Swedish CSR Made in Taiwan - DiVA portal

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Swedish CSR Made in Taiwan - A case study of cross-cultural management

within IKEA and Scania

Authors: Frida Magnusson International Business Kristoffer Pettersson International Business

Tutor:

Petter Boye

Examiner: Hans Jansson

Subject: International Business

Level and semester: Master Thesis Spring 2012

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ACKNOWLEDGEMENTS

In the process of writing this thesis many people have contributed to its establishment.

We are very grateful for the inspiration and support we have received, and would like to

express our appreciation to the following:

First and foremost, we would like to thank our supervisor, Petter Boye, for his

assistance, constructive criticism, and intellectual advise throughout the process of the

research. This is the second time Petter Boye is our supervisor, and we are sincerely

grateful for the feedback he has provided.

Further, we also want to thank our interview respondents for sharing their experiences

and for devoting their time to participate in our research. We are truly appreciative for

the honesty and openness they showed in the interviews.

Finally, we want to thank our peers who during three seminars gave us relevant

feedback, which contributed to make this thesis to what it is today. Last but not least,

we want to acknowledge the following people for their help and inspiration: Joachim

Erlandsen, William Graham, and Louise Byström.

Taipei, 24th of May 2012

Frida Magnusson Kristoffer Pettersson

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ABSTRACT

The purpose of this thesis is to analyze, describe, and explain how Swedish managers

engage their Taiwanese employees in the organization’s CSR. In order to reach the

intention of the thesis, a qualitative case study has been conducted, which involved

personal interviews with respondents at IKEA and Scania in Taiwan.

The theoretical framework comprehends theories concerning CSR, culture, and

communication, which are all relevant to contribute to the analysis, in order to answer

the research questions. The empirical findings contain the interview respondents’ view

on the firms’ CSR activities, how they perceive and manage cultural differences, and

how they communicate CSR to their Taiwanese employees.

In the analysis a theoretical synthesis is applied in order to analyze the empirical

findings. Our analysis demonstrates that both case firms take economic, legal, and

ethical responsibilities, while only one firm pursues philanthropic responsibilities.

Further, our analysis reveals that there are several cultural differences and

communicational barriers to overcome, when engaging employees in CSR.

The conclusion of the thesis shows that Swedish managers actively try to engage their

Taiwanese employees in CSR by continuously communicating their perception of the

firm’s social responsibilities. Moreover, combining CSR that is embraced by Asian

culture with managerial efforts to increase employee participation, result in effective

CSR practices in Taiwan.

Keywords: Cross-‐cultural leadership, CSR, Taiwan, Sweden, Carroll’s CSR pyramid,

Hofstede model, High-‐ and low-‐context communication.

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TABLE OF CONTENT

1 INTRODUCTION 1

1.1 CORPORATE SOCIAL RESPONSIBILITY 1 1.2 EMPLOYEE ENGAGEMENT 2 1.3 CROSS-‐CULTURAL LEADERSHIP 3 1.4 PROBLEM DISCUSSION 4 1.5 RESEARCH QUESTIONS 4 1.6 PURPOSE 5 1.7 DISPOSITION OF THE THESIS 6

2 METHODOLOGY 7

2.1 CHOICE OF SUBJECT 7 2.2 RESEARCH APPROACH 8 2.3 RESEARCH METHOD 9 2.3.1 RESEARCHERS’ FRAME OF REFERENCE 9 2.4 LITERATURE REVIEW 10 2.5 RESEARCH STRATEGY 10 2.5.1 RESEARCH DESIGN 11 2.5.2 SELECTION PROCESS OF CASES 12 2.6 DATA COLLECTION METHODS 13 2.6.1 INTERVIEWS 13 2.6.2 OBSERVATIONS 14 2.6.3 DOCUMENTATION 14 2.7 ACCESS TO THE COMPANIES 14 2.8 RESEARCH QUALITY 15 2.8.1 CREDIBILITY 15 2.8.2 CONSISTENCY 16 2.8.3 TRANSFERABILITY 17

3 THEORETICAL FRAMEWORK 19

3.1 CORPORATE SOCIAL RESPONSIBILITY 19 3.1.1 CARROLL’S CSR PYRAMID 19 3.1.2 CSR IN ASIA 21 3.2 CULTURE 22 3.2.1 THE HOFSTEDE MODEL 22

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3.2.2 THE CHINESE BUSINESS CULTURE 27 3.2.3 LEADERSHIP STYLES IN DIFFERENT CULTURES 27 3.3 COMMUNICATION 29 3.3.1 HIGH-‐ AND LOW-‐CONTEXT COMMUNICATION 29 3.3.2 COMMUNICATING CSR TO EMPLOYEES 32 3.4 THEORETICAL SYNTHESIS 32

4 EMPIRICAL FINDINGS 35

4.1 IKEA 35 4.1.1 CSR IN TAIWAN 36 4.1.2 CULTURE AND LEADERSHIP 38 4.1.3 EMPLOYEE COMMUNICATION 40 4.2 SCANIA 41 4.2.1 CSR IN TAIWAN 42 4.2.2 CULTURE AND LEADERSHIP 43 4.2.3 EMPLOYEE COMMUNICATION 44

5 ANALYSIS 47

5.1 CSR IN TAIWAN 47 5.1.1 SUMMARY 49 5.2 CULTURE AND LEADERSHIP 50 5.2.1 SUMMARY 54 5.3 EMPLOYEE COMMUNICATION 54 5.3.1 SUMMARY 56

6 CONCLUSIONS 57

6.1 ANSWERS TO THE RESEARCH QUESTIONS 57 6.2 LIMITATIONS OF THE RESEARCH 59 6.3 APPLICABILITY OF THE FINDINGS 60 6.4 SUGGESTIONS FOR FURTHER RESEARCH 60

7 BIBLIOGRAPHY 61

Attachment 1: Interview Guide (Swedish)

Attachment 2: Interview Guide (English)

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LIST OF FIGURES AND TABLES FIGURES Figure 2.1 Bachelor-‐ and Master theses. 8

Figure 2.1 Basic types of designs for case studies. 11

Figure 3.1 The CSR pyramid. 20

Figure 3.2 Comparison of Sweden and Taiwan. 26

Figure 3.3 Regions on the continuum of low-‐ and high-‐context. 31

Figure 3.4 Theoretical synthesis. 34

TABLES Table 1.1 Disposition of the Thesis 6

Table 3.1 The dimensional values of Sweden and Taiwan. 25

INTRODUCTION

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1 INTRODUCTION

This chapter will introduce the topic of the thesis, followed by a discussion of the

research problem. Thereafter, the research questions and the purpose of the thesis

will be stated. Last, in order to provide an overview of what the thesis will cover, a

disposition of the thesis is presented.

1.1 Corporate Social Responsibility

According to Edwards et al. (2007), the process of globalization has resulted in

raised concerns that multinational corporations (MNCs) might pursue profit at

the expense of vulnerable workforce or the environment. In response to such

concerns, MNCs are increasingly taking steps to show their social responsibility

as a business organization and one development has been the elaboration and

implementation of Corporate Social Responsibility (CSR) codes and programmes

(Collier & Esteban, 2007; Edwards et al., 2007). The Commission of the European

Communities defines CSR as followed:

“A concept whereby companies integrate social and environmental concerns in

their business operations and in their interaction with their stakeholders on a

voluntary basis.” (Prieto-‐Carrón et al., 2006, p. 978)

Several authors argue that CSR to a large extent is undertaken by organizations

characterized by high risk and valuable reputations, and with a direct connection

to the consumer market (Pollach et al., 2012; Borglund et al., 2009; Grafström et

al., 2008; Trebeck, 2008). Borglund et al. (2009) and Grafström et al. (2008)

further claim that the most effective CSR policies are those with strong

connections to the organizations core operations and values.

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One of the purposes of the CSR codes is to guide employees’ behavior in

accordance with the image of the firm (Edwards et al., 2007). This is the

principal way for MNCs to achieve consistency across borders and operations.

However, Von Weltzien Hoivik (2007) argues that the value concepts in Western

firms’ codes of ethics do not necessarily work in other cultures, mainly because

the values stated rest on deeply rooted cultural characteristics and Western

concepts of duty. Therefore, these concepts may not work in Asian cultures that

are predominately relationship-‐oriented.

Based on the statement that Swedish companies are regarded as global leaders

when it comes to advanced CSR policies (Grafström et al. 2008), one could

assume that Swedish firms have plenty to share concerning CSR activities both at

home and abroad.

1.2 Employee Engagement

Employees are the people that deliver the firms' end objectives, wherefore their

investment and understanding in CSR are of importance (Walton & Rawlins,

2011; Munslow, 2010; Simmons, 2008). Collier and Esteban (2007) argue that it

is the employees who carry most of the burden regarding the responsibility of

implementing the ethical behavior of the company throughout their daily work.

Achieving the desired outcomes will therefore mainly depend on employee

willingness to collaborate (Morsing et al., 2008; Collier & Esteban, 2007).

According to Munslow (2010) such involvement cannot be realized through

newsletters or intranet, but effective employee engagement in activities must be

in place within the organization to ensure that the staff not only understands the

purpose of CSR, but also what it requires of them. Walton and Rawlins (2011)

explain that when employees believe that they can act as ambassadors for their

firm’s CSR efforts their commitment and conviction spread. The issue of

employee engagement becomes even more significant in companies that operate

in several markets where it is a necessity that the employees’ values and visions

are fully aligned with the organization in order to handle ethically complex

situations effectively (Collier & Esteban, 2007).

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1.3 Cross-‐Cultural Leadership

The world is increasingly becoming more and more interconnected; hence an

even further progressive globalization of companies and organizations is

occurring (Javidan & House, 2001). This opens up many opportunities, but also

complex challenges for businesses becoming transnational. Cultural interactions

have been stated as problems, with leadership efforts as solutions (Holmberg &

Åkerblom, 2006; Javidan & House, 2001). Traditionally, leaders were valued for

their consistency, but due to globalization today’s leaders are valued for seeking,

valuing, and leveraging different perspectives and invite dissent (Bindra, 2012).

Javidan and House (2001) further argue that due to complex challenges the most

important factor for business success is competent global leaders whom are

flexible and respond positively and effectively to practices and values that are

different from what they are familiar to. Newman and Nollen (1996) explain, that

management practices that reinforce national culture are more likely to yield

predictable behavior, self-‐efficiency, and high performance, since consistent

management practices are coherent with behavioral expectations and routines

that surpass the workplace. Moreover, global leaders need to understand the

importance of creating cross-‐cultural trust and understanding in their company

(Boot, 2011), and also realize that good staff communication is essential to

business success (Javidan & House, 2001; http://www.inc.com). Furthermore,

communication is the essential tool for managing people (Kurpritz & Cowell,

2011) and building trust (Thomas et al., 2009).

In the following statement Percy Barnevik, the former CEO of ABB, presented his

view on the characteristics of a global manager.

“Global managers have exceptionally open minds. They respect how different

countries do things, and they have the imagination to appreciate why they do them

that way. ” (Javidan & House, 2001, p. 292)

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1.4 Problem Discussion

The research on CSR communication has mainly focused on external

communication (Uusi-‐Rauva & Nurkka, 2010; Nielsen & Thomsen, 2009), with

the main approach being quantitative content analysis (Nielsen & Thomsen,

2009). Pollach et al. (2012) agree, and add that there is an absence of empirical

research on the relationship between internal communication and CSR.

Furthermore, Dhanesh (2012) claims that employees have received hardly any

research focus within this field of research. Despite the vast interest in the

concept of CSR, we find that there are still many unanswered questions,

especially concerning internal communication of CSR, within organizations

across countries.

