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Building Motivation for Chinese Workers

B. Talamantes-Becerra, J. Rachkova, A. Herve Lenhardt, and S. Garnier. Av. General Ramn Corona No. 2514. Col. Nuevo Mxico. Zapopan, Jal. Mxico. Instituto Tecnolgico y de Estudios Superiores de Monterrey, Campus Guadalajara, Mxico. March, 2011

Abstract Chinas impressive economic growth has developed into a strong domestic competitive environment, rivalling many foreign markets; where business strategies will determine who wins and who loses. With the increasing importance of the China market in the world economy, many international companies rushed and planned to enter China to explore business opportunities. So, hiring skilled and capable employees represent the most difficult task for foreign companies doing business in China, and retaining employees in companies is increasingly challenging. The method of distributing pay to motivate employees may also depend on cultural values stated, employees can be rewarded according to their performance, equally or their needs (principle of need). Considering the Hofstedes Cultural Dimension, in this article we focused to compare these dimensions with working environment, using primary sources and secondary sources of information. Our results shows that the Hofstedes cultural dimensions are not applied to the working environment, because these dimensions only focus on culture and not the labor aspects.

Keywords: motivation, Chinese workers, motivation theory.

I.

INTRODUCTION

The increasing number of foreign enterprises operating in China, there is a need to focus on the motivation of Chinese workers in such enterprises, and the way that human resource management practices address Chinese work values and motivational factors. Problems of productivity and retention of employees have been reported which reflect on the ways foreign companies attempt to motivate Chinese employees, often relying on practices drawn from concepts which work in the West (Jackson & Bak, 1998). In todays competitive and global environment, businesses must not only have a winning business model, they also must have winning employees (Pepe, 2010; Fitz-enz, 1997). The most valuable asset that any company has is its people. Business executives are becoming increasingly concerned with the costly challenges of locating, attracting and, most importantly, retaining quality employees (Pepe, 2010; Wagner, 1994).

Managers must be cognizant of the effect that working condition have on employee job satisfaction and commitment levels since is significant economic impact with the organization

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losing any one of its critical employees. Combined with direct and indirect costs, the total cost of employee turnover is a minimum of one years pay and benefits, or a maximum of two years pay and benefits (Pepe, 2010; Fitz-enz, 1997).

PROBLEM STATEMENT

Hire skilled and capable employees represent the most difficult task for foreign companies doing business in China, and retaining employees in companies is increasingly challenging. What kind of motivation should be applied to motivate Chinese employees?

OBJECTIVE

To explain how we can motivate Chinese to work for. Considering that we are not related with their culture.

HYPOTHESIS

To motivate Chinese employees is necessary to use money incentives and considerate the Hofstedes cultural dimensions, resembling to long term orientation and collectivism, in order to understand their behavior and retain employees.

METHODS 1. PRIMARY DATA. Provide results from the interview to professors according to Hofstedes cultural dimensions and compare results with Hofstedes Chinese results. 2. SECONDARY DATA. Review information about motivation and doing business in China. To obtain the background to support this article. Only scientific articles and official websites are considered for this research.

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II. HISTORICAL BACKGROUND Motivation1 Motivating is defined by some as the action of providing with a motive. Others consider motivation as a virtuous exchange summed up by this motto: To the degree you give others what they want, they will give you what you want (Cairo, 1998).

Motivation is the set of forces that cause people to choose certain behaviours from among the many alternatives open to them.

An employee's performance typically is influenced by motivation, ability, and the work environment. Some deficiencies can be addressed by providing training or altering the environment, motivation problems are not as easily addressed. Motivation is important because of its significance as a determinant of performance and its intangible nature.

Historical views of motivating. Evolution can be traced from scientific management, through the human relations movement, to the human resource approach. Scientific management: The assumptions of scientific management were that work is inherently unpleasant for most people and the money they earn is more important to employees than is the nature of the job they are performing. Human relations movement:

For this section, the information was taken from UW (2011), unless the reference is stated in the

paragraph.

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This school of thought emphasized the role of social processes in organizations and assumed that the need for belongingness and the need to feel useful are more important than money in motivating employees. Human resource approach: This view assumes that people want to contribute to organizational effectiveness and are able to make genuine contributions. The organization's responsibility is to create a work environment that makes full use of available human resources. The human resource approach guides most thinking about motivation today, but three integrative approaches conceptualize motivation more completely: need-based, process-based, and reinforcement-based approaches. Need-based approaches to motivation: Need-based approaches to motivation focus on what motivates employees to choose certain behaviors as shown on the following diagram. Need Hierarchies: Two of the most popular need hierarchies are Abraham Maslow's hierarchy and Clayton Alderfer's ERG theory of motivation. Maslow's hierarchy of needs assumes that people are motivated to satisfy five levels of needs: physiological, security, belongingness, esteem, and self-actualisation.

Alderfer developed the ERG theory of motivation in response to criticisms of Maslow's hierarchy.

ERG stands for existence, relatedness, and growth needs ERG theory. Existence needs are satisfied by food and water pay fringe benefits and working conditions. Relatedness needs are satisfied by relationships with co workers, superiors family and friends. Growth needs cover the need to advance and develop. As with Maslow's theory, assumes that motivated behavior follows a hierarchy, but it has two important differences:

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ERG theory suggests that more than one level of needs can cause motivation at the same time; ERG theory has a frustration-regression element that suggests that if needs remain unsatisfied at some high level; the individual will become frustrated, regress to a lower level, and begin to pursue lower-level needs again.

