Sociocultural integration in Chinese outbound M&As : a multiple-case study from a Dutch perspective

Master Thesis

Sociocultural integration in Chinese outbound M&As:

A multiple-case study from a Dutch perspective

Myra Hendriks 11398396 (UvA) 2172658 (VU)

Master of Science Entrepreneurship (joint degree) Supervisor: G. T. Vinig

Preface

Statement of originality

This document is written by Student Myra Hendriks who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

Table of Contents

Abstract ... 4 1 Introduction ... 5 2 Literature review ... 8 2.1 Cultural differences ... 8 2.1.1 National cultural differences ... 8 2.1.2 Organizational cultural differences ... 9 2.2 Sociocultural integration ... 10 2.3 Research on post-acquisition integration by Chinese multinationals ... 12 2.4 Five-year plans ... 13 2.5 Relation-based versus rule-based governance ... 14 3 Theoretical framework ... 16 3.1 The impact on sociocultural integration ... 16 3.2 Mutual enhancement of rule-based and relation-based governance ... 17 3.3 Conceptual framework ... 19 4 Methodology ... 21 4.1 Research approach ... 21 4.2 Research design ... 21 4.2.1 Multiple case study ... 21 4.2.2 Case selection ... 22 4.3 Data collection ... 23 4.3.1 Semi-structured interviews ... 23 4.3.2 Interview questions ... 24 4.4 Data analysis ... 24 5 Results ... 26 5.1 Within case findings ... 26 5.1.1 Rule-based governance ... 26 5.1.2 Relation-based governance ... 26 5.1.3 Sociocultural integration ... 27 5.1.4 Other cultural differences ... 29 5.2 Across case findings ... 30 6 Discussion ... 34 6.1 Implications ... 36 6.2 Limitations ... 37 6.3 Future research ... 38 7 Conclusion ... 39 8 References ... 40 9 Appendices ... 44

Abstract

This multiple case study explores the influence of organizational cultural differences between Chinese and Dutch organizations on sociocultural integration after a merger or acquisition. A comparative analysis of two governance approaches, rule-based and relation-based

governance, examines the organizational cultural differences between Chinese and Dutch organizations. The two governance approaches are used to analyse three Dutch cases of Chinese outbound mergers and acquisitions, in order to have an understanding of the

sociocultural integration process from a Dutch perspective. By conducting in-depth interviews with employees of three acquired organizations detailed data is obtained. The findings suggest that mutual enhancement of Chinese relation-based governance with Dutch rule-based

governance has negative impact on the social and cultural outcomes within the Dutch organization. Moreover there seems to be a lack of willingness by the Chinese organizations to integrate with the Dutch organization on a social and cultural level. However, on-going internationalisation in China forces Chinese organizations to become more integrated. Certain strategies should therefore be considered in order to manage the post-acquisition integration process. Effective communication and mutual trust appear to be important enabling factors during the sociocultural integration in Dutch organizations.

1 Introduction

“The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning” (Angang, 2015, p. 8). While it is only the beginning, China’s overseas expansion already leads to many challenges and opportunities for Western societies and organizations. According to Peng (2012) the internationalization and rapid increase of outbound Chinese acquisitions is mainly because of three reasons. First of all, there is need for fast market entry and secondly, Chinese companies often are plagued by a lack of expertise such as branding and R&D expertise. Therefore they have to acquire world-class brands and knowledge in order to overcome this weakness. The third reason concerns managerial arrogance and empire building.

Over the last few years, the expansion of Chinese multinational companies has become a trending topic worldwide, however literature on Chinese mergers and acquisitions, known as M&A, has been fragmented and lacks theoretical background (Deng, 2013). There is a gap in the existing literature, especially with respect to the post-acquisition phase. Research has shown that during the post-acquisition phase integration is a leading challenge (Peng, 2012). The underlying thought of a merger or acquisition in theory is to combine the best of both worlds. The acquiring and acquired organization can benefit from each other in terms of financial resources, innovativeness and social networks. However, it still remains a big challenge for organizations to put collaborations into practice (KPMG, 2015), especially within foreign acquisitions (Peng, 2012). This is for the greater part due to the major cultural differences between the organizations (Sarala, 2012). The particular challenge is known worldwide, however since Chinese outbound mergers and acquisitions are a relatively new phenomenon there is not much known about the emerging Chinese multinationals in the Western world. The Netherlands is, among European countries, an important business partner for China as it is an efficient gateway to rest of Europe. Moreover, the Netherlands is among the European countries that are most open to cooperation with China (Hemphill & White, 2013). Therefore this study will focus particularly on acquired organizations in the Netherlands.

The question is raised how a successful collaboration and sociocultural integration between companies from two completely different cultures can be achieved. Several recent studies have already been conducted in order to find the best ways to build collaborative

teams. A great example comes from Kohler (2016), who developed a theoretical framework for designing effective collaborations. However, current research does not tackle the cultural and social gap that exists between companies due to inter firm diversity (Parkhe, 1991). Literature mainly focuses on recommendations and best practices of collaborations in general. Hence, it is necessary to also look at the social and cultural processes of the outbound

acquisition in order to achieve a successful collaboration. Moreover, the process of sociocultural integration will be explored, which involves the changes in organizational structure, the development of a consistent corporate culture and the establishment of new leadership (Shrivastava, 1986). Sociocultural integration will be measured by mainly three integration measures: shared leadership, a shared organizational culture and effective communication (Frensch, 2007). Sociocultural integration means, moreover, that the organizational systems of the merging firms are compatible, do not create conflicts and managers have the same assumptions (Shrivastava, 1986).

This study explores the problems that arise from cultural differences in acquisitions from Chinese companies in the Netherlands due to both cultural and organizational diversity. Research has shown that national cultural differences such as power distance and

individualism (Nazarian, Irani & Ali, 2013) often increase integration problems within foreign acquisitions (Datta and Puia, 1995; Olie, 1994 & 2005; Weber et al., 1996).

