Innovation Sources of Economies in Eastern Asia...The goal of the article is a proper presentation of reasons ... Keywords: multinational companies, merger, cross-cultural management,

Innovation Sources of Economies in Eastern Asia

PRACE NAUKOWE Uniwersytetu Ekonomicznego we WrocławiuRESEARCH PAPERS of Wrocław University of Economics

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Contents

Introduction ..................................................................................................... 9

Part 1. International trade as a factor of innovation in Asian economies

Jerzy Dudziński, Jarosław Narękiewicz, Iwona Wasiak: PricemovementsintheinternationaltradeandAsiandevelopingcountries’exports........... 13

Guenter Heiduk: Is innovation-based competitiveness in trade crisis-resistant?ThecaseofChina....................................................................... 23

Bartosz Michalski: Technological intensity of the international trade. Thecaseofthesecond-tierAsianTigers.................................................... 36

Paweł Pasierbiak: TechnologicalintensityofJapanesemerchandisetrade.... 47Ewa Mińska-Struzik: Learningbyexportingasasourceof innovation in

Asiancompanies......................................................................................... 59

Part 2. Foreign direct investment as a source of innovation in Asian economies

Magdalena Kinga Stawicka: Economic and Technological DevelopmentZones(ETDZ)asaplaceofFDIlocationinChina.................................... 75

Maciej Żmuda: The determinants of Chinese outward foreign directinvestmenttodevelopingcountries............................................................ 86

Tadeusz Sporek: Foreign direct investment in Nepal. Strategy andpromotion.................................................................................................... 98

Aleksandra Kuźmińska-Haberla: Promotionofforeigndirectinvestment.ExamplesfromtheAsia-Pacificregion...................................................... 109

Part 3. Innovativeness of network in Eastern Asia

Sebastian Bobowski, Marcin Haberla: Networkedclusters in thecontext ofknowledge-seekingstrategyofinternationalbusiness........................... 121

Jerzy Grabowiecki: Zaibatsuconglomeratesasorganisational innovations atthetimeofthemodernisationofJapan’seconomy................................. 132

Małgorzata Wachowska: The importanceof the Japanesekeiretsugroupsforknowledgespillover.............................................................................. 144

Małgorzata Dolińska: Network-centricinnovations.ThecaseofChina....... 153Anna H. Jankowiak: Chineseindustrialclusters........................................... 164

6 Contents

Karolina Łopacińska: Cultural differences in the context of managing aninternationalcorporationwithaSwedishandChinesecapital............. 174

Part 4. Innovativeness of Asian financial markets

Magdalena Broszkiewicz: Innovations incorporategovernance systemas anecessaryimprovementsofcapitalmarketinJapan................................ 187

Jacek Pera: Modern trends in financial innovations on theAsianmarket. Anattemptofassessment........................................................................... 198

Artur Klimek: Sovereignwealthfundsintheglobaleconomy...................... 208Paweł Folfas: Dubai–anemergingandinnovativeoffshorefinancialcentre 217

Streszczenia

Jerzy Dudziński, Jarosław Narękiewicz, Iwona Wasiak: Ruchcenwhand- lumiędzynarodowymaeksportazjatyckichkrajówrozwijającychsię..... 22

Guenter Heiduk: Czykonkurencyjnośćwhandluopartanainnowacjachjestodpornanakryzys?PrzykładChin............................................................ 35

Bartosz Michalski: Technologicznaintensywnośćhandlumiędzynarodowe-go.Przypadektygrysówazjatyckichdrugiejgeneracji.............................. 46

Paweł Pasierbiak: Intensywność technologiczna japońskiegohandlu towa-rowego......................................................................................................... 58

Ewa Mińska-Struzik: Uczenie się przez eksport jako źródło innowacjiwprzedsiębiorstwachazjatyckich.............................................................. 71

Magdalena Kinga Stawicka: Ekonomiczneitechnologicznestrefyrozwojujako miejsce lokowania bezpośrednich inwestycji zagranicznych w Chinach....................................................................................................... 85

Maciej Żmuda: Motywy bezpośrednich inwestycji zagranicznych Chin wkrajachrozwijającychsię........................................................................ 97

Tadeusz Sporek: ZagraniczneinwestycjebezpośredniewNepalu.Strategiaipromocja..................................................................................................... 108

Aleksandra Kuźmińska-Haberla: Promocja bezpośrednich inwestycji za-granicznych.RozwiązaniazkrajówregionuAzjiiPacyfiku.................... 118

Sebastian Bobowski, Marcin Haberla: Usieciowioneklastrywkontekściestrategiiknowledge-seekingbiznesumiędzynarodowego......................... 131

Jerzy Grabowiecki: Konglomeratyzaibatsu jako innowacjeorganizacyjneokresumodernizacjigospodarkiJaponii.................................................... 143

Małgorzata Wachowska: Znaczeniejapońskichgrupkeiretsudlarozprze-strzenianiasięwiedzy................................................................................. 152

Małgorzata Dolińska: InnowacjepowstającewsiecinaprzykładzieChin... 163

Contents 7

Anna H. Jankowiak: Chińskieklastryprzemysłowe..................................... 173Karolina Łopacińska: Różnicekulturowewkontekściezarządzaniafirmą

wielonarodowązkapitałemszwedzkimichińskim................................... 184Magdalena Broszkiewicz: Innowacjewsystemieładukorporacyjnegojako

konieczneudoskonaleniefunkcjonowaniarynkukapitałowegowJaponii 197Jacek Pera: Współczesne tendencjew zakresie innowacji finansowychna

rynkuazjatyckim.Próbaoceny.................................................................. 207Artur Klimek: Rola państwowych funduszy majątkowych w gospodarce

światowej.................................................................................................... 216Paweł Folfas: Dubaj–wschodząceiinnowacyjnecentrumfinansowe.......... 226

PRACE NAUKOWE UNIWERSYTETU EKONOMICZNEGO WE WROCŁAWIU RESEARCH PAPERS OF WROCŁAW UNIVERSITY OF ECONOMICS nr 256 ● 2012

InnovationSourcesofEconomiesinEasternAsia ISSN1899-3192

Karolina ŁopacińskaWrocławUniversityofEconomics

CUlTURAl DIFFERENCES IN THE CONTExT OF MANAGING AN INTERNATIONAl CORPORATION WITH SWEDISH AND CHINESE CAPITAl

Summary: Due to globalisation and the fastrate of economic development,multinationalcompanies aregettingmoreandmorepopular.Theyare createdas aneffectofbeneficialbusiness agreements. One of these agreements is mergers. Mergers of companies fromdifferentculturesresultwithnewchallengesformanagers.Theyareconnectedwithcross--culturalmanagement,mainlywithcross-cultural communication. In thearticle theauthorpresentsconnectionsbetweenculturedimensionsandmanagement styles, staffbehavioursandcross-culturalcommunication.Thegoalofthearticleisaproperpresentationofreasonsandways inwhich themerger between theChinese companyGeelyAutomobile and theSwedish brand Volvo influences multinational corporation, when it comes to changes inGeely’smanagement.

Keywords: multinational companies, merger, cross-cultural management, cross-culturalcommunication,GeelyAutomobileVolvo.

1. Introduction

Globalisationprocessesand the fastpaceofeconomicdevelopmentstimulate theestablishment of multinational companies, the management of which requiresaccountingforculturaldifferencesbetweentargetmarkets.Cultureisafactorwhichstrongly affects a management style, since it influences thinking, feeling andbehaviour patterns, thus determining achieved results andgeneral efficiencyof acompany.Theeffectivenessofmanagingamultinationalcompanydependsontheadoptedmodel,amongwhichthefollowingmodelsneedtobeindicated:theculturaldominance model, the coexistence model and the model based on interculturalcooperation.1The last model is considered the most effective in internationalmanagement. Itallows theexchangeofdiverseviewpointsand ideaswithpeoplefromdifferentculturalcircles,thusenhancingcreativityandbecomingabasisformutual understanding, which is indispensable for achieving goals of a given

1A.K.Koźmiński,Zarządzanie międzynarodowe,PWE,Warszawa1999,pp.217–219.

Culturaldifferencesinthecontextofmanaging… 175

organisationandcompetitiveadvantageonthemarket.Theapplicationofthismodeldecreasestheprobabilityofconflictsinsideanorganisationandfacilitatessolvingthem. This is particularly important in a situation in which completely differentculturesclash,whichisthecase,e.g.,whenenterprisesfromdiverseculturalcirclesare merged. The cases of mergers with Chinese enterprises, which implementstrategiesofinternationalexpansion,deserveattention.TheaimofthispaperistopresentaforecastimpactofculturaldifferencesoninternationalmanagementofacorporationestablishedasaresultofthemergeroftheSwedishVolvocompanywiththe Chinese Geely company. The analysis was conducted as a cross-section ofHofstede’sculturaldimensions,i.e.,powerdistance,individualism,masculinityandlong-term orientation. Hofstede’s model is one of the most often used conceptsappliedinvariousresearchstudiesonculturaldifferencesinthecontextofmanagingan international corporation in crosscultural environment, even though thereexistdebatablebeliefsregardingthismodel.

Swedish andChinesemanagers represent completely diverse cultures,whichleadstodifferencesinthemannerofthinkingandbehavingoftherepresentativesofthesecountries.Hence,mutualcooperationinvolvesthenecessityofcomprehendingthemanagement style and themanner of conduct of the employees of a partnercompany,whichunfortunatelyoftenrequiresarevisionofcertainbasicprinciplesappliedbyagivencompany.ItisworthnotingthatChinesemanagersarefamousfor dodges, while Swedish managers prefer competition. The Chinese perceivethenotionofleadershipfromadifferentperspective,sinceleadersarenotusedtolisteningtotheirsubordinatesandadoptingteam’sviewpoint.Decisionsaremadebyleadersbasedontheirexperienceandknowledge.Participationofnotonlymanagersor owners but also of lower-level employees in decision-making processes is acharacteristicfeatureoftheorganisationalcultureinWesterncountries.

TherelationsbetweenthedimensionsofcultureandmanagementarepresentedinTable1.Theimpactofcultureonthemanagementstyle,employeebehavioursandcommunicationsystemisdemonstratedbasedontheanalysisofsecondarysources.

2. Management style

Thedatainthetablemakeitevidentthatthelevelofpowerdistancediffersinbothcountries,whichresultsindifferentmanagementstyles.DuetolargepowerdistanceinChinesecompaniesandhighlyhierarchisedstructure,subordinatesareafraidtocontradict the opinion of their superiors and decisions are not subject to teamdiscussion.IntSwedishculture,inturn,whichischaracterisedbysmallhierarchicaldistanceandlargeindividualism,decisionsaresubjecttothoroughdiscussionpriortotheirfinalimplementation.Theclashofthesediversemannersofmakingdecisionsmaytriggerconflicts.

Significant differences between Swedish and Chinese cultures refer to thelong-termorientation.TheChinesemanagementmodel ischaracterisedbyahigh

176 KarolinaŁopacińska

indicatoroflong-termorientationwithahighlevelofhierarchy,whichmeansthatthismodelisstronglyorientedonthefutureandfocusedongeneratingsavingsandpursuing a goal by undisputed performance of the decisionsmade by superiors.Hence,itisdifficulttoreconciletheChinesemanagementmodelwiththeSwedishone.TheSwedishperceivetheshort-termorientationappliedbythemasoneofthesourcesofgreatereffectivenessandefficiency.Theseculturaldifferencesintensifytheoccurrenceofcommunicationbarriers.

Table 1. Matrixofculture’sinfluenceoncommunicationbetweenSwedenandChina

Powerdistance Individualism Masculinity Long-term orientation

China China (80)

Sweden (31)

China (20)

Sweden (71)

China (55)

Sweden (5)

China (118)

Sweden (33)Sweden

Management style

Centrali-sationofpower

Decentra-lisationofpower

Decisionsmadebythemanager

Decisionsmadeasaresultofdiscus-sion

Resolu-teandassertive manager

Managerrelyingonintuition,strivingforreachingconsensus

Tendencytoadoptnewma-nagementstyles

Respectforone’sownman-agementstyle

Employee behaviour

Highlevelofemotionaldistancetowardssuperiors

Equalitywith superiors

Ideaskeptwithinonegroup

Ideassha-redwiththeentireorganisa-tion

Highpressureoflife;workasasourceofliving

Lowpressureoflife;workasasourceofself-ful-filment

Focusonlong-termsuccess

Focusonprofitsintheshortterm

Communication system

Highlevelofhierarchi-sation

Lowlevelofhierar-chisation

High-contextcommu-nication

Low-contextcommu-nication

Formalcommu-nication

Flexi-bility;acceptingpossibleincidents

Visionsofactionsdirectedat the future(flexible)

Visionsofactionsdirectedat the presentandthefuture

Source:R.He,J.Liu,Barriers of Cross Cultural Communication in Multinational Firms,2010.

Takingintoconsiderationthelevelofmasculinityasafeatureofculture,extremelyvariedresultsareobtainedamongthesecountries.Chinesemanagersaredominantindecision-makingprocesses,whileSwedishmanagersresttheiractionsonintuitionstrivingforreachingaconsensus.Suchdifferentorientationsofmanagerscertainlyresultintheoccurrenceoffurtherbarriersincommunication.InChinathemanagerisrequiredtopossesscompleteknowledgeonindividualareasofcompany’sactivitiesandallaspectsrelatedtheretobecausethisisnecessaryfordeterminingcompany’sgoals, takingproperdecisionsand shaping responsibility. InSweden, in turn, themanager’sroleistostimulatemediationamongsubordinatesinordertocoordinateemployeeactionsbetter,strengthenthemasagroupandincreasetheeffectiveness


of teamwork.Themanager is expected tomotivateemployees in anappropriatemannerandusetheirpotentialtoachievepursuedgoals.

The application of the Swedish style in managing Chinese employees maycausefundamentalproblemswithmotivatingthemtoworkastheseemployeesneeddetailed instructions anddecisions.Similarly, the excessively formal approachofChinesemanagersmaynotmeettheexpectationsofSwedishemployees.

3. Employee behaviour

Employees are a fundamental resource of each organisation and therefore it isnecessary to motivate them in an appropriate manner so that they achieve highefficiencyandenhanceanorganisationwithasimultaneous increaseofemployeesatisfaction.InSwedishcompaniesemployeesareproudoftheirworkandofwhattheydofortheirenterprise.Workisveryimportantinformingtheiridentity,strivingfortheirpersonalsatisfactionanddevelopment.EmployeesofChinesecompanies,in turn, have different expectations, since they hold the conviction that financialachievementsandstrengtharemoresignificant.Therefore,whattheyvaluemostiscompetitionandachievedresults,whicharefeaturesofaculturecharacterisedbyahighdegreeofmasculinity.

Moreover,employeesinChinesecompaniesarecloselyrelatedwitheachotherand their relations, particularlyon theprofessionalplane, are relatively complex,whichistypicalofthehigh-contextculture.Thisresultsfromalongserviceinanenterpriseandastrongrelationwithacompany. Inconsequence, theChinesearemoreprone towork in teams.However, itneeds tobeobserved that this typeofinterpersonalintimacydoesnotgobeyondthecompanywheretheywork.Hence,peopleworkinginthesameorganisationcommunicatewithoutsubstantialobstacles,whereas considerable difficulties arise with regard to people from a differentorganisation. In the low-context culture, in turn, people coming from differentculturesestablishrelationswithoutanyproblems.Thisiswhythecommunicationbetweenthemanagersfromthelow-contextSwedishcultureandtherepresentativesofthehigh-contextChinesecultureisnoteasy.Ontheonehand,theSwedishareafraidtoexpressthemselvesandtheirownexpectationsinawaytheywoulddosoamongeachother,andontheotherhand,theChinesetrytocontactwiththeirpartnersonlyinthecaseofemergencies.Itisobviousthatexpressingexpectationsbybothpartiesinfullisaconditionofefficiency.Otherwise,thecompanyhasdifficultyincreatingappropriateconditionsforcooperationand,whatfollows,takingadvantageof development opportunities.Reprogramming people originating from the high--context culture so that they get accustomed to functioning in the low-contextenvironment,andthereverseisbothextremelydifficultandtime-consuming.

ThesignificantdifferencesinthebehavioursofSwedishandChineseemployeesresultalsofromthenatureoftheprofessedorientation:short-terminSwedenandlong--terminChina.Thelong-termorientation,mostoftenappliedbyChinesecompanies,encouragesadifferentperceptionofprofitandloss.Therefore,theChinesebelieve


thatdecreasingshort-termprofitmaybebeneficial.Hence,theydecidetouselowqualitymaterialsandreducecostsinordertoachieveanincreaseinfuturefunds.However,suchpracticesnegativelyinfluencethereputationofnotonlythebrandbutalsoofthewholecompany.Conversely,fortheemployeesofSwedishcompaniesthebrandandreputationofacompanyistooimportanttoriskitsdepreciationbymanufacturinglow-qualityproductsinordertodecreasemanufacturingcosts.

4. Communication system

Inmultinationalcompaniesthecommunicationsystemisparticularlysignificantforthe international information flow.Anefficient communication systemcomprisesthelinksallowingcompany’semployeestocommunicatenotonlyinformationbutalsoprofessedvalues,whichisparticularlyimportantwhentakingjointinitiatives.

ASwedishcompany,suchasVolvo,isperceivedbyrecipientsallovertheworldas a dependable company which ensures high quality and reliability of offeredproducts andwhichwishes tomaintain its good reputation that has been earnedovertheyearsofitsoperationonthemarket.Thevaluesandgoalsinscribedinthemissionandvisionrefertoboththepresentandthefuture.ThevisionandmissionoftheChineseGeelycompany,inturn,refersstrictlytothefuture.Thisdifferencebetweentheorientationsofbothcompanieshindersmutualunderstanding.

The reasons for the diversity of the communication systems between bothcompaniesareaderivativeofthedifferencesinthelevelofhierarchicaldistance.InaChinesecompanyeventhemostinsignificantproblemneedstobereportedtothesuperiorinordertospecifythesolutionanddirectitsimplementationtoaparticulardivision.Hence,itmaybesaidthattheChinesecommunicationsystemisapurelyformalone,whereasinSwedishcompaniesthissystemismoreopenasitaccountsforthepossibilityoftheoccurrenceofunpredictablecircumstancesandsituations.

Due to the differences in management styles and employee behaviours,communicationbetweencompaniesfromSwedenandChinaisnotaneasytaskanditleadstonumerousobstacles.Themajorbarriersininterculturalcommunicationofsuchcompaniesarisefromthefollowing:

thelackofmutualunderstandingandspecificationofone’sexpectations, –differencesinemotionaldistancetowardspower, –diverseexpectationstowardsmanagers, –diversificationoftheabilitiestodealwiththeoccurrenceofincidents, –differentlanguagesandgeographicaldistance, –differentmotivationsforundertakingwork. –Hence,thebestwaytoachievedesiredcommunicationeffectsinamulticultural

companyismutualunderstandingofpartnersbasedonmutuallearningandadaptinginthemulticulturalperspective.2

2R.He,J.Liu,Barriers of Cross Cultural Communication in Multinational Firms,2010;R.Geste-land,Różnice kulturowe a zachowania w biznesie,PWN,Warszawa2000.


5. Merger of enterprises and its managerial implications

Amergerisanoperationconsistinginacombinationoftwoormoreenterprisesoranestablishmentofanewentityasaresultoftakingoveranenterprisebyanotherone. It constitutes a certain business agreement concluded by parties to achievecertaingoals.Themajorpremisesfortakingactionssuchasmergersareaboveallthewishtoexpandpresentoutputmarketsandobtaincheapersupplysourcesbygettingaccess to newmarkets and increasing access to thepresentmarket as a result ofevadingcustomsandadministrationbarriersestablishedbythecountryofapartner.Strivingfortheachievementofthesynergyeffectandthescaleeffectamongothersby joint creation and mutual exchange of technologies between the companiesoperatinginabroaderareaalsoneedsemphasisingamongthepremisesforamerger.Amergerallowsalsoforthereductionofincurredriskbyitsdiversification.Mostimportantly,however,amergerseemstobeanexceptionallygoodsolutionwhenonewantstostimulatethedevelopmentoftheircompany,improvetheirresultsachievedbyseekingasufficientlystrongstimulusfortheirlong-termdevelopment.3

The merger as a result of which the Chinese Geely Automobile CompanypurchasedtheSwedishVolvobrandfromtheFordgroupforUSD1.8billiontookplaceinMarch2010.ItwasthegreatestforeigntransactionperformedbythisChinesecompany.Bothpartieshadnegotiated the termsandconditionsof theagreement,whichhadafullsupportofBeijing,forovertwoyears.

Oneof thepremisesfor themergerof these twocompanieswas theexpectedexchangeofthebenefitslyingintheexperiencesandvaluesofVolvoaswellasinthepotentialandstrategyofGeelyAutomobile.Volvoisafamousbrandvaluedforitshighsafetystandard,highqualityandreliabilityofsoldcars.Thefollowingarethefourmajorvaluesprofessedbythecompany:

precision, skill and care for details in order to achieve high quality of the –manufacturedvehicles,appearancebasedonthepassionforsimplicity, –reductionofexhaustemissionwithsimultaneousincreaseinefficiencyandcare –fortheenvironment,strivingforensuringsafetyofitscustomers. – 4

Geelyalsoaspirestomanufacturethesafestcarsintheworld,whichwouldbeat the same time themost efficient andenvironmentallyfriendly.This largest andfirstprivate(hencerareinChina)carmanufacturerstrivesforenhancingitsbrandbyVolvo’sintellectualcapital,providingitinexchangewithaccesstotherapidlydevelopingChinesemarket,whichcanboasthighpotentialandhighprofitability.

3C.M.Christensen,R.Alton,C.Rising,A.Waldeck,Nowezasadyfuzjiiprzejęć,Harvard Busi-ness Review Polska2011,November,pp.51–60.

4http://www.volvocars.com.


Geely’sfounder,LiShufu,whobecamealsoamemberofVolvo’smanagementboard,assumesthatbothcompanieswillremainonthemarketasindependententities.Asaconsequenceofthemerger,Volvoexpandeditssupplier/dealernetworkby81ChinesecitiesandisplanningtostartmanufacturingcarsinChengdu,inSichuanProvinceGeely,wherethebrandhasnotbeenthatpopularyet.

VolvoaimsatincreasingitssalesinChinabyoverfourtimesin2015,i.e.,upto200,000cars.AsignificantstepinpromotingthesevehicleswastheemploymentofabasketballstarfromtheNewYorkKnicksteam,JeremyLin.

Under the technology transfer agreement Geely has full access to Volvo’stechnology,theuseofwhichontheChinesemarketwillreinforceGeely’spositionand its competitive advantage. Geely is planning to create a new make, GellyAutomobile,foramassChineserecipientwiththeuseofVolvo’stechnology.Therelationsbetween these twocompaniesaredescribedbyGuiShengYue,Geely’sexecutive director, as brotherly relations. There is no competition between thembecausetheyareorientedondifferenttargetmarkets.Geelysellsvehicleswiththemassrecipientas thetarget,whereasVolvoaimsat theluxurygoodsmarket.ThecooperationbetweenGellyandVolvohasbeenrelativelysuccessfulthusfar.5

Figure 1. GeelyAutomobile’sproductionfacilities

Source:www.geelyauto.com.hk/,GeelyAutomobilecorporatepresentation,December2011.

5 http://www.reuters.com/;http://news.flanders-china.be/.


GeelyAutomobileisaveryactivecompanyontheChinesemarket;itsambitionsinvolve expansion home and abroad. By introducing significant changes in bothmakesandproductionchains,Geelycreatedthreenewmakespromotedinall1,000showroomswithwhich itmaintains trade relations.Thecompany’sachievementsincludethedevelopmentofthetechnologiesthatarecrucialforthepursuedactivity,the establishment of nine industrial plants inChina (see Figure 1)with the totalcapacityof600,000unitsperyearand4%ofthecompany’sshareintheChinesesedancarmarket.Moreover,thecompanysells40,000carsperyeartoforeignmarkets.Ithasaccess toa rangeofvaluable resourcesandexpert’sopinionsbyestablishingstrategic allianceswith key international suppliers, focusing onmaintaining highqualityofservicesandhighlevelofcustomersatisfaction.6

GeelyisthefirstChineseautomotivecompanywhichpresenteditselfatacarshoworganisedinDetroit.Undertakenactions,thepotentialofthecompanyanditsstrategicaspirationspermittheexpectationofafurtherenhancementofcompany’scompetitiveness.After itsmergerwithVolvo, thiswillalso largelydependontheefficiency of intercultural management and particularly on overcoming potentialbarriersinthisrespect.

6. Proposed directions of changes in managing the Geely international corporation after its merger with Volvo

Adjusting themanagement style andmethods to the habits of the employees ofSwedishcompaniesisachallengeforChinesemanagers.Thisisextremelyimportantin the context of striving for the release of the potential represented by the staffemployedinVolvo.Thebasisoftheeffectivenessofundertakenactionswiththisrespectisaboveallgettingfamiliarwithculturaldifferencesandunderstandingthem,as well as developing such features of organisational culture that will facilitatetriggeringsynergyeffectsintheoperationoftheestablishedcorporation.Thepointistocreateconditionsforthecooperationbetweentherepresentativesofbothculturesinaccordancewiththeprinciplesallowingrespectforthespecificityofeachofthemandthereleaseoftheirbestfeatures.

Whenstrivingfortheachievementofthisstateofaffairs,changesoccurredintheorganisationalstructureofVolvo,wherethepositionofthedeputydirectorforoperationswithChinawas acquired byFreemanH. Shen in 2010.Owing to hiseducationobtainedinboththeUSAandChina,aswellastheprofessionalexperiencegainedininternationalcorporations,suchasTXUGroup,EatonCorp,BorgWarner,FiatGroupandZhejijangGeelyHoldingGroup,heacquiredanextensiveknowledgeofthefollowingareas:engineering,projectandinternationaloperationsmanagementaswellasbusinessandprojectdevelopment.Healsoobtainednecessarycompetences

6www.geelyauto.com.hk/,GeelyAutomobilecorporatepresentation,December2011.


in intercultural management. Due to that, he contributed to the rapid growth ofmanagedcompaniesandreceivedmanyawardsforhisachievements.7

However,thecooperationofthecompaniesoriginatingfromasdiverseculturalcirclesasVolvoandGeelyAutomobileposesaconsiderablechallenge.Thearisingproblemiswhatstrategytoapplyinmanagingamulticulturalteam.Thechoiceisamongtheadaptationstrategy(openacceptanceofculturaldifferencesandavoidingthem), the structural interference strategy (bymodifying the team structure), themanagerialinterferencestrategy(specifyingtheprinciplesofcooperationwiththepossibilityofengagingahigher-levelmanager)andthedismissalstrategy(ifotheroptionsproveunsuccessful).

Fromtheviewpointofinterculturalmanagement,theadaptationstrategyisthebest,sinceitallowstheteamtosolveproblemsindependently,withthelowestpossibleparticipationofthemanagementstaff.Adaptationisapplicableifteammembersarecapableofadmittingandnamingculturaldifferencesandassumingresponsibilityforlearningthem.Apartfromthat,teammemberslearnontheirowninthecourseoftheprocess.Adaptationcanleadtofullunderstandingofthecausesofproblemsandavoidingtheiroccurrenceinthefuture.Theopennessofteammembers’mindsandtheircreativeapproachtoculturalproblemsarecrucialhere.Thestrategyisalsothemosteducatingforthem.Inthecaseofthecooperationbetweencompanies,suchasGeelyAutomobileandVolvo,thestructuralinterferencestrategy,whichassumesstructural changes within the established corporation, may be also considered.However,thereisnoprovenmannerofsolvingagivenproblemintheinterculturalenvironment. Determining the solution requires first specifying faced challengesand next, and more importantly, assessing the circumstances in which the teamoperatesbecauseitisnotuntilanappropriateanalysisofsituationalconsiderationisperformedcantheteamleaderdeterminethepropermannerofreacting.8Inthecaseof theanalysedmerger, theadoptedaimwas thecoexistenceof two independentbrandsbasedoncooperationwhenstrivingformutualbenefits.Therefore,thereisno need to apply the structural interference strategy; themanagerial interferencestrategyperformedbytheaforementionedFreemanH.Shenissufficient.

7. Conclusion

Acombinationofcompaniesaspartofamergerisalwaysanextremelycomplexoperation in the present business world. The success of an international mergerdependsmostofalloncarryingoutanobjectiveanalysisofstrongandweakpointsofthecompaniesinquestion,aswellastheopportunitiesandthreatsthattheymayface.Itisalsonecessarytoaccountfortheuniquenessofthebehaviourpatternsof

7www.media.volvocars.com/.8 J. Brett,K.Bahfar,M.C.Kern, Zarządzanie zespołamiwielokulturowymi,Harvard Business

Review Polska2010,February,pp.115–125.


theentitiesexpressingtheirculture.Inordertoachieveexpectedresultsofabusinesstransaction, it is indispensable tobecomefamiliarwith the impactexertedby thebehaviourpatternscharacteristicforacompanyoperatinginagivencultureonthesuccess of the transaction. It is necessary to know elements common to therepresentativesofdiverseculturesandbeabletodistinguishthem.Adetailedanalysisoforganisationalbehavioursandculturesofcompaniesdemonstratesanareaofapossible agreement between parties, owing towhich the improvement ofmutualrelationsandcommunicationisallowed.Italsopermitsaharmoniousadjustmentoftheremainingcomponents influencingbehaviours, i.e., remunerationsystemsandemployee promotion systems for their performance.Doing this in a professionalmanner may constitute the best way to enter new markets and result in a verysuccessfulcooperation.9

Nevertheless,thevastmajorityofthistypeofagreementsendswithafailureformultiplereasons,amongwhichthefollowingonesshouldbementioned:adecreaseinthesharevalueasaresultofamerger,lowerprofitabilityincomparisontothelevelachievedprior toconcludinganagreementandasignificantlylowersynergylevel thanexpected.Oneof themajorcausesof this stateofaffairs isgiving toolittleattentiontothestageoftheintegrationofthecompaniessubjecttoamergerwith the focus on cultural standards, beliefs andvalues professedby.10Owing tothat, it ispossible tomitigateculturaldifferencesbetween interactingcompanies,andparticularlythemergingones.Thesuccessdependsalsoontheapplicationofanappropriatelyselectedstrategyofmanagingmulticulturalteams.

Managementstyleandinstrumentsaredeterminedmostlybyalltheeconomicobjectives of an organisation, as well as by its strategy, which is created withconsiderationforallprioritiesofcapitalowners.Althoughwhatiscrucialwhenitcomestoefficiencyisadequateinfluenceofbothculturesofthemarketonwhichanorganisationworksandtheabilityofshapingaculturalisationprocessesproperly.

references

ArnaudovaM.,The Role of Cultures in International Mergers Exploring the Reasons for Daimler- -Crystler’s Failure,JacobsUniversityBremen,January2011.

BrettJ.,BahfarK.,KernM.C.,Zarządzaniezespołamiwielokulturowymi,Harvard Business Review Polska2010,February,pp.115–125.

ChristensenC.M.,AltonR.,RisingC.,WaldeckA.,Nowezasadyfuzji iprzejęć,Harvard Business Review Polska2011,November,pp.51–60.

GestelandR.,Różnice kulturowe a zachowania w biznesie,PWN,Warszawa2000.HeR.,LiuJ.,Barriers of Cross Cultural Communication in Multinational Firms,2010.

9 M.Arnaudova,The Role of Cultures in International Mergers Exploring the Reasons for Daim-ler-Crystler’s Failure,JacobsUniversityBremen,January2011.

10AccordingtoNguyenandKleiner,2003.


KoźmińskiA.K.,Zarządzanie międzynarodowe,PWE,Warszawa1999.

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