Differentiating the Effects of Culture from Societal and Economic Factors in International Collaborations between Hong Kong and Mainland Chinese Businesses

Abstract

The International Joint Venture (IJV) has been an important vehicle for entering the Chinese market since the 1980s, stimulating the development of indigenous industry and providing Western companies with local help navigating the Chinese business environment. Nevertheless, international collaborations are prone to failure with cultural difference being an often cited reason. Studies of the effects of Chinese culture on business mainly concentrate on how to manage the effects of cultural difference, not on understanding the dynamic nature and effects of culture on business. Furthermore, culture is known to be affected by an economy’s stage of development. Many Hong Kong businesses collaborate with Mainland Chinese companies, sharing manufacturing facilities and a local workforce. Yet despite Hong Kong’s Chinese cultural heritage, businesses operate essentially on the Western model and Hong Kong’s advanced state of development means that the social drivers are quite different to the Mainland. Thus, despite their cultural similarities, collaborations between Hong Kong and Mainland businesses suffer similar problems to Mainland companies collaborating with Western multinationals. This paper focuses on the nature of cultural evolution through the hybrid business culture of Hong Kong, and distinguishes the true influences of culture from those associated with other societal and economic factors.