Moreover, studies have shown that cultural differences at the organization level have negative impact on acquisition success (Datta, 1991; Weber et al, 1996). Organizational cultural

differences can be defined as “shared perceptions of organizational work practice within organizational units, which provide a guideline for the organization’s business mission and goals” (Nazarian, Irani & Ali, 2013, p. 12). What is remarkable is that there are only few studies that test the impact of both national and organization cultural differences on acquisition performance. Weber et al. (2013) have been the first who have tested the post-acquisition integration by including organizational culture differences, national culture dimensions and the synergy potential between the merging firms in their model. The authors have constructed a theoretical framework that explains international M&A performance in terms of cultural differences based on the literature. In order to have a full understanding of this topic more research is needed. This study will therefore elaborate on the topic by

conducting a multiple case study and in this way further develop the sociocultural integration framework. The results of the study can be helpful for Dutch managers who have difficulties with managing the post-acquisition integration process in Chinese acquisitions. Moreover,

since the number of Chinese foreign direct investments in Western countries has grown exponentially in recent years (Deng, 2013), it is rather relevant to explore.

To conclude this study investigates the impact of organizational cultural differences between companies on sociocultural integration in Chinese outbound mergers and

acquisitions in the Netherlands. The development of people and cultural dimensions on acquisitions will be reviewed by testing the effect of organizational cultural differences on sociocultural integration from the perspectives of Dutch acquired organizations. Managing the post-acquisition phase continues to be a gap in the existing literature; hence this thesis will provide an answer to the following research question:

How do organizational cultural differences influence sociocultural integration in Chinese M&As in the Netherlands?

The research question will be answered by conducting semi-structured in-depth interviews with employees of Dutch companies that are acquired by Chinese companies. The employees are from three different companies and they were all involved with the post-acquisition process. The multiple case research design will help to create an overview of the differences and similarities between different Chinese outbound M&As cases from a Dutch perspective.

The research paper is structured as follows. First the existing literature will be reviewed and will be continued by the theoretical framework where the research proposition and the conceptual model will be presented. The following chapter will explain the

methodology and then empirical results will be presented. The discussion chapter will provide an analysis of the findings, limitations of the study and suggestions for future research.

2 Literature review

The aim of this study is to combine the cultural and people dimensions on acquisitions by exploring the impact of cultural and social factors on the post-acquisition integration process. This section will provide a review of existing literature on national and organizational cultural differences, outbound M&A and sociocultural integration.

2.1 Cultural differences

Cultural differences can be divided into two types: national cultural differences and

organizational cultural differences. The two types will be further explained in the upcoming sections.

2.1.1 National cultural differences

Hofstede is well known for his research on cultural differences. He has developed a cultural dimensions model that describes the effects of a specific culture on its members (Hofstede, 1984). He argued that the nature of management skills is culturally specific, meaning that management methods are influenced by the culture it is conducted in. The framework of Hofstede consists of five dimensions: power distance; uncertainty; avoidance; masculinity versus felinity; individualism versus collectivism and short-term versus long-term orientation (Nazarian, Irani & Ali, 2013). Table 1 shows more detailed descriptions of the five

dimensions.

Table 1: Hofstede’s National Culture Dimensions. Reprinted from The Relationship between National Culture and Organizational Culture. By Nazarian, Irani & Ali, (2013).

Dimension Description

Power distance

Uncertainty avoidance

Masculinity versus femininity

The degree to which the less powerful members of society accept and expect that power is distributed unequally.

A society's tolerance for uncertainty and

ambiguity; the extent to which the culture likes to control the future.

Individualism versus collectivism

The extent to which people expect to look after him/herself and family compared to the degree of support expected from social institution.

Short-term versus long-term orientation The degree to which society embraces long term commitment to traditional as opposed to forward thinking values.

The culture of a country can be positioned by ranging the value of each particular dimension. The five dimensions have, in turn, implications for behaviour and management systems within a culture. In order to create effectiveness within a culture, management should thus adjust to the national culture. This framework does not only offer guidance for international management (Hofstede, 1984), it also implies that national cultural differences are an important aspect within outbound mergers and acquisitions. However, since national culture is closely related to organizational culture, this study will particularly focus on organizational cultural differences. The next section will elaborate on this.

2.1.2 Organizational cultural differences

Organizational culture can be defined as “the shared values, beliefs, norms, expectations and assumptions which function like a glue holding employees and organizations systems together and stimulate employees performance and commitment” (Nazarian, Irani & Ali, 2013, p. 12). Organizational culture is also defined as corporate culture and it involves how employees of an organization are related to each other. According to Schein (2012), organizational culture can be analysed at three different levels: visible artefacts; espoused beliefs, values, rules and behavioural norms; and basic underlying assumptions (p. 53). He argues as well that

leadership plays an important role in organizational culture and within this study leadership will therefore be a determinant factor of organizational culture.

The effect of differences in organizational culture can be significant since it can have impact on the efficiency and interaction of people from different organizational cultures (Frensch, 2007). Interaction means that people use the same verbal and nonverbal symbols and only if they share the same interaction symbolic, efficiency will be achieved and conflict will be avoided. Therefore, it is necessary to coordinate interaction between different

organizational cultures. According to Frensch, the integration process can be more costly than beneficial, hence it will take a lot of attention and focus.

Hofstede et al. (1990) have constructed a six-dimensional model that enables measurement of organizational cultures (see table 2). These dimensions can be used to measure the organizational culture within a company. Employee-oriented cultures, for

example, often have higher invested capital, younger workforce and more highly educated top managers (Hofstede, 1984).

Table 2: Six Dimensions of Organizational Culture, Based on Hofstede et al. (1990)

Dimension Description

Process-oriented versus results-oriented

Job-oriented versus employee-oriented

Professional versus parochial

Process-oriented cultures are about means and the nature of a task rather than the accomplishment or outcome of the task.

Orientation on getting the job done versus orientation on the work environment and employees.

The professional work environment is about the profession itself, while within parochial cultures employees derive their identity from the

organization itself. Open systems versus closed systems Tight versus loose control Pragmatic versus normative

Open systems have transparent communication systems and focus on human resources and public relations.

Control concerns the degree of formality and amount of internal structuring.

Flexible versus rigid way of dealing with the environment in terms of rules and laws.

2.2 Sociocultural integration

As mentioned earlier in the introduction sociocultural integration is about the creation of a shared culture, re-establishment of new leadership and effective communication after a merger or acquisition. This section will elaborate more on the broader definition of sociocultural integration and its implications for this study.

