Intercultural Trainings for German Expatriates going to China

Table of Contents

1 Introduction

2 The China business environment
2.1 Economic Data
2.2 Chinese culture
a. Confucianism
b. Daoism
c. Guanxi
d. Face
2.3 China as a textile market
2.4 The Chinese and German economic relations

3 Culture
3.1 Basic considerations about culture

4 The preparation of German employees for a business trip to China
4.1 The reasons why companies send their employees abroad and the motivation factors from the employees’ point of view
4.2 Selection process and selection criteria
4.3 The intercultural learning process
4.4 Intercultural trainings – an overview
4.4.1 The history of intercultural trainings
4.4.2 The aims of intercultural trainings
4.4.3 Confusing diversity
4.4.4 Methods / Approaches of intercultural trainings
4.5 Evaluation of an employment abroad and an intercultural training

5 Different suppliers of intercultural trainings
5.1 SinaLingua
5.2 IFIM – Institute for intercultural management

6 Empiric study about the preparation of German employees in the textile and clothing industry and the comparison with other industries
6.1 Introduction
6.2 The results of the investigation
a. The textile and clothing companies
b. The companies from other industries
6.3 Analysis
a. The textile and clothing companies
b. The companies from other industries

7 Concept for an intercultural preparation of an expatriation

8 Summary

9 Bibliography

10 Declaration

11 Abstract

12 Appendix

Table of figures

Figure 1: The distribution of income according to the group of employment in China (data in % of popularity)

Figure 2: China’s imports in Mio US $

Figure 3: China‘s textile exports in Mio US $

Figure 4: Labour cost in the textile industry, Winter 04/05

Figure 5: German Apparel Imports 2005

Figure 6: Model of culture

Figure 7: The influence of culture on the behaviour

Figure 8: Important aims of dispatch of German companies

Figure 9: Reasons for a delegation abroad (employee’s point of view)

Figure 10: Hierarchy of needs by MASLOW

Figure 11: Selection criteria of dispatches abroad in order of importance

Figure 12: Requests on international employees from the employees' point of view

Figure 13: Selection criteria according to Mendenhall, Dunbar and Oddou

Figure 14: The model of learning intercultural communication by BEAMER

Figure 15: Desired training outcomes, suggested methods, and evaluation activities

Figure 16: Typology of Intercultural Training

1 Introduction

The increasing international interconnection of the world’s economics has the consequence that more and more German employees have to stay abroad for a longer time^[1].

The south-east Asian and especially the Chinese economic environment are gaining a bigger and bigger role – also for the German textile market due to a strong economic growth^[2], the low wage level – especially in the manufacturing branch this is an important decision factor - at approximately € 0, 32 per hour^[3] and the size of a potential market. The low wage level will not rise in the near future^[4]. China as a market is not interesting at the moment because the purchasing power is not large enough at the present^[5].
The fact that China’s economic importance is growing requires a new kind of approach to enter the market in any kind of way. Since Germany is a country with only few raw materials the requirements of manpower have changed. The requirements regarding the qualification of the labour rise and the so-called ‘human-capital’ develops into one of the factors with the biggest influence on economic growth and employment^[6].

China does require special skills regarding management, communication and intercultural interactions. In the last years the persons in the responsible departments became aware of this.

A relatively new area of research has become more and more important for the human resource departments in German companies: the intercultural preparation of employees and expatriates.

Expatriates fill the key positions for the exchange of information between the parent company and the office abroad^[7].

For a successful expatriation a profound preparation regarding intercultural communication and behaviour is needed. The better the preparation the better will be the expatriation for the company and the expatriate. A failed dispatch abroad can cost the company approximately € 125.000, - per employment^[8]. However, the consequences for the expatriate can also be disastrous: social and professional decline and depression and others^[9].

This work has the aim to answer the following questions:

- How can well designed training programs look like?
- What kinds of possibilities do exist?
- Who does offer intercultural trainings in Germany?
- How are employees in German textile and clothing companies prepared in practice compared to other industries?
- Is the investment in the intercultural trainings useful, efficient and worth it?

To find answers to these questions the second chapter gives an overview about China’s business and cultural face and the Chinese-German relations.

