Center for Asian Business Cases: Establishing an ‘ECL’ Culture in China: Organizational Difference or National Difference?
University of Maryland, University College
Case Study 3: PMAN 638, Section: 9041
April 23, 2011
Table of Contents
Executive Summary 3
Primary Cultural Differences 4
Negotiation Differences 5
Communication Challenges 5
Situation Analysis 6
Cultural Differences 6
Communication Challenges: 7
Electronic Communications Ltd. (ECL) was a global international company providing integrated communications and electronic solutions. In 1980’s and 1990’s China emerged as a most promising and emerging market for foreign investments due to its size and diversity. In 1987, ECL decided to establish itself in China to take advantage of these business opportunities.
This case analysis identifies key start up problems multinational firms face when establishing in China. Management of human resources was one of the biggest challenges faced by ECL due to differences between Chinese culture, values, and beliefs and from their own. By identifying these areas of key cultural differences, situation analysis and recommendations; multinational firms can have a better understanding and be better prepared when doing business in China and manage these differences to establish a strong organizational culture in socialistic society.
ECL faced several communication problems stemming from cross-cultural differences, and how cultural differences can impact negotiation skills, conflict resolution strategies, and communication methods which need to adapt to local culture in order to build successful business relationships in China. Culture is “a learned set of shared interpretations about beliefs, values and norms which affect the...