FOR the past six years, Professors Gu Qingliang from Donghua University and George B. Graen from Louisiana State University have been working on a project entitled "Cultural Conflicts in Foreign-capital Enterprises and Cross-culture Management".

The study dealt with the high turnover rate of Chinese employees in foreign-funded enterprises in Shanghai, which now stands at 40 per cent per year. Annual costs associated with this turnover are estimated at more than 1 million yuan (US$120,000). The results of the project are based on interviews and research conducted with more than 150 Chinese MBAs and managers from 33 foreign-capital enterprises in Shanghai.

According to the study, the reasons for high turnover are threefold. One reason is that younger managers, particularly those under 30, are highly sought after by executive search firms. These candidates are continuously fielding offers of better jobs with more money and opportunity. Second, there is an increasing demand for better-educated staff with higher degrees. But the most significant factor seems to be cultural conflicts within the workplace.

Ill-favored advice

Many of the Chinese employees interviewed for the study complained that they are not completely accepted by their foreign senior colleagues. Some said their foreign bosses know little about Chinese culture and local facts, yet refuse to learn even a little about them. The employees added that they feel frustrated and disappointed when their advice on improvement goes unheeded or is rejected by foreign seniors. The worst situation is when they are misunderstood and, as a result, alienated by foreign colleagues.

Working in a foreign-funded enterprise is not easy for many Chinese nowadays, and many feel that cultural differences have created wide gaps between them and their foreign colleagues and employers.

Li Yiqi, a 38-year-old Chinese businessman, was formerly a senior quality assurance manager at a Fortune 500 company. Just one year after being promoted to that position, he resigned to run his own business. "People were surprised when I resigned, because that position was promising and brought with it a considerable salary," he said. "But I have never regretted it. I think a good working environment where employees and employers communicate well is more important for me. When I discovered that my foreign higher-up had incorrect beliefs about Chinese employees and rejected to my efforts to help him, I made up my mind to leave. Plus, running my own business is a good challenge for me."

Adequate training

Samuel P. Huntington, in his "The Clash of Civilizations and the Remaking of World Order", has a pessimistic prediction about contact and communication between different cultures. His thoughts and theories are controversial, as they see cultural conflicts as very significant in the context of globalization. The more different cultures come into contact with one another, the greater the chance that cultural conflicts will arise. And when that becomes a barrier to resolving concrete issues, solutions must be found. As Professors Gu and Graen have shown, cultural diversity can be an obstacle to the development of foreign-funded enterprises, local talent and local economies. Thus it is inevitable that measures will be implemented to avoid such economic and human resource losses.

Gu and Graen also suggest that foreign-capital enterprises should carry out thorough studies of Chinese culture, and foreign staffers working in China should attend training classes related to local culture. Yang Hui, who once worked in a foreign-invested consulting firm in Shanghai, said her company did a good job in this respect. All her foreign colleagues and higher-ups can speak basic Chinese due to language training prior to their arrival in China. Following a six-month course, only those who were qualified could work in China. Sometimes Yang's company held activities outside of work to help employees get better acquainted in an informal and relaxed environment.

As the saying goes, "all roads lead to Rome", and there are many ways to overcome cultural conflict, even when it is more like a head-on-collision. But the first step is to remain tolerant and understanding about differences in culture. Derrick works at a university in Shanghai as a foreign teacher and says he has been in China for nearly seven years since graduating from a US college. He confessed that in the early days of his stay in China, he sometimes felt uncomfortable because he didn't understand why people treated him in certain ways. But after several years, he became accustomed to his surroundings and the culture, and now gets along very well with the Chinese. "Understanding is necessary when you try to 'dive into' a certain culture, a certain custom and a certain group of people. Maintaining tolerance, understanding and knowledge of the local culture before I jumped in helped me a lot," he said.

In today's highly globalized society, different cultures come into much greater contact with one another, and their different qualities and characteristics surely won't blend in total harmony. In the abstract, "macro" sense, the collision of cultures will have a great impact on the future of humanity as it relates to matters of war and peace. So in the concrete sense, this issue involves everyone in their daily lives.