In the third chapter the expression culture itself and its influence on the human behaviour are explained.

The fourth chapter presents the area of intercultural trainings and preparation of German employees who are sent to China: the history of intercultural trainings and the different methods, the role of intercultural trainings for the preparatory process and ways to evaluate them.

In the fifth chapter two German renowned suppliers and their programmes are introduced.

The question how German employees of textile and clothing companies are prepared – also in comparison to other branches of industry - is attempted to be clarified in the sixth chapter by presenting an empiric study which has been drawn up by questionnaires filled in by German employees, conversations with experts and extracts from companies’ policies regarding human resource management.

The seventh chapter introduces a concept and guidelines for companies for an integral intercultural preparation for German expatriates. The eighth chapter draws a final conclusion.

2 The China business environment

2.1 Economic Data

In the last years due to the opening of China, China has become a country where the western world sees a lot of potential regarding business opportunities and success. On the world wide list China is in the sixth place among the size of national economy and still in the forth place tending to the third one regarding China as a trading nation^[10].

Regarding the consumer behaviour China is changing rapidly as well. The consulting company McKinsey predicts that until 2010 the number of Chinese people who have a purchasing power of 25 000 US dollar and will rise to 50 million people^[11]. Similar predictions are made by German CEOs such as Jürgen Hambrecht from BASF. He says that from the world wide 1, 1 billion people who had more than 10 000 US dollar at their disposal more than 700 million came from China.

In December 2003 Asia demographics published a study about the groups of employment in China and one can see clearly that the number of well earning Chinese is rising.

Figure 1: The distribution of income according to the group of employment in China (data in % of popularity)

Abbildung in dieser Leseprobe nicht enthalten

The low labour costs in China have always been a reason for western companies to outsource their production to China. The legal minimum hourly wage in China amounts / comes to 0.31 US $^[12]. The average hourly wage which is paid is slightly higher.

2.2 Chinese culture

a. Confucianism

The Confucianism is the education of the society whose main interest lies in the ‘cultivation of the personality’ meaning the role of the individual towards the society. It was founded by Confucius who lived from 551 till 479 b.c. The aim was to create a copy of the heavenly order the ‘Great Harmony’^[13].

Although Confucius said that his philosophy was no religion it was based on one of the oldest religious rites: the worship of the ancestors.

Confucius developed a very complicated and interwoven system of relationships between the single family members and friend and friend (the only relation with possible equal rights). This system also included the regulation of claims to oneself and others and certain rules of behaviour.

The so-called ‘Five Relations’ within the family weld together the family, the state and heaven to a unity^[14].

The Chinese ‘xiao’ – the love and duties towards the family, the ancestors and the state – is the basis for the human order as an image of the universal order. The family order is seen as the germ cell / nucleus of the state.

Although the Confucianism has been changed through the decades often to the advantage of certain rulers it has been stable and effective in its essential features.

b. Daoism

The Daoism arose around the same time as the Confucianism but does turn into the very opposite direction. The actions of the individual in harmony with the dao, often translated by ‘way’ meaning a productive, leading and omnipresent power that can only be experienced with the fusion of nature, build the main focus and not the societal norms and hierarchies.

The daoist does not work against the nature and its forces but practices a non-intervention which should not be confused with not taking any actions.

The daoists often represented the opposite of the present government.

The actions should follow the power and the rules of nature and create harmony.

Historically seen the founder of the Daoism is the eremite Lao Tse (Old master).

c. Guanxi

Literally ‚guanxi’ means ‘relationships’ and includes any kind of relationship: regarding the private life or the business life.

It does not only mean friendship but this term is often mentioned in context to ‘guanxi’. It is a whole network of relationships. ‘Guanxi’ means among other things ‘I’ll scratch your back if you scratch mine’ or in other terms it means doing favours and loyalty. The Chinese link friendships and business contacts to mutual duties. One negative result might be that foreign people who do not maintain any relations to Chinese people are taken advantage of by demanding unlimited and unpleasant goods or services^[15].

Although ‘guanxi’ has a historical and cultural background in the Chinese society it is still present also in business life with foreign companies and it cannot be overlooked even though one can observe a loosening coming along with the integration of China in the world’s economics.