The Dual-Structure approach to motivation The dual-structure approach was developed by Frederick Herzberg and is often referred to as the two-factor theory. Herzberg's studies of accountants and engineers led him to suggest that entirely different sets of factors are associated with satisfaction and with dissatisfaction. Motivation factors, relating to the job itself, result in feelings ranging from satisfaction to no satisfaction. Hygiene factors, relating to the work environment, result in feelings ranging from dissatisfaction to no dissatisfaction. Process-based approaches to motivation

Expectancy Theory: Expectancy theory suggests that motivation is based on how much we want something and how likely we think we are to get it. Porter and Lawler extended the basic expectancy model by suggesting that high performance may cause high satisfaction. When performance results in various extrinsic and intrinsic rewards, the individual evaluates the equity of these various rewards relative to the effort expended and the level of performance attained. The individual is satisfied if the rewards relative to the effort expended and the level of performance attained. The individual is satisfied if the rewards are felt to be fair.

Implications for managers: Nadler and Lawler suggest how managers can apply the basic ideas of expectancy theory. Managers should first determine the outcomes each employee is likely to want. Then they should decide what kinds and levels of performance are needed to meet organizational goals, making sure that the desired levels of performance are attainable. Managers then need to ensure that desired outcomes and desired performance are linked. Finally, the rewards need to be large enough, and the total system needs to be equitable.

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Equity Theory: Equity theory, developed by J. Stacy Adams, suggests that once an individual has chosen an action that is expected to satisfy his or her needs, the individual assesses the equity or fairness of the outcome. Equity is an individual's beliefs that he or she is being treated fairly relative to the treatment of others. Three attitudes are possible: an individual may feel equitably rewarded, underrewarded, or overrewarded. When individuals feel underrewarded or overrewarded, they will do something to reduce the inequity. The single most important thing to remember about equity theory is that if rewards are to motivate employees, they must be perceived as being equitable and fair.

Other approaches to motivation in organization:

Goal-setting theory: this approach suggests that managers and subordinates should set goals for the individual on a regular basis and that rewards should be tied to the accomplishment of goals. Research support for goal-setting theory is more consistently favourable than any other single approach to employee motivation.

The Japanese approaches to motivation: the Japanese approach is not a theory or model but a philosophy of management. The basic tenet is that managers and workers should come together as partners - as one group.

Goal Orientation and Job satisfaction:

Goal orientation is a form of self-regulation that emerged from research on social-cognitive theory. Goal orientation is defined as both a dispositional trait and also as a current state, with outside factors influencing the trait to bring about the current state. There are three different strategies, a learning goal orientation in which person focuses on improving their abilities, a performance prove orientation in which a person seeks to demonstrate their abilities successfully in order to gain a reward, and a performance avoid orientation in which a person seeks to avoid punishment by successfully accomplishing their tasks (Brown & Huning, 2010).

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Job satisfaction is defined as the enjoyment that employees experience by performing their jobs. It is considered an important outcome due to its links with job-related stress, turnover, absenteeism and similar outcomes (Brown & Huning, 2010).

Extrinsic and Intrinsic motivation

*Intrinsic motivation (IM) refers to engaging in an activity purely for the pleasure and satisfaction derived from doing the activity (Deci, 1975). When a person is intrinsically motivated he or she will perform the behavior voluntarily, in the absence of material rewards or external constrains (Deci and Ryan, 1985). The literature reveals the presence of three types of IM have been identified as IM to know, IM to Accomplish things, and IM to Experience stimulation (Pelletier et. al, 1995).

Intrinsic Motivation to Know:

This type of IM relates to several constructs such as exploration, curiosity, learning goals, IM to learn and the epistemic need to know and understand. Thus, it can be defined as performing an activity for the pleasure and the satisfaction that one experiences while learning, exploring, or trying to understand something new (Pelletier et. al, 1995).

Intrinsic Motivation toward Accomplishments:

This second type of IM has been studied in developmental psychology, as well as in educational research, under such terms as mastery motivation, efficacy motivation and taskorientation. In addition, other authors have postulated that individuals interact with the environment in order to feel competent and to create unique accomplishments. Thus IM toward accomplishments can be defined as engaging in an activity for the pleasure and satisfaction experienced when one attempts to accomplish and create something (Pelletier et. al, 1995).

Intrinsic Motivation to Experience Stimulation:

IM to experience stimulation occurs when someone engages in an activity in order to experience stimulating sensations derived from ones engagement in the activity (Pelletier et. al, 1995).

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*Extrinsic Motivation:

Contrary to intrinsic motivation, extrinsic motivation (EM) pertains to a wide variety of behaviors that are engaged in as means to an end and not for their own sake (Deci, 1975). It was thought that extrinsic motivation referred to non-self-determined behavior that could only be prompted by external contingencies. However, different types of extrinsic motivation can be ordered along a self-determination continuum, from lower to higher levels of self-determination, they are: external regulation, introjections, identification (Pelletier et. al, 1995).

External Regulation:

This type of motivation corresponds to extrinsic motivation as it generally appears in the literature. That is, it refers to behavior that is controlled by external sources, such as material rewards or constrains imposed by others (Pelletier et, al, 1995; Decy & Ryan, 1985).

