Cross-cultural Adjustment and Synergy Creation of Foreign Managers in China: An Empirical Study

This research presents a comparative study of cross-cultural adjustment of foreign managers in China in successful creation of synergies. Results of analyses were collected at individual levels by Japanese managers and European managers working in China. The results showed communication orientation and feelings of integration are significantly related with synergy creation. Based on the findings, further research will be developed regarding hybrid managers and communities of practice in the Chinese context.


Introduction
In today's world economy, multination corporations (MNCs) increase in cross-border activities, so the role of subsidiary in those MNCs increase in significance (Rugman & Verberke, 2001;Au & Fukuda, 2002).At the organizational level, competence development is crucial for any business with the long-term survival orientation (Porter, 1985;Prahalad & Hamel, 1990).
To develop intercultural competences means create synergy in the organizations.Researchers have shown than synergy creation can make business units more competitive (St. John & arrison, 1999).Several studies have been conducted on firms' synergy creation in the context of inter-organizational relationships (e.g.Anju, Song & ettit, 2000;Nielsen, 2005;Wu & Chol, 2004).The term "synergy" originally comes from Greek word "synergos" which means working together, it describes the collaboration of individual factors which mutually boost each other (Daum, 2012: 10).It seems that it is more important to study the synergy creation by individual members in the organizations.Researchers (e.g.Selmer, 1999) have investigated the adjustment of European expatriate business managers (EEBNs) in China, gave evidences that EEBNs felt 'somewhat adjusted' to the Chinese mainland in the sociocultural aspects.However, little is known about the adjustment of Japanese expatriates in China, several studies have made on the adjustment of Japanese expatriates in the US (Yamazaki, 2010), in Britain (Nicholson & Imaizumi, 1993) and in Singapore (Chew & Putti, 1995).
This research presents a comparative study of cross-cultural adjustment behavior of foreign managers in China in successful creation of synergies.Quantitative and qualitative analysis was conducted with foreign managers based in China during August to October in 2011.Results of analyses were collected at individual levels by Japanese managers (n=75) and European managers (n=87) working in China.The purpose of this study and research problem are to answer the following questions: -What kind of management behavior's aspects are important to adjust in the host country business environment?
-Do language differences affect the exchange process for Japanese and European managers in Chinese business communities to create intercultural competence?
The study is organized as follows.The next section will provide an overview on literature review.First, I examine the boundary spanner roles of expatriates.Second, I review expatriates' adjustment.Then, in the methodology section, I discuss data collection, sample results and empirical results, and present the results from cross-cultural adjustment aspects.Finally the research finding will be discussed, limitations and implications for further research and theory development regarding communities of practice will be shown.

Expatriates' Boundary Spanner Roles
Cross-cultural management research offers the key to an understanding of the question: "what is the impact, if any, of culture on the behavior of people within organizations?" (Adler, 1983).Boundary spanning means the activity by which individuals within organizations bridge external needs and provide information for internal users (Scott, 1995), Expatriates play the roles of boundary spanner, they gather market information, and bridge internal and external organization contexts (Aldrich & Herker, 1977;Dowling et al., 2008).Expatriates also get job satisfaction during they are engaging the boundary spanning activities (Au & Fukuda, 2002).Yagi & Kleinbery (2011) showed boundary spanning as an individual cross-cultural identify process.Reiche (2011) found that managers' boundary spanning is positively related to both with their individual effort to transfer knowledge, but also with headquarters' staffs' efforts to acquire subsidiary-specific knowledge.