Sociocultural integration is about the creation of a sense of trust, a shared identity, and positive attitudes among employees towards new organizations within a merger or acquisition (Bauer et al., 2014; Cording et al., 2008). The sociocultural integration theory underlines the interaction between developing people and their culture. The integration process consists of organizational structure, organizational culture and personnel management practices (Sun, 2016). Kahn et al. (2016) have studied socialization integration, which is defined by Van Maanen & Schein (1979) as the process by which individual employees in an organization acquire the necessary attitude, behaviour and knowledge needed to effectively participate in the organization. Van Maanen & Schein also suggest that these mechanisms are effective tools for new employee integration and adaptations within a company. Besides, it could facilitate task integration in mergers and acquisitions through knowledge transfer and learning (Kahn et al., 2016). They argue that sociocultural integration, through, for example, team building activities and cross-cultural training, is the key enabling factor for successful

performance in acquisitions. So in order to achieve socialization in the post-acquisition phase specific strategies should be implemented, such as cultural seminars and trainings (Kahn et al., 2016).

Post-acquisition integration thus plays an important role in determining the acquisition results (Sarala, 2010). Although previous theoretical and qualitative research has recognized the importance of the people dimension in determining post-acquisition outcomes, this has not led to large-scale empirical research on the antecedents of the people dimension. Such studies are nevertheless needed in order to further test and develop the theories put forward in

theoretical and qualitative papers (Sarala, 2010). Other studies have shown as well that human and sociocultural integration are the key factors for acquisition success, for example

Björkman et al. (2007), who investigate the moderating role of social integration mechanisms and the degree of operational integration of the acquired firm. However, socialization

integration mechanisms as a key-mediating variable between the leadership styles and outbound mergers and acquisitions have not been explored yet. A greater level of tolerance for diversity and multiculturalism will be achieved when the autonomy of the acquired companies will be maintained (Kahn et al., 2016). The degree of autonomy thus has a moderating role between the relationship of leadership and M&As success.

Hofstede (1980) argued that a successful collaboration could only be achieved through the development of a strong organizational subculture or common identity. This will take time and patience since the creation of an identity takes a long time to build up. Management can stimulate the integration process by removing symbols of previous organizational cultures and

replace them by new symbols (Olie, 1994). The most straightforward symbol is leadership since management is a powerful tool to create employee engagement and express a message. In 2007, Frensch has identified a major gap in the existing literature on mergers and

acquisitions: the (non) cooperation between employees of merging firms. This social aspect appeared to an important moderating variable in sociocultural integration as well, however previous research has not taken cooperation into account yet. Cooperation depends on

different variables such as demographic and firm related characteristics as well as integration measures such as communication. The latter one appears to be essential for successful

collaboration after a merger or acquisition (Frensch, 2007).

To conclude there are three important aspects within sociocultural integration: a shared culture, leadership and communication. By conducting a multiple case study it will be further explored whether the perception of post-acquisition conflict and its antecedents differ between organizations.

2.3 Research on post-acquisition integration by Chinese multinationals

This study focuses especially on Chinese outbound mergers and acquisition. Outbound

acquisitions can be defined as an acquisition in which the headquarters of the acquirer and the acquired firms are located in different countries (Sarala, 2010). In this study there is no distinction made between a merger or an acquisition as there are no practical differences. Research has shown that, during the post-acquisition phase, integration for outbound acquisitions is a leading challenge (Peng, 2012). This challenge is known worldwide, however, since Chinese outbound acquisition is a relatively new phenomenon, there is not much known about these emerging Chinese multinationals. Despite the quick development on the Chinese expansion the literature on this topic has been, as mentioned earlier, fragmented and lacks theoretical synthesis (Deng, 2013).

Lin et al. (2009) were one of the first who compared mergers and acquisitions in different institutional environment by comparing these environments in China and the United States. They found that behaviour such as the learning and network factors indeed vary across countries. Deng (2013) addressed the literature about the expansion of Chinese multinationals as well. His research has shown that more process-focused knowledge and analyses is needed in order to understand the complicated developments in Chinese outbound acquisitions.

Liu & Woy-Wode (Weber et al., 2013) have tested Chinese M&As in Germany and examined a new post-acquisition integration approach, referred to as light-touch integration. This approach essentially synthesizes the preservation and cooperation integration approaches

due to the contextual characteristics of Chinese overseas M&As and assists the implementation of the post-acquisition step. To conclude they suggest a multilevel

perspective in order to understand the Chinese acquisitions, by including synergy potential, culture influences and the learning perspective. Moreover, Weber et al. (2011) suggest that the reason for poor performance after an acquisition could be that they fail in their integration approach. They have tested this by including in their model organizational cultural

differences, national cultural dimensions and the synergy potential between the merging firms.

Lastly, Sun (2016) has investigated the ambivalent roles of the Chinese government and Chinese companies in outbound mergers and acquisitions. She points out that the legitimacy of Chinese outward M&As is not as conceivable as other researchers suggest it is. The role of the government in China should therefore not be underestimated as it can have big impact on the approval of an outbound investment. Examples of these obstacles are regulatory

arrangements and restricted financial support (Sun, 2016). The role of the government will be further explored in the next section.

2.4 Five-year plans

Every five years, China’s central government drafts a plan for long-term social and economic policies. The first five-year plan was modelled in 1953 after the Soviet central planning process. The central plan is developed by the National Development and Reform Commission and includes specific economic targets such as GDP growth rates and urbanization rates. The five-year plan is China’s core mechanism for coordinating and implementing policy across national ministries and local governments (Heilman & Melton, 2013).

Actionable government targets and priorities in the central five-year plan and corresponding local and industry plans have the potential to shape or change the business models for foreign companies in China. The broad economic growth targets and initiatives have an impact on the overall business environment, while local and industry plans can drive the direction of government support and future growth (KPMG, 2016). The 12th five-year plan, for instance, was approved in 2011 and ran until 2015. Currently, the central

government has set a goal of seven per cent GDP growth and aimed to double per capita GDP by 2020 compared with the 2010 level (Angang, 2015). These kinds of targets send a clear signal, especially to state governments that look to Beijing for guidance: when it comes to growth, focus on quality, not quantity. However, in the near future the country is expected to take on an even greater role abroad. China is already the world’s largest contributor to global

growth, and if its economy continues to expand at a rate of approximately seven per cent, the country will likely remain, in terms of purchasing power parity, the most important force driving global growth (Angang, 2015).