Introjection:

With introjections, the formerly external source of motivation has been internalized such that is actual presence is not longer needed to initiate behavior. Instead, these behaviors are reinforced through internal pressures such as guilt or anxiety (Pelletier et. al, 1995).

Identification:

This last type of extrinsic motivation is in operation when the individual comes to value and judge the behavior as important and, performs it out of choice. The activity is still performed by extrinsic reasons; however, it is internally regulated and self-determined (Pelletier et. al, 1995). . Motivation without costing too much money

According to Flanagan (2006) enlightened managers in all industries understand the benefits of using noncash incentives to motivate workforce. Thats not to say that cash doesnt; have a place in motivation, it does. Companies need to have a competitive salary base to attract and keep good talent, but the one-size-fits-all nature of cash can have a negative effect on employee

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behaviour in the long and short term. Assuming you have an attractive salary base, the question becomes, Why not more cash? On the surface, its an easy solution, and one that, according to many studies, gives employees what they most want and need. Flanagan (2006) listed 10 recommendations that say that merchandise, travel, gift cars or even a path in the back work better than cash to get employees striving toward a common goal:

1. Cash becomes compensation: Employees vied cash incentives and awards as part of their annual compensation. The cash is just part of what you take home, theres nothing special about them. Normally, money tends to get spent paying bills and you dont really do anything thats memorable. 2. Tough to take away. Beyond cashs poor ability to change behaviours, it can be harmful. When everyone is flush and goals are being reached, cash can be easy to give out, but when times are bad, and the cash goes away, employees wonder where their money went. A noncash incentive program has considerably less negative impact on employee motivation than quitting a cash program. 3. Buyers Remorse. A family man receiving cash from his company is faced with a tough decision: Put the money in saving or a college fund, or use it to pay bills or splurge on family vacation. Its more attractive if a company says If you exceed your sales goals by 10%, were going to take you on all-expenses-paid family vacation to Hawaii. 4. No trophy value. Cash lacks trophy value and social reinforcement attributes that increase the perceived value of the noncash award over cash. 5. Not promotable. The trophy value associate with noncash awards can have a positive effect on other employees who didnt reach their goals and take home the award. You cannot promote dollars but you can promote the heck out of merchandise and travel to really improve behaviour and also talk about the people that actually earned the reward 6. Cash Satisfies Needs-Not wants. Cash is easy for companies to give away and everybody needs it. But for true motivation, you need to give people something they want or desire, not something they need.Cash is spent on gas, you wont remember where the money was used but now its gone 7. Nothing personal. Its for sure that everyone could use money. But whats special about that? The best rewards cater to a particular group interests and having that personal edge makes a big difference in how effective your program will be. 8. One size doesnt fit all. One argument for cash is that a recipient can use it to buy anything he or she wants. But why not excite their imagination a bit? Merchandise and gifts cards

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allow for personal choice by the recipient, especially when offered in the context of a pointsbased program with the kind of large, diverse award catalog incentive merchandise supplies can offer. 9. Managers prefer noncash. According to a study, managers view noncash awards as more important, more effective and generally superior for achieving the majority of specific organizational objectives 10. No global Parity. In economic terms, its called purchasing power parity, which means, roughly, that the cost of living can be vastly different in different parts of the world. Companies with worldwide footprints need to make sure their award offering are equal on a global scale. Noncash awards such as gifts cards allow companies to offer parity in terms of the overall worth of the award. Hofstedes five points2

Geert Hofstede's research gives us insights into other cultures so that we can be more effective when interacting with people in other countries. If understood and applied properly, this information should reduce your level of frustration, anxiety, and concern. But most important, Geert Hofstede will give you the 'edge of understanding' which translates to more successful results.

Masculinity: refers to the distribution of roles between the genders. In China, masculinity reaches a level of 50%. This means that the gap between women values and men values is not that big. So the Chinese society is as assertive and competitive as caring and modest.

Uncertainty avoidance index: it stands for a society's tolerance for uncertainty and ambiguity, as well as the search of men for truth. It shows to what extent the members of a society are prepared to face unstructured situations. China has a 40% score in this category, which means that Chinese people are quite well prepared to this kind of situation, and accept uncertainty as part of their daily life quite good. Furthermore, the Chinese society and laws dont try to minimize the risk of such situation to occur. They are also more tolerant to different opinion and try to have as few laws as possible.

This section was taken from the official website of Geert-Hofstede Cultural dimension (2011).

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Long-term orientation: Hofstede self-defined Virtue regardless of truth. The Chinese have the highest Long term orientation in the world. It means they have a great time perspective and an attitude to persevering. Most of Chinese people for instance think they cannot obtain a social promotion, but believe their children can make it through education, and they value a lot the fact their children study and go to the University. Thrift and perseverance are the values the Chinese share the most. Both faces of this dimension are inspired by the values taught by Confucius, the most important Chinese antique philosopher.

Collective motivation: The Chinese society may be interpreted as very little individualistic. Is that so in the firm context? Owing to Kwok Leung, from the Chinese university of Hong Kong, collectivists are willing to work hard and make sacrifices for a work group only if they regard it as their in-group (a group they are undoubtedly integrated in). In major cities of China, turnover of employees has become a serious problem: between 1992 and 1993, 15% had changed job and some industries face a rate of 50%. This is a factor why Chinese employees dont see their work-group as an in-group.