Competence and Capabilities
In international business studies, scholars use resource-based view to investigate the tangible and intangible assets a firm uses to implement its strategies (Barney, 2001).Teece, Pisano & Shuen (1997) advocate a "dynamic capabilities" view to measure a firm's capacity to dynamically deploy resources.The definition of "dynamic capabilities" is "The ability to sense and then seize new opportunities, and to reconfigure and protect knowledge assets, competencies, and complementary assets with the aim of achieving a sustained competitive advantage (Angier & Teece, 2009: 412)".Other researchers use "core competence" referring to firms' internal attributes that provide a basis for competitive advantage (Prahalad & Hamel, 1990).To avoid confusion between capabilities and core competencies, the term "core competence" is only be used when discussing diversification strategies (Peng, 2006).The capabilities can be divided into two categories: tangible capabilities and intangible capabilities (Hall, 1992(Hall, , 1993)).Tangible capabilities are resources that are observable, such as: 1, the ability to generate internal funds and to raise external capital; 2, location to plants, offices and equipment, access to materials and channels; 3, Patents, trademarks, and copyrights; 4, organizational control systems and practices.Human resource, innovation resource and reputational resource are the intangible capabilities.

Research on Expatriate Adjustment
Studies on adjustment have typically examined how individual, organization and external environment factors are related to adjustment (Aycan, 1997).Tung (1981) found national differences between American and Japanese managers, US firms ranked "Inability of the spouse to adjust" as the most important, while this was ranked fifth of the Japanese firms.Early studies (Black, 1988) pointed out expatriates adjustment should consider from sociocultural adjustment aspect and time to proficiency aspect.Researchers use social capital and network theory to investigate expatriate adjustment, as expatriates transfer knowledge during the boundary spanning activities (e.g.Liu & Shaffer, 2005;Wang & Nayir, 2006).

Sample and Data Collection
The Japanese managers contact information was collected from the member list provided by Monotsukuri Industrial Exhibition (MIE) is one of the most important industrial exhibitions supported by Japan External Trade Organization (JETRO) and Chinese local government.It provides a platform for Japanese manufacturing companies which supporting the development of business between China and Japan.More than 500 Japanese companies exhibit in MIE each year.The mailing address of each managers was obtained through a name list provide by the 14 th MIE.).A mailing list consisting of 235 Japanese managers' addresses containing their names, company affiliations, postal and e-mail addresses was build up, these managers were asked to fill in the online survey in Japanese.Same questionnaire was also translated into English to investigate European managers' behavior.The survey was pre-test by four managers who are working in multinational corporations and have rich international assignment experiences, and also several professors.The European managers contact information was collected from social network media: XING.com.The managers' information are selected by managers who are working in China and who have the language skills for German, Spanish, Finnish, French, Hungarian, Italian, Dutch, Polish, Portuguese, Russian, Swedish or Turkish.Social network media provide us with rich information and community platform with managers.The professional business based network media, such as XING is a popular community platform for managers from European counties.
The survey was conducted from September 29 th to October 28 th 2011, a paper-version questionnaire in Japanese was filled out by seven Japanese managers during interviews.It was uploaded to internet and accessible for international managers who have been informed about the URL from September 29 th until October 28 th 2011.The online questionnaire was divided into multiple-screen pages, in total of 155 managers filled in the online questionnaire resulting among 162 participants in total (See Table 1).The hypothese of this research are: H1: The communication/language ability is positively related to synergy creation.
H 2: The high social interaction feeling is positive related with synergy creation.

