Literature review first draft
1. How does a manufacturing subsidiary of a MNC (Datalogics) in Vietnam resolve its non-routine problems with the presence of expatriate managers and specialists from Italy and the USA?
2. How does Italian and American expatriate specialists and managers have an influence on the Vietnamese subsidiary of a European MNC?
3. How effective is Cross cultural training compared to informal intercultural interactions in terms of resolving communication problems in subsidiaries?
Vietnamese cultural differences with the Western culture in workplace.
In terms of cultures, Vietnam shared a large number of similarities with China. The same thing can be said for work ethics and practices. The heavy stress on hierarchy and saving faces have been embedded in the society and workplace. The Vietnamese subordinates would consider their leaders to be strong and charismatic while they would be asked to be obedient, diligent and hardworking yet accepting towards any policies made by the managers. This prevented them from being creative and initiative in terms of dealing with crisis and non-routine problems. Such disadvantages prove to be countered with a suitable approach, which is usually either a local manager familiar with the Western working culture or an expatriate manager. (Le, n.d.)
Khanh Le (n.d.) and Anphabe (2013) company have cooperated with each other to come up with key information regarding the Vietnamese cultural values in the workplace.
It indicated that Vietnamese workers who answer to Anphabe’s surveys regard highly of three main values: Fairness and respect, professionalism and the creative and dynamic work environment. According to the report, Vietnamese employees also favor the ability to lead through visions and clear strategies (Anphabe, 2013)
Le also stated on his website that loyalty to the group means everything to the employees (n.d.). Such strong relationships foster one to take care of another in the ingroup environment. Conflicts are resolved using compromises and negotiation approach. This differs significantly with the Western individualistic behavior, which will be fairly aggressive during conflicts. However, the Vietnamese modern working culture is slightly different from the Chinese working culture due to its flexibility and low resistance to change. The report from Anphabe (2013) shows great insights into the mindset of modern Vietnamese employees and their expectations as well as workplace cultures. However, along with Le, these reports are slightly biased towards certain specific areas, especially Ho Chi Minh City due to the high percentage of respondents. The present paper is focusing on the case study of a firm in that city so it may give certain confirmation bias towards the research findings.
It is important to take into account of how similar and different the Vietnamese working culture to other Asian countries. Vietnam used to be under heavy Chinese influence due to the colonization of the first millennium and even after becoming independent, the country was still pressured economically and politically for hundreds of years. However, China is not the only nation to influence the modern day Vietnamese cultural mindset. The country was colonized again by the French from the 19th century until a revolution ended the French regime in 1945 with the establishment of the first legitimate independent Vietnamese government. However, war and turmoil wrecked the nation until the late 20th century. The south of Vietnam was heavily influenced by the Americans and Western cultures. Such impacts create a mixture of bits and parts of western and eastern values. Western expatriates find themselves surprised when it comes down to working with Vietnamese workers since it was different from the Chinese cultures of Guanxi in terms of inflexibility but still have the elements of face-saving.
Expatriate agenda and practice transfer across units
The rapid growth in globalization and global competition has increased the importance and influence of expatriates in Multinational Companies (MNCs)and their subsidiaries. The effectiveness of expatriate managers become a determinant in the successful rate in establishing subsidiaries and the communication between and within these units. Brewster (1997) pointed out that the reasons that many foreign firms have not achieved successes in sending expatriates were to the inefficient management and lack of preparation for these expatriates. Studies (Brewster & Scullion, 1997; Lee, 2010) have found that the main reason for these expatriates to be present at foreign subsidiaries was to fill the technical and management skills gap that these units lack.
Ahlvik and Björkman (2013) also claimed that the implementation of expatriate in subsidiaries was to integrate and internationalize practices in MNC units. Their work indicated that ‘the ability to transfer organization practices across multiple locations is a potential source of competitive advantages for MNCs’ is a viable strategy and should be conducted wisely. However, the implementation, integration and internationalization of these practices differ due to the nature of their studies, which focuses mainly on the Nordic MNCs and their subsidiaries. Their working culture and practices cannot be taken as examples for this paper, which is focusing on the effects of Western expatriates on the local practices in a Vietnamese subsidiary. In this case, Brewster and Scullion (1997) provided a significantly better analysis of the role and implications of expatriates in a foreign unit. However, Brewster and Scullion’s work is far outdated comparing to Ahlvik and Bjorkman.
A good example of a study regarding expatriate managers in a culturally different country would be Hannah Lee’s work regarding the intercultural communication adjustments in local operations in host countries (2010). She used her home country, China, as the study case for her paper. According to her work, there is a need for managerial development in nations that are host countries for these involved expats. There is usually the lack of motivation for improvement of work performance from the employees. The low number of competent local managers have been proven to be somewhat damaging the potential of these local subsidiaries (Lee, 2010). This situation is applicable to the present paper due to the similarities in culture and work practices in China and Vietnam. Similar with Ahlvik and Björkman (2013), she showed that internationalisation of practices would bring cohesion in these subsidiary units in terms of working culture. It would to a certain degree enhance the competitive advantage that these units were designated.
The effects of trust and shared vision knowledge transfer among Headquarter units and their subsidiaries have also been studied. In order to achieve the comparative advantages mentioned by Ahlvik and Björkman (2013), companies need to establish long-term mutual relationships with their subsidiaries as positive and trustworthy. Similar studies have shown that a high degree of trust would influence the expatriates and their local employees to integrate more and share more information. It was also mentioned by Hsiang-Lin Cheng and Carol Yeh Yun Lin (2008) in their work that people with a willingness to communicate with an open mind is crucial in working abroad.
