Cultural Conflict Edward Lu & Joe Sampsel

Outline The challenge The literature Daimler-Chrysler Suggestions

The Literature Broad Review Diversity between Asia and West Problems to recognize as an English Speaker Avoiding language traps –In business, online Multi-national advertising Suggestions for business-people

The Challenge How do international corporations avoid conflict brought on by differences in cultures? Stereotypes Geographic –Business Style Values –Relativism Communication

Stereotypes Stereotypes need to be unlearned –They are the most damaging in creating cultural conflict Stereotypes impede progress –Lead to conflict –Misunderstanding –Breakdown

Geographic Conflict Differences abound –Business style East and West –Emotional vs. Logical –Yes and No Nationalism –West and West –East and West –East and East

Values Relativism –Different cultures value things differently Life Family Money and Possessions Autonomy

Communication Clear communication solves problems with conflict caused by miscommunication Verbal –Small talk vs. 5W ’ s and H –Yes and No are not always clear –Progress is viewed differently –Time Meetings Phone Time zones –Agenda –Superiority Non-Verbal –Sight-seeing –Smoking –Eye-contact –Physical Contact

The DaimlerChrysler Merger

Daimler-Benz luxury vehicles had captured less than 1% of the American markets. Chrysler's primary reason for teaming with Daimler-Benz is to extend its international reach

The goal of the merger Expected huge savings by combining purchasing and other operations Reduce total research and development costs

The DaimlerChrysler Merger Provide Culture Workshops for employee No Culture Clash at manager level

However …

The DaimlerChrysler Merger -- James Holden, President of Chrysler “Mercedes was universally perceived as the fancy, special brand, while Chrysler, Dodge, Plymouth and Jeep were the poorer, blue collar relations”

Our Analysis Corporate Structure Corporate Cultures Customer proposition Value chain Leadership

Corporate Structure Daimler Hierarchical Structure Chrysler Team-orientated

Corporate Cultures Daimler Management processes of planning, organizing and controlling. More conservative, efficient and safe. Chrysler Setting goals, directing and monitoring implementation. Known as the risk-taking underdog

Customer proposition Daimler The driving image and experience associated with the highest quality available in the market Chrysler Attractive, eye-catching design at a very competitive price

Value chain Daimler Emphasis on engineering, design, quality and after sales service Chrysler High volume, low cost manufacturing and distribution

Leadership Daimler J ü rgen Schrempp - with independent personality and South African overlay Chrysler Robert Eaton - broke the Chrysler tradition of commanders

Conclusions Recognize the differences in the corporate contexts – will this merger work? Channels of communication must be open –Consider a mediator at meetings – hired help (if you are a multi-billion dollar company) –Goals, goals, goals? Avoid cultural stereotyping –Trade employees – a major failure Resolve cultural stereotypes Contextual differences - $ Share knowledge Exploit the merger

Questions?

References Cox Jr. T.H. (1996) “ Intergroup conflict ”, in: Shafritz, J. M. & Ott, S. J., Classics of Organization Theory, 4th edition, Dou, W. & Clark Jr., G.W. (1999). “ Appreciating the diversity in multicultural communication styles, ” in: Business Forum, Vol. 24, Is.. ¾, pp. 58. Finkelstein, S. (2002). The DaimlerChrysler Merger. Retrieved Mar. 2, 2006 from pdf Strebel, P. (2002). Focus on Corporate Specifics Not National Clich é Cross-Border Lessons from the DaimlerChrysler Merger. Retrieved Mar. 2, 2006 from Wan, K. (2004). “ Bridging Cultural Gap Through Communication ” in: Korea Herald. January 1, 2004.