It has been mentioned before that one of the primary reasons for Chinese foreign investments is to acquire knowledge and expertise (Hemphill & White, 2013). This can be linked to the current five-year plan, which has moving away from the mass manufacturing and shift into a higher quality economy as its primary drivers (KPMG, 2016). Great results have already shown up since the country is now among world’s largest generators of

intellectual property; from 2000 to 2012 investors in China were responsible for nearly 62 per cent of the growth in the world’s patent applications (Angang, 2015). And as part of its new commitment to innovation, Beijing will likely adopt stricter intellectual property protections and encourage Chinese companies to apply for international patents and disseminate new technologies.

2.5 Relation-based versus rule-based governance

A specific theory about the differences in governance approach between the Western and Eastern world will form the basis for the study. According to Li (2013), Western societies rely mainly on rules and experience great support through well-established infrastructure of public ordering, including law and trustworthy public information. Governance relies on effective rules that help to make information more transparent, reduce uncertainty and lower

transactional costs. This approach can be defined as rule-based governance (Qin, 2011). In contrast, most East Asian countries are relation-based societies where complex relationships are managed to produce mutual trust and a shared understanding of social norms and human morality (Qin, 2011). In China, one of the most relation-based countries, order and society depend on complex and private relations for business protection (Li, 2013). Laws are often made without trustworthy and reliable institutions. Li even argues that relation-based governance disrupts formal and public rules.

The different governance approaches, rule-based versus relation-based governance, have big impact on the sociocultural integration process of M&As. Within European societies people use formal contracts as a precondition for exchange and they are therefore seen as highly individualistic people (Qin, 2011). Besides, the Western governance approach is result-oriented, which means that only effective rules are adopted in order to reach targets and goals. Eastern societies, such as China, are rather communitarian and relational governance dominates in these societies (Qin, 2011). Individuals are not recognized in China; social

groups form the society where relations are the key to governance (Qin, 2011). This also means that, among Chinese people, hierarchy is more important than equality. According to Qin (2011) both approaches have three distinct elements that can be used to describe the differences. Rule-based societies are formed by rationality, egoism and contractual rules, while relation-based governance emphasize on relationality, morality and trust. These associations can be classified as the key differences between the Western and Eastern world and can be linked also to Hofstede’s six dimensions of organizational culture.

The question if China should make a transition from relation-based to rule-based governance has become a trending topic within current research. Many scholars of political economy and policymakers argue that this transition is needed in order to sustain further international growth. Moreover, the question arises whether the two approaches can be combined and if so, how? The following chapter will elaborate on this and will furthermore introduce the two propositions.

3 Theoretical framework

This chapter will describe the connection between the presented theories in the literature review. In this way the theoretical framework will provide a starting point for the research propositions that will help to answer the main research question: How do organizational cultural differences influence sociocultural integration in Chinese M&As in the Netherlands?

3.1 The impact on sociocultural integration

The organizational cultural differences between the Netherlands and China are reflected by the two previously discussed governance approaches. In China, organizations in general rely on relation-based governance and this approach rarely coexists with rule-based governance. Hence the question rises whether Chinese acquisitions in the Netherlands, where business relies heavily on formal rules and contracts, can still succeed in terms of sociocultural integration. In this section the interaction of the two governance approaches and its effect on sociocultural integration will be explored. A deeper understanding of the mutual enhancement of the two approaches is therefore needed as well. Two opposite perspectives regarding this have appeared to dominate current literature and will be introduced in the next section.

In this study the influence of the organizational cultural differences on sociocultural integration is being investigated. It has already been discussed that sociocultural integration is about the creation of a shared culture after the acquisition. Since rule-based governance versus relation-based governance expresses the organizational cultural differences between China and the Netherlands, the two approaches have significant impact on the sociocultural integration phase. There is theoretical evidence that shows that cultural differences can create major obstacles to achieve sociocultural integration. Stahl & Voigt (2004) examined the impact of the differences on sociocultural integration variables such as employee resistance, job performance, job satisfaction, trust top management turnover and employee stress. The interaction between organizations with different organizational cultures appears to be

negatively related with sociocultural integration in most of the cases they observed. It can be a source of confusion, hostility and distrust between people of both the acquiring and acquired company (Stahl & Voigt, 2004), especially in international settings as is the case with Chinese outbound M&As. As a result of different organizational cultures there are different

values, goals and beliefs regarding organizational habits and rules. Furthermore, there is a language barrier that can lead to miscommunication.

3.2 Mutual enhancement of rule-based and relation-based governance

As highlighted in the previous paragraph there are two prevalent perspectives within current literature. From one perspective it is argued that the two governance approaches are contradictory and thus seen as substitutes. Li (2011) suggests that when businesses expand and transactions become more complex, relation-based models would be replaced by rule-based models since this is a more cost-efficient and more refined approach. Li shows

empirical evidence for that China is slowly transitioning from a relation-based governance to a rule-based governance. The main logical argument for this transition is, according to Li (2013), cost efficiency; relation-based governance has high and increasing marginal costs while rule-based governance has high fixed cost but minimal marginal cost. The high fixed cost from the latter one are due to the establishment of a costly legal infrastructure. Once this is achieved, the marginal cost of one more transaction is minimal. On the other side, relation-based governance has minimal fixed cost yet high incremental cost. Since there is no effective legal system, the cost of accomplishing a new transaction is much higher than in a rule-based model. The two cost curves are graphically shown in figure 1 below. The turning point is the point where relation-based governance will lose its cost advantage and must change to a rule-based governance model to successfully grow from a national to international player (Li, 2013). This perspective can serve as evidence that the two models cannot both function in parallel in the long run and has led to the first proposition:

Proposition 1: Rule-based and relation-based governance influences one another in a negative way, hence making sociocultural integration difficult.

Figure 1: Cost Curves of Relation-Based and Rule-Based Governance. Reprinted from China’s (Painful) Transition from Relation-Based to Rule-Based Governance: When and How, Not If and Why. By Li (2013).

While it, according to Li (2013), seems most likely from a rational choice perspective to have rule-based governance when business scale enlarges, Qin (2011) argues that when businesses grow and governance becomes more complex, relational governance might rather be the best approach. Research conducted by Zhou, Poppo & Yang (2008) shows that Chinese organizations rely on personal ties in order to govern large and more complex transactions. The logic behind this statement is that personal ties appear to, in contrast to figure 1 shows, stimulate transaction efficiency.

