Conflict Handling Styles in International Joint Ventures: A Cross-Cultural and Cross-National Comparison

Article excerpt

Abstract

* Based on a large-scale survey of international joint venture managers of Chinese, other Asian, and Western origin, this study compared and explored the cross-cultural and cross-national differences in preferred conflict handling styles.

* Such differences are explained by individualistic-collectivist cultural values as well as factors beyond cultural influences.

Key Results

* (1) Western managers tend to use forcing and problem-solving styles more than Asian (including Chinese) managers do; (2) Asian (including Chinese) managers tend to prefer a compromising styles more than their Western counterparts do; (3) Western managers tend to use a legalistic approach more than Chinese managers do; and (4) Asian managers tend to prefer forcing and legalism more than their Chinese counterparts do.

Introduction

Conflict handling styles have been given considerable attention in research on international joint ventures (IJV) (Black/Mendenhall 1993, Fey/Beamish 1999, Koot 1988, Lin/Wang 2002). Studies suggest that cultures differ in their preferred forms of handling conflict (Chua/Gudykunst 1987, Elsayed-Ekhouly/Buda 1996, Leung 1987, Morris et al. 1998, Ting-Toomey et al. 1991, Trubisky/TingToomey/Lin 1991, Chen/Ryan/Chen 2000, He/Zhu/Peng 2002). The managerial importance stems from the fact that participants' adoption of different conflict resolution strategies not only affects the immediate resolution of a specific disagreement, but also has critical relational consequences (Lin/Wang 2002). While the mostly Western-based literature suggests that the right amount of conflict is healthy in organizations (Robbins 1974), many Asian cultures, East Asian cultures in particular, consider that conflict has a negative effect on the balance of feelings within the work unit (Swierczek 1994). Even efforts by each IJV partner to resolve conflicts may become the most serious sources of conflict because each side typically attempts to resolve them by using methods that have proven successful in their own country (Black/Mendenhall 1993).

Understanding the ways in which people from different cultures approach resolving conflict is, therefore, of great importance. Although many researchers have addressed this problem, only a limited number of empirical studies have examined cultural or national differences in managers' preferences for conflict resolution styles in IJV settings (Habib 1987, Lin/Wang 2002). To investigate this issue, the present research is based on IJVs between Chinese local companies and partner companies from Western or other East Asian countries/regions. As such, this research provides a unique opportunity to examine the impact of national cultures, given the prevailing belief that culture exerts an influence on conflict resolution behavior. Moreover, by comparing Chinese managers with joint venture partners from other East Asian countries/regions (throughout the paper, managers from local Chinese firms will be referred to as Chinese, managers from East Asian firms as Asians, and managers from North American and European firms as Westerners), factors other than cultural variables that influence managers' preferences for conflict styles in IJVs are also examined.

During the past two decades, the Chinese government promulgated a number of laws and regulations, including the joint venture law, to institutionalize a favorable environment for foreign investors. As a result, the record of foreign investment inflow into China has been quite impressive. China has become the second largest foreign direct investment (FDI) recipient, after the US, since 1993. By the end of 2002, China approved a cumulative of 423,720 foreign investment projects, with a total utilized investment value of US$ 446.3 billion. The leading sources of investment in China include Hong Kong, Japan, the US, Taiwan, Singapore and South Korea (Hong Kong Trade Development Council 2003). …