Chong and Thomas (1997) explain that cultural differences between the leader

and the follower may result in communication difficulties, which can reduce

effectiveness and potentially cause conflict; yet, Silberg (2012) argue that

managers are a crucial part of making the firm’s CSR efforts understood among

the employees. Moreover, Tanova and Nadiri (2009) explain that differences in

communication styles are especially apparent when comparing people from

Scandinavia and Asia. The increasing presence of Swedish companies in Asia and

the importance of the market (handelskammaren.se) make it significant to study

problems that these firms encounter. Moreover, CSR, being a highly essential

part of numerous Swedish MNCs’ operations (Grafström et al. 2008), contributes

to stressing the importance of this field of research.

The topics of CSR, culture, and communication have been widely researched

independently, but it was the interconnection that raised our curiosity.

Accordingly, this thesis seeks to enrich this relatively unexplored part in the

research on CSR, in order to make a contribution to the literature.

1.5 Research Questions

Primary research question

How do Swedish managers in Taiwanese subsidiaries engage employees in CSR?

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Secondary research questions

We believe that in order to answer our primary research question we first need

to answer the following sub questions:

With the first sub question we aim to describe to what extent the case firms take

social responsibility in Taiwan, in order to gain further understanding of what

kind of CSR the companies engage their employees in.

In the second sub question we intend to gain knowledge of how Swedish leaders

manage the cultural differences in the Taiwanese subsidiaries, in order to be

effective leaders.

With the third sub question we aim to answer how Swedish managers

communicate the firms’ social responsibilities to their Taiwanese employees.

1.6 Purpose

The purpose of this thesis is to:

§ Analyze and explain how Swedish managers perceive and manage cultural

differences in their Taiwanese subsidiaries, and how they communicate

CSR with their Taiwanese employees, in order to engage them in their

CSR practices.

§ Provide knowledge and inspiration on how companies more effectively can

engage their oversea employees in their CSR practices.

To what extent do Swedish firms take social responsibility in Taiwan?

How do Swedish managers perceive and manage cultural differences in their Taiwanese

subsidiaries?

How do Swedish leaders manage the communication regarding CSR in relation to their

Taiwanese employees?

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§ Increase knowledge dispersion that could result in more effective CSR,

which would not only be valuable for the company, but for society as a

whole.

1.7 Disposition of the Thesis

Table 1.1 Disposition of the thesis

Chapter 1 Introduction

Introduces the readers to the topic of the thesis, to why there is a need for this research, and the purpose of the study.

Chapter 2 Methodology

Explains the methods applied, how the literature was selected, the access to the firms, and how the data was collected. Lastly, the quality of the thesis is discussed.

Chapter 3 Theoretical Framework

Presents theories concerning CSR, culture, and communication, which are the core concepts of the thesis. The chapter concludes with a theoretical synthesis, which describes how the theories will be applied in the analysis.

Chapter 4 Empirical Findings

Provides the data collected through the interviews with the Swedish managers.

Chapter 5 Analysis

In this chapter, the empirical findings are analyzed using the theoretical synthesis presented in chapter three.

Chapter 6 Conclusions

In the last chapter the research questions are answered, based on the analysis in the previous chapter. Last, the limitations of the thesis, its applicability, and suggestions for further research will be presented.

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2 METHODOLOGY

In this chapter the methodology of the thesis will be presented. We will explain the

choice of subject, followed by the various methods applied. Thereafter we will

present the case firms, data collection procedures, account for our access to the

firms, and end with stating the quality of the research.

2.1 Choice of Subject

The choice of subject for this thesis came natural to us since we both strive to

work in Asia in the future, and believe that the knowledge obtained from this

research will enable us to become better employees with a broader

understanding of people from different cultural backgrounds. Both of us have

experienced cultural clashes in our travels around the world and as exchange

students in North America, Asia and Australia, and we are certain that we will

experience several more in our careers. This has awakened a curiosity of how

such cultural clashes are dealt with within business organizations, and since our

present location is Taiwan, the research will be conducted there.

During the research for our Bachelor thesis (Swedish CSR with Chinese

Characteristics – A case study of four Swedish firms’ CSR engagement in their

Chinese supply chains) we found that all our respondents experienced severe

difficulties when managing their Chinese supplier relations regarding CSR

(Magnusson & Pettersson, 2011). We concluded that one of the issues in this

matter concerned the level of involvement, which in the Chinese case firms were

considered as too low in order to fully implement the intended CSR activities.

These statements and conclusions resulted in personal curiosity for how

Swedish leaders in Asia manage their relationship with the firms’ employees,

who they have a closer relationship to, and especially concerning the aspect of

CSR and how it is communicated.

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Figure 2.1 Bachelor-‐ and Master theses.

2.2 Research Approach

In the early beginning of this thesis we had a few theories we knew would

contribute to the analysis, but we were also aware of that after the interviews

were completed, we would need new insights and theories in order to make a

complete analysis. Therefore, neither the deductive nor the inductive approach

was chosen, instead we decided to use the abductive research approach. Dubois

and Gadde (2002) define this approach as systematic combining and a constant

movement between the theoretical framework and the empirical findings. Using

an abductive research approach enabled us to constantly move between the two,

and assisted us to gain insights both from theory and reality during the process.

We began our research by searching for articles focusing on cross-‐cultural

context, and found three main areas of theories, those being CSR, culture, and

communication. When the interviews were conducted we needed to find more

theories within these areas to complete the theoretical framework. Therefore,

Supply chain management

Internal CSR management

How do Swedish firms implement CSR in their Chinese supply

chains?

How do Swedish managers in Taiwanese

subsidiaries engage employees in CSR?

Corporate Social

Responsibility

Bachelor Thesis Master Thesis

Swedish firms in Asia

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we believe that the abductive approach served as an inspiration during the

research process.

2.3 Research Method

Lauring and Thomsen (2010) claim that in order to investigate the ambiguous,

debatable and disputed concept of CSR, researchers need to apply a fairly

sensitive data collection tool, which the qualitative research method provides.

This method facilitates a deeper understanding of the phenomenon studied

compared to a quantitative research method (Merriam, 2009). A qualitative

method is more concerned with “how” and “why”, rather than with “how much”

or “how many”. It is also a method concerned with how people interpret what

they experience (Merriam, 2009), which is the most important aspect of our

research.

2.3.1 Researchers’ frame of reference

When conducting a qualitative research it is impossible for the authors to be

completely objective (Gummesson, 2007). Subjectivity is ever-‐present in

everything we do and impossible to avoid. Therefore, we find it important to

state our frame of reference in this field of research. Both of the authors have

studied four years of international business in mainly Sweden and Taiwan. We

have studied in multi-‐cultural environments, and worked in companies with

people belonging to different cultural backgrounds. Moreover, we have

completed a few courses in leadership, the most recent relating to cross-‐cultural

leadership. We have prior experience regarding conducting research on CSR

(“Swedish CSR with Chinese Characteristics – a case study of four Swedish firms’

CSR engagement in their Chinese supply chains”). Before writing the Bachelor

Thesis mentioned above, we completed a course in CSR in order to obtain more

insight into the concept. Further, we find it important to clarify that we are

biased about firms’ implementation of CSR, and consider it to be of great

importance especially in emerging economies. However, during the interviews

we did not state any of this information, and we acted objective in order to

collect the interview respondents own view of the phenomenon studied.

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2.4 Literature Review

Researchers who do not review previous literature on the subject may miss an

opportunity to make a contribution to their field of research (Merriam, 2009).

The author (2009) further explains that conducting a literature review will

create an overview of the topic with the intention to identify major studies and

theories that can contribute to the researchers’ knowledge domains. Therefore,

in the initial stage of our research we studied articles and theses written on the

subjects of interest, in order to find a gap in the research area. We found that

there is a lack of research related to how companies communicate CSR

internally, in cross-‐cultural contexts. Proceeding from there, we used key words

such as: CSR, cross-‐cultural, communication, culture, leadership, Taiwan,

Sweden, and Asia, in order to create the introduction and theoretical framework

of this thesis. We selected scientific journals and literature relevant to the topic,

and did so by using valid sources and selecting theories widely accepted by other

researchers.

2.5 Research Strategy

Yin (2009) presents five different strategies for conducting a research, those are;

archival analysis, experiments, surveys, history, and case studies. In order to

choose between the five strategies the research question acts as a key

differentiator. Case studies are preferably based on “how” and “why” questions

that describes a present circumstance (Merriam, 2009; Yin, 2009), which CSR in

Taiwan is. Further, case studies are in-‐depth descriptions and analysis of various

cases, and qualitative case studies are characterized as being particularistic and

descriptive (Merriam, 2009). According to Schell (1992), the case study is the

most flexible of all research strategies, which in turn allowed us to retain the

holistic characteristics of the real life events investigated. According to

Gummesson (2007) case studies contain an interaction between the researchers,

the object of study, and its actors, and Yin (2009) further emphasizes interviews

and observations to be the main strengths of this research strategy. The case

study strategy enabled us to visit the firms, and use triangulation when collecting

data, which further made an in-‐depth analysis of the two case firms’ internal CSR

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management possible. We therefore received a more holistic view of the

phenomenon studied, and were able to form an interesting conclusion to this

thesis.

The greatest concern with case studies is lack of rigor, mainly depending on the

authors’ subjectivity (Yin, 2009). In order for this thesis to remain credible we

have stated our frame of reference (2.3.1), our applied methods, and followed

structural recommendations given by Yin (2009) and Merriam (2009). Merriam

(2009) further argues that when studying a complex phenomenon, the strengths

of using a case study design are greater than its limitations, since it is the one

strategy that in-‐depth can explain a complex phenomenon.

2.5.1 Research design

Yin (2009) presents four different designs for case studies, which are illustrated

in Figure 2.1. We decided to conduct a holistic multiple-‐case design, since we

wanted to interview more than one company in order to be able to receive a

more generalizable result. Furthermore, evidence collected from multiple cases

is considered more compelling, and the overall study will become more robust

compared to a single-‐case study (Yin, 2009). Additionally, the analytical benefits

from having more than one case are substantial.

Figure 2.2 Basic types of designs for case studies (modified from Yin, 2009).

Single-‐Case Design

Multiple-‐Case Design

Con-‐text

Con-‐text Case

Context Case Case

Holistic

Context Case

Unit

Unit

Embedded Con-‐text

Con-‐text

Case Case

Unit

Unit

Unit

Unit

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2.5.2 Selection process of cases

When deciding upon which companies to include in the research, our main goal

was to find Swedish companies established in Taiwan with a stated CSR policy

on their website. Further, having a Swedish manager and Taiwanese employees

was a necessity in order to find an answer to our research questions. Therefore,

we decided to focus on companies considered large, i.e. more than 250

employees and revenues exceeding €40 million (europa.eu). By using the

Swedish Chamber of Commerce’s and the Swedish Trade Council’s lists of

Swedish companies established in Taiwan (cci.se; swedishtrade.se), we found

firms that matched our criteria.

We approached the companies by telephone and explained the intentions of the

thesis, why they were chosen, and asked whether they were interested in

participating. After this process, the following two companies were willing to

contribute:

IKEA

Founded in 1943 by Ingvar Kamprad, IKEA today employs 131 000 people in 41

countries (ikea.se). In 2011 IKEA maintained stable growth and profitability, and

increased their revenues by 6.9 percent from the year before, to a total of EUR

24,7 billion. IKEA’s business concept focuses on providing their customers with

home furnishing products at low prices. As of the 31st of August 2011 the

company had 287 stores in 26 countries around the world, Taiwan being one of

those countries. Our respondent at IKEA is the CEO of the Taiwan, Hong Kong,

and Indonesia divisions, Mr. Martin Lindström.

