Cultural synergies and challenges in the context of Supplier Relationship Management: Finnish-Chinese interaction

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School of Economics | Master's thesis
International Business Communication
International Business Communication
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Objective of the study: The objective of the study was to identify the cultural synergies and cultural challenges in the context of a case study on supplier relationship management. The two main case organizations of the study were a Finnish subsidiary of a Western MNC, called with the fictional name Power Oy and its Chinese supplier of welded structures, called with the fictional name Frames CN. The Finnish case company manufactures products for the power generation industry. The study explored the perceptions and experiences of Power Oy‘s managers and business partners in order to answer the main research questions: "What kind of cultural synergies and cultural challenges can be identified between the Finnish case company and the Chinese supplier within supply chain processes?" and "At what stages of the supply chain processes do these cultural synergies and cultural challenges occur?". Methodology and the theoretical framework: The main source of data in the qualitative single case study carried out consisted of six semi-structured interviews with representatives of the organizations involved, conducted at Power Oy. In addition, supporting documentation was provided by Power Oy. The interviews were conducted in Helsinki, with three of them over the phone with the interviewees located in China. The theoretical framework of the study dealt with three main cultural dimensions: (1) the physical dimension, emerging from the field of cultural materialism, (2) the psychological dimension, emerging from cultural cognitivism and (3) the language dimension, which serves to bridge the physical with the psychological dimensions. The three dimensions were used to describe the cultural synergies and challenges identified during the supply chain process stages. Findings and conclusions: Cultural synergies were identified through a representation of standard procedures from the supplier approval stage to the purchase order completion stage. In particular, there was no indication of cultural challenges in the processes of supplier selection, placing the order into the enterprise resource planning (ERP) system and design. The following organizational and country-specific culture related challenges were identified within the supplier approval and quality control stages: lack of know-how, lack of welding procedure specifications (WPS), differences in organizational attitudes and beliefs, insufficient understanding of the International Organization for Standardization (ISO) standards, differences in communication styles, use of authority power and interpersonal values. Within the language dimension there were several additional challenges: the Chinese supplier lacked English language skills, non-verbal communication was almost non-existent and there were mistakes in the translation of technical specifications. Finally, recommendations on how to improve communication with the Chinese supplier were given.
international business communication, intercultural business communication, organizational communication, supply chain management, supplier relationship management, sourcing in China, Finnish culture, Chinese culture, Chinese manufacturing, supplier quali
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