Besides, according to Qin (2011), there is evidence that the two approaches can function as complements, whereas formal contracts and relational governance are combined. He developed a model that shows the coexistence of the two approaches, see figure 2. Zhou, Poppo & Yang who discuss the advantages of both approaches, also support this perspective. Formal contracts can stimulate cooperative and long-term relationships, while relation-based governance reinforces continued cooperation. Qin (2011) moreover states that deciding between the two approaches is not a mere choice. Whether governance is rule-based or relation-based, it is embedded and nurtured in culture and society. Since it is rather a result of social matters than rational choice, social and cultural factors are important variables to

consider when investigating the impact of Chinese outbound M&As on sociocultural

integration. Besides, since Eastern and Western cultures are mixing due to globalization, it is impossible to ignore the reinforcement of the two approaches. The second perspective has therefore led to the following proposition:

Proposition 2: Rule-based and relation-based governance influences one another in a positive way, hence facilitating sociocultural integration.

Figure 2: A Synthetic Model of Governance. Reprinted from Rule, Rules, and Relations: Towards a Synthetic Approach to Governance. By Qin (2011).

3.3 Conceptual framework

In this section the conceptual model is presented, see figure 3. It shows the research questions and the working propositions graphically in order to have a full understanding of the

Figure 3: Conceptual Model

As mentioned earlier in the literature review both approaches have elements that can be linked to Hofstedes et al. (1990) six dimensions of organizational culture. Rule-based is associated with process, employees, professionalism, openness, loose control and norms. While relation-based governance places emphasize on results, jobs, parochialism, closeness, tight control and pragmatics. These associations can be classified as the key differences between the Western and Eastern world and serve as the basic units of the analysis in this study.

4 Methodology

4.1 Research approach

In this study the literature review has been a means of gaining an initial impression of the topic area. Hence, the process of reviewing the literature has been an uncertain process of discovery and wide-ranging in scope. This type of reviewing, known as a narrative review, was most suitable in this study since it concerns a qualitative research based on an

interpretative epistemology (Bryman, 2012). Within this certain paradigm, the world is based on real phenomena and the paradigm is one of subjectivism. Subjectivism is the view that reality is dependent on human consciousness and can therefore be seen as subjective (Scotland, 2012).

The approach to the relationship between theory and research is rather more inductive, meaning that new theory emerges from the data, than deductive, where existing theory is tested. Therefore, interpretative research is more likely than deductive research to change its view of the literature as a result of the analysis of collected data and so it requires greater flexibility to modify the boundaries of the subject of study as they go along (Bryman, 2012). However, the study involves deductive reasoning as well. The research process started with thinking up a general theory, whilst at the same time being exploratory. To further develop the theoretical framework, two propositions were tested with the use of three different cases. This observation of patterns in the data provided new insights for sociocultural integration in Chinese outbound M&As.

4.2 Research design

4.2.1 Multiple case study

The choice is made for a multiple case study in order to explain the dynamics of the cases in detail. This approach suits best because a multiple case study enables the researcher to

explore differences and similarities within and between cases and in this way improves theory building (Bryman, 2012). Besides, a multiple case study tends to increase the external validity because there is more variation in places and respondents. Within this research design the cases have been selected first, whereupon the respondents within the cases have been chosen.

4.2.2 Case selection

For this study, the goal is to get insights into the influence of cultural differences on the post-acquisition integration process. To be able to get these insights, the respondents needed to have some knowledge of this topic. Hence, the selected target group are employees that currently work or have worked at the business development or management departments of Dutch companies that are acquired by Chinese companies.

This study consists of three company cases from three different industries. The cases and first three respondents were selected with the help of my own network. This approach is called purposive sampling since it is a non-probability form of sampling and both cases and respondents are sampled in a strategic way (Bryman, 2012). A specific type of purposive sampling is used, which is criterion sampling. This means the cases and individuals had to meet the following criteria:

1. The Dutch company needs to be acquired by a Chinese company within the past 10 years. 2. Acquisitions will need to involve post-acquisition integration: functional, organizational

or cultural.

3. The companies should be from different industries in order to explore diversity and similarities between the different cases.

4. The respondents need to be willing to give an interview of at least 30 minutes in the month of May 2017.

Furthermore, the remaining respondents have been selected through snowball sampling, another specific technique of purposive sampling whereby the researcher first samples a few respondents by him or her self and after this, these respondents suggest other respondents. This technique is a common method for investigating hard to reach people (Noy, 2008).

Table 3 gives an overview of the three selected companies, their industry, number of employees, the acquisition year and the acquisition motive. As can be seen the three

companies are from different industries and can be classified as large enterprises, since there are more than 250 persons employed (OECD, 2017). It should be noted that the number of employees refers to the amount of the acquired and acquiring company together. The deal value of company 1 was 1.35 billion USD, however the two remaining deal values of the other companies are unknown. The acquisitions of company 1 and 3 took place relatively recent, which has been taken into account during the analysis of the results since the integration duration has an influence on the integration outcome.

Table 3: Overview of the companies

Company Industry Employees # Acquisition year Motive Company 1 Financial services 4.000 2015: 100% New markets Company 2 Company 3 Offshore Agriculture >11.000 4.000 2009: 100% 2015: 51% 2016: 49% Expertise Natural resources 4.3 Data collection 4.3.1 Semi-structured interviews

Data collection has been conducted within the first two weeks of May 2017 through semi-structured interviews until theoretical saturation was achieved. Theoretical saturation means when new data no longer stimulates new theoretical understandings and the relevant

categories are created (Charmaz, 2006). Semi-structured interviews suit best in multiple case studies, because some structure is necessary in order to ensure cross-case comparability (Bryman, 2012). The interview questions were based on the literature review and generated primary qualitative data. The goal was to find out what sociocultural factors have played a role within the organization during the post-acquisition phase. Five interviews were done by personal visits, the one remaining interview was done by telephone. In order to overcome a language barrier the interviews were furthermore conducted in Dutch, since both the

interviewer and all interviewees were Dutch native speaking persons. In this way the quotes in the data analysis chapter are translated to English. Since the research topic is a delicate subject within certain organizations, the respondents and companies remain anonymous (see table 4).

