Question $1$

Read below case study$1$ on international knowledge transfer:

The Company:

Alpha Beta Company $($ABC$)$ is a medium$-$sized Swedish company with about $200$ employees at its headquarters. The firm is specialized in office appliance manufacturing, and is a market leader in its industry in Europe. ABC owns several subsidiary companies in other countries, one of which is in China. This Chinese branch is located in Shanghai, one of the fastest developing regions in China, and has about $400$ employees. The Shanghai branch previously was a state$-$owned factory, and had a good reputation in the local office appliance industry. Back in $1998,$ when the Swedish company bought $51\%$ share of the Chinese company, it became a Sino$-$Swedish joint venture. Later, in $2002,$ the Chinese subsidiary was totally bought out by the Swedish company and became a wholly owned foreign enterprise.

In Sweden:

It is $9$:$00$ a$.$m$.$ on Monday in Sweden. The technical product manager of ABC sent an email about the new design of a product to its subsidiary company in China. He would like to have a production ready model of the new design by Friday, when he flies to China. An email came on Thursday saying that there was a $1$mm error in the product the Chinese subsidiary made, and asking the manager what they should do$.$ The product manager finds himself confused: $$Do they need to ask such a question? They could simply adjust the error and give me the model on Friday. Why are they waiting for orders instead of taking initiatives?$$

In China:

It is $15$:$01$ Monday in Shanghai. The Chinese R&D manager in Shanghai received an email from the parent company in Sweden. The parent company asked for a production ready model of the latest design in five days. The R&D manager called the production manager immediately, and $3$ days later he got the new model $$ but with a $1$mm error. He knew it would be better to provide a standard model, but nevertheless decided to notify the Swedish manager first and let him to decide what to do$.$ It is$,$ after all, the Chinese way of showing respect to their superior by asking the latter$$s opinion on everything.

$1$ Based on: Rufei, He & Jianchao, Liu $(2010).$ Barriers of Cross Cultural Communication in Multinational Firms $$ A Case Study of Swedish Company and its Subsidiary in China. Halmstad School of Business and Engineering.

Analyse the above case and identify the cross$-$cultural differences between the Swedish firm and its Chinese subsidiary in terms of a$)$ management style, b$)$ staff behaviour, and c$)$ communication system in relation to Hofstede$$s dimensions of national cultures.

For each of the statements below, mark which country they apply to$,$ and which dimension of national culture they reflect. Copy the tables into your answer booklet and complete accordingly. $(30$ marks$)$

$1.$ Decisions are made through discussion, via consultative approach, and strong individual opinions and resistance are expected. Loyalty in execution, however, is demanded.

$2.$ Management is confident in past achievements, with a clear focus on successes in the present.

$3.$ Fear of negative outcomes and personal blame lead to conservatism; responsibility is pushed down.

$4.$ Managers use intuition and strive for consensus, with due attention to the caring aspect and emotional arguments.

$5.$ Power is decentralized and flat organizational structures prevail.

$6.$ Management embraces a long$-$term vision by making decisions that may seem arbitrary now.

$7.$ The manager himself makes the decision, as the sole source of authority; strict downward pressure is applied, but subordinates collectively and loyally expect and accept top$-$down decisions.

$8.$ Power is centralized in strong hierarchical structures.

$9.$ Management demonstrates a willingness to take risks and learn from mistakes; they show a strong sense of individual responsibility.

$10.$ Managers are expected to be decisive and assertive, demonstrating strong masculine behaviour.