Scania

Scania was established in 1900 and is today one of the leading manufacturers of

trucks, industrial-‐ and maritime engines, and buses (scania.se). The firm

operates in approximately 100 countries and the number of employees exceed

35 000. Scania has not experienced any annual losses since 1934, and in 2011

their revenues increased by 12.2 percent from the year before, to a total of USD

87,686 million. An interview was conducted with the manager of the regional

production unit in Taiwan and South Korea.

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2.6 Data Collection Methods

In order to understand how managers engage their Taiwanese employees in CSR

we conducted interviews and observations in the field, and used various

documentations to confirm our findings. These are common tools utilized in a

qualitative research since they offer increased understanding of underlying

aspects and data that might be critical in order to understand the entire concept

(Merriam, 2009). Quotations from the interviews were also collected since those

will contribute to a more descriptive research.

2.6.1 Interviews

The primary source of data collections was interviews conducted by the authors.

According to Merriam (2009), interviews provide the most useful information

when conducting a qualitative research. We decided to conduct semi-‐structured

interviews since this method assumes that the interview respondents define the

phenomenon in unique ways. A semi-‐structured interview requires questions to

be flexibly worded and ordered which allows the interviewer to respond to each

situation at hand (Merriam, 2009). Additionally, interviews were conducted in

Swedish, which reduced the possibility of confusion and misunderstandings

since both the authors and interviewees are of Swedish origin. Moreover, as

recommended by Glaser and Strauss (1967) we made every attempt to begin our

interviews with an open mind. The interviews, which were conducted on the 18th

of May 2012 at the case companies offices, each lasted for approximately one and

a half hours, were digitally recorded, and later reviewed by both respondents.

Moreover, the opportunity to remain anonymous were declared in both cases,

and our respondent at Scania decided that he did not want to have his name

published in the thesis, wherefore the fictitious name of Mr. Andersson is used

instead.

According to Merriam (2009), there are limitations when conducting interviews,

the most prominent being the interviewers’ biases. Therefore, that is discussed

under heading 2.3.1 Researchers’ frame of reference.

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2.6.2 Observations

Observations were used as a complement to the interviews, since combined with

documentation and interviews it allows for holistic interpretations of the

phenomenon studied (Merriam, 2009). Gummesson (2007) states that

observations are under-‐exploited in researches, and further argues that a major

share of communication is non-‐verbal. Yin (2009) further stresses that in order

to enhance the validity of observations there should be more than a single

observer making the observations.

During our visits to Scania and IKEA we identified various non-‐verbal

communication, which will be revealed in the empirical findings.

2.6.3 Documentation

The most important use of documents is to confirm evidence from other sources

(Yin, 2009). Documentation, such as e-‐mails, verifications of case firms’

economic data, and spelling matters have been used to a limited extent, and only

in the selection process of case firms and in order to confirm data from the

interviews.

2.7 Access to the Companies

Access is defined as the opportunities available to find information and empirical

data, and is considered a critical problem when conducting a study (Gummesson,

2000). Through our contact at the Swedish Chamber of Commerce, Mrs. Louise

Byström, we were introduced to the case firms of interest for this research. We

believe this made the interview respondents more comfortable with having us

interviewing them.

Gummesson (2000) emphasizes that the choice of research methods and the

researcher’s competence are of great importance regarding access to companies.

We find that our previous proficiency of writing a thesis abroad has given us the

experience and knowledge on how to conduct a second thesis in a similar

context. We both felt more confident when approaching the companies this time

since we had previous practice.

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2.8 Research Quality

In order to have an effect on the practice or the theory in the field of research,

the thesis need to provide insight and conclusions that sound true to the reader

and other researchers (Merriam, 2009). Our goal throughout the writing of this

thesis has been to contribute with knowledge that is trustworthy and believable.

The quality of this thesis has been tested through credibility, consistency, and

transferability, and it has been achieved through constant concern and attention

to the data that has been collected, analyzed, interpreted, and presented, as

suggested by Merriam (2009) and Yin (2009).

2.8.1 Credibility

The credibility criterion focuses on how research findings match the reality

(Merriam, 2009). In qualitative research, human beings are the primary

instrument of data collection and analysis; hence, interpretations of the reality

are accessed through their interviews and observations. Merriam (2009)

therefore claims qualitative studies to be closer to reality, than if a data

collection tool had been interjected between the researchers and the

participants. Therefore, viewed in this manner, credibility is seen as a strength of

qualitative research. However, we had to acknowledge that qualitative research

could never capture an objective reality. Thus, we have applied five strategies

suggested by Merriam (2009) in order to enhance the credibility of this thesis.

First, two types of triangulation suggested by the author were used in order to

increase the credibility of the study. Those triangulations were multiple methods

and multiple investigators. Regarding the use of multiple methods of data

collection, we have applied interviews, observations, and documentation in

order to be able to crosscheck the accuracy of the data. Investigator triangulation

was also applied since both of the authors participated in collecting and

analyzing the data.

The second strategy to ensure the credibility of the thesis is called respondent

validation (Merriam, 2009). This is a strategy to rule out that the findings and

interpretations made by the researchers are not misinterpreted or

misunderstood. This strategy has been accomplished through feedback from our

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interview respondents after the interviews were transformed into empirical

data.

Adequate engagement in data collection is the third strategy suggested by

Merriam (2009). This implies making sure to receive the right amount of data

needed to reach a truthful conclusion. The data collection process was finished

after reaching a point of saturation, indicating that we came across the same

things over and over again.

The fourth strategy recommended by Merriam (2009) is called researcher’s

position. The author indicates that the researchers have to clarify their biases,

dispositions, experiences, and theoretical orientation regarding the research.

This kind of clarification will enable the readers to better understand how the

researchers might have arrived at the interpretations of the data. This

information is found under the heading 2.3.1 Researchers’ frame of reference.

Finally, as advised by Merriam (2009), we applied a strategy called peer review.

During the process of writing this thesis we have participated in three seminars

where four or more people have read and commented on our thesis. Further, an

experienced advisor was contacted regularly, in order to give us feedback on the

material.

2.8.2 Consistency

Consistency refers to the extent to which research findings can be replicated

(Merriam, 2009). This is considered problematic in qualitative researches since

human behavior is never static; yet, it is conducted in a way that human behavior

cannot be isolated. Therefore, replication of qualitative studies will not yield the

same results, but this does not discredit the result of any qualitative study since

there can be numerous interpretation of the same data. The more important

question in a qualitative research is therefore whether the results are consistent

with the data collected. This can be improved through researcher’s training and

practice concerning data collection, methodologies, and experience. We find that

our previous research gave us the adequate experience, and our four years of

METHODOLOGY

17

university studies have prepared us well for this thesis to be considered

dependable.

2.8.3 Transferability

According to Merriam (2009), transferability indicates to which extent the

findings of a study can be applied to other situations and how generalizable the

results are. We decided to apply extrapolations, which are modest speculations

on the likely applicability of the results to other situations under similar, but not

identical, conditions. Merriam (2009) argues that the general lies in the

particular, indicating that what one learns in a particular situation can be

generalized in similar situations. It is up to the reader to decide whether the

findings of this thesis is applicable to their situations, although, it is the

researchers’ responsibility to provide enough detailed description of the study’s

context to support the readers to compare the fit with their own situations. The

transferability of this thesis is stated under heading 6.3 Applicability of the

findings.

Transferability can be enhanced through thick descriptions, implying highly

descriptive, detailed presentations of the settings and findings of the study

(Merriam, 2009). We have done this by presenting the companies and the

interview respondents, using quotes from the interviews, by carefully and clearly

presenting the data collected, and lastly re-‐reading it several times before final

completion. Another way of enhancing transferability is by carefully selecting the

cases to study. As stated under heading 2.5.2 Selection process of cases, we

deployed several criteria in order to find the ultimate companies to interview.

METHODOLOGY

18

THEORETICAL FRAMEWORK

19

3 THEORETICAL FRAMEWORK

In the following chapter the theoretical framework of the thesis will be presented.

The framework is divided into four parts, CSR, culture, communication and

theoretical synthesis. Initially, Carroll’s CSR pyramid will be introduced followed by

Hofstede’s model on national cultural characteristics. Thereafter low-‐ and high-‐

context communication will be explained, followed by the theoretical synthesis.

3.1 Corporate Social Responsibility

Faisal (2010) explains that CSR is a wide concept which has resulted in a variety

of definitions based on the extent to which a firm stretches its acceptance of

responsibility beyond its primary role as a an economic institution to include

social duties. A description of CSR was presented in the introduction of the thesis

but a more narrow definition of the subject will be introduced in the next

paragraph.

3.1.1 Carroll’s CSR pyramid

One of the first, and yet the most widely accepted conceptualization of CSR is

defined by Archie Carroll (Dhanesh, 2012; Galbreath, 2009; Qu, 2009), who

states that CSR is a multi-‐dimensional construction, consisting of four types of

firm responsibilities: economic, legal, ethical, and philanthropic (Carroll, 1979).

Carroll (1991) further suggests that these four elements of social responsibilities

compose the total CSR. Together the four dimensions form a pyramid, where the

responsibilities rest upon each other (Figure 3.1). However, the four layers are

not mutually exclusive, but are shown in this way to easier grasp the context. The

total responsibilities of organizations include simultaneous fulfillment to earn

profit, obey the law, be ethical, and be a good corporate citizen.


20

Figure 3.1 The CSR pyramid (modified from Carroll, 1991).

Historically, business organizations were the basic units of society with a main

purpose to produce goods and services needed by consumers, in order to earn

profit (Trebeck, 2008; Carroll, 1991). The other business responsibilities are

established upon the economic responsibility of the organization, since without

it the other elements become unlikely considerations (Carroll, 1991).

Organizations do not only operate according to the profit motive, but is at the

same time expected to comply with the regulations and laws declared by the

state (Carroll, 1991). Hence, organizations are expected to pursue profit within

the context of the law. The legal elements are the next layer of the CSR pyramid,

but are appropriately comprehended as coexisting with the economic

responsibilities.

The third layer of the CSR pyramid is the ethical responsibilities, which embrace

those practices and activities that are expected or forbidden by the members of

society even though they are not codified into laws (Carroll, 1991). Thus, the

ethical responsibilities embody standards, expectations, or norms that reflect a

concern for what the community, shareholders, employees, and consumers

regard as fair. These values and norms reflect a higher standard than that

required by law, and are often vague in definition. Therefore, they are

considered difficult for organizations to deal with.

Economic Responsibilities

Legal Responsibilities

Ethical Responsibilities

Philanthropic

Responsibilities


21

Philanthropic responsibilities are in response to society’s expectations that

organizations should be good corporate citizens (Carroll, 1991). Such

responsibilities include engaging in programs to promote human welfare or

goodwill, and making financial contributions to the community. The

philanthropic element is not expected in an ethical or moral sense, but is desired

by the community. However, organizations that do not engage in philanthropic

responsibilities are not considered unethical, and it is merely a voluntary choice

made by the firm (Azmat & Zutshi, 2012; Carroll, 1991).

The most outspoken proponent to this view of organizations’ responsibilities is

the economist Milton Friedman (Carroll, 1991), who argues “The only

responsibility of businesses is to make as much money as possible while conforming

to the basic rules of society, both those embodied into law and those embodied in

ethical custom” (Friedman, 1970). However, Carroll (1991) argues that

Friedman’s statement embrace three components of the CSR pyramid, being

economically, legally, and ethically responsible. Hence, leaving only the

philanthropic responsibilities for Friedman to reject. Nevertheless, Carroll’s

framework of CSR has been utilized by several theorists, empirical researchers,

and numerous businesses (Azmat & Zutshi, 2012; Barnett, 2012; Galbreath,

2009; Qu, 2009; Matten & Moon, 2008; Schwartz & Carroll, 2003).