Table 4: Overview of respondents

Company Respondents Job role Company 1 Respondent 1 Respondent 2 Head of Strategy PA Company 2 Company 3 Respondent 3 Respondent 4 Respondent 5 Respondent 6 Project Manager CEO Business Development Trader

4.3.2 Interview questions

The semi-structured interview guideline covered mainly five broad questions: (1) the acquisition motivations of the acquirer and the acquired; (2) the differences between the acquirer and the acquired in terms of organizational structure; (3) the differences between the acquirer and the acquired in terms of national and organizational culture; (4) the sociocultural integration process; and (5) the acquisition performance up to now. The semi-structured interview questions can be found in appendix 1.

4.4 Data analysis

The interviews have been, after permission, recorded and transcribed afterwards. Moreover the transcripts were systematically analysed and coded in ATLAS.ti, a quantitative data analysis software program (see appendix 2). Before the analysis the code structure was already developed, however a few new codes emerged during the process (see table 5). The computerized data analysis has been done to identify emerging patterns and common themes. This information has been summarized into an Excel sheet in order to have a clear overview of the differences and similarities between the cases (see appendix 3). This Excel file is used to analyse the within and across case findings that will be discussed in the following results chapter.

Table 5: Code Overview

Code group Codes Description

Rule-based approach Process-oriented Employee-oriented Professional Open systems Loose control Normative Routines Employees well-being Career minded Transparency, freedom Informal

Rules and procedures Relation-based approach Results-oriented

Job-oriented Parochial Closed systems Tight control Pragmatic Outcomes Job performance Organization minded No outsiders Formal

Sociocultural integration Others Shared culture Leadership Communication Trust

Other cultural differences Performance

Discussion

Shared identity Management

Internal and external Mutual trust

All others

M&A performance Discussion chapter

5 Results

5.1 Within case findings

This section will present the findings by discussing the presence of cultural differences and its effect on sociocultural integration within the cases.

5.1.1 Rule-based governance

The rule-based governance approach appears to be the most dominant approach in each of the three organizations that are being investigated. Research has shown that Western

organizations often have a very open working environment (Chen & Miller, 2010). This is supported by a quote from respondent 2: “We in the Netherlands are used to interfere with everything. Here you automatically speak to each other with first names, everyone talks with everyone and as well in management meetings everyone is allowed to raise their voices”.

The essence of rule-based governance certainly is the use of contract law and formal rules. All the respondents mention this characteristic often, especially because it is entirely different from the Chinese governance approach that rather relies on informal relationships. As respondent 3 said: “When you sign something in China, it is more like an expression of intent”. This respondent furthermore mentioned: “They like flexibility, but they sort of hate commitments”. Besides, respondent 6 implies that management control is much looser than in the Eastern world: “Dutch people do not often let them tell what to do”. Respondent 4 argues that the boss in practice often does not have that much power in the Netherlands compared to in China: “They say in China 95 per cent of the time the boss is right, here in Europe that is about 40 per cent and in the Netherlands it is approximately 25 per cent”. The differences mentioned here have big impact on the corporate culture in both countries, as can be seen in the next sections.

5.1.2 Relation-based governance

The Chinese organizational culture shows clear characteristics of tight control and strong hierarchical structures. All respondent provided clear examples of these two dimensions, for example respondent 1 who said: “The key positions in the Dutch organizations are taken by Chinese directors, among whom a chief transformation who was responsible for transforming the organization to a new one”. The same respondent told that the Chinese directors went so

far that every invoice needed to be checked twice. The Chinese organizations are moreover marked by hierarchical structure divided into many levels, which was pointed out by respondent 4 with the quote: “You must do what the boss tells you to do”.

Another aspect that was often mentioned by every respondent was that Chinese corporate cultures are extremely focused on outcomes. This in contrast to Dutch

organizations, who are rather process-oriented. Respondent 1 described this characteristic as: “Everything is about achieving targets, problems are not there to discuss but to solve. Dutch people have a totally different management style”. Respondent 2 provided the following explanation for this: “I do not think this is because of cultural differences, but rather because our Chinese colleagues are so busy solely with their work. They are under enormous pressure and therefore are not able to pay attention to the social aspect of work as well”.

5.1.3 Sociocultural integration

According to the respondents, sociocultural integration is a very complex part of the integration process. It seems to be attributable to difficulties in the overall post-acquisition phase and it is questionable whether there is an optimal strategy in order to achieve a shared culture, re-establish new leadership and achieve effective communication channels. There appear to be three important findings with respect to sociocultural integration.

First of all, the three Dutch organizations showed a proactive stance towards the acquisitions by implementing trainings and seminars that addressed the need for sociocultural integration. Respondent 1 told for example: “Just after the acquisition we participated in Chinese training for a couple of days”. However, in every case these training were developed for an exclusive group only, such as the board members and managers. According to

respondent 3 “other colleagues did took a seminar about collaborating with Chinese people, however I did not have the opportunity”. Moreover respondent 1 mentioned that “at the time a group of forty people took the course, but only seven of them still work here. The rest has left the organization, deliberately or otherwise”. There are different and diverging positions involved on the outcome of such trainings. One of the respondents gave positive feedback, while respondent 2 was sceptic about it: “It depends on the training, but overall the only effect it had was confirming prejudices about the Chinese culture”. Respondent 3 was not amused at all about the trainings: “It has proved to be ineffective, what does work is actually going to China and work there for a few months like I have done”.

The second important finding is that much can be gained from establishing effective communication between the acquiring and acquired organization. According to respondent 3

communication has been, and still is, a critical factor during the integration process: “Communication is the most important part of a collaboration. And we always have the feeling that we send our information into a black hole, there is no response and this is very, very frustrating”. Respondent 2 stated: “It looks like there has been communicated too little, from both the Dutch and Chinese side. From the beginning this has caused frictions”. Respondent 6 also said: “No one talks about certain developments with me, better

communication and transparency is a must”. It suggests that communication can be the key to successful integration, however the respondents do not know how to achieve effective communication. Especially because Chinese people communicate in a different way,

respondent 6 mentioned for example that: “When you are in a meeting, you just sit there for one hour listening to the Chinese manager without responding. It is not communication; it is more or less like being in a lecture”.