Response Rates for Different Countries
Table 1 indicates the response rates per countries.The overall response rate of this survey is 16.7%.According to Harzing (1999: 211), most of the studies had response rates between 6% and 16%.The responses cover nine countries: Germany, Japan, Australia, France, Netherlands, Brazil, Italy, Spain and Switzerland.Although one manager is from Brazil, as the sample selected method mentioned above, he/she should has stayed in European countries for a long time.The responses from Germany and Japan are much higher than responses from other countries.The response rates between Germany and Japan are very comparable.Although German managers are the main part in this research, as people from European country have the similar cultural foundation: Greek idea of citizenship, the differences between European countries are not so big, we can call those managers who participated this survey as European managers.Table 2 indicates the differences of employment scheme between Japanese managers and European managers.In total of 128 managers answered this questions, in the sample, most of the Japanese managers are expatriates; most of the European managers are expatriates and local employed.It shows that Japanese companies preferred to send parent-country national (PCNs) managers from Japan.The employment scheme of European companies has two main special feathers: 1, the managers are sent as expatriates from home country to China.2, a lot of local foreign managers who are living in China, are hired in the European firms.Referring to self-employed, the European companies show higher percentage than Japanese companies.We could assume that European managers are more actively as a self-employed manager than Japanese managers are.However, I also bought other database book-"Hello Shanghai" published by a Japanese company: R&R Co., Ltd, which contains the information of Japanese who are living in Shanghai, there are very many Japanese set up their business in Shanghai according to that database, but as managers' mail addresses are not contained in that database, it is difficult to use it to contact the managers to fill in the online survey.

Length of Residence
Figure 1.Length of residence The final characteristic of the sample included in this sample is the length of residence of the managers in China.
Figure 1 indicates differences of the length off residence between Japanese managers and European managers in China.Managers with less than one year residence in China, the percentage of Japanese managers are higher than European managers.On the contrary, managers with more than six years residence in China, the percentage of European managers is much higher than Japanese managers.Managers who have stayed in China between one year and six years, the percentage between Japanese managers and European managers is almost the same.

Empirical Results
In this research, I conducted the investigation from cross-cultural adjustment.According to this perspective, the result is discussed as below.

Adjustment and Synergy Creation
Synergy creation can be considered as a kind of outcome.Because the expatriates' developed cross-cultural awareness to work productively with local managers, synergy creation is a kind of soft performance appraisal (Hill, 2000;in Saee, 2005: 244-245).Intercultural competences are created from synergy creation mechanism.
As the cultural differences for high and low context (Hall, 1977), I assume that there are significant differences between Japanese managers' and European managers' behavior regarding to synergy creation.The items of adaptation, participation, integration, language, spouse support and involvement are used to do the investigation.
To succeed to create best practices in the organizations, MNCs might limit the adaptation on home practice (Pudelko & Harzing, 2007).Expatriates' acculturation level is dependent on their participation in host community (Kim, 1987).Social integration may facilitate the success of expatriates' assignment in China (Wang & Kanungo, 2004).Language skills and spouse support are important in terms of performance and adjustment (Tung, 1982).The involvement in the decision making group refers to role of expatriates as an agent of direct control role, Harzing (2001) found that German companies tend towards this form of control, she labels this kind of expatriates as 'bears'.Here are the questions: 1) Do you prefer to apply your home country practice?
2) Do you prefer to participate in host community?
3) Do you feel integrated in host community?This research used 5-point scale (from 1, "strongly disagree," to 5, "strongly agree") to measure above items.The Mann-Whitney U test was used in the present study to test for synergy creation significant differences.Table 3 and Table 4 report the results of the Mann-Whitney U test on six adjustment items in the questionnaire.The results of the Mann-Whitney tests indicates a significant differences between high integration and low integration (p<.01), high language skills and low language skills (p<.05) for Japanese managers.For European managers, only indicates a significant differences high language skills and low language skills (p<.05).It means that Japanese managers who have high language skills, may not feel themselves integrated in Chinese community, this kind of feeling may result with the low degree of synergy creation.The European managers with high language skills are more likely to create synergy in China.