Individualism: According to Hofstede, individualism is the degree to which individuals are integrated to groups. That is, the degree of importance in the relationship individuals has between themselves and others. In Asia, the individualism ranking has an average of 24 whilst as far as China is concerned; the country has a ranking of 20 which can be explained by the Communist party with the importance of communism. Indeed, in history, China has been predominated by the importance of family and farm, which are intrinsically collectivist since they are developed by working together in unity. Since Mao Ze Dong became leader, he sent most of the population to work in collectivist fields and thus, increased collectivism.

Power distance and motivation: In Hofstedes cultural values, power distance is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. In other words, it is the relation towards hierarchy between individuals from a different level in the company. China has a power distance close to 80 which indicates the inequality of power as well as the huge gap there is between the rich and the poor, especially when it focuses on career opportunities. Indeed, in China hierarchy is deeply important and workers just follow the orders of executives without questioning it.

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Smith and Misumi (1989), after an observation in Japan, concluded that an authoritarian/ paternalist superior-subordinate relationship is a factor of motivation in high power distance society. It means that in a high power-distance context, motivation is higher if it is initiated by superiors with a high status. This is in opposition with the goal-setting theory, in which a high power-distance would lead to demotivation.

Cooperation depending on the culture on the firm

Some studies show that collectivists adapt to the culture of a firm: if the company they work for has an individualistic culture they would work cooperatively. By contrast in an individualistic organizational culture firm, they will work individually. And in a collective organizational culture, collectivist workers are more cooperative than individualists. The fact collectivists behave differently depending on the organizational culture of the firm shows they are tend more to make the difference between outgroups and ingroups. Therefore, collectivist culture are more liable to implement a collectivist culture among their workers, be individualistic or collectivists, whereas, individualist companies dont encourage any of them to behave as an in-group. Indeed, collectivist workers feel themselves as interdependent and need the group to rely on: Leung finds that this sense of interdependence between a worker and his/her work team is a factor of acceptance of the workgroup as an in-group.

But work groups in collectivist societies are not necessarily motivated: A study confirmed that collectivists are more reluctant to display social loafing (the tendency for people to work less hard when they work in a group than when they work alone) than individualists. These results suggest that collectivism may lead to a homogenizing effect on the productivity of group members: since their primary motive of a newcomer is to be accepted by the group, collectivists are to reach the performance of the rest of the members of the group. Nevertheless, if cohesiveness in a work group does not always lead to a higher level of productivity, it only reduces the difference in the productivity of the workers (Kwok Leung, n.d.). So Chinese people work groups are in the situation of a collectivist society, so it seems that they behave this way: they have all a similar productivity, which doesnt mean it is high, but it is homogeneous.

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The overshadowing effect of negative feedback

In high power-distance societies, direct criticism is less well accepted by the workers than in low power-distance ones. For example, in the United States of America, people have a very close relationship with their superior (low power-distance) and criticism is made directly, which is very less appreciated by Chinese workers for example, hence they have a tradition of indirect criticism and more distant relationship with their superior. The Chinese fear direct negative comments on their work from hierarchical superiors, which are for them a source of demoralizing and the cause of stronger defensive reaction.

Trouble with accents and fluency in work

Although the language of international business is English, misunderstandings or deep frustration may occur because of nonnative speakers' accents, lack of fluency, or problems with translation or usage. These may also influence perceptions of status or competence (RISMEDIA, 2008).

According to Beamer and Varner (2008), and Pongpronod-Ongwatana (2008) communications system such as language and non verbal communication are products of culture. They are also tools intricately bound up in the processes of culture itself: language is related to thought processes and to mental learning processes. In fact in the vast literature of culture and communication many scholars have used them interchangeably as culture is communication and communication is culture. But as our culture is often defined by our language, it leads to the distinction between the two as separate segments. It is quite inadequate to define culture on the basis of language as it limits our expression within a single word or words. But when language is turned back on itself and communication is the object of its enquiry as well as the means. Understanding communication can help us understand culture. Therefore, there is a great degree of impact on communication as far as culture is concerned.

Further going to seek the influence of different cultures on effective communication, it has been proved that even in the same culture or intra-culture work teams only 75% is actually captured by the receiver while on the other hand in case of intercultural teams it much lower to 50%, (Pongpronod Ongwatana, 2008; Li, 1999). He analyses that this loss of information was

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independent from the languages kills (above a certain level) of the individuals which is a common perception and the amount of information sent by the sender (Pongpronod Ongwatana, 2008). According to Pongpronod Ongwatana (2008) and Li (1999) barriers other than language prevented inter-cultural dyads from getting the information through; this clearly underlines the need to understand the hidden and unhidden cultural rules in a conversation and not only the language. Basically the people belonging to same culture have the same level of understanding regarding the undefined cultural norms and rules but the people from different cultures in absence of that understanding are generally misunderstood which creates problems.

For example, one member of a multicultural consulting team lamented, "Many times I felt that because of the language difference, I didn't have the words to say some things that I was thinking. I noticed that when I went to these interviews with the U. S. guy, he would tend to lead the interviews, which was understandable but also disappointing, because we are at the same level. I had very good questions, but he would take the lead" (Pongpronod Ongwatana, 2008).

Nonfluent team members may well be the most expert on the team, but their difficulty communicating knowledge makes it hard for the team to recognize and utilize their expertise. If teammates become frustrated or impatient with a lack of fluency, interpersonal conflicts can arise. Nonnative speakers may become less motivated to contribute, or anxious about their performance evaluations and future career prospects. The organization as a whole pays a greater price: Its investment in a multicultural team fails to pay off (Breet, 2007). Native speakers of the teams language should make particular effort to ensure that everybody understands them.

