The dilemma of managerial cooperation in Sino‐Western business operations

Chinese foreign trade suffered during the Asian financial crisis, but in 1999, trade rebounded. However, even as China prepares for the 10th Five‐Year Plan and entry into the WTO, rising unemployment coupled with persistent deflationary pressure and continuing declines in foreign direct investment suggest that hard adjustments will have to be made. Just the same, the role that foreign invested firms play in the foreign trade sector and the economy is one of the bright spots on the macroeconomic scene. However, communications problems plague Sino‐Western operations, as indeed they bedevil most cross‐cultural joint ventures. In the Chinese case, the origin lies in the conflict between western universalistic values and Chinese particularistic values in business situations, thus giving rise to difficulties in establishing trust and effective interpersonal cooperation between Chinese and Western managers in Western subsidiaries in China. Using this framework, we develop a model that suggests that the best possible condition for cooperation under these circumstances exists when appearance, i.e., paying attention to human relations, is particularistic and substance, i.e., the way of running the business, is universalistic. The implication for Western managers is that they should both understand and acknowledge the realities of these key value differences and accept what may seem to be a sub‐optimal operational style in order to get the job done. This outcome may pose a dilemma for managers who are con‐ditioned to work toward optimal, maximizing outcomes. Nevertheless, the stakes—and potential benefits—are high. © 2000 John Wiley & Sons, Inc.