3.1.2 CSR in Asia

CSR is an ambiguous term lacking a unanimous meaning (Azmat & Zutshi, 2012).

People interpret the term CSR differently based on their culture, and what makes

the term even more difficult to understand is that it is context-‐bound and

influenced by the environment in which an organization operates (Ardichvili et

al., 2012; Azmat & Zutshi, 2012). Hence, the term CSR is not universally shared

around the world (Ardichvili et al., 2012), but is perceived differently to different

people at different places, at different times (Azmat & Zutshi, 2012).

A positive relationship has been reported between countries with high levels of

economic development, and the importance of CSR to consumers in those

countries (Becker-‐Olsen et al., 2011). However, there is an evident movement


22

towards an increased emphasis on CSR across all markets (Azmat & Zutshi,

2012; Becker-‐Olsen et al., 2011).

One dimension of CSR is commonly implemented in Asia, that being the

philanthropic responsibilities (Azmat & Zutshi, 2012; worldbank.org). This is

mainly due to cultural traditions originating from religions (Azmat & Zutshi,

2012). Furthermore, Asian businesses engaging in philanthropic responsibilities

seldom participate in ethic responsibilities, such as employee training and

development, work place safety, or responsibilities in their supply chain

(worldbank.org). In conclusion, there are several difficulties to implement CSR in

Asian organizations, some of those being the confusion between CSR and

philanthropy, poor definition of CSR, lack of commitment from senior executives,

and lack of support from the local governments.

3.2 Culture

Hofstede (1980, p. 43) defines culture as “the collective mental programming of

the people in an environment”. He further explains that culture is not a

characteristic of individuals, but encompasses a number of people who were

conditioned in the same life experience and education. Hence, culture refers to a

mental programming that people have in common. National cultures share a

national character, which is usually more apparent to foreigners than to the

nationals themselves. Treven et al. (2008) add that people from different

cultures often do things in different ways, and further emphasize that one way to

explain variations in behavior is the idea of culture. Cultural variations do not

only exist in nations, but in regions, organizations, and individuals over time.

However, not everyone in a culture believe or behave in the same ways, and

sometimes differences within single cultures are greater than across cultures.

3.2.1 The Hofstede model

Hofstede’s research is considered one of the most well known and has together

with other researchers found evidence that national cultures vary and that a

range of management practices, such as leadership style, strategic decision-‐

making, and human resource management differ by national culture (De Mooij &


23

Hofstede, 2010; Kachelmeier & Shehata, 1997). Hofstede focused his attention on

work-‐related values in his study of culture (Treven et al., 2008). The Hofstede

model distinguished four different categories of values where national cultures

differ (Hofstede, 1980), and later a fifth category was added (Treven et al., 2008).

These categories are power distance, uncertainty avoidance, individualism-‐

collectivism, masculinity–femininity, and long-‐ and short-‐term orientation.

However, it is important to keep in mind that these dimensions do not describe

individuals, but the common characteristics within a national culture (Hofstede,

1980).

Power distance refers to the differences in power and status that are accepted in

a culture (De Mooij & Hofstede, 2010; Treven et al., 2008; Hofstede, 1980). In

cultures with high power distance everyone has his or her place in a social

hierarchy, and one’s social status must be clear in order for other people to show

proper respect (Hofstede, 1980). In organizations, power distance impacts the

amount of formal hierarchy, the degree of centralization, and the amount of

participation in decision-‐making (Newman & Nollen, 1996). The authors add

that employee participation is less likely in high power distance cultures, and

they view participative management with fear, disrespect, and distrust, since

participation is not consistent with their national culture. Managers who

encourage participations in high power distance cultures are seen as weak and

incompetent.

Uncertainty avoidance indicates the extent to which people feel threatened by

ambiguous and uncertain situations, and try to avoid such situations (Treven et

al., 2008; Hofstede, 1980). In societies with high uncertainty avoidance, there is a

need for formality and rules to structure life. Further, people in high uncertainty

avoidance cultures are less open to change and innovations than people from a

low uncertainty avoidance culture. In organizations, uncertainty avoidance is

manifested by the clarity of plans, procedures, policies, and systems (Newman &

Nollen, 1996).


24

The third category refers to whether the collective or individual action is the

desired way to deal with issues (Treven et al., 2008). In individually oriented

cultures people tend to emphasize their individual needs, concerns, and interests

over those of their organization. Moreover, belief is placed in individual

decisions (Hofstede, 1980), and a low-‐context communication culture with

explicit verbal communication is present (De Mooij & Hofstede, 2010). The

opposite is true for the collectivistic societies where one is expected to interact

with members of one’s group, and it is almost impossible to perceive a person as

an individual (Treven et al., 2008). Furthermore, the collectivistic society is

considered a high-‐context communication culture with a less verbal and indirect

style of communication (De Mooij & Hofstede, 2010), and belief is based on

group decisions (Hofstede, 1980). In organizations, collectivistic management

practices emphasize work unit solidarity and rewards based on the effort of the

team (Newman & Nollen, 1996). To the contrary, individualistic management

practices emphasize individual responsibility for results, and individual-‐level

rewards.

The most important difference in the masculine and feminine cultures is the role

differentiation (De Mooij & Hofstede, 2010). In a masculine society the role

differentiation is large, while in the feminine society it is small. Further, success

and achievement are dominant values in a masculine society (De Mooij &

Hofstede, 2010), money and things are considered important, and “you live in

order to work” (Hofstede, 1980). In a feminine society the dominant values are

quality of life and caring for other people (De Mooij & Hofstede, 2010), the

environment is important, and “you work in order to live” (Hofstede, 1980). In

organizations, feminine management practices emphasize the quality of

interpersonal relations and quality of working life issues (Newman & Nollen,

1996). Masculine management practices are manifested in opportunities for high

earnings, recognition, advancement, and rewards.

Hofstede’s last dimension refers to countries’ time orientation, one side of the

spectra being long-‐term and the other short-‐term (Newman & Nollen, 1996).

Values included in short-‐term orientation are personal steadiness and stability,


25

and respect for traditions (De Mooij & Hofstede, 2010). Long-‐term-‐oriented

cultures are characterized by patience, perseverance, a sense of obedience and

duty toward the larger good, and respect for one’s elders (Newman & Nollen,

1996). Long-‐term values are ordering relationships by status, belief in thrift and

savings, and having a sense of shame (De Mooij & Hofstede, 2010). In

organizations, management practices consistent with long-‐term cultural

orientation include providing long-‐term employment and solving problems for

the long term, rather than making quick fixes.

In conclusion, Hofstede’s cultural dimensions are considered significant and

influential in the understanding of cross-‐cultural differences in business

research (Kirsch et al., 2010; McKenna, 1998; Kachelmeier & Shehata, 1997).

Dimensional Values of Sweden and Taiwan

In Table 3.1 the differences between Sweden and Taiwan are displayed. The

table provides values from 0-‐100 for each dimension, which position countries

on each dimension relative to other countries (geert-‐hofstede.com). Hofstede

conducted this research between 1967 and 1973, covering more than 70

countries, using value scores collected from the employees at IBM. Hofstede

further argues that without comparison countries, a country’s scores are

meaningless. The scores have proven to be stable over decades, and the changes

that have affected cultures have been global, which indicates that when one

culture changes, other cultures change as well and their relative score remain. In

Figure 3.2 below, the differences are shown more clearly.

Table 3.1 The dimensional values of Sweden and Taiwan (inspired by geert-‐hofstede.com).

Power distance

Uncertainty avoidance

Individua-‐lism

Masculinity/Femininity

Long term orientation

Sweden 31 29 71 5 20

Taiwan 58 69 17 45 87


26

Figure 3.2 Comparison of Sweden and Taiwan (inspired by geert-‐hofstede.com).

To sum up the values of the two countries, the first dimension of power distance

shows that in Sweden, hierarchy is for convenience only, superiors are

accessible, equal rights are promoted, and managers coaches and empowers

employees (geert-‐hofstede.com). In Taiwan people accept hierarchies,

centralized organizations are popular, employees expect to be told what to do, to

challenge the leader is unacceptable, and the ideal leader is autocratic. The

dimension of uncertainty avoidance shows that the Swedish society has a low

preference for avoiding uncertainty, which also indicates a society where

schedules are flexible, innovation is not seen as threatening, and people believe

there should be no more rules than necessary. On the contrary, the Taiwanese

society has a relatively high preference for avoiding uncertainty. In such

societies there is an emotional need for rules, innovation may be resisted and

people have an urge to work hard.

The third dimension shows that Sweden is an individualistic society where

people are expected to take care of themselves and their immediate family only

(geert-‐hofstede.com). The relationship between employer and employee is

contract based on mutual advantages. Taiwan is a collectivistic society, which

manifests in long-‐term commitment to the group. The relationship between

employer and employee are perceived in moral terms, and viewed as a family

link. The fourth dimension shows that both countries are feminine societies

where it is important to keep a work life balance. However, there is a gap

between the countries scores, which indicates that Sweden to a larger extent is

31 29

71

5

20

58

69

17

45

87

0 10 20 30 40 50 60 70 80 90 100

PD UA IDV MAS LTO

Sweden

Taiwan


27

feminine oriented compared to Taiwan. The last dimension implies that Sweden

is a short-‐term orientation culture, which is typical for Western societies. On the

contrary, Taiwan is a long-‐term orientation culture, which is typical for the

Eastern societies.

3.2.2 The Chinese business culture

The Chinese business culture is rich and complex (Lin, 2010), and is not only

found in China, but also in countries where large numbers of Chinese migrants

are present, such as Taiwan, Singapore, and Hong Kong (Dong & Lee, 2007; Chen,

2001; Kao, 1993). Kao (1993) emphasizes that the Chinese business culture is

bound by shared traditions and not by geography, and can also be found in

Europe and North America. Dong and Lee (2007) stress that western managers

must understand the uniqueness and complexity of the Chinese business culture,

which has its origins in Confucianism (Lin, 2010). Confucianism refers to the

teachings from Confucius who valued harmony, hierarchy, reciprocity, obedience

to authority, filial piety, and conformity. Western managers often find the

Chinese business culture to be regimented, dictatorial, and slow moving (Sabath,

1999).

3.2.3 Leadership styles in different cultures

Research has shown that leadership styles vary in different cultures (Jogulu,

2010; Kirsch et al., 2010; Yousef, 1998; Hofstede, 1980), and it is mainly due to

the fact that different cultures maintain different norms and beliefs on how

reality should be viewed and practiced (Jogulu, 2010; Shahin & Wright, 2004).

Further, Hofstede (1980) argues that leaders cannot choose their leadership

style, but it depends to a large extent on the cultural conditioning of the

employees. Although, awareness of the cultural differences between parent

company and subsidiaries, and knowing where they differ on the various

dimensions mentioned under heading 3.2.1, will enable managers to predict

what consequences the differences might have for his or her leadership style.

The author further explains that one dilemma for organizations operating

abroad, is whether to adapt to, or try to change the local culture. If deciding to try

to change the local culture, it should be acknowledged that it is not an easy task,

and should not be taken lightly.


28

Leaders in collectivistic cultures prioritize the needs of the group, family, and

overall community when engaging in leadership actions (Jogulu, 2010). Values

and mutual obligations require leaders to give employees’ protection and

direction, in exchange for loyalty and commitment. Additionally, research has

shown that employees tend to avoid direct debate, and they complete tasks

quietly since the managers clearly assign what to do. Leaders in individualistic

cultures show characteristics as mentoring, networking, and other personal

initiatives, and their overall focus is emphasized on better financial results.