But it is also often misunderstood as a ‘magic key’ that can open hidden and closed doors for foreign business men and women^[16]. It is more a traditional and social ‘custom’ that still plays a key role in China. Once the right ‘guanxi’ has been established it can help to overcome hurdles and other kinds of problems on the long run. It minimizes risks, frustrations and disappointments when doing business in China. The right ‘guanxi’ means among other things meeting the right people from the right field. It is of course necessary to establish strong relations with your business partners but since Chinese companies are still often supported by subsidiaries from the government it is no less important to have relations to the Chinese government or officials^[17].

One definition of ‘guanxi’ was given in 1994 by Yang^[18]:

‘Guanxixue involves the exchange of gifts, favours and banquets; the cultivation of personal relationships and the networks of mutual dependence; and the manufacturing of obligation and indebtedness. What forms these practices and their native descriptions is the conception of primacy and binding power of personal relationships and their importance in meeting the needs and desires of everyday life.’

The term ‘guanxi’ can be subdivided into two fields depending on the type of relationship:

On the one end you have ‘ganqing guanxi’ or ‘emotional tie’ which covers loyalty, emotional feelings and the observance of social propriety. This field corresponds to the Western understanding of friendship. Another facet is to keep promises and to be reliable like good friends are. Keeping contacts regarding ‘guanxi’ is a key element. It is often reported that when foreign companies made their first steps in China the business meetings differed a lot to the European ones: business itself was sometimes not even mentioned. But the patience and the willingness to keep contact were worth it^[19].

The more important field for business life is the ‘jinqian guanxi’ or ‘money tie’ which emphasizes the utilitarian and instrumental aspect of this type of social relationship^[20]. This form of ‘guanxi’ can be mistaken for bribery in the Western sense but this is not true. To a certain extent gifts such as wine and cigarettes or German chocolate are very welcome presents which back up the establishment of ‘guanxi’ but the monetary value should not pass a certain limit.

One should not only try to apply one field of ‘guanxi’. A mixture of both promises the best results.

The history and cultural anchoring of ‘Guanxi’

The development of ‘Guanxi’ has its origin in the frequently changing powers in China. The Chinese people realised that they can only survive by maintaining a strong and powerful network of relationships based on family, common school education (tongxing), common origin (tongxiang) or the common family name.

During the introduction of the communistic power the parameters were enlarged: common entrance to the communist party, common visit of the party’s school or the common unit in the army^[21].

The Chinese idea is that political and social events are tightly linked to the cosmic processes of heaven and nature. A good net of relationships where taking and giving are balanced results in harmony. The concept of heaven philosophy was built by the philosopher named Dong Zhongshu during the Han Dynasty (approx. 206 before the time – 220 after the time ‘v.d.Z.’). The period of the Han Dynasty is also titled as the ‘golden era of China’. And also the fundaments for Daoism and Confucianism were built.

As mentioned before it takes a lot of time and patience to build up the right ‘guanxi’ with the right people. This time is definitely worth it but one should not forget that China is not known for its (political) stableness and once ‘guanxi’ with high ranked officials has been established it does not guarantee that it lasts forever. The same is true for business contacts^[22].

d. Face

The term face in China does not mean face in the sense the Western world knows it. It describes one of the most ancient concepts of self-definition of a Chinese person regarding the social association and moral behaviour.

It means to avoid any embarrassing situation for oneself and also for one’s counterpart. One can keep or lose the face due to the own behaviour or the behaviour of one’s counterpart. Traditionally the concept of face means to keep all moral virtues given by the Confucianism such as loyalty, keeping the hierarchical structures or reverence^[23]. If someone crosses these borders he or she loses his or her face. Not only the individual person can lose his or her face.

The whole family and even deceased ancestors can lose their face because of the wrong behaviour of a family member. This principle can be extended from family to city to the Communist Party to the whole of China.

The concept of face is also important in business life and especially in co- operations with foreign companies. A foreign business man can get easily into a precarious situation where the taking and giving or keeping face is threatened. He or she can find him- or herself in this situation without realizing it due to the lack of knowledge about the Chinese culture.