Avoid sports English. In the U.S. and in Canada, many phrases come from either baseball (covering all the bases, far out in left field, three strikes and youre out, bench strength, etc.) or football (fumbling, running interference, punting, one down, three to go, etc.). These phrases mean virtually nothing to people who do not know these sports and that is a very large portion of the worlds population (Mendez and Mughan, n.d.).

Simplify your sentence structure and vocabulary. This is particularly important for English speakers who have been raised in the United Kingdom, where the breadth of ones

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vocabulary and the ability to use complex grammatical structures reflects (to some extent) ones education and position in society. For many non-native English speakers, a simple vocabulary (where one word is consistently used to mean the same thing) and simpler sentences go a long way to increase communication effectiveness. For example, use big, which is widely understood, and avoid synonyms (Mendez and Mughan, n.d.).

Beware of the differences between the various versions of English. British, American and Australian English assign different meanings to phrases, resulting sometimes in significant confusion. For example, stating that a project is a bomb is very positive in the UK (where a bomb is a spectacular success) and very negative in the USA (where a bomb is a catastrophic failure). Similarly, tabling an issue means putting it on the table in the UK and postponing the corresponding discussion in the USA. Keep in mind that, in continental Europe, in Africa and in the Middle East, non-native English speakers study British English (Mendez and Mughan, n.d.).

Chinese business environment and entering the Chinese market

Recently China has surpassed Japan as the second largest economy in the world; with the future projections suggesting it will surpass the U.S. economy, as the largest economy in the world, by the year 2030 or sooner. This, Chinas impressive economic growth has developed into a strong domestic competitive environment, rivalling many foreign markets; where business strategies will determine who wins and who loses (Torres, 2011; Adidam, Gajre, & Kejriwal, 2009; Liu & Roos, 2006).Further, Chinas competitive market affects Multinational Companies (MNCs) in different countries, even if they do not have presence in China. Additionally, Chinas impressive economic growth over the past few decades has strategies, cost structures, and other factors that have allowed them to challenge, competitively , companies within China and those foreign countries (Torres, 2011; Adidam, Gajre, & Kejriwal, 2009). Moreover, China, the fastest growing economy in the world, has been successful in its transition from a command economy to market-oriented economy. And as China has deregulated its markets, foreign competition has increased against Chinas SOEs (State-Owned Enterprises) (Torres, 2011; Wang, Zhao, Ning, & Yu, 2010).

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Ai (1994) and Root (1987) identified three main modes for foreign market entry, the Export Entry mode, the Contractual Entry mode and the Investment Entry mode. The Export Entry Mode was used if a companys final or intermediate product was manufactured outside the targeted country and subsequently transferred to it. Companies using this entry mode could export directly or indirectly to it. Companies using this entry mode could export directly or indirectly through middlemen or agents. The Chinese never encouraged imports into the country due to foreign exchange problems and for fear of culture pollution (Ai, 1994; de Keijer, 1992) except in the areas of commodities, textile yarns, medical equipment, telecommunication equipment and electrical machinery (Ai, 1994).

The Contractual Entry Mode included long-term non-equity associations between an international entity and a foreign target country that involved the transfer technology or human skills from the former to the later. Technical, service and management contracts, licensing agreements, franchising and turnkey operations were in this category. This entry mode was referred to as co-operative or contractual ventures. The Chinese often called this entry strategy Cooperative Ventures (Ai, 1994; de Keijer, 1992).

The Investment Entry Mode involved ownership by a foreign company of sales units, manufacturing plants or other production units in the target country. The venture could be wholly owned by the foreign investors or jointly owned by an entity of the target country and foreign investors (Ai, 1994).

Ai (1994), Czinkota (1991) and Kogut (1988) defined equity joint venture as two or more companies joining in one enterprise in which both parties contribute assets, own the entity and share the risks. This entity was subject to joint control by its parents firms, each of which was economically and legally independent of the other (Ai, 1994; Shenkar and Zeira, 1987).

Wholly owned Investment involved foreign investors setting up a wholly owned business by way of Greenfield or acquisition of an existing enterprise in the target country (Ai, 1994; Root, 1987). The local operation could be involved in manufacturing (Hornell & Vahlne, 1986), or simply servicing the local market by setting up a local sales capability (Bartleet & Ghoshal, 1992). This type of structure was not allowed in China prior to 1988, as the Chinese law prohibited 100 percent ownership (Ai, 1994).

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Companies often chose entry modes that provide the greatest control over foreign operations. The confidence in and knowledge of the foreign markets were acquired through learning. There were two main types of knowledge to be learned: objective knowledge and experiential knowledge (Ai, 1994; Johanson and Vahlne, 1977). While other three more methods of learning were added (Ai, 1994; Judge and Mackillop, 1993) which are learning, vicarious learning, grafting and search process.

Vicarious learning was about borrowing knowledge from other organizations. Grafting referred to learning by acquiring information sources through hiring new members to the team or by acquiring whole organizations. Search process referred to intentionally collecting information from established sources outside organization.

Staffing and employee training

Recruiting skilled and capable manpower from the labour force represent the most challenging task for foreign companies doing business in China. Joint ventures were more vulnerable since them were upgrading their level of technology or transferring more decision making to local staff (Ai, 1994; Cheng, 1989).