Leaders in individualistic countries are more concerned with employees’

progress, and therefore functions more as visionary leaders who provide

intellectual stimulation, articulate goals to employees, and also identify

themselves with the employees.

In high power distance cultures titles, positions, and social status is highly

regarded, since these indicate how other people treat and behave towards you

(Jogulu, 2010). Thus, it is anticipated that leaders demonstrate consensus in

working out rules that are acceptable for everyone, show tolerance, and respect

for age. Furthermore, high power distance cultures prefer an autocratic

leadership approach (Jogulu, 2010), which is defined as a leader who makes the

decisions and closely supervises the employees (Yousef, 1998). Low power

distance cultures believe that responsibilities and roles can change based on

individual effort and achievement (Jogulu, 2010). Moreover, a democratic

leadership approach is preferred (Jogulu, 2010), which is characterized by

employees’ participation in decision-‐making processes, and the absence of close

supervision from the leader (Yousef, 1998). Further, the relationship between

leader and employee is viewed as more equal (Jogulu, 2010). In low power

distance cultures managers encourage disagreement and prefer more open

discussions in order to avoid the risk of being misunderstood. Additionally,

research has shown that in low power distance countries, such as Sweden, some

initiatives are taken by the employees and not the leader.


29

Hofstede (1980) states that adapting managers to higher power distance

contexts do not present too many problems. He further claims that those

managers soon learn that they have to adapt to a more autocratic leadership

approach in order to be effective, and also tend to do so. However, for a manager

to adapt to a context with a lower power distance norm than his or her own is

more problematic, since the very idea of management prerogatives is not

accepted in very low power distance cultures.

3.3 Communication

Communication is an essential tool for managing people (Kupritz & Cowell,

2011), and is the best way to build trust (Thomas et al., 2009) and engage

employees (Groysberg & Slind, 2012). The main purpose of organizational

communication is to provide the necessary information for the employees to

carry out the strategic goals of the organization (Tanova & Nadiri, 2009).

Companies that operate across nations therefore have to be aware of differences

in communication styles due to different cultures. The key reasons for difficulties

encountered in cross-‐cultural communication stem from the fact that actors from

different cultures have different styles of dialogue and different understandings

concerning the interaction process (Korac-‐Kakabadse et al., 2001). Furthermore,

coming from a Western culture to an Eastern culture can be a frustrating

experience, especially if one is unaware of the communicational differences

(Balsmeier & Heck, 1994).

3.3.1 High-‐ and low-‐context communication

Ever since Edward Hall’s statement in 1959 that “culture is communication, and

communication is culture”, there has been a strong tradition in business studies

to distinguish between national cultures based on their way of communicating

(Lauring, 2011). Hall developed a theoretical model called low-‐ and high-‐context

cultures (Korac-‐Kakabadse et al., 2001), which explains differences in

communication styles among regions (Treven et al., 2008). Hall defines context

as the information that surrounds an event, and it is inseparably bound to the

meaning of that event (Treven et al., 2008; Korac-‐Kakabadse et al., 2001). More

explicitly, Hall refers to the situation, background, or environment connected to


30

an event, a situation, or an individual (Würtz, 2005). He explains that context is

the hidden, unconscious part of culture, which is not expressed by verbal

communication (Chan & Cabrera, 2007). Further, Hall observed that diverse

cultures use a different range of information processing systems to provide

context (Korac-‐Kakabadse et al., 2001).

Hall categorizes cultures from high-‐context to low-‐context (Treven et al., 2008).

He explains that on one end of the continuum is a low-‐context system where low

levels of information are used to provide context (Korac-‐Kakabadse et al., 2001).

Hence, a large quantity of explicit information must be present in order to

specify meaning. On the other end of the continuum is a high-‐context system

where a high amount of information is used to provide context. Consequently,

more time is essential to abstract meaning from the given set of information. As

shown in Figure 3.3, Western countries in general, and Scandinavian countries in

particular are considered low-‐context countries, while Asia, Middle East, and

Latin America is regarded as high-‐context countries (Tanova & Nadiri, 2009).

Low-‐ and high-‐context cultures imply the cultural rules around information

exchange, and the degree to which information in a culture is explicit or implicit

(Korac-‐Kakabadse et al., 2001). In low-‐context communication, information is

clear, vested in words, and precise in meaning. On the contrary, in high-‐context

communication information is vested in shared experience and assumptions, and

conveyed through verbal-‐ or non-‐verbal codes. People who belong to high-‐

context cultures tend to talk around the subject, but indicators are in place for

the crucial point to be understood. Additionally, silence can be a strong

statement in high-‐context cultures, and people from low-‐context cultures usually

have difficulties assigning meaning to the non-‐verbal codes (Tanova & Nadiri,

2009).


31

Figure 3.3 Regions on the continuum of low-‐ and high-‐context (inspired by Tanova & Nadiri, 2009).

Hall explains that all cultures can be placed on the low to high information

processing continuum, although no culture exists entirely at one or the other end

of the scale (Tanova & Nadiri, 2009; Korac-‐Kakabadse et al., 2001). He

recognizes cultures that predominantly use and prefer high-‐context modes as

“high-‐context cultures”, and cultures that predominantly use and prefer low-‐

context modes as “low-‐context cultures”. The preference for using the various

modes is highly related to how the people view space and time within these

cultures. People from low-‐context cultures emphasize schedules, promptness,

and segmentation, while people from high-‐context cultures are characterized by

a more holistic view where everything happens at the same time. Chen (2001)

explains that in high-‐context cultures the schedule has to follow the line of

events, while in low-‐context cultures the line of events have to follow the

schedule. Balsmeier and Heck (1994) state that knowing where a particular

country is placed on the low-‐ to high-‐context continuum provides valuable

insight in the appropriate style of communication with people from different

cultures.

The low-‐ and high-‐context model has received criticism such as

overgeneralization, lack of empirical foundation, and bi-‐polarization (Tanova &

Nadiri, 2009). However, the model remains widely accepted and used as an

Low-‐Context Communication Germanic Countries

Scandinavia

North America

Eastern Europe

Mediterranean

Latin America

Middle East

Asia

High-‐Context Communication


32

organization theory in the intercultural field of research (Lauring, 2011; Tanova

& Nadiri, 2009).

3.3.2 Communicating CSR to employees

In order to delegate the firm’s CSR to its employees, it is paramount to clarify

what CSR means to the organization (De Wit et al., 2006). In a cross-‐cultural

environment it is also of importance to translate those CSR activities to local

initiatives and local language. Thomas (2008) argues that employers should

leverage CSR internally and communicate what contributions the organization

does for the community, and also get the employees involved, since this will

enhance their commitment to the firm. To achieve alignment from employees, it

is essential to reach the hearts and minds of the people through communication,

training, and learning (De Wit et al., 2006). When communicating CSR,

consistency of language is essential to avoid confusion. Furthermore, the impact

of communication alone is short-‐lived, and has to be constantly reinforced.

Employees’ response to the organizations CSR are dependent on the

characteristics of the individuals, the organization, the industry, and on the

environmental context (Dhanesh, 2012). The author further argues that in

organizations that go beyond the economic and legal responsibilities and take it

one step further to adhere to high standards of ethics, employees are more likely

to experience a higher sense of emotional attachment to the company. Further,

the increase in emotional attachment to the organization could generate internal

benefits such as increased employee loyalty, motivation, and engagement

(Dhanesh, 2012; Amble, 2007).

3.4 Theoretical Synthesis

In the theoretical synthesis we will define and summarize the theoretical

framework so as to increase the comprehension of the theories and how they are

applied in order to analyze the empirical findings; thus, creating understanding

of how Swedish managers engage employees in CSR, in a different cultural

context.


33

In the CSR pyramid, Carroll identifies four categories of responsibilities that an

organization has towards society. Through the CSR pyramid we will be able to

analyze to what extent the case firms engage in social responsibility in Taiwan.

Moreover, arranging the firms’ CSR activities into categories will result in a

greater understanding concerning how the case firms’ CSR differ between each

other. Additionally, theory on how Asian organizations perceive and pursue

social responsibility will be utilized in order to analyze the potential difficulties

that the Swedish firms face when implementing CSR in their Asian subsidiary.

In his theoretical framework, Hofstede distinguish five different categories of

values where national cultures differ. Through these dimensions, we will be able

to identify and categorize the cultural differences that exist between the Swedish

managers and their Taiwanese employees. Moreover, theory focusing on cultural

differences in leadership will be utilized in order to provide understanding for

how leadership is perceived differently among the Swedish managers and their

Taiwanese staff.

CSR

CSR Culture


34

The communication between our respondents and their employees will be

analyzed using Hall’s theory of high-‐ and low-‐context communication. Hall

distinguishes cultures by how explicit information is being communicated. This

will provide an understanding for the communication difficulties that might exist

in the case companies due to cultural differences. Further, in order to analyze

how the firms communicate CSR to their employees, theory focusing on this

matter will be used.

Figure 3.4 Theoretical synthesis.

The theoretical synthesis will be utilized when analyzing the empirical findings,

with the intention to answer the research questions.

How do Swedish managers in Taiwanese subsidiaries engage

employees in CSR?

CSR Culture Communication

CSR Culture Communication

EMPIRICAL FINDINGS

35

4 EMPIRICAL FINDINGS

This chapter contains the primary data that was collected through interviews with

our two respondents. With the intention of making it easier for the reader, the

empirical findings will be presented by one company at a time using headlines that

are similar to the various parts of the theoretical framework.

4.1 IKEA

Our respondent at the company is Mr. Martin Lindström, the CEO of IKEA in

Taiwan, Hong Kong and Indonesia. Lindström has held this position for five years

and started his career at IKEA 22 years ago. During his career he has gained vast

experience from working abroad in countries such as Poland, Austria, Hong Kong

etc. The company’s Taiwan office is located in the western parts of Taipei, in the

same building as one of their department stores. The office landscape can be

described as open and employees working there were either dressed in the IKEA

uniform or dressed casually. Lindström’s office was located further into the

office landscape, with frosted glass walls and an open door, with the following

quote written on his wall: “No method is more effective than a good example”.

IKEA Taiwan and the other divisions under Lindström´s supervision is not

owned by the IKEA group but instead franchised by the retail conglomerate

Dairy Farm based in Hong Kong. However, Lindström emphasizes that the

ownership does not affect the customers who perceive the stores as any other

IKEA outlet in the world.

“Traditionally, those markets that has been too far away, too small, too different

has been owned by international franchisers /…/however, approximately ninety

percent of the revenue in IKEA worldwide is derived from the IKEA group.” -‐ Lindström

EMPIRICAL FINDINGS

36

The first IKEA store in Taiwan was established in 1994 and today the division

consists of four department stores across the country with a staff of 1100 people.

The combined annual revenue of these four outlets exceeds 160 million USD and

IKEA currently holds the largest market share in Taiwan within their industry.

According to Lindström, Taiwan is of great significance for IKEA and Ingvar

Kamprad since it was the first country in Asia Kamprad came to in the end of the

1970s in order to locate suppliers.

IKEA’s CSR policy

Social responsibility is communicated on IKEA’s website under the heading

People and Environment, which is the company’s focus in this matter (ikea.se).

The firm explains that their concern stretches from reducing child poverty to

producing renewable energy, and that both employees and suppliers are

engaged. The result of this can, according to the company, be seen in innovative

products and solutions, and the way IKEA conducts business. Information

regarding social responsibility on the company’s website is extensive and

practices such as caring for employees, making local as well as global

contributions, and strengthen supplier relations are discussed. Moreover,

organizations such as Unicef, Save the children, and WWF are stated as IKEA’s

foremost cooperation partners.

4.1.1 CSR in Taiwan

Operating IKEA Taiwan as a franchise does not result in any compulsion to

follow the brand’s social responsibility practices. However, Lindström means

that this factor comes as a natural part of the business since it is not possible to

only apply a few parts of the IKEA concept.