Expatriate adjustments in subsidiaries
Adjustments to cross-cultural training
Brewster (1997) claimed that despite knowing fully that cross-cultural training would bring potential benefits to the expatriate managers, most firms disregard them as wasteful and ineffective. The training was deemed to be lacklustre in comparison to the real on-the-field experience. However, other studies argued that such training would go far in preparation for the foreigner managers as they could receive somewhat of a tip of the cultural iceberg. Other sources have also claimed how most of the difficulties were a direct result of the language barrier. Hannah Lee (2010) stated in her study that most of the times the Western managers failed to communicate with their Chinese counterparts was due to the lack of language training. There were also claims that the host country’s colleagues should also undergo the same language training as to improve the relationship with the expatriates.
Thomas (1996) agreed in his work that Cross-Cultural Training (CCT) program do serve a purpose in informing the expatriates in terms of easing the initial adjustments and making intercultural interactions successful. The goal for CCT was to reduce the amount of stress from both sides and to achieve the goal of establishment of new relationships. However, both Thomas (1996) and Brewster (1997) claimed that despite the literature showing how effective CCT could be for the expatriates, most firms do not use it.
The studies regarding the cross-cultural training and its evaluation are well documented due to its importance in the field of HRM, expatriate management and training(Lin et al., 2012; Brewster & Scullion, 1997; Thomas, 1996). They provide certain insights into how the training is conducted and its benefits from doing so. However, it lacks the implementational practical aspects that you would expect from such an important factor of expatriation, especially in Vietnam. There have been very few studies regarding the usage of such training and documentation of related consequences. This provides room for this study to analyze how expatriate managers cope with the cultural differences in a Vietnamese subsidiary. The paper will be focusing on evaluating the theoretical concepts of cross-cultural training in such environment and the real scenarios retold by ex-expatriate managers having worked in the aforementioned environment.
Expatriate adjustments through interactions
Freeman and Lindsay (2011) suggested that expatriates who have not been mentally prepared for the mission will most likely adjust to the new environment through regression and isolation into an enclave them from the host society. They claimed that the Host Country National (HCN) workers would be the vital factor in the expat adjustments. In order to achieve the main objective of expatriation, these foreign managers need to interact with the local colleagues and achieve knowledge and technology transfer without creating too much conflict. Studies also argued that HCN’s classification of the expatriate managers as members of their in-group have helped these expats to adjust more effectively.
Thomas (1996) indicated that adjustments made by the expatriates need to be categorized into three different accounts, which are work adjustments, interactions adjustments and general adjustments. The work adjustments focus mainly on the working culture of each specific organization, which may not reflect the real cultural identity presented by the CCT program. However, it is critical if the expatriates were aiming for work cohesiveness. The interactions adjustments are mainly how the expatriates adapt to the colleagues’ way of life and become a part of the in-group. Lastly, the general adjustments are the ability to adjust to all facets of the new environment. However, his work showed his argument that CCT is needed for such adjustments to occur. This is contradicting to the work of Brewster (1997), which acknowledged the necessity for CCT but claimed that most firms consider it to be redundant.
Most research conducted on expatriation mentioned the selection process of expatriates and how it can be a factor in the process. Lee believed that such task should be given high priority due to its importance. The skills that most scholars are suggesting are the abilities to EQ competencies, possession of an understanding of HCN’s cultures, independence, openness and social ability. These are major contributing factors to how these expatriates are reacting to the new environment and adjust accordingly. Therefore, the selection of expatriates becomes an independent variable that affects the process in whole. (Freeman & Lindsay. 2012)
Peltokorpi’s work depicted intercultural communication as communicative encounters between people from the various cultural background (2010). She mentioned that despite languages are the core elements of cultures, they were most of the times ignored due to the assumption of using English as Lingua franca in most organizations. However, she argued that using the same foreign language may not guarantee an error-free understanding due to the different cultural values. These values along with different communication styles will create barriers to ‘perceiving, analyzing, and decoding explicit and implicit messages.’ Moreover, the language proficiency of those involved may vary, which would lead to the lack of willingness to communicate and misinterpretation. The author revealed that cultural competencies and behavioral adaptations were not so important in intercultural communication in the environment where the local employees are not so proficient in the chosen foreign language. Mastering the local language seems to be a big challenge for the expatriate managers, especially the languages that are significantly linguistically different to their home countries. However, the fluency in the language may not be the major determinant in capturing the cultural nuances in the host countries. If anything, the proficiency in the local language will create the false expectancy of understanding the cultural norms that are mostly unfamiliar with the expatriates. This study provided the present papers some perspectives into how language proficiency of both parties can influence the effectiveness of the communication.
Other scholars (Park et al., 1996) also suggested that the intercultural communication is hindered due ‘selective transmission’, when one side only inform the other side what this side seems to be necessary or what the other side wants to hear. Other reasons include suspicion, mistrust, ethnocentrism and reluctance in use of foreign language. These studies provide insights into what can cause the communication problems and their effects in subsidiary units. However, these researches cannot focus on too many countries since most of the case studies were comparing two different cultures, one from a low-context culture and another from a high-context culture. This prevented these studies to be used effectively in Vietnam despite the similarities in cultural context due to the complexities of a specific subsidiary unit.
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