The Management of Culture in Chinese International Strategic Alliances
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The Management of Culture in Chinese International Strategic Alliances Li Donga and Keith W. Glaisterb a
School of Management, Royal Holloway, University of London, Egham, Surrey TW20 0EX, UK. Management School, University of Sheffield, 9 Mappin Street, Sheffield S1 4DT, UK. E-mail: [email protected] b
This study examines the rationale and consequences of the adoption of culture management policies by Chinese parent firms in their international strategic alliances (ISAs). We distinguish between national and corporate culture and examine the perceptions and effects of both constructs. From a sample of 238 Chinese ISAs, using questionnaire data obtained from Chinese partners, we find that (i) a policy of active culture management is more likely to be adopted the more important national and corporate culture differences are perceived to effect ISA outcomes, such as performance, learning and trust; (ii) the perception of culture difference between ISA partners is reduced in firms adopting culture management policies, for the perception of both national and corporate culture differences and (iii) firms adopting culture management policies report a much higher degree of trust at different relationship levels of the ISA compared with firms not adopting these policies — this tends also to be the case for Chinese firms whose foreign partners have adopted culture management policies compared with those whose partners have not. Asian Business & Management (2007) 6, 377–407. doi:10.1057/palgrave.abm.9200234 Keywords: international strategic alliances; culture management; national culture; corporate culture; China
Introduction International strategic alliances (ISAs) are ‘the relatively enduring interfirm cooperative arrangements, involving flows and linkages that utilise resources and/or governance structures from autonomous organisations headquartered in two or more countries, for the joint accomplishment of individual goals of each sponsoring firm’ (Parkhe, 1991: 581). Conflicts between partners of different nationalities arising from culture differences are often cited as reasons for the high dissolution rates of ISAs (Brown et al., 1989; Shenkar and Zeira, 1992; Hennart and Zeng, 2002). National culture differences may reduce Received 4 April 2006; revised 27 September 2006; accepted 20 February 2007
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effective communication, trust and knowledge-sharing in ISAs, which in turn may lead to lower alliance performance (Parkhe, 1991; Lyles and Salk, 1996; Doney et al., 1998). Different corporate cultures may exaggerate a sense of difference between potential partners and further complicate the management of ISAs (Weber et al., 1996; Pothukuchi et al., 2002; Sirmon and Lane, 2004). National and corporate culture differences are related but different from each other (Brown et al., 1989). The effect of national culture differences is well examined in ISA research, but not that of corporate culture differences, though that remains a major hindrance in managing
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