“It is not possible to pick out a few parts of the IKEA concept. It is all or nothing,

and that is also the consequence of having an IKEA franchise.” -‐ Lindström

One of the greatest challenges in Taiwan has been the accessibility of land, which

some retail firms solved by acting on the verge of what was legal. However,

EMPIRICAL FINDINGS

37

Lindström emphasizes that complying with the law has always been of great

importance for both IKEA and Dairy Farm, and therefore the growth of the

division was delayed. After changes in the Taiwanese law were introduced, IKEA

could finally start to expand in 2004.

Lindström explains that social responsibility, in his perceptions, is a wide and

difficult concept to define. In Taiwan there are many companies who focus a lot

of effort on communicating their CSR to the media, but according to Lindström

IKEA Taiwan is more focused on establishing a platform in this matter and to

gain an understanding of what the concept means to them. Further, he believes

that future CSR activities will result in mainly internal value and increased

employee commitment. Additionally, Lindström does not believe that these

practices will be used as a marketing tool.

“For me it is important that it strengthens the brand positioning of IKEA, that we

are a responsible company, and that it feels right and genuine.” -‐ Lindström

One of the CSR activities utilized in Taiwan is the global practice among the

national divisions of IKEA, to give away one Euro for each soft-‐toy they sell

during the Christmas season. The money collected in this campaign is then

distributed to different projects in India and Vietnam. Lindström further explains

that IKEA Taiwan has established a relationship with the organization Save the

Children, in order to generate a deeper understanding and gain greater

knowledge in the area of social responsibility. Moreover, material relating to

social responsibility distributed by IKEA’s headquarter are often used for the

purpose of educating employees.

Another project that IKEA supports together with their customers is a school

meal-‐program in the eastern parts of Taiwan. Recently, a group of 20 to 30

employees travelled to one of the schools supported by this project to help out.

According to Lindström, this activity was well received by the IKEA employees

and for many of them this fieldtrip was an eye-‐opener that this type of situation

is present in Taiwan.

EMPIRICAL FINDINGS

38

“There are exceptionally many children who do not get any food in school /…/ and

many parents cannot afford to pay for school meals. We were surprised when we

heard of this.” -‐ Lindström

Lindström also explains that the Taiwanese government has become more

demanding regarding sustainability, something IKEA is very proactive in. The

new IKEA store that is going to open in the city of Taichung, is focusing especially

on this area in terms of solar panels on the roof, collection of rainwater for usage

inside the building, re-‐planting trees etc. Another perspective that Lindström

emphasizes when discussing the new store and their operations in general is to

have a long-‐term orientation, something he believes is of great significance when

maintaining IKEA’s brand-‐position in Taiwan.

Through the American-‐ and European Chamber of Commerce, IKEA is active

together with other retailers in forming proposals for new legislations in Taiwan.

Lindström explains that this makes it possible for IKEA to be a part of reforming

the country and helping Taiwan to reach an international standard.

“The situation for Taiwan is special /…/ nobody recognizes Taiwan and that results

in Taiwan not having any other countries to talk to, and because of that

international companies become natural conversation partners’ of the

government.” – Lindström

4.1.2 Culture and leadership

Lindström argues that company culture in Taiwan has traditionally been, and

still is, driven by the leader of the company. The Taiwanese employees expect

the leader to know everything and it is common that they delegate upwards.

According to Lindström the reliance on the manager’s directives and what he

says are often used in order to avoid taking own decisions. Another example of

what Lindström found noticeable in Taiwan, is that as a manager you need to be

careful with how late you stay in the office since many of the employees are

reluctant to leave before the manager does.

EMPIRICAL FINDINGS

39

Before Lindström took over the position as CEO of IKEA Taiwan, the organization

had been experiencing turbulence due to the fact that there had been four

different managers in less than seven years. He explains that establishing a kind

of continuousness in the relationship is necessary in order to create trust, which

is extremely important, but time consuming, in Taiwan.

Lindström finds it paramount to, as he describes it, tear down the hierarchical

barriers between him as a manager and his employees, something he perceives

as deeply rooted in the Taiwanese mindset. He arranges casual meetings,

breakfasts and lunches in order to get to know his employees in smaller groups.

Further, by establishing clear specifications for what is expected of the

employees, but also what they should expect of him as a manager, helps to create

a closer relationship according to Lindström.

Another difficulty Lindström experiences is that Taiwanese employees often

openly agree even though they do not agree, and getting to know their real

opinion is very problematic.

“You have to find the right techniques to get input. To enter a meeting and say that

we should brainstorm is a guarantee for silence. /…/ then I just keep being silent

and sometimes it works.” – Lindström

At the moment Lindström has increased the amount of people reporting to him

which puts him in a situation were he is constantly occupied and unavailable to

others. Therefore many employees do not have the possibility to get his input

and are forced to make decisions on their own. Lindström explains that this

situation clearly shows which of his employees who are proactive and have

potential.

“They know that I am busy and they know they have to take the decision by

themselves /…/ it is actually quite effective.” -‐ Lindström

According to Lindström different management has been necessary during the

different phases of the company’s expansion in Taiwan. That kind of

EMPIRICAL FINDINGS

40

organizational change is something he perceives to be very difficult for

Taiwanese employees to handle. Conflict avoidance is another problematic area

where Lindström has actively tried to promote the fact that conflicts can be

constructive, by openly arguing with one of his store managers who is of German

origin.

4.1.3 Employee communication

The communication with employees is done in English, since Lindström believes

it is imperative due to the fact that the corporate language of the IKEA

organization is English. The company offers language classes in English and, on

certain occasions, in Swedish.

Lindström finds it paramount to make sure that his employees are not afraid of

challenging decisions and suggestions, including those connected to social

responsibility. During a discussion regarding the soft-‐toy project employees

were questioning why the money were going to India and Vietnam, instead of

supporting projects in Taiwan. Lindström explains that he was surprised by the

lack of knowledge regarding the situation in Vietnam and India, and finds it very

valuable that the employees now have a better understanding of the conditions

in those countries.

According to Lindström there has been a very positive response from the

employees during and after CSR activities, and he perceives it as easy to get them

involved, especially when they see a clear link between their efforts and the

results. As an example, supporting the school meal program was an employee

suggestion. Another employee proposal was to make it possible for some of them

to travel to Vietnam and visit the projects that are supported by IKEA. These

kinds of employee suggestions emerge in both meetings and casual

conversations.

“To create the format where they dare to take decisions and come up with ideas,

that is the biggest challenge.” -‐ Lindström

EMPIRICAL FINDINGS

41

Lindström emphasizes the importance of communicating his and IKEA’s vision,

that making mistakes is part of the learning process. He hopes that this will

eventually make the employees more willing to take risks, and to be more

proactive in questions regarding every area of the firms business.

“We have handed out booklets to everybody /…/ then you need to study it over and

over, and repeat the same thing until you are truly tired of it /…/ and then say the

same things next year.” -‐ Lindström

IKEA Taiwan has an annual review of employee perception, including answering

the question if they believe IKEA is a responsible company. The answers are then

used to build strategies for future advancements. Lindström emphasizes the

importance of clarity in the strategies that the firm uses and he argues that they

need to function as guidelines to what the employees need to prioritize and focus

on, one of the core values being social responsibility. In order to make this more

explicit, Lindström has created a booklet that is distributed among the staff

where the strategies and responsibilities are displayed. He encourages the

employees to study and gain comprehension for what is explained in the booklet.

In addition, to be able to make the impact long lasting, Lindström finds it

imperative to be consistent in what is being communicated in order to avoid

confusion.

4.2 Scania

The respondent at Scania is Mr. Andersson who is the manager of the company’s

production unit in Taiwan and South Korea. Andersson has been in this position

for the last three years and has been employed in the organization for 23 years.

Andersson has previous experience from working in similar positions in several

Swedish production units, and has a one-‐year experience of working abroad in

Holland some ten years ago.

The production unit, located outside of Taipei, opened in the end of 2008 and

now employs some 40 people, including administrative staff. Scania’s office is

open and spacious, with Andersson’s room located in the corner with frosted

EMPIRICAL FINDINGS

42

windows and the door left open. The production unit in Taiwan assembles bus-‐

and truck chassis for the local market. Scania’s inter-‐city buses are doing

especially well, and today the company controls a significant part of the

Taiwanese market share in this product category. Before 2008, the same job was

outsourced to an external Taiwanese firm, but due to company decision the

manufacturing is now fully owned by Scania.

“I believe quality has improved quite significantly since Scania took over.” – Andersson

Scania’s CSR policy

On Scania’s website social responsibility is communicated under the heading

Scania in society, where the importance of minimizing the environmental impact

from their products is stated. A sustainable manufacturing of vehicles that are

low in fuel consumption, and low in emissions is paramount for Scania’s business

concept. The company describes themselves as having an important role in

society, since they create work opportunities and helps their customers to

become more efficient. Moreover, the combination of support from OECDs

(Organization for Economic Co-‐operation and Development) guidelines for

MNCs, Scania’s leadership principles, and the firm’s core values constitute the

foundation for all activities within the organization.

4.2.1 CSR in Taiwan

Andersson finds it difficult to define the concept of CSR, but he believes that the

three core values of the Scania Production System function as a guideline.

“One is the customer first, another is respect for the individual and the third is

elimination of waste /…/ and when it comes to respecting the individual, factors

such as good work environment and safety are of significance.” -‐ Andersson

Scania utilizes a production system that is influenced by the method used by

Toyota. Andersson explains the core values as per above with safety and

environment as the top priorities. He perceives Taiwan as having sufficient laws

regarding protection of the environment but is not sure on how they are obeyed.

EMPIRICAL FINDINGS

43

Andersson further explains that it took some time before the employees at the

company realized that they needed to separate the garbage. He argues that this

type of waste management is not only beneficial for the environment but also

results in lower costs for Scania.

An important part of the firm’s social responsibility practices, Andersson

believes, needs to be directed at caring for the employees and make them enjoy

working for Scania. As a result of low demand Scania introduced flextime, which

is utilized by not having any production on Fridays. Andersson explains that this

makes it possible for the company to handle a downturn much more smoothly.

Moreover, when Scania has experienced decrease in production demand

Andersson has used some time left over to let his employees gain experience in

the company’s service workshops, visit the port where Scania’s consignments

are delivered etc.

A long-‐term view is significant for Scania, Andersson explains, and therefore he

does not mind spending “extra” money when it comes to quality. Something he

believes is less common in local firms.

The trade unions in Taiwan are weak but Andersson feels that within Scania,

responsibility is taken as a normal situation for items such as safety,

environmental issues, health controls etc.

Future advancement in social responsibility activities in Scania Taiwan is,

according to Andersson, going to originate from the headquarter. There is a

strong emphasizes on aligning practices among all of Scania’s subsidiaries,

including activities that is related to social responsibility.

4.2.2 Culture and leadership

Andersson explains that he has not changed his leadership style to any greater

extent compared to back home in Sweden. Andersson describes his employees as

very loyal, and if the company had to reduce the staff, the employees left would

still try hard to get the additional job done.

EMPIRICAL FINDINGS

44

“They have a deep respect for the manager /…/ maybe too much respect and often

they do not to suggest certain things.” -‐ Andersson

Andersson explains that the employees were unfamiliar with the Swedish

leadership style in the beginning, but after a couple of years it seems like they

now appreciate it. Making it possible for everybody to participate and being able

to influence their job is of great importance for Scania but it seems like the

Taiwanese employees are not used to this.

