Cultural Differences Between China and UK: Implications for Joint Venture

This presentation explores the cultural differences between China and UK and their implications for a joint venture. It discusses various aspects such as language, greetings, business approach, and more. It also highlights the success and failure factors of a joint venture and provides recommendations for AstraZeneca to succeed in the Chinese market. The presentation concludes with references for further reading.

Assessment

Table of content
• INTRODUCTION
• CHINESE CULTURE AND ITS DIFFERENCE FROM UK
CULTURE
• SUCCESS AND FAILURE FACTORS OF JOINT VENTURE
• CULTURAL SENSITIVITY IN CHINA / THE
DIFFERENCES FROM THE UK
• HOFSTEDE CULTURAL DIMENSIONS: UK AND
CHINA
• RECOMMENDATIONS
• CONCLUSION
• REFERENCES

Introduction
Culture can be defined as way of living life by a group of people
and way of doing things. It is based on various factors such as
Knowledge, behavior, belief etc. Culture can vary from area to
area, country to country. The culture and practices in China may
be lot different that what is followed in UK, therefore it is one of
the important factors to be considered while making important
strategic decisions of business organization

Chinese Culture and its
difference from UK Culture
From the above understanding of
culture, it can be asserted that there are
lot of cultural differences between
Chinese and UK traditions. Culture
can vary from various aspects such as
Languages, beliefs, art, religions,
literature, preferences of consumers,
business laws and regulations,
festivals celebrated, traditional
practices followed etc

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Greeting: In China greetings are
shared by bowing down to each
other and they are not so
comfortable in being touched by the
stranger whereas in UK and most
other part of the world greetings are
shared by shaking hands and
patting arms or shoulders
sometimes along with that.

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Readability: There is huge difference
in the expression style of people of
UK and China. It is tough to read
mind or thinking of Chinese people
from their expression as they are quite
constant face or poker face whereas
people from UK has expressing faces.
It is sometimes to predict them based
upon their expressions.

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Business Approach: Every country has its own resources and
dependencies. The supply of labor is not so high therefore cost of
labor workforce in UK is high therefore, there are automation
and machine-oriented approach whereas in China labor supply is
adequate which leads to affordable labor cost so, their businesses
are human oriented.

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Punctuality: Chinese people are considered to be more punctual
and follow different meeting ethics strongly, non-adhering with
any of them is considered rude by them whereas there are not
that much set of rules established in UK other than being on
time, therefor they have to be aware of all those principles and
follow them strictly to establish their business in China and get
success.

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Language barrier: One of the major culture changes is change
of communication language between China and UK, language
preferred by UK people is English where Chinese is preferred by
people there. This might be one of the biggest culture differences
between the two countries.

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Legal and Ethical Culture: UK follows various legal systems
like English Law, Northern Ireland Law, European Union Laws
etc. whereas Chinese legal culture is based on Confucian
Philosophy from long and adopted soviet law influenced laws.

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These are some of the prominent cultural differences between
China and UK and this might affect the decision of AstraZeneca
a pharmaceutical company to establish its joint venture in China.
They must critically evaluate all these cultural differences and
analyze the affects that a cultural factor might have on its
decision and come out with an action plan to overcome the
difference.

Success and failure Factors
of Joint Venture
Joint Venture is a form or type of business organization in which
two organizations enters into a business agreement to carry on
the business operations by sharing their resources with each
other. In context of this report we are discussing the plans of
AstraZeneca to expand its business operations out of UK to
China by forming a Joint Venture.

Success Factors
Reduction in Labor Cost: Since population of China is high
therefore there is adequate supply of labor there which leads to
cheap labor cost. Currently since AstraZeneca is operating in
UK, they have high labor cost whereas by entering a joint
venture with a local Chinese firm they might be able to reduce
their labor costs for manufacturing of their pharmaceutical
products.

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Overcoming Cultural Differences: As highlighted above there
are huge cultural differences between Chinese culture and UK
culture and it is not easy for AstraZeneca or any other company
to overcome them therefore this can be a major success factor
through Joint Venture as instead of starting from scratch in
analyzing their culture they can reduce their stress from the fact
that the local firm is already familiar and aware of their culture
and they can easily overcome the same which would benefit in
expanding their business operations smoothly.

Continue…
Capturing larger Market and Reliability: By collaborating
with the local firm through a Joint Venture which might already
be directly or indirectly associated with pharmaceutical industry
which is known to their local population there is high probability
of business success and capturing the large audience and also
develop the reliability of their brand.

Failure Factors
• Negative goodwill of local firm: In case the local firm with which
AstraZeneca is collaborating has a bad or negative reputation in the
local market of China and they are entering into a joint venture
there is high probability that due to this adverse brand name of
local firm brand name and reputation of AstraZeneca might be
negatively impacted.
• Sharing in Profits: In Joint Venture both firms enters into a
contract to share each other’s resources and profit and losses.
Therefore binding into this business arrangement can lead to
increase in cost and reduction in profit margin for AstraZeneca as
they have to share their profit with the other firm.

Cultural sensitivity in China / The
differences from the UK
• Cultural sensitivity is a term used to define acknowledgement
and awareness of the fact that cultural differences and
similarities exist between various countries and people without
assigning or defining any values to them either positive or
negative. According to this concept it is a acknowledged fact
that there are differences in cultures and traditions of various
people from different countries and they have to adapt to same
to accomplish success and establish their business in Chinese
market

Hofstede cultural
Dimensions: UK and China
• Hofstede cultural dimension theory
formed by Geert Hofstede and
associated with cross-cultural
communication. It shows and lists
effects of culture and values of
people and correlates these values
to behavior using a structure
derived from factor analysis.

Recommendations
• For AstraZeneca, in order to succeed themselves in this joint
venture formed in China it is important for them to analyze all
the major cultural differences between UK and China affecting
their business in China. It is recommended for them to enter
into this Joint Venture and make sure their partner is having a
well established reputation in the Chinese Market and they
have adequate Labor resources available at low cost that will
enable to manufacture their pharmaceutical products at low
cost

Conclusion
From the above PPT and analysis from Hofstede’s theory it can
be concluded that for AstraZeneca in order to succeed in the
Chinese market it is important for them to analyze and compare
various cultural factors of both UK and China and critically
analyze the differences and based upon that they should form a
plan to overcome the same.

REFERENCES
• Nippa, M. and Reuer, J.J., 2019. On the future of international
joint venture research. Journal of International Business
Studies, 50(4), pp.555-597.
• Richter, N.F., Hauff, S., Schlaegel, C., Gudergan, S., Ringle,
C.M. and Gunkel, M., 2016. Using cultural archetypes in
cross-cultural management studies. Journal of International
Management, 22(1), pp.63-83.