China National Building Material Company’s and ABC Supply’ Merger

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Table of Contents

Introduction
Conclusion
Works Cited

Introduction

China National Building Material Company [CNBMC], which is a firm in the Chinese building and construction industry, intends to merge with ABC Supply that operates in the US roofing and building material industry. The objective of the merger is to establish a multinational company, hence attaining competitiveness in the global building industry. However, the success of the merger will be determined by the extent to which the management teams analyze and understand the United States and China’s cultures and values.

Cultures and values

The national culture and values of the two countries can be assessed using the national culture dimensions as proposed by Geert Hofstede. These dimensions include power distance, individualism, uncertainty avoidance, and masculinity (Varner and Beamer 5).

Power distance

This dimension emphasizes the inequality between individuals in a particular society or organization about power or ability to influence other people’s behaviors and opinions. China’s power distance index is estimated to be 80 while that of the United States is 40. This aspect shows that the Chinese generally accept power inequalities within society, while the Americans emphasize the provision of equal rights amongst all.

Individualism

Elmer defines individualism as the extent to which individuals in a society or organization value and maintain interdependence (73). American society is characterized by a high degree of independence, as evidenced by the individualism score of 91. Conversely, China appreciates collectivism as illustrated by the low individualism score of 20. Therefore, the Chinese value working as a group (Elmer 48).

Masculinity

This dimension assesses the degree to which individuals in a society are motivated by success, competition, and achievement. The Chinese masculinity score is estimated to be 66 while that of the US is estimated to be 62. Thus, the Chinese are masculine, and hence, success-oriented — the Chinese sacrifice a substantial amount of their leisure and family time to work (Elmer 91).

Uncertainty avoidance

This dimension assesses a society’s tolerance for ambiguous or unknown situations. China’s uncertainty avoidance index is estimated to be 30 while that of the US is 46. This aspect shows that the two societies value new ideas and opinions.

Communication characteristics

Communication is one of the cultural components and it affects how relationships are developed. China has five distinct communication styles, which include implicit communication, polite communication, face-directed communication, listening-centered communication, and insider-communication. The listening-centered communication emphasizes on allocating communication roles to seniors, experts, or leaders.

Additionally, the Chinese are very polite, and they observe protocol during negotiations. The insider-oriented characteristic asserts that the Chinese speak with relative ease with people that they know as opposed to strangers. On the other hand, face-directed communication characteristic explains the Chinese’s commitment to achieving social harmony by controlling emotions and appearing humble during communication (Fang and Faure 8).

On the contrary, the American communication style can be described as direct, which emanates from the American culture that emphasizes efficiency, individualism, egalitarianism. Moreover, the Americans prefer being straightforward, informal, and literal, and they freely exchange information with anyone irrespective of their seniority (Fang and Faure 9).

Standardization or localization

To succeed, the new entity formed through the merger must determine whether to standardize or localize its organizational culture and values. Some of the issues that the firm will be required to take into account relate to its people management practices. First, the firm will be required to assess the opinions and ideas of the employees in both firms on various aspects such as the reward system, employee training, and recruitment.

Employees of the two firms may have a divergent opinion regarding the most effective reward management practices, employee training, and recruitment. Moreover, it is imperative for the new entity to determine whether to standardize or localize its internal communication processes.

Failure to consider these elements and standardizing or localizing the new entity’s operation to a particular culture might affect the employees’ morale and productivity. Additionally, the firm may experience a high rate of employee turnover, thus leading to the failure of the new entity.

Effect of the new organization and structure on communication

The new entity established might experience a challenge in its internal communication processes due to the cross-cultural differences between China and the US. As a collectivist society, the Chinese firm may prefer the new entity to adopt a hierarchical organizational structure to ensure effective control of the organization’s operations, which means that CNBC may prefer a top-down communication channel.

On the other hand, ABC Supply may perceive hierarchical organizational structure as a matter of convenience and hence may prefer a situation where the lower level employees can be in a position to share information with the top-level managers conveniently. Consequently, ABC Supply may prefer a bottom-up communication channel. This difference may affect internal organizational communication. Therefore, the firm must collaborate in designing its internal communication processes.

Conclusion

National culture constitutes one of the core components of a society’s existence, and it varies from one country to another. Thus, firms intending to operate as multinational companies must evaluate the prevailing cross-border cultural differences to formulate effective organizational strategies.

Works Cited

Elmer, Duane. Cross-Cultural Connections: Stepping Out and Fitting in around the World, Illinois: InterVarsity Press, 2002. Print.

Fang, Tony, and Guy Faure. “Chinese communication characteristics: A Yin Yang perspective.” International Journal of Intercultural Relations 4.2 (2010): 1-14. Print.

Varner, Iris, and Linda Beamer. Intercultural communication in the global workplace, New York: McGraw-Hill Education, 2011. Print.

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