“The culture here and back home is very different and that is something you need

to be aware of. My perception is that the Swedish style is very appreciated.” -‐ Andersson

Another cultural difference Andersson faced in Taiwan is peoples’ perception of

quality. He describes his experience with Taiwanese craftsmen who have been to

the factory and how their repair jobs were of very low quality, resulting in them

coming back the next year to fix the problem once again.

“Long term solutions is something I believe is regarded slightly different in Taiwan

from Sweden. Here it seems like low price and short-‐term are given more priority.” -‐ Andersson

According to Andersson, Taiwanese employees in general are less proactive and

often need to be told what to do. However, after making the work teams become

responsible for their own working area in terms of cleaning, maintenance etc.,

and linking this to a bonus system Andersson has experienced an improvement.

4.2.3 Employee communication

Communication with the employees is often done through the Taiwanese

supervisor who reports directly to Andersson. It is very uncommon that the staff

communicates with him directly, and the supervisor acts as a link between him

and the rest of the assembly workers since he speaks both Chinese and English.

However, according to Andersson, even the supervisor has difficulties

EMPIRICAL FINDINGS

45

disagreeing with him, and only occasionally he speaks up and correct Andersson

if he believes him to be wrong.

“They find it difficult to speak up and say that they have done mistakes. /…/ I try to

tell them that it is ok to make mistakes as long as you tell everybody openly and

learn from them.” – Andersson

Clarity is something that Andersson finds crucial in his communication with his

Taiwanese employees. There are several whiteboards around the office and the

assembly area where everything from production plans, quality controls,

damaged material, and the principles of Scania are being communicated in a

clear and simple way.

At Scania Taiwan, meetings are held with the entire workforce at least once a

month where Andersson talks to the employees and answers their questions.

According to Andersson the employees are very reluctant regarding openly

showing their disapproval, but he often becomes aware of their opinion through

the supervisor. In order to get a better understanding of the employees’

perception Andersson used an anonymous survey where they could share their

opinion about him, other supervisors and about several other issues in general.

Overall the feedback was positive and the staff seems to like the Swedish

leadership style Andersson explains. Moreover, Andersson finds it important to

have an open communication with his employees to make them committed.

EMPIRICAL FINDINGS

46

ANALYSIS

47

5 ANALYSIS

In this chapter we will combine the theoretical framework with the empirical

findings. Initially, we will discuss and analyze to what extent IKEA and Scania take

social responsibility in Taiwan, how the managers perceive and manage cultural

differences, and end the analysis with how they communicate CSR to their

employees.

5.1 CSR in Taiwan

Carroll (1979) states that CSR is a multi-‐dimensional construction consisting of

economic, legal, ethical, and philanthropic responsibilities, which the author

illustrates in a pyramid-‐shaped figure (Figure 3.1). The economic responsibilities

form the base upon which the other responsibilities rest, since without it the

other elements are unlikely considerations (Carroll, 1991). Firms do not only

operate according to the profit motive, but are expected to comply with laws and

regulations declared by the state as well. Hence, the legal responsibilities are

appropriately comprehended as coexisting with the economic responsibilities.

The empirical findings indicate that both firms have increased their revenues

from last year and IKEA is currently expanding in the country. Moreover, both

IKEA and Scania control a substantial market share within their business area in

Taiwan, and due to the reasons stated earlier, we consider the companies to

fulfill the economic responsibilities. Furthermore, the interviews reveal that the

companies find it imperative to follow the laws and regulations in Taiwan. IKEA

had to postpone their expansion in the country since the regulations regarding

land accessibility at first were very complex and strict. According to Lindström,

other retail firms who pursued expansion during that time had to act in ways

that sometimes could be considered as illegal, and therefore IKEA decided to

wait until new legislations were introduced. The environment is of high priority

ANALYSIS

48

for Scania, and Andersson perceives the Taiwanese regulations within this area

as sufficient, but he is unsure of how well other companies comply with them.

The third layer of the pyramid consists of the ethical responsibilities, which are

practices embraced or forbidden by the society, even though they are not

codified into laws (Carroll, 1991). According to Lindström, the Taiwanese

government has lately exerted an increasing pressure on firms to be more

environmentally sustainable, something IKEA has taken into consideration in

their new store in Taichung, which will have solar panels and rainwater

collection for usage inside the building. Moreover, the firm is active in helping

the government developing new regulations, which in the case of Taiwan is

problematic due to their limited relations with other countries. One of Scania’s

core values is respect for the individual and the empirical findings show that the

company has shouldered some of the responsibilities that the trade unions

normally are in charge of. Moreover, caring for employees is of importance in

Scania who focuses especially on safety and modifying the way they operate in

order to avoid laying off people when production is decreasing. These kinds of

CSR practices that have strong connections to the organizations core operations

and values are considered to be the most effective (Borglund et al., 2009;

Grafström et al., 2008).

The philanthropic responsibilities constitute the fourth layer of the pyramid

(Carroll, 1991). These responsibilities are not expected, but desired by the

community; hence, philanthropy is merely a voluntary choice made by the firm

(Azmat & Zutshi, 2012; Carroll, 1991). Based on the interviews, only IKEA

pursues philanthropic practices through the support of a school-‐meal program in

the east of Taiwan and monetary donations to organizations in India and

Vietnam. This difference between the two companies could be explained by the

nature of IKEA’s business model, which is business to consumer oriented.

Several authors argue that CSR activities are to a larger extent applied by

companies with a direct connection to the consumer market (Pollach et al., 2012;

Borglund et al., 2009; Grafström et al., 2008; Trebeck, 2008).

ANALYSIS

49

Moreover, the findings show a clear connection between what both respondents

describes as their CSR activities in Taiwan with those global values and activities

that their company communicates on their website. Further, findings also show

that IKEA has a greater CSR-‐engagement than Scania, and a more engaged

Manager regarding CSR.

The empirical findings show that both respondents find it difficult to define the

concept of social responsibility, which confirm the statement made by Azmat and

Zutshi (2012) that CSR is an ambiguous term. Due to cultural traditions

originating from religions, philanthropic practices are often applied in Asian

organizations (Azmat & Zutshi, 2012). However, ethical responsibilities, such as

work place safety or employee training and development, are seldom utilized

among firms in Asia, which is apparent in both of our case companies. Moreover,

Western value concepts that rest on deeply rooted cultural characteristics and

concepts of duty do not necessarily work in other cultures (Von Weltzien Hoivik,

2007) and therefore, to what extent the two case companies take social

responsibility might be perceived differently from the perspective of their Asian

employees.

5.1.1 Summary

§ In our opinion, both IKEA and Scania comply with the economical and

legal aspects of Carroll’s definition of CSR. Moreover, different practices

that can be considered as a commitment to ethical responsibilities are

apparent in both of the case firms. However, only IKEA pursues

philanthropy, which can be explained by their direct relation to the

consumer market. Moreover, what is communicated on the companies’

websites as the firms’ values and CSR activities are confirmed in the

Taiwanese subsidiaries.

§ The perception of social responsibility is different in Asia where

organizations prioritize philanthropy before ethical responsibilities.

Therefore, to what extent the case firms are socially responsible might be

considered differently from a Taiwanese perspective.

ANALYSIS

50

5.2 Culture and Leadership

Culture is defined by Hofstede (1980) as the collective mental programming of

the people in an environment. The author further argues that culture should not

be seen as the characteristics of individuals but something that embodies a

number of people who were conditioned the same way, hence the presence of

cultural differences among nations. Hofstede’s model distinguishes five different

categories of values in which national cultures differ (Treven et al., 2008), and

these are power distance, uncertainty avoidance, individualism-‐collectivism,

masculinity-‐femininity, and long-‐ and short-‐term orientation (Hofstede, 1980).

Power distance concerns the differences in power and status that are accepted in

a culture (De Mooij & Hofstede, 2010; Treven et al., 2008; Hofstede, 1980). As

displayed in Figure 3.2, Taiwan can be considered as a high power distance

culture, especially in relation to Sweden. In a high power distance culture,

employee participation is relatively non-‐existent and participative managers are

viewed with fear, disrespect and distrust and can also be seen as weak (Newman

& Nollen, 1996). The empirical findings show that Lindström is well aware of the

greater distance in power that is present in the Taiwanese culture, and he

actively tries to change that within IKEA by creating a more casual environment

and having meetings where employee participation is encouraged and

sometimes almost forced. The same context is evident at Scania, where employee

participation is considered a high priority even though the Taiwanese staff

seems unaccustomed to it. In the interviews conducted there were no evidence

that our respondents perceive their employees to disrespect or distrust them

because of their participative management style. However, research has shown

that challenging the leader is unacceptable in high power distance cultures, such

as Taiwan (geert-‐hofstede.com), and therefore this kind of opinions will most

likely be withheld.

The second category in Hofstede’s model is uncertainty avoidance and indicates

to which degree people are threatened by uncertain and ambiguous situations,

and therefore tries to avoid such circumstances (Treven et al., 2008; Hofstede,

ANALYSIS

51

1980). As stated in Figure 3.2, Hofstede’s research shows that Taiwan is

perceived as a high uncertainty avoidance culture, whereas Sweden is

considered to be on the other end of the continuum. Employees at IKEA are often

reluctant to take decisions on their own, and instead delegate the decision-‐

making to Lindström. This is also apparent at Scania, where Andersson perceives

the employees as generally less proactive compared to Swedish staff. However,

after making work teams responsible for their own working area in terms of

maintenance and cleaning, and further linking it to a bonus system, Andersson

has experienced change. Moreover, both of the respondents actively try to

convey the message that making mistakes are part of the learning process in

order to encourage the staff to be more proactive. Newman and Nollen (1996)

explain that in order to overcome the difficulties related to uncertainty

avoidance, clarity is of essence regarding plans, procedures and systems. Scania’s

practice of using numerous whiteboards to clarify plans and procedures are

most likely a significant contribution to the change that Andersson has

experienced. Treven et al. (2008) and Hofstede (1980) argue that people from

high avoidance cultures are less open to change, which has been evident at IKEA

during their expansion where organizational change was necessary.

The third category in Hofstede’s model focus on whether a country is considered

as individualistic or collectivistic (Treven et al., 2008). Figure 3.2 shows that

Taiwan is a collectivistic society, while Sweden is an individualistic society. In

organizations, collectivistic management practices emphasize work unit

solidarity and rewards based on team-‐effort (Newman & Nollen, 1996). On the

contrary, individualistic management practices focus on individual responsibility

for results and individual-‐level rewards. The empirical findings show that linking

team-‐effort and rewards is present at Scania, and that it is well accepted.

The fourth category concentrates on variations in role differentiation in what De

Mooij and Hofstede (2010) define as masculine and feminine cultures. Both

Taiwan and Sweden are considered feminine societies, however, as displayed in

Figure 3.2, the difference in to what extent they are feminine is substantial, and

Taiwan is on the verge of being masculine oriented. In masculine societies you

ANALYSIS

52

live in order to work, while in the feminine society, you work in order to live. As

can be seen in IKEA, Lindström experiences that many of his employees are

reluctant to leave the office before he does, demonstrating commitment to the

firm. Also Andersson at Scania perceives his employees as very loyal and hard

working. Our findings indicate that Taiwanese employees behavior are more in

accordance with that of a masculine society. In feminine management practices

the quality of interpersonal relations are emphasized (Newman & Nollen, 1996),

which is evident in both cases since both managers actively tries to establish

close relations with their employees.

The last category in Hofstede’s model focus on countries’ time orientation, one

side of the continuum being long-‐term and the other short-‐term (Newman &

Nollen, 1996). The gap between Sweden and Taiwan concerning this category is

significant (Figure 3.2), demonstrating that Sweden is rather short-‐term oriented

and Taiwan is highly long-‐term oriented. Characteristics in long-‐term oriented

cultures are among others, patience and perseverance (Newman & Nollen,

1996). Lindström emphasizes the importance of creating trust between himself

and his employees, something he perceives as quite time consuming. De Mooij

and Hofstede (2010) argue that management practices consistent with long-‐term

oriented cultures include solving problems for the long-‐term, rather than making

quick fixes. The empirical findings in our study contradict this statement.