In the Western way of thinking an open and clear coping with a conflict contributes to a solving of the issue whereas from the Chinese point of view it is regarded as an attempt to steel the face from one’s counterpart^[24]. One can lose, keep, save, his or her own or someone’s face; give, steal or rebuild face, however, certain steps are necessary for this.

2.3 China as a textile market

China has always been a country known for textile reasons. It is a cheap but qualitatively high level production country gaining more importance as a market for foreign textile products. The capacity of China to satisfy the needs of the Chinese is huge but may not be sufficient for the future. This is not only true for oil and gasoline but also for textile raw material and products. At this point possible business opportunities for Western and – of course German – companies arise.

The following table shows the development of China’s imports.

Figure 2: China’s imports in Mio US $

illustration not visible in this excerpt

Source: German-Chinese Chamber of Commerce /

www.china.ahk.de/gic/biznews/bfai/bfai-textilbranche-auslaufen-juli2004.htm

The fact that the Chinese are earning more and more (see figure further above) can give a perspective concerning their needs: they will rise as well as one can also see in the development of China’s imports.

Another reason why China is an interesting country from the economic point of view are the high resources of raw material as shown in this table.

Figure 3: China‘s textile exports in Mio US $

illustration not visible in this excerpt

Source: German-Chinese Chamber of Commerce

The hourly wages in China are not the lowest compared to other nations but they are at an economically favourable level. In 2002, hourly wages for textile and clothing workers averaged from US $0.41 to US $0.88 in China, US $0.38 to US $0.57 in India, and US $0.34 to US $0.41 in Pakistan^[25].

Compared to China Indonesia has only 65 % of productivity. The production costs for a cotton shirt in China are US $3.30, in Indonesia US $3, 70^[26].

The labour costs in the winter 2004/2005 are presented in the image below.

Figure 4: Labour cost in the textile industry, Winter 04/05

Abbildung in dieser Leseprobe nicht enthaltenSource: Hourly wage report established by Werner International Mangement Consultant / www.wernertex.com 22.08.2005

Regarding fashion China has a high potential to become a huge outlet^[27]. The number of well earning people rises (see also figure ‘The distribution of income according to the group of employment in China’ in 2.1) and along with it the purchasing power.

In addition to that the consumer behaviour especially among the 25 to 39 aged and the young Chinese generation under 25 is changing^[28].

The first group has a great affinity to consumption and represents 20 % of the population and the younger Chinese prefer international sport labels like Nike, Adidas, Reebok and Converse. This was found out by the Chinese market research company Yuan through an opinion poll interrogating 2000 Chinese students in six cities^[29].

Nevertheless the local brands are dominating and for foreign brands it takes time, patience and - probably the most important factor- a good partner to enter the Chinese market and to stay there.

2.4 The Chinese and German economic relations

The Chinese-German economic relations are consolidating and gaining more and more importance since the labour situation in Germany has deteriorated and the economic future of German companies lies in the foreign business. In 2004 Germany represented the most important business partner for China in the EU and in the world wide ranking Germany is in the sixth place^[30]. Excluding Taiwan and Hong Kong, Germany is in the forth place. From the German point of view China is the most important partner in Asia and worldwide in the tenth place^[31].

In the textile sector China imports the biggest quantity of clothing items to Germany.

The following table shows the imports of the year 2005 from January until May.

Figure 5: German Apparel Imports 2005

illustration not visible in this excerpt

Source: Statistisches Bundesamt

The drastic increase of imports can be explained by the fall of the quotas which allows China to import unlimitedly to Germany and other countries. New regulations should help to stop this development because it could expel other importing countries from the market. In spite of these regulations China will gain more importance for Germany concerning the textile market and consolidate a stable role.

China is not only a cheap production country but furthermore it has become an important market for German products. The textile company Saurer which produces textile machinery for spinning of natural and chemical fibers as well as machines for non-wovens exported approximately 72 % of its products to China in the year 2004^[32].