Despite the plentiful supply of low cost labor, finding capable employees was still a mayor task for many companies doing business in China for several reasons. First reason, for many Chinese, their employment with their Danwei (working unit) was life-long. Their life style, including housing and schooling of their children were often provided by the employer. Permission and compensation to the employers were often required in order for the individual to free himself from this life-long contract (Ai, 1994).

Second reason, though the nominal salary for the average worker was low in China, bonus and employment benefits such as subsidised housing and health care could be very costly. Such fringe benefits could be worth more than the actual wages. Third, low labour costs were not more or less offset by labour quality. Chinese workers usually did not have the drive to excel and were unwilling to take responsibility. Chinese managers in general were less concerned about cost, and very reluctant to make any mistakes. The managers and workers often had poor relationship. Training was often required and not just to improve productivity. It was important by itself for the

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Chinese management and employees. For the Chinese, acquiring technology via training programs, sharing of designs, materials engineering, or management skills were important training goals (Ai, 1994).

Cross-cultural challenges With the increasing importance of the China market in the world economy, many international companies rushed and planned to enter China to explore business opportunities. They enter the huge market by forming joint ventures or participating in mergers and acquisitions. This has spurred the need for cross-cultural research in China. It was reported that the great barriers caused by cultural differences like difficulty of communication, higher potential transaction costs, different objectives and means of cooperation and operating methods, have led to the failure of many Sino-foreign cooperation projects. The questions like "how to understand China" and "how to do business with Chinese people" have occupied the minds of international business people who are planning to enter China (Zang, 2004).

To clarify the differences between China and the West, we will refer to Hofstede's four cultural dimensions and Bond's fifth dimension. Among researchers who have given a variety of definitions of culture, Hofstede is one of the first to adopt a pragmatic problem-solving approach in the field and relates culture to management. He defines culture as a kind of "collective programming of the mind, which distinguishes the members of one category of people from another" (Zang, 2004; Hofstede, 1980). Where they explain the culturally-based values systems comprised four dimensions: power distance, individualism/ collectivism, masculinity/femininity, and uncertainty avoidance.

By comparing some Western countries and China along these five dimensions according to their cultural dimension scores (Data source: Zang, 2004; Hofstede, 1991), some tentative conclusions may be drawn. First, Western countries seem to be generally lower (United States of America 40, Canada 39, United Kingdom 35, Germany 35, and France 68) than China (80) in power distance.

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Second, in terms of individualism, Western countries are generally much higher (United States of America 91, Canada 80, United Kingdom 89, Germany 67, and France 71) than China (20). Third, Western countries seem to have short-term orientation while China is considered to be long-term oriented (Zang, 2004).

Impact of Cultural Differences on Conflict Management

The Chinese and Americans tend to resolve conflicts in different ways. Since the Chinese come from a strong collectivism and medium feminine society in which harmony and personal relationship are emphasized, they will try to use indirect ways to avoid direct and open conflict. When they face conflict, they prefer to use authority to suppress it, or settle things in private. They prefer to resolve conflict through negotiation and compromise. Individualistic and medium masculine American managers are used to confronting problems directly and bringing things out in the open. To resolve differences, American managers will prefer to use tactics that involve directly confronting others with rational arguments, factual evidence, and suggested solutions (Zang, 2004; Ting-Toomey, 1985). It is also consistent with the pragmatic short-term orientation and moderately low power distance in USA. Chinese managers use those tactics less than American managers, because using the tactics will provoke overt disagreement, which is considered highly undesirable (Zang, 2004).

To deal with a difficult or controversial request, indirect forms of influence are preferred by Chinese managers to avoid losing face and damaging guanxi. When their Western partners propose to use direct and open ways to deal with the conflict, they may feel embarrassed. On the other hand, Western partners may get totally confused by the roundabout way the Chinese use to solve seemingly simple problems. The different ways that Chinese and American managers resolve conflicts seem to find support from Weaver's finding that feminine societies prefer to resolve conflict through negotiation and compromise (Zang, 2004; Weaver, 2000).

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Impact of Cultural Differences on Work-group Characteristics

China is a relational-oriented country in which people place great importance on personal relationship. Chinese managers may initially focus more effort on building social and interpersonal relations (guanxi) before entering into business or contractual relationship. They would like to spend time developing and maintaining guanxi during the process of interaction and consider it as a prerequisite to do business. In contrast, American managers may encourage their group members to learn from each other, to focus on task rather than on social and interpersonal relations, and to build the confidence required for superior performance (Zang, 2004; Sosik and Jung, 2002). They place a much higher importance on the task or business deal and hope to focus very quickly on specific business matters. They are achievement oriented, that is "work first". They don't think establishing personal relationship is necessarily involved in the work (Zang, 2004).

Living in a collectivism society, the Chinese view people differently as "in-group" and "outgroup". They have much higher confidence in "in-group" members than "out-group" members. But the passing of time, and the development of guanxi, the out-group members may turn into in-group members. If American managers want to do business with Chinese managers, they should give their Chinese partners enough time to know themselves and develop a personal relationship with them. Only when Chinese managers believe that they can trust their partners and consider them as part of the in group, will the business deals follow smoothly (Zang, 2004).

In contrast, individualists who exercise short-term thinking place more emphasis on pursuing hedonistic goals and may be unwilling to commit to long-term relationships developed through group interactions (Zang, 2004; Shamir, 1990). Many American managers are not patient enough to build personal relationships with Chinese partners when they invest in China. They cannot understand how important the relations are to the Chinese and their business (Zang, 2004).

