by addressing how your home and host culture differ and how you plan to overcome these differences. 10. Make up examples of communication problems that occurred as a result of differing cultures and explain how you overcame them

1. Question:

My company produces different types of consumer printers. It‘s located in a city in the western part of America and was founded in 1993. It became soon one of the most successful printer companies in the USA. During these years, the Asia region and especially China became an important market for my products. But in the last few years, the printer market became more and more a hard-­‐fought battleground. It was very difficult to sell high quality printers on a market which is flooded by cheap products from other Asian countries. Their advantage is that they can produce and sell their products very cheap in the local market while I have to pay high shipping costs for my printers. This rising costs made it harder to compete within the Chinese market. Until now I produced all printers of my product line in the USA, but the rising costs and falling sales figures forced me to make an important decision.

2. Question:

After several trips to China, I saw in China a very good opportunity to establish a production plant to manufacture printers for a reasonable price and to sell them directly on the Chinese market. The reason to establish my new production facility near Shanghai was that this region offers an excellent infrastructure for transports and resources necessary to produce cheap printers. In addition to the new plant I decided to open a new Asian office to control the production and sales of my printers in this region.

3. Question:

The Chinese are about 1.3 Billion people who have one of the oldest cultures in the world that was influenced by more than 50 ethnic groups and different styles of religion (e.g. Buddhism and Confucianism) and policies (Capitalism and Communism). Since the mid 1970s China has undertaken an economic transition and cultural liberalization with great success, but there is still the one party ruler ship of the Communist Party of China (CPC). That means if you want to do business in China, you have to do business with the Party.

Another important key to China is to build-­‐up close relationships and networks. The Americans are short term orientated, that means the focus lies on tasks and we use wide and loose networks to be successful. On the other hand the Chinese will always try to build-­‐up long-­‐term relationships and dense networks. To establish these two kinds you will need a lot of time, because you can‘t

create them instantly. As an outsider it is very hard to enter their networks. The Chinese will always greet you friendly but in their eyes you are an outsider and they will never let you know what they are thinking about you.

4. Question:

There are 2 cultural variables which will influence the communication process the most: First the High versus Low Context Dimension will explain, why it is necessary to build up long-­‐term relationships and dense networks in China1. As a foreigner you are an outsider in the eyes of the Chinese and the first thing you have to do is to build up a relationship with them which needs time. By comparison in a Low Context Society the focus lies on tasks and they are very easy to enter. The result is that as long as the Chinese see you as an outsider, they will never give you precise answers and that means you couldn‘t reach your goal. My goal was to establish a successful production plant and sales office in China. To reach this goal it was necessary to build up a close relationship and dense network with my chinese staff on the one hand and on the other hand with my chinese business partners. So I visited my future chinese business partners and staff several times in advance and discussed with them problems which occurred during the construction phase.

Second the cultural dimension is High vs. Low Power distance2. The Chinese culture shows a very high power distance in comparison to the American culture profile. Therefore the chinese employees want to have strong leaders as their head of company. If you want to be sucessful with your chinese business, you have to implement a hierarchical organizational structure to meet the expectations of your chinese working staff.

5. Question:

Due to the fact that the Americans are a high individualistic nation we use much eye contact during negotiations and like it to present ourselves in front of a group. We think this is the best way to sell products or present our products and ourselves as the best on the market. This fact stands in opposition to the Chinese’s behavior. As I have explained, the Chinese depend on a

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Source: http://www.culture-at-work.com/highlow.html Source: http://www.geert-hofstede.com/hofstede_china.shtml

dense network or group and the reason is that they keep a low profile during negotiations and will act very calm.

6. Question:

We had to establish a hierarchical structure in our chinese office and production plant to meet the expectations of our chinese working staff. Because of the High Power distance and the High Context variable in China, the staff needs a head of department who gives them direct orders and leads them like the father as the head of the family. To give them the feeling of a family, half of the heads of department are chinese managers. If we had established a horizontal organizational structure like our HQ in the USA, this may have caused several problems.

7. Question: In my production plant and sales office I want to establish a high degree of local responsiveness to give my staff the feeling to work in a family and to keep the harmony in balance. Therefore I use a polycentric staffing policy and have half of the heads of departments being local Chinese. Many of my friends asked me if this cause any problems. But I always answer that I don‘t worry, because I have build up a dense network and guanxi with my local chinese heads of department. I will give a precise description of guanxi in the next question.

8. Question:

The chinese people regard foreigners as outsiders in their social systems. This refers to the importance of harmony within the Chinese society. To enter this social context of harmony and dense networks you have to build up guanxi, which is a central concept in the Chinese society. You can describe guanxi as a personal relationship between two individuals and the stronger this relationship is the more each individual gain a profit out of this. A result of a strong guanxi between individuals can be a big difference in the price for goods. In this case: If you don‘t have a strong guanxi with you business partner you will pay a much higher price for the goods.

9. Question:

You can describe the first pillar as establishing rapport. For the American culture it is very important to keep this stage short and don‘t use it to build up relationship. If you follow this structure you will not be successful because for the Chinese this stage is very important and you should spend long time to keep the harmony in balance.

The second pillar is exchanging information which is for the Americans and Chinese an important point. But if you give the Chinese precise information, they will ask you for more. So you should go well prepared to each meeting where you will exchange information.

The last pillar is called persuasion. For the Americans and Chinese this is also a very important step and the Americans will often use pressure to be successful (e.g. „On sale for limited time only“). But as we have learned, the most important subject for the Chinese is to keep the harmony in balance. If you use pressure in this stage, you will not be successful.

10. Question: The most difficult thing was to find a trustworthy supplier for necessary producer goods. The reason was I often got late delivery of goods or sometimes the wrong delivery. A chinese friend gave me the advice to build up a long-­‐term relationship with only one supplier instead of looking for the cheapest one. So I invited one of my former suppliers I made a good deal with for dinner. After some weeks and several dinners the chinese supplier gave me his business card and said: „If you need any goods, just give me a call! “. After this evening we established a very good and long-­‐ term business relationship. So I learned that it is more important to build up a dense network and long-­‐term relationship in china to keep the harmony in balance instead of looking for the quick deal!