Cross Culture &

Digital Business
• Bachelors Program on Digital Business
• Foreign Trade University
• October 2023
• 4th Class
Recap from the previous class
Richard Lewis model’s three groups

➢ What are the three groups?

➢ What are their characteristics?
➢ Why categorizing the countries
important?
➢ How do you benefit from the
categorization?
 • Linear Active style?
• Talks half the time
• Rarely interrupts

Speaking • Multi active style?

and • Talks all the time

• Interrupts frequently

listening • Reactive style?

• Listens
• Doesn’t interrupt
Why do we study cultural
differences?
• Impacts on business in the globalized world – consumers,
service users vs. companies, service providers including
government

• Impacts on work style, communication, understanding each

other

• Where do you feel comfortable working when you graduate

from the university?
• What do you need to do if you are to work in a
Singaporean or Australian or Hong Kong IT company?
Use of time – Linear Time
• Americans, Anglo Saxons, Netherlands, Austria,
Scandinavian
• Tend to be ‘monochronic”, prefer to do only one
thing at a time, to concentrate on it and do it
within a fixed schedule
• Protestant work ethics – the more you work, the
more successful you will be and the money you
make
Use of Time: Multi-Active
• Southern Europeans, Latin Americans, Sub-Saharan Africans,
etc.
• The more things they can do at the same time, the happier
and the more fulfilled they feel.
• Not very interested in schedules or punctuality – the present
reality to be more important than appointments.
• Priority is given to the relative thrill or significance of each
meeting.
Reactive Use of Time
• Mostly East Asians
• Instead of tackling problems immediately in sequential
manner, circle around them for a few days or weeks
before committing them. After reflection, tasks A, D and
F may seem worthy of pursuing. Tasks B, C and E may
be quietly dropped. Contemplation of the whole scene
has indicated, however, that task G, not envisaged at the
beginning, might be the most important.
 Negotiation Styles
Negotiators in Linear-Active cultures will:
• Demonstrate and look for technical competence
• Place facts before sentiments, logic before emotion
• Be deal oriented, with a view to immediate achievement and results – time is
money
Negotiators in Multi-Active cultures will:
• Rely on their eloquence and ability to persuade – negotiation is an art
• Use human force as an inspirational factor
• Complete human transactions emotionally
Negotiators in Reactive cultures will:
• Dominate with knowledge, patience and quiet control
• Display modesty and courtesy
• Create a harmonious atmosphere – building up trust is key
One of RL’s points: Must Not Lose “Face”
• What is “face”?
• The term face refers to one's own sense of self-
image, dignity or prestige in social contexts.
• To “lose face” means to be humiliated, lose one's
credit, good name, or reputation
• To “save face” means to avoid having other people
lose respect for oneself
Homework
• Read “Culture Clash in the Boardroom – a Case Study by Harvard
Business Review”
• Please respond to the following questions:
1. What are the critical issues at the Boardroom?
2. Three recommendations for Liu Peijin’s action from your group.
3. Reasons for your recommendations from cultural perspectives.
• 5 minutes for each presentation (you may be asked to respond to only
one or two questions)
FYI: HR (Human resources dept.) SAP (A German multinational software
company) ERP (Enterprise Resource Planning)
Situation
• Almond China – a subsidiary of Almond Chemical
• Almond Chemical - a German firm
listed in the NY Stock Exchange and Munich

• Liu Peijing – President of Almond China

• Wang Zhibao – VP in charge of sales for the Chongqing joint venture
• Dolf Schulman – SVP of Business Development, Almond Chemical
• Chen Dong – Chairman of the joint venture
• George Ho – Finance Director for the joint venture
Almond China
• Almond Chemical
• Headquartered in Munich
• Listed on the New York Stock Exchange and Frankfurt
Stock Exchange
• What does this mean?
• What is bribe?
• Almond China established in 1999
• Two joint ventures – Almond China 1 (70% controlled by
Almond Chemical) and Almond Chongqing (51%
controlled by Almond Chemical)
Critical Issues of Almond
China Board Room
• German standard vs. Chinese standard on
• Marketing
• Safety
• Environment
• Accounting
What is the position of Schulman?
• Caught in between the two institutions
• German & US law, standard and practices
vs. Chinese law, standard and practices

• Concerned about the future of Joint Venture

• Thinks that he may have to give in to Chen
Dong
What is the cultural background?
• Germany

• China

• Hong Kong
What should Liu Peijing do?
Pros and Cons of following the course of
actions that Chen Dong proposed
Long term and short-term
consequences
• Almond China

• Almond Chemical
Is there a compromise?
Environmental
issues in
Vietnam
 • Bribes occur in many forms, ranging from
minor transactions between individuals
What to major deals between corporations
and/or governments. Bribes can also be

is masked as tips, gifts, favors, donations, et

al. There is no universal definition or
classification system for bribery as some
Bribe? nations approve of and legalize certain
transactions that are illegal elsewhere.
 • Microsoft agreed to pay more than $24 million to
settle SEC charges related to FCPA violations in

Two Hungary, Thailand, Saudi Arabia, and Turkey, and

criminal charges related to Hungary.
• The SEC charged Walmart Inc. with violating the

bribery books, records, and internal accounting controls

provisions of the FCPA by failing to operate a
sufficient anti-corruption compliance program for

cases
more than a decade as the retailer experienced rapid
international growth. Walmart agreed to pay more
than $144 million to settle the SEC’s charges and
approximately $138 million to resolve parallel
criminal charges by the DOJ for a combined total of
more than $282 million.
Homework for the next class
• Read Page 69 – 103 Nation-State Traits and how they affect corporate cultures
in Seven Countries; from Kai Hammerich & Richard D. Lewis, Fish Can’t See
Water (John Wiley & Sons Ltd. 2013)
• Choose two countries mentioned in the section and compare their national traits –
each group can choose whichever countries you like
• Identify one or two companies from the countries you chose. Make sure that the
companies represent the national traits and explain why you think the company
represent the national traits;
• For example, Apple for USA, H&M for Sweden and SAP for Germany
National traits
• USA • Germany
Companies of these countries
• USA • Germany
• Walmart • SAP
• Because xxxx • Because xxxxx