The third valuable finding was that during the interviews there appeared to be a fourth significant factor besides a shared culture, leadership and communication, that influences sociocultural integration, which is trust. Especially from the Chinese perspective trust is very important, as respondent 1 said: “For some reason the Chinese people do not trust the Dutch managers completely and therefore the invoice process still does not work optimally”. Moreover, it appears that the integration process depends largely on the way the acquired company is being controlled by the acquiring organization, which can be linked to mutual trust. Respondent 1 mentioned: “We see internationalisation within the organization and they (the Chinese organization) did this very well by putting new Chinese people on the key

positions”. In case 2 both respondents argue that due to the fact that they control the Dutch organization from a distance, the two organizations each work in a vacuum because there is a lack of coordination and trust: “From the beginning this was the case, they barely involved us and the process still is a stop and start affair”. Both case 1 and case 2 therefore show that it is important to have real life contact with the Chinese firm, for example by having Chinese managers working at the Dutch office like in the first case. This confirms the theory that integration is stimulated by replacing old symbols, such as leadership, by new ones (Olie, 1994). Moreover the way of controlling influences the process as well. In China it is usual to always listen to your boss, or as respondent 4 said: “If the boss is silent, everyone is silent”. Respondent 6 also said: “You are expected to bow in their presence”. Whereas in the Netherlands, it is very common to speak up to the boss or to even contradict his or her opinion. These differences seem to have a negative influence on the sociocultural integration process.

5.1.4 Other cultural differences

As mentioned earlier, Chinese governance is extremely focused on what is effective in the long term. Good examples are the five-year plans and its long-term economic targets and government policies. However, the cases show rather contradictory results, as all the respondents suggest that their Chinese colleagues behave on short-term when it comes to decision-making and working styles. Respondent 2 said: “Chinese are long-term oriented but how they actually work is very last-minute, so meetings for example are planned on very short-term, often even spontaneously. While the Dutch corporate culture aims at planning months ahead: there are people coming to me at the beginning of the year to plan a meeting at the end of the year”. Respondent 5 from another case confirms this as well: “You would think that Chinese people are long-term thinkers, but the truth is far from that and what we notice is that they are too dependent on the issues of the day”. Lastly respondent 3 stated: “There are long-term goals and plans, but they have much more layers in their hierarchy as well. Thus somewhere in the upper class they have long-term strategies but for someone on the workplace, these strategies are far away and he or she has nothing to do with this.

Working people actually seem to think more short-term than the majority here”. These quotes imply that while on paper the Chinese organizational culture is associated with long-term thinking, it is the opposite in practice. Moreover, they all suggest that short-term thinking on the workplace can be linked to the pragmatic and job-oriented work style of the Chinese organizational culture (Hofstede, 1990). Chinese people are flexible with laws and rules whereby they often change their mind and rarely stick to their initial plan. This may cause friction between the organizations during the post-acquisition integration process.

Chinese organizations are more job-oriented than in Western societies, where

organizations are rather employee-oriented. This means that Chinese employees often are not able to see the bigger picture. As respondent 5 said: “Chinese employees always have a blinkered view of their organization, they are deemed not to interfere in someone else’s work… They think: these are your targets and you should do anything to reach those targets”. Respondent 4 gave a very specific example: “For instance, when we had a presentation at the Chinese office, the moment we got into the details the management suddenly said everyone had to leave the room. In this way only the people that were allowed to hear the details stayed in the room so that no other employee could have an overall view of things going on, because that would give them some sort of power”. The reason for this authoritarian, top-down style of management could be that China emphasizes more on the

collective action, instead of on the individual (Chen & Miller, 2010). This is pointed out by respondent 1 as well: “Dutch people need to get to the bottom of the problem, while Chinese people at that moment already have reached their goal. This can cause problems when the Dutch people feel like they are not involved in the process and meanwhile the Chinese people think it is not about the process, but rather about achieving the goal”. The power is

concentrated at higher levels of the organization whereby the employees at lower levels are not allowed to interfere with managers; they must only adhere to their agreements.

Respondent 3 described this as: “If the Chinese boss gives you an order while you can smell a mile ahead the order is not going to work, you still obey and just do it”.

5.2 Across case findings

Within this section the across case findings will be presented and moreover related to the propositions. The across case findings are built upon the comparison of the within case findings from the last section. Table 6 shows the key findings that have been found as a result of this cross-case analysis.

Table 6: Across Case Key Findings

Themes Key findings

Rule-based approach Ÿ Dutch people want to be involved Ÿ Dutch organizations have strict guidelines Ÿ Collegiality and enjoyment of work Ÿ Work environment is important

Relation-based approach

Sociocultural integration

Shared culture

Ÿ A Chinese “no” does not necessarily means a “no”, it has different meanings

Ÿ Chinese people focus on their job and task

Ÿ Chinese people do not rely on contracts or agreements Ÿ Chinese organizations are flexible and often inefficient in

terms of time management

Ÿ There are long-term plans, however in practice Chinese people are focused on the short-term only

Ÿ Difficult to change a corporate culture

Ÿ There is no intent to create shared cultures after the acquisitions

Others Leadership Communication Trust Other differences Performance

Ÿ Integration of culture is not the main outcome and thus organizations do not attach considerable importance to it Ÿ Different employer-employee relationship

Ÿ In China leadership is about loyalty and hierarchy

Ÿ In the Netherlands the social aspect of leadership is very important

Ÿ Frequency of communication between Dutch and Chinese colleagues is low

Ÿ WeChat in China very important, however not common in the Netherlands

Ÿ Miscommunication and differences in expectations have led to conflicts

Ÿ Face-to-face communication appears to be important for effective management

Ÿ Creating a sense of trust is one of the most important aspects during Chinese outbound M&As

Ÿ Building trust by hiring Chinese employees is effective Ÿ Chinese people are afraid to lose face, this influences their behaviour

Ÿ Many organizations are state-owned

Ÿ Government plays a major role in Chinese outbound M&As, both direct and indirect

Ÿ Overall negative influence on sociocultural integration and performance, depending on the case

As can be seen in table 6 there are many factors that need to be considered when analysing the effect of organizational cultural differences in outbound acquisition cases. During the data analysis two other factors appear to have significant impact on the sociocultural integration process as well, although they are not necessarily labelled as sociocultural factors.

Firstly, within all three cases the acquiring organization had different acquisition motives. In the first case the Chinese organization already used advanced technology that had not been adopted in the Dutch market yet. Hence they were able to enter new markets by acquiring the Dutch company that potentially had very high-returns. The second case turned to be the other way around. The Chinese company was looking for specific knowledge about their products that only a few European companies possessed. One of them was this particular

Dutch company. For this reason the Chinese organization acquired the Dutch organization and integrated the business unit in its corporate structure as a research & development department. In the last case, there was again a different motive for the acquisition. By

acquiring the Dutch organization, new natural resources were going to be within reach. In this way new possibilities were created to become a crucial player in the worldwide industry.

