Wharton Around the World

By Robert Gunther

Management professor Karen Jehn is asking for trouble. For the past seven years, she has been traveling to China, and more recently to Russia, to interview domestic managers and expatriates about sources of conflict in their cross-cultural joint ventures. During the roughly two to four months she spends abroad each year, she has heard many tales of woe — ranging from crossed signals to corporate failures — because of cultural misunderstandings.

International joint ventures, says Jehn, Kraft General Foods Term Assistant Professor of Management, are a cross-cultural disaster waiting to happen. For example, consider the difference in the way Chinese and American managers deal with conflict. If Chinese managers have a problem with another manager, they will tell a third party about their conflict and the third party will communicate with the manager. American expatriates, on the other hand, will directly confront the offending colleague. The Americans feel their Chinese colleagues are going behind their backs, while the Chinese are offended by the directness of their Western peers. “The natural way for Americans to deal with conflict is the exact opposite of the Chinese approach,” says Jehn.

Even a simple matter such as answering the phone in Russia can be problematic. Many Americans complain that Russians do not take messages, but in Russia, it is the responsibility of the calling party to keep trying to get through. There is no expectation or obligation to return phone calls, nor for a secretary to relay a message to a manager. A standoff is created as Americans wait for unreturned calls and Russian managers can’t understand why their U.S. colleagues don’t keep trying. And you thought the cold war was over.

Cross-cultural conflicts go far beyond the issue of positive or negative corporate environments. They can make or break a joint venture. “The problem with joint ventures isn’t just market issues; it is the day-to-day functioning of different people in different cultures,” says Jehn, whose work has earned her recognition from the National Science Foundation, the American Psychological Association and the Academy of Management.

For example, cross-cultural conflicts nearly destroyed Chrysler’s manufacturing joint venture with a Chinese company during the mid-1980s. As author Jim Mann writes in Beijing Jeep: The Short, Unhappy Romance of American Business in China : “The atmosphere became so tense that even the most trivial business dealings between the Americans and Chinese became bogged down in charges and countercharges.”

Cultural differences contributed to the failed attempts of several major hotel chains to enter Russia. American managers found it difficult to teach staff to follow American standards of customer service. In contrast to the American belief that “the customer is always right,” the Russian tradition was “the seller is always right.” Once re-educated, the Russians then erred in being too customer-oriented. “They didn’t realize, for example, that you don’t just give away meals for free,” says Jehn. These and other problems led to the withdrawal of three major chains from the Russian market.

In the seven years since Jehn began studying this issue, companies have become a little more aware of the importance of cross-cultural conflict. They are spending more time on cultural training, she says, and relying more on domestic managers rather than sending expatriates for two-year stints — a strategy that has led to reduced conflicts among expatriates and between them and domestic managers.

Some of the studies conducted by Jehn and her colleagues ask managers to respond to specific situations of cross-cultural conflicts. The reactions of Chinese and American managers to the same situation are often quite different. Consider this example:

An American manager has a Chinese colleague who is as old as he is. The manager feels his colleague is secretly competing with him. The manager also believes his colleague stole some of his (the manager’s) ideas and presented them to their boss as his own. The manager has another grievance: He feels his colleague gave him an old computer reference program even though the colleague had a newer version of the program which would have saved the manager tremendous time and effort. (The same scenario is presented to Chinese managers with the roles reversed.)

Americans recorded five different responses to this scenario:

– Active: Communicate with colleague to work it out
– Passive: Stop sharing ideas
– Conciliatory: Figure out how to work together … have an exchange … encourage colleague to think the same way
– Aggressive: Remove authority
– Accommodation: Shouldn’t do too much … ignore problem

The Chinese recorded four responses:

– Indirect and constructive: Tell friends and colleagues; they will talk to colleague to improve situation … use indirect signals, then colleague won’t do it again
– Direct and not constructive: Give false information … explain to boss and then avoid colleague … complain to boss, get back at colleague
– Direct and constructive: Don’t argue, but complain to boss … go together to see boss … raise issue in formal meeting
– Indirect and not constructive: Get newer version to embarrass him … don’t tell ideas to him .. wait and see; then put an end to his tricks — don’t talk to colleague.

Source: Elizabeth Weldon, Karen A. Jehn, Lorna Doucet, Xiangming Chen, Zhong-Ming Wang, “Conflict Management in U.S.-Chinese Joint Ventures.”

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