Impact of Cultural Differences on Motivation Systems

The method of distributing pay to motivate employees may also depend on cultural values (Zang, 2004; Leung, 1997). As Zang (2004) & Aguinis (2002) stated, employees can be rewarded

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according to their performance (principle of equity), equally (principle of equality), or based on their needs (principle of need). In general, the equity principle is common in individualistic cultures while the equality principle is widely used in collectivistic cultures.

According to Zang, (2004) & Triandis (1995), the basic distinction between collectivism and individualism is based on four universal dimensions. One is that the definition of the self is independent in individualism and interdependent in collectivism. Another is that personal and communal goals are not aligned in individualism but closely aligned in collectivism. These two may account for the great difference in motivation systems generally preferred by American companies and Chinese companies, pay for performance in American companies, and pay equity in Chinese companies.

In American value systems, great emphasis is placed on individual achievement, and they are expected to achieve success only by their individual efforts. They value competition, achievement and personal goals, and therefore, desire to have plans that recognize individual contributions. They generally see success as contingent upon their own efforts, so they prefer "pay for performance" systems which imply that an individual is solely responsible for what he has accomplished even though he may have had help from others. They consider these systems as effective means to motivate employees. The talents and job performance of employees will be considered first by their superiors for salary increases and promotion (Zang, 2004).

Collectivistic cultures emphasize cooperation, interdependence, and group goals, and thus prefer plans that support group harmony (Zang, 2004; Aguinis, 2002). The Chinese believe that the sense of belonging to the group and devotion to the group are important. They hold the view that one's success is mainly based on group work, so one cannot claim the reward just for oneself. In that case, the equality principle is reflected in the motivation system. When setting salaries, Chinese managers will pay more attention to the working experience and academic qualifications of employees. In terms of promotion, one's political quality, history, and interpersonal relationship are given primary consideration (Zang, 2004).

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Motivation programs to support the workers families3

Competition in the Chinese labour market is every day broader due to the constant increase of the population so the Chinese have to find alternatives to improve their knowledge and skills to be the best and have more opportunities to be hired in a good company. However, training and education start at an early age and some companies even increase their employees motivation by appealing to their family values by deciding to help their workers with education programs. Indeed, when they provide support in the childrens education via company-sponsored scholarships or maternity benefits, companies thus build loyalty among their employees and thus retain talent.

Health-care benefits and maternity benefits When it comes to corporate benefits, one of the best examples is the health care system. Many companies provide their employees with a very effective health care system since this aspect is one of the most expensive for the Chinese. The mobile phone company Siemens takes good care of its employees by dedicating a consequent part of its profit not only to the health-care of its employees but also by being involved in social responsibility by sponsoring aid programs in rural areas through the sponsoring of hospitals. For instance, in 2010, the company dedicated $10 million in a Chinese rural healthcare project in which it provide hospitals with top-scale diagnostic imaging equipment such as ultrasound or X-ray. Regarding maternity benefits, some companies participate in a local maternity insurance fund with a contribution rate between 0.5% and 1% of an employees salary. Moreover, employees are likely to receive their full pay during maternity leave. While Chinese women usually receive a 3-month long holiday when they have a baby, in 2010, Hangzhou Beingmate Group, a Chinese baby food & beverage supplier was the first to introduce an 18-months maternity leave to its female employees. The employees of the also have the opportunity to attend a training scheme where they can learn more about how to nurture their coming baby. However, despite this innovative measure, many other companies are reluctant in settling down this program due to its inconsiderate cost. Many other companies such as NALCO, -a company specialized in industrial water, energy and air applications- offers a wide range of benefits such as medical check-ups, statutory social security or even relocation travel costs for their employees and their children.
3

This section was taken from the website: https://www.gmfamilyfirst.com/ip-vpp/

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The GM Family First program

The American car constructor General Motors is part of the best companies in terms of employee benefits through the General Motors Employee New Vehicle Purchase Program. Through this General Motors employee discount, employees and their family members can buy a brand new General Motors vehicle and benefit from a price discount that can be up to nearly $9,000 when buying a Chevrolet Avalanche. Via the GMAC Insurance, workers can also cover their cars for repairs and nationwide towing. The General Motors Employee New Vehicle Purchase Program along with the GMAC Insurance are obviously part of a wider scheme known as General Motors Family First, dedicated to General Motors employees which allow them to participate in the GMAC Real Estate brokerage, a housing cash back scheme they can use when they sale their house and buy a new one. A focus on SAS Families Even if many companies offer benefits to their employees, one of the most involved Chinese companies in terms of employees compensation is SAS. This Chinese leader in business analytics software and services dedicated a company website to their employees known as SAS Families. The range of help their provide is really broad and goes from an adoption program to mental health resources but for the purpose of this article, it is relevant to focus of several aspects of the help SAS provides to its workers. We have seen earlier how important family is to the Chinese so the leader in providing software solutions did a great job in order to retain its employees and motivate them.

SAS Family is an excellent opportunity for Chinese workers to receive help in many cases. If they want to adopt a child, they can attend educational seminars and participate in an adoption mentoring program during which they can receive support in the process of adoption and educating adopted children from people who have also adopted kids. In many Chinese plants of the company, employees children can stay in a child care center and can receive support on special needs parenting. Workers can also give financial and legal help for education or attend various workshops on life as a double-duty mother or adolescent sexuality. Help is even provided in case the family splits up and has to face a divorce and employees have the opportunity to discuss issues with a separation consultant. Even when they retire, employees can come to the plant and enjoy the cafeteria, massages, a book exchange club or dry cleaning.