3 Culture

3.1 Basic considerations about culture

The word ‘culture’ has no absolute definition but there are a few attempts. The word’s origin implicates that it means to cultivate / take care of the social life. But nowadays it means more: it includes the individual and societal life and furthermore the dealing with the world of objects^[33]. One proper definition for this is the following:

‘Kultur umfasst das gesamte soziale Erbe, bestehend aus dem Wissen, den Glaubensvorstellungen, den Sitten und Gebräuchen…Die individuelle Persönlichkeit entwickelt sich also auf der Basis einer bestimmten Kultur…Trotz individueller Unterschiede bestehen Ähnlichkeiten zwischen den Persönlichkeitsstrukturen der Mitglieder gleicher Kultur ^[34] .

The society of the same culture makes demands on the individual regarding thinking, feeling and acting pattern. These patterns are also called culture standards. Alexander Thomas came up with this definition: culture standards are characteristics that regulate wide areas of assimilation, way of thinking, judging and acting of a group, culture or nation.

By the individuals representing and using the culture standards they regulate the interpersonal behaviour because through the frequent use of them they are considered as normal and taken for granted^[35].

Another possibility to describe culture is to present it in a model. Fons Trompenaars developed one in his first book ‘Riding the waves of culture’ (1993).

Figure 6: Model of culture^[36]

illustration not visible in this excerpt

The outer layer: artefacts and products

According Trompenaars the first layer of culture does not begin with the sharing of values but in a more concrete way. He says that the first thing that a person from another culture recognizes immediately is the most explicit part of culture. A stranger observes the language, the food, the monuments, the houses, the agriculture, the markets and of course the fashion of the foreign culture from the first moments on and most often prejudices start at that level.

The middle layer: norms and values

The reason for the outer layer and its consequences are the norms and values of an individual group. Trompenaars defines norms as ‘the mutual sense a group has of what is “right” and “wrong”’^[37].

[...]

^[1] cf. Kühlmann, 1995, p. 1

^[2] cf. Schilling, 1996, p. 21

^[3] Informationsdienst der deutschen Wirtschaft, 1995

^[4] ebenda

^[5] cf. TextilWirtschaft TW No 5 page 43, Kirsten Reinhold

^[6] cf. Götz, Bleher 2000, p. 11

^[7] cf. Roessel, 1988. p. 15

^[8] cf. Black/Mendenhall, 1990, p. 34

^[9] cf. Mendenhall / Oddou, 1995, p. 56

^[10] German Embassy Beijing, ‘Wirtschaftsdaten kompakt’ Stand 15.Dezember 2004

^[11] cf. TextilWirtschaft TW No 5 page 43, Kirsten Reinhold

^[12] Source : German-Chinese Chamber of Commerce

^[13] cf. Krücker, 1999, p.10

^[14] cf. Krücker, 1999, p.10

^[15] cf. Lang, Nikolaus-Sebastian, 1998, p. 90

^[16] cf. Lang, Nikolaus-Sebastian, 1998, p. 90

^[17] Thomas / Schenk, 2001, p. 116

^[18] Yang, M.M. 1994, p. 111-123

^[19] cf. Lang, Nikolaus-Sebastian, 1998, p. 38

^[20] cf. Yang, 1994

^[21] cf. Thomas / Schenk, 2001, p. 116

^[22] cf. Thomas / Schenk, 2001, p. 116

^[23] cf. Thomas / Schenk 2001, p. 83, 84

^[24] cf. Chung 2000, p. 57

^[25] Source : American Manufacturing Trade Action Coalition, Feb 2004

^[26] http://fesportal.fes.de/pls/portal30/docs/FOLDER/WORLDWIDE/ASIEN/BERICHTE/ INDONESIEN06_04ARBEITSMARKT.HTML

^[27] TextilWirtschaft TW No 5 page 43, Kirsten Reinhold

^[28] TextilWirtschaft TW No 5 page 43, Kirsten Reinhold

^[29] TextilWirtschaft TW No 5 page 43, Kirsten Reinhold

^[30] Statistisches Bundesamt

^[31] German Embassy Beijing, ‘Wirtschaftsdaten kompakt’ Stand 15.Dezember 2004

^[32] Saurer Business report 2004

^[33] cf. Götz / Bleher, 2000, p.13

^[34] cf. Kammel / Teichelmann, 1994, p. 35

^[35] cf. Thomas, 1996, p. 107

^[36] Trompenaars, 1993, p. 40

^[37] Trompenaars, 1993, p. 22