Secondly, the management structure appeared to be an important factor to take into account as well when analysing post-acquisition integration. In the first case there was a major restructuring where three Chinese members joined the board after the acquisition. For this reason there has been put more time and energy into the integration process compared to the second case. In the second case, unlike the first case, there nothing truly changed in terms of the management structure of the Dutch organization and therefore, they remained

independent because there was, and still is, less interference from the Chinese management. However, respondents argue that in order to deliver good work, the Dutch organization needs to cooperate with the Chinese colleagues. The fact that this is not being coordinated causes both confusion and frustration from the Dutch side. This is remarkable since the literature argues that a greater level of tolerance for diversity will be achieved when the autonomy of the acquired company will be maintained (Kahn et al., 2016). Within the third case a Chinese man, the CEO of the acquiring company, has been named CEO of the Dutch organization immediately after the acquisition. The findings suggest it has probably been a logical and smart move since it can improve the creation of synergy. As mentioned before it confirms the theory of Olie (1994) that replacing old symbols by new ones stimulates integration.

The key findings support the first proposition: rule-based and relation-based

governance influences one another in a negative way, hence making sociocultural integration difficult. Organizational cultural differences appear to have negative impact on sociocultural integration. The findings suggest that mutual enhancement of the two approaches triggers conflicts within the Dutch organizations. Miscommunication and differences in norms and values are often seen as the causes of these conflicts. Moreover, in all three cases there is no question of a shared culture. This implies that sociocultural integration has not been achieved yet. An explanation could be that Chinese organizations seem to have no incentives to create sociocultural integration.

Strategies such as employees bonding activities and cross-cultural trainings can be implemented in order to stimulate sociocultural integration. However, the influence is

questionable. According to the findings these efforts in terms of cross-cultural trainings have been helpful for some of the respondents, however only on the short-term. For long-term

effects it is argued by several respondents that the best way to understand the Chinese culture is by living in China for a certain period of time. This will create more understanding for each other in order to overcome the big differences between Chinese and Dutch organizational cultures. From this it follows that the second proposition is not supported: rule-based and relation-based governance influences one another in a positive way, hence facilitating sociocultural integration. The findings imply that this perspective, as described before, in practice does not hold.

6 Discussion

This study provides insights into the sociocultural integration process in Chinese outbound M&As by investigating three acquired Dutch companies. The research contributes to the growing literature focusing on the Chinese overseas expansion from a Western perspective and in this particular case from a Dutch perspective. The main research question therefore was: How do organizational cultural differences influence sociocultural integration in

Chinese M&As in the Netherlands? This chapter will analyse the findings by discussing three important findings. After that, the implications and limitations of the study will be presented, followed by future research suggestions.

First of all, the findings suggest that sociocultural integration has not been the main outcome of the acquisitions in all three cases. According to the literature this has rarely been the case in other Chinese outbound mergers and acquisitions (Deng, 2013). This is remarkable because previous research has shown that sociocultural integration is a precondition for acquisition performance (Sarala, 2010). An explanation could be that the primary motive for M&As is to address competitive disadvantages and social and cultural factors are not immediately taken into consideration within this perspective. The findings of this study have shown accordingly that the Chinese acquiring organizations do not put much effort into the sociocultural process. Thus an important implication of the research stems from the findings on the willingness of sociocultural integration from the Chinese side. The results point to a negative perspective on sociocultural integration and no need to engage in integration. Hence the question rises: is sociocultural integration truly desired by the acquiring Chinese

organizations?

The answer is that Chinese acquirers have different preferences than Dutch organizations. The most common approach to acquisition in the Western world is quick integration. Otherwise the deal will lose its strength before the integration has been achieved (Cogman & Tan, 2010). The Eastern world has a different approach and does not rush to become synergized. Cogman & Tan (2010) argue that acquiring Chinese companies tend to create only selective partnerships in order to avoid disrupting the acquired Western

organization. They often undermanage the acquired organizations by integrating only the board of directors (Sun et al., 2015). This suggestion is supported by the findings of this study and it may clarify the lack of willingness of Chinese organizations to integrate in the post-acquisition phase. Besides, most Chinese organizations have other organizational

competences and experiences than Western organization. Some Chinese even admit to lag behind most European organizations in terms of skills and the acquisition is rather

opportunistic instead of strategic (Sun et al., 2015). This implies that Chinese acquirers might want to integrate, however they do not know how to manage the post-acquisition integration phase. They take sufficient time as they learn how to operate effectively in new and difficult situations (Cogman & Tan, 2010), whereby the cultural gap remains unaffected. Last but not least, previous research suggests that Chinese organizations feel less pressure to show short-term results because of the state control trough the five-year plans of the government (Sun et al., 2015). This could also explain the light-touch approach of the Chinese acquirers. The following part will elaborate upon this.

Second of all, the findings imply that the role of the government should not be

underestimated when analysing Chinese organizations. The majority of Chinese organizations are still owned by the central and local government. Research has shown that state-owned companies are naturally more likely to expand overseas. An explanation could be that they are forced by the local or national government to go into outbound acquisitions and that they receive financial support from the government (Nicholson & Salaber, 2013). Besides, the government is shaping the business environment in China by means of the five-year plans that have been discussed in the literature review. Recent five-year plans have especially

influenced the Chinese competitive environment and therefore indirectly affected foreign companies as well, for instance by adjusting export regulations (Li & Woetzel, 2011). Certain strategies have resulted as well in Chinese companies being forced by national government to engage in overseas M&As. The aforementioned findings support the proposition that Chinese organizations are often not leaping at the chance to become involved with sociocultural integration. The influence of the state on outbound M&As is rather high in China and

according to Deng (2009) it is therefore needed to understand the institutional environment in which the organizations are embedded. Li & Woetzel (2011) argue that companies can do this by understanding the implications of the five-year plans in order to identify the opportunities and threats.

Third of all, what is also remarkable is the contradictory result between the literature, arguing that Chinese organizational culture is associated with long-term thinking and the Western world with short-termism, and the findings, that argues the opposite. A possible explanation could be that that the underlying thought is perhaps not as black and white as it is being presented in this study. The literature review states that the Chinese society embraces long-term commitment in comparison to Western societies that concentrate more on