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Competition on the labour market is very high so to create a cohesion feeling and keep the best employees within the company, firms have to appeal employees by giving them incentives. However, sometimes this is not sufficient enough and corporations have to use family, which is really important in the Chinese culture in order to motivate them even more.

III. RESULTS AND DISCUSSION

By obtained results of research we can compare the literature review and the answers from the questioning to Dr Clemente Hernndez and Dr Daniel Lemus, both members from ITESM campus Guadalajara. The comparisons of results obtained are shown in graph 1a and 1b (annex 1) and the survey applied is included in annex 2. We are going to discuss about differences between Hofstedes Research and answers from professors.

Analysis from the answers from Dr Daniel Lemus and Dr Clemente Hernndez Dr Daniel mentioned that theres a difference in ethnics groups from China. We cannot only focus on Hofstedes research that was concentrated on modern China and big cities like Shanghai, Beijing. In China, there are 54 ethics groups that mean huge differences between languages, behavior and values. So we consider that Hofstedes research couldnt be applied to whole China, it will depend of region. If you need to understand Chinese and doing business with them, you need to focus on a particular area and learn more about it.

For motivation, both respondents said that money is the second important point for Chinese. The first one is BRAND of company. It means that for Chinese is very important to work for known and high prestige companies.

Also, both of them answered that Chinese need to have a manager to decide what they need to do; they do not have initiative to do work by themselves, if they are not asked to do so. Besides, looking for best opportunities, they will negotiate with the current manager about the salary if not,

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they will leave.

Dr Cervantes mentioned in one of his lectures, that nowadays, the philosophy of Chinese is how to get money. They are not interested a lot in relation with foreign; they think how much money they will get from you. They will be interested in you, if they have clearly convinced that they will have benefits from you. Chinese dont have high standards to do tasks or in the best way, they will just do that they are required. They are hard-working people but they lack of initiative.

Dr Clemente mentioned that they have problems to work in teams. For example: There is a process of collectivization when we have a group of Chinese with the same task but each Chinese will work individually. They work like a group of people but not like a team (exp.: football team).

Dr Daniel said they do not except to be friend with manager, they see in him only an administrator. Because there are three circles of friendship: 1. Family. 2. Friends from your town. 3. University friends.

It is necessary to wait at least three years before having the trust from Chinese. Its part of Chinese culture to get services for services, for example: to hire a person if he/she is from his/her native town and accept that one this person will serve in his/her way. Chinese are so individualistic, each one consider himself/herself as a Star, thats why they will be never satisfied to work on group and share his/her success with other member of team.

IV. CONCLUSIONS

To make Chinese to work for, we need to get them clear task and do not except them to work in team. Being more orientated in individual behavior. To motivate Chinese workers there are other facts more significant than money. Working with a high prestige company is more important,

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than having a high salary. For Chinese to avoid having Loose face is crucial. Nowadays, to keep talents many companies new extent employees benefits to their families whether through the classic healthcare system or maternity leave. However, some companies institute innovative measures such as General Motors or SAS via programs dedicated to their employees families in which they offer broader compensations such as workshops, discounts on cars, provide help for adopting or divorce. In a society where family values are very important, these incentives are an efficient way to attract and appeal talents so Chinese firms which are quite reluctant to it might have to follow this path in order to keep up with conserving valuable elements of the company.

V. ACKNOWLEDGEMENTS

We would like to thank Dr Clemente Hernndez and Dr Daniel Lemus for his accessibility and participation in our research. The information provided was very useful for the purpose of this work. We appreciate a lot that they have shared their expertise with us.

VI. ANNEXES 1. Geert Hofstedess Cultural Dimensions.

Geert Hofstede Cultural Dimensions

120 100

80
60 40 20 0 PW.D. IND. MAS U.A. L.T.O.

a) Graph obtained from the official website.

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GROUP RESEARCH
80 70 60 50 40 30 20 10 0 PW.D. IND. MASC. U.A. L.T.O.

b) Graph obtained according this research. *PW.D. Power distance; IND. Individualism; MASC. Masculinity; U.A. Uncertainty avoidance; L.T.O. Long term orientation

2. Survey applied to Dr Clemente-Hernndez and Dr Daniel Lemus.

INTERPERSONALSKILLS DR MARTIN VELAZQUEZ. 1. Regarding your experience. Could you say if Chinese are more orientated for a long term relation? Do you think they can move to another company with a better salary or a better position seeking another opportunity? Could Chinese change their work or they will wait the same opportunity from the current company? 2. To delegate responsibilities and trust between colleagues. Do you think that Chinese people can support each other? Do you think that they will be more satisfied to work together or individually? Or theres a competition between employees? It is necessary to be friends to work together or is contemporary relation just achieving goals? 3. Do you think that Chinese are absolutely sure about achieving goals or they just try to do tasks? 4. What do you think if Chinese need to have the potential leader and to be controlled? If they expect to have a good relation with manager or they just see in him an administrate of work?

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VII.

APPENDICES

1. Interview applied to Dr Clemente Hernndez.

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2. Interview applied to Dr Daniel Lemus.

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