Discussion, Conclusion, Limitation and Implications for Future Research
The results of the present study offers clear evidences that the differences of intercultural competence creation of foreign managers in China.I assumed that intercultural competence is produced from synergy creation mechanism.The synergy creation mechanism was investigated from managers' adjustment process.
The language differences positively affect knowledge exchange process for both Japanese managers and European managers in Chinese business communities.The ability to speak Chinese is an important for managers to produce intercultural competence in China.Referring to the corporate common languages, I learned that there is a difference between Japanese multinationals and European multinationals.The Japanese multinationals prefer to speak Japanese as corporate common language; meanwhile the European multinationals in China prefer to speak English.
Although those managers made an effort to use local language in China, the Japanese managers do not feel integrated in the local Chinese communities.Some Japanese mentioned that there is enrichment of Japanese communities in China, such as Kenjinkai, an association of Japanese who originate from the same prefecture and many other Japanese corporates-community-networks in China.During the interview with a Japanese manager (the interview was conducted on 5/9/2011), he told me that his diary work in China is mainly with other Japanese communities, his living and working environment are completely Japanese.However, he is actively attending other Chinese communities such as language school and sports club to be more integrated in the local environment.
Another European manager who accepted the interview on 9/9/2011 mentioned that she felt that the corporate community is the main part for her daily work, although she thought it is important to learn and communicate by Chinese, as the Chinese subordinates are fluently with corporate common language -English, she does not feel integrated a lot in the local Chinese communities as she does not need to speak fluent Chinese.
There are might some limitations in this study.Because of the nature of the database, I could not analyze how the corporate factors influence the managers' behavior.However, the database used in this study covered the answer not only top-manager but also general managers, it help us get a comprehensive understanding from different hierarchic managers.To solve above problem, an additional analysis and a follow-up interview with those managers who participated in the survey will be conducted.However, this research has taken a step into comparative analysis of the relationship between intercultural competence creation and managers' adjustment behaviors in China.This research will be useful to give implications for, both foreign manager who are eager to succeed to produce intercultural competence in China, and also multinationals to develop and complement the global human resource practices.This study has taken a step in the direction of investigating the factors which affect the synergy creation by hybrid managers in the Chinese business context.It is possible that different industries may show different results.I would argue that future research into different industries and use the insights of other country based managers, such as managers from Anglo-American.The study reported in the paper has some shortcomings, but it seems to demonstrate that an individual perspective that could lead to new important finding about this field.In the future research, I will investigate hybrid manager and community of practices from this research framework.

Hybrid Manager and Community of Practices
The "hybrid manager" succeed to create synergy because of his good command of host country language and advances in cultural knowledge and experiences, are positively result in synergy creation overseas (Schlunze & Plattner, 2007), there is a possibility that in China, the hybrid managers are also existing.In this research, I also confirmed the significance of the language skills and cultural knowledge for international managers to produce intercultural competence.According to Jones (2007:22), "a hybrid form of globalized working practice that can only be understood in both its form and implication by seeking to map and understand the multitude of distanciated relations that shape what practices are being undertaken."A further direction of this study will be to examine the existing of hybrid managers among foreign expatriates in China and the mechanism for the hybrid process; the international managers create community of practices (CoPs) in China, when they are balancing the global community and local community.The concept for CoPs was introduced by Wenger (1998).
Wenger argued that the acquisition of knowledge is a social process where people can participate in the group (See: Hildreth and Kimble, 2004).Wenger gave the definition of CoP as: communities of practice are group of people who share a concern or a passion for something they do and learn how to do it better as they interact regularly.(Wenger 2004) Wenger hypothesized that engagement in practice is the fundamental process for people's useful perspective on knowing and learning.Since then over the past years, a considerable number of studies have been conducted in different fields from this approach.Amin & Roberts (2008) argued that the CoPs could be a driver of learning and knowledge across different environments.Different with the traditional thinking for success of CoPs strategies inside of the multinationals, I assume that the hybrid managers would more actively for creation CoPs in overseas environment.

4)
Do you try to command and use Chinese as much as possible?5) Your partner is understanding and supportive your work-life in China.6) I am actively involved in the decision making of the local subsidiary in China.

Table 1 .
Distribution of responses across nine countries

Table 2 .
Employment scheme between Japanese managers and European managers

Table 3 .
Rank of synergy creation (Japanese managers)

Table 4 .
Rank of synergy creation (European managers)