According to Andersson, low price and short-‐term are given more priority in

Taiwan, something he is actively trying to make sure is not present in Scania.

Research has shown that leadership styles vary in different cultures (Jogulu,

2010; Kirsch et al., 2010; Yousef, 1998; Hofstede, 1980). In collectivistic cultures,

which Taiwan is considered to be (Figure 3.2), leaders are required to give

employees’ clear directions in exchange for loyalty and commitment, and direct

debate from employees are unusual (Jogulu, 2010). The empirical findings show

that this is true in both case companies. Lindström perceives Taiwanese

employees to be highly conflict aversive, and Andersson sees it as necessary to

give his employees clear directions in what they have to do.

ANALYSIS

53

In high power distance cultures, such as Taiwan (Figure 3.2), autocratic leaders

are preferred (Jogulu, 2010) with the decision-‐making resting upon the leader

(Yousef, 1998). A democratic leadership style is preferred in low power distance

cultures (Jogulu, 2010) such as Sweden (Figure 3.2), where the decision-‐making

is characterized by employee participation (Yousef, 1998). Employees trying to

avoid participating in decision-‐making are present in both of the case companies.

In the case of IKEA, Lindström actively tries to get his employees to challenge

decisions and suggestions, which according to Jogulu (2010) is in accordance

with managers from low power distant cultures. Moreover, both Lindström and

Andersson experience that their staff is more used to autocratic leadership.

A dilemma that is present among companies who operate abroad is whether to

adapt or try to change the local culture (Hofstede, 1980). For managers to adapt

to a higher power distance context do not present too many problems, and

managers soon learn that they need to adjust to a more autocratic leadership

style in order to be more effective. The empirical findings show that Lindström

actively tries to change the local culture in his attempt to tear down the

hierarchical barriers, forcing his employees to make decisions on their own, and

promote the fact that conflicts can be positive and constructive. Andersson

explained that he has not changed his leadership style to any greater extent, but

he believes it has been necessary to apply a higher level of governing. However,

Newman and Nollen (1996) argue that management practices that reinforce

national culture are more likely to yield predictable behavior and high

performance due to coherency with behavioral expectations. Chinese business

culture is not only found in China but also in countries where large numbers of

migrants are present, such as in Taiwan (Dong & Lee, 2007; Chen, 2001; Kao,

1993). Knowledge regarding the teachings of Confucianism, from which Chinese

business culture originates (Lin, 2010), result in a better understanding of its

uniqueness and complexity (Dong & Lee, 2007). The empirical findings show no

signs that the aspect of Confucianism is something that the respondents reflect

upon.

ANALYSIS

54

5.2.1 Summary

§ The cultural differences that are described in Hofstede’s model

correspond to a great extent with how the respondents perceive the

variations between them and their Taiwanese employees.

§ Both Lindström and Andersson actively try to change their employees’

behavior, rather than adapting to their culture, something that could

result in inefficiency in the organization.

5.3 Employee Communication

The main purpose of communication within organizations is to provide

employees with the necessary information in order for them to carry out the

strategic goals of the organization (Tanova & Nadiri, 2009) and it is considered

as an essential tool for managing people (Kupritz & Cowell, 2011). Companies

that operate across nations therefore have to be aware of the variation in

communication styles, which Hall’s theory of high-‐ and low-‐context

communication aims to clarify (Korac-‐Kakabadse et al., 2001). Hall defines

context as the hidden and non-‐verbal information that surrounds a specific event

(Chan & Cabrera, 2007). In his model, Hall categorizes cultures on a scale from

high-‐context to low-‐context (Treven et al., 2008), where in low-‐context cultures

information is clear, vested in words, and precise in meaning (Korac-‐Kakabadse

et al., 2001). In high-‐context cultures, information is vested in shared experience

and assumptions, and conveyed through verbal or non-‐verbal codes. As

displayed in Figure 3.3, Scandinavians are considered to apply a low-‐context

communication style, where as people from Asia are using the most extreme

level of high-‐context communication style.

The empirical findings show that both Lindström and Andersson emphasize the

importance of clarity when communicating with their Taiwanese employees,

something that is highly related to low-‐context communication (Korac-‐

Kakabadse et al., 2001). To enhance the clarity, both companies also

communicate the most significant messages in writing, either through

whiteboards or in booklets. Moreover, both the respondents explain that they

ANALYSIS

55

are often met by silence when communicating with their staff. According to

Tanova and Nadiri (2009) silence can be a strong statement in high-‐context

cultures, and people from low-‐context cultures usually have difficulties assigning

meaning to non-‐verbal codes. Taking this into consideration one could assume

that our respondents do not comprehend some of the communication from their

Taiwanese employees, and their workers’ silence might instead be perceived as

disinterest.

It is the employees who carry most of the burden when it comes to implementing

the ethical behavior of the company (Collier & Esteban, 2007) and therefore

their investment and understanding of the organization’s CSR is paramount

(Walton & Rawlins, 2011; Munslow, 2010; Simmons, 2008). In order to delegate

the company’s CSR to its employees, it is imperative to clarify what CSR means to

the organization (De Wit el al., 2006). The empirical findings show that both

respondents find it difficult to define CSR, but they work actively to communicate

their perception of the firm’s social responsibilities. According to De Wit et al.

(2006), companies that operate in a cross-‐cultural environment need to translate

CSR activities into local initiatives. This is especially evident at IKEA, where

encouraged employees have provided suggestions for how the company can be

socially responsible in Taiwan. The situation at Scania more resembles a one-‐

way communication from the Swedish manager regarding CSR. However, the

employee suggestions at IKEA have been entirely focused on philanthropic

responsibilities, confirming the statement made by Azmat and Zutshi (2012) that

the understanding of social responsibility in Asia is more directed towards

philanthropy than ethical responsibilities.

According to Thomas (2008), communicating how the firm contributes to society

and getting the employees involved will enhance their commitment to the firm. If

the firm goes beyond the economical and legal responsibilities, and adhere to

high standards of ethics, which both the case companies do, employees are more

likely to establish a higher sense of emotional attachment to the company

(Dhanesh, 2012). De Wit et al. (2006) argues that the impact of communication

alone is short-‐lived and therefore has to be constantly reinforced. The empirical

ANALYSIS

56

findings show that both IKEA and Scania have at least monthly meetings where,

among others, issues concerning CSR are discussed.

5.3.1 Summary

§ Communication difficulties due to cultural differences are evident in both

of the case companies.

§ Both respondents find it problematic to define CSR, but work actively in

communicating their perception of the firm’s social responsibilities on a

continuing basis.

CONCLUSIONS

57

6 CONCLUSIONS

The final chapter will present the findings of this thesis. To begin with, the three

sub questions will be concluded, in order to reach an answer to our primary

research question. The chapter will end with the limitations of the thesis, followed

by the thesis applicability, and recommendations for further research.

6.1 Answers to the Research Questions

The purpose of this thesis is to contribute with knowledge regarding the

relatively unexplored area of internal CSR communication in cross-‐cultural

contexts. We believe that the findings in this study will help organizations to

increase engagement in CSR among employees in subsidiaries where the culture

is different from that of the parent company. In this chapter, we will

incrementally discuss and conclude the three sub questions: To what extent do

Swedish firms take social responsibility in Taiwan?, How do Swedish managers

perceive and manage cultural differences in their Taiwanese subsidiaries?, and

How do Swedish leaders manage the communication regarding CSR in relation to

their Taiwanese employees?. This will result in an answer to our primary research

question “How do Swedish managers in Taiwanese subsidiaries engage employees

in CSR?”

The first sub question focuses on to what extent the Swedish firms take social

responsibility in Taiwan. Our analysis shows that both case firms take economic,

legal and ethical responsibilities. The ethical responsibilities are focused towards

the company’s employees, the development of new regulations in Taiwan, and

being environmentally sustainable. Only IKEA commits to philanthropic

responsibilities, which can be explained by the fact that the company is business

to consumer oriented. Further, our analysis suggests that due to cultural

CONCLUSIONS

58

differences the Taiwanese employees might perceive the extent of the case

companies’ CSR differently.

The second sub question concerns how Swedish managers perceive and

manage cultural differences in their Taiwanese subsidiaries. Our findings

demonstrate that several cultural differences are visible in both case firms, and

mainly concern issues such as lack of employee participation and unwillingness

to take risks. Further, our analysis determines that the respondents manage

these cultural differences by actively trying to change the behavior of the

employees and adapt them to a democratic leadership style, which our analysis

suggests could lead to inefficiency within the organization.

The third sub question focuses on how Swedish leaders manage the

communication regarding CSR in relation to their Taiwanese employees. The

analysis shows that communication difficulties due to cultural differences are

evident in both of the case firms. Moreover, the respondents actively and

continuously communicate their perception of the firm’s social responsibilities

to their Taiwanese employees. Our findings show that IKEA demonstrates a

more interactive employee communication regarding CSR compared to what is

evident in Scania.

Last, we will answer our primary research question:

How do Swedish managers in Taiwanese subsidiaries engage employees in CSR?

Through the analysis of the thesis we conclude that Swedish firms in Taiwan are

committed to CSR, but to different extents, which can be explained by the nature

of the company’s business operations. Moreover, the respondents actively try to

engage their employees in CSR by continuously communicating their perception

of the firm’s social responsibilities.

Our analysis suggests that participation from employees is crucial in order to

establish effective CSR. However, due to cultural conditioning, participation

CONCLUSIONS

59

among the employees in the case firms is considerably low, resulting in a

negative impact on the companies’ CSR commitment. Managerial actions are

taken with the intention to change the behavior of the Taiwanese employees,

which we have found is especially effective when related to the firm’s

philanthropic activities. We therefore conclude, that combining CSR that is

embraced by Asian culture with managerial efforts to increase employee

participation, result in effective CSR practices in Taiwan.

Through the above stated conclusions we find that we have reached the premise

of the thesis. This thesis provides a case study of how Swedish managers in

Taiwanese subsidiaries engage their employees in CSR, based on personal

interviews conducted with Swedish managers in Taiwan. To our knowledge,

internal CSR communication in cross-‐cultural contexts is a relatively unexplored

area of research, and our intention has been to make a contribution to the

existing research gap.

6.2 Limitations of the Research

Firstly, the case study contains a small sample size. If given the chance to conduct

more interviews, we would have had the possibility to generalize to a larger

extent on how Swedish managers engage Taiwanese employees in CSR.

Nevertheless, a pattern was revealed in the two firms interviewed, showing a

similar perception of cultural and communicational differences. Secondly,

interviews were only conducted with the Swedish managers in the companies

and it would have been optimal to interview their Taiwanese employees as well.

Through interviews with the Taiwanese employees we would receive a more

comprehensive perspective of the subject studied in this thesis. However, due to

lack of time and resources this was not possible. Lastly, we base our findings

regarding CSR, culture, and communication on an empirical research conducted

under a limited period of time. People are not static, and the context might

therefore change in the future. However, we believe that similar results will be

found in a similar context.

CONCLUSIONS

60

6.3 Applicability of the Findings

Due to the country’s many Chinese migrants, Taiwan is heavily influenced by

Chinese business culture and therefore we consider this study to be highly

applicable in other countries where this specific culture exists, such as China,

Singapore and Hong Kong. This also indicates that the study is not only relevant

in organizations operating in Taiwan and Asia, but also in the West where

employees from Eastern cultