On the surface, this highly successful joint venture in the electronics industry is going well. Research and development (R&D) is based in Germany, and production is based in China. The business is starting to be profitable. But tensions are developing in the team, and an external consultant is brought in to analyse the situation. This is what she reports after interviewing representatives from both sides.

The German managers views of the Chinese: "We are impressed by our ambitious Chinese colleagues and their speedy reactions. They seem keen to learn and are very open-minded. What is not so good is that they aren't prepared to take responsibility or follow agreed procedures. They think in a hierarchical way and there is very little horizontal communication. They seem reluctant to take the initiative or make independent decisions.

Recently, they have started to turn up late to meetings or not come at all. When we ask them about a problem, they often beat about the bush, and it is very difficult to know what they are really thinking. They smile politely and say yes, but don't do anything. I wish they'd put their cards on the table and tell us directly if they have a problem with something. We've hired quite a few new Chinese colleagues but, although they have excellent qualifications on paper, we've been disappointed with their performance. The other issue is loyalty. We hire them, train them and then they leave and join one of our competitors."

The Chinese managers' views of the Germans: "The Germans are excellent planners, and they think very logically. We like their focus on quality and their disciplined, straightforward approach. They like China and clearly enjoy themselves when they come to see us in Shanghai. On the other hand, they don't seem to trust us. They don't give us any real responsibility. Instead, they set up complicated processes that just slow everything down and stop us from reaching our targets. They waste time with too many meetings. They are never available when we need them - you can rarely get them at the weekend and they often seem to be away on holiday. If we can't get an answer to our questions quickly, we have a problem with the deadlines that they have set for us and keep insisting on.

An analysis of the key cultural differences creating the tension

There seem to be a number of cultural differences here:

Responsibility
While the Germans think that the Chinese don''t take responsibility, the Chinese don''t feel they are given any. For the German side, taking responsibility means acting independently within a predefined framework. For the Chinese, taking responsibility means to have clear instructions and authority to deal with specific targets and procedures.

Rule bending
The Chinese are accustomed to getting things done through informal channels and expect to be able to make exceptions when issues arise. The Chinese see their own ability to get around rules as a positively valued skill. They often ignore or bypass rules or regulations if they feel this is necessary to achieve their goals.

Decision making
The Chinese are used to top-down decision-making and value rank and seniority. They think those at the top are responsible for outcomes and expect their managers to make all decisions. The Germans believe that some decisions can be delegated but the Chinese prefer to have clear lines of authority and responsibility in the workplace.

Attitudes to Meetings
The Chinese don''t see the importance of the meetings and being team players. They think it is important to communicate with their managers, but not with the whole team. If the managers are not present at the meetings, the Chinese feel there is no real need to attend them.

Directness
The German style of straightforward communication is foreign to the Chinese. The Chinese prefer indirect communication and rely heavily on context to communicate important meanings. They do give feedback but in an ambiguous way. Rather than stating it explicitly, they show their disapproval by avoiding the problem, through silence or failure to cooperate.

Educational background.
The young Chinese managers have excellent theoretical knowledge but lack of practical experience. The job profiles don''t match those that the Germans are used to. The Chinese education system does not encourage lateral thinking or learning from experience. Leaders, teachers, books are the source of learning. Personal experience is only fragmentary compared to the collected wisdom.

Chinese culture values hard working and there is no clear distinction between work and private life as the Germans do. They are expected to be available 24 hours a day. Clearly The Chinese side have difficulty to accept the German way of time management. There is also a clash of different life styles and attitudes toward work.

Recommendations

Intercultural Consultant Jennie Gao advises the following points:

While it is necessary to promote advanced German business management model, expatriate managers should be aware that strict adherence to the rules may create internal tension in a flexible and rule bending business environment. Some adaptation and integration of business procedures on both sides is desirable. Both sides must first determine differences in business practices and then be prepared to make adjustment in order to prevent further conflict.

The combination of a strong group orientation and individual desire for equal treatment generates reluctance among the Chinese to accept responsibility or take initiatives. In a hierarchical and top-down Chinese management model, there is little room for delegation or individual responsibility. What the company can do is to offer material attractions or performance related incentive in return for accepting individual responsibility, such as higher pay, equitable treatment and good prospects for advancement. Then the Chinese may decide to go along with them. They may also be encouraged to accept practices from another culture if these are perceived to be part of a more comprehensive policy.

As in all international teams, time has to be invested in team building and fostering company identity, corporate culture, mission, goal and values. A personal action plan should encourage the Chinese to learn working as part of a team and taking initiatives. Management expectations need to be clearly defined on a case to case basis. Local staff need to establish what their personal goals and company's expectations are.

The two sides need to become aware of the fact that there are different communication styles e.g. explicit vs. implicit. To let effective communication take place, both sides need to identify certain cultural factors that influence their thinking and behaviour. The Chinese side need to use a more linear, simple communication style and be less circular. The German side need to communicate the importance of the meetings that everyone who is needed should make sure to attend them so that decisions can be taken.

Saving face is a strong psychological drive in China. Direct or confrontational approach to conflict, or giving negative responses are to be seen facing-threatening and hurting relationship. In cases of intercultural conflict, the Chinese managers may avoid dealing directly with their foreign colleagues. The use of an intermediary or third party trusted by both sides to resolve conflicting situations is recommended.

Respect and trust between the parties is fundamental to effective business relationships. This is particularly important to the Chinese side from a point view of cultural traditions. The German side needs to adopt a people-orientated management strategy and invest in "guanxi" with their Chinese counterparts. Time needs to be spent on rapport building and establishing credibility among local business communities.

The Chinese concept of time is circular and loose use of time. The Chinese don't believe planning is the cure-all for problem prevention and the schedule must follow the flows of events. The German side need to accept that working with their Chinese colleagues cross different time zones, flexible time management is necessary. The Chinese side need to learn dividing private and work life into different segments.

Your task is to think about the main cultural differences underlying the tension. What advice would you give to each team to prevent further conflict escalation?

Please send your comments and suggestions to info@chinagenie.co.uk This e-mail address is being protected from spambots. You need JavaScript enabled to view it