Answer to Question #101987 in Management for george

Question

Imagine that you are the head of a profitable Silicon Valley software company seeking to expand into the Chinese market by acquiring an existing Chinese firm. Your company culture is highly decentralised and unbureaucratic. Performance incentives include extra vacation time. You anticipate that transmitting your company culture to your Chinese subsidiary will be difficult. What strategies might you use to make the process less painful and costly?

Answer 1

Expanding a Silicon Valley Software company into the Chinese market is extremely challenging because of the difference in culture. Silicon Valley companies have centralized and bureaucratic work cultures compared to the Chinese decentralized and non-bureaucratic cultures. Expanding into the Chinese market requires some strategies that make the process less costly and painful. One of the strategies is the training and development of the personnel on the Chinese culture to enhance their performance and interactions with the locals. The difference in culture may have adverse effects making it significant to take foreign employees through training. Training of personnel should focus on communication including verbal and non-verbal, work cultures and social values. Another method to enhance expansion into the Chinese market is recruiting people in the Chinese market. The company should hire locals who understand the local work practices and culture to streamline the operations of the foreign venture. The company should have local employees at different levels of management. The organization also requires recognizing the Chinese culture as the main organizational culture. Maintaining the Silicon Valley organizational culture would result in a culture crisis. All the operations of the organization should be aligned to the Chinese culture and maintaining international standards.

References

Reissner, S., Pagan, V., & Smith, C. (2011). ‘Our iceberg is melting’: Story, metaphor, and the management of organizational change. Culture And Organization, 17(5), 417-433. doi: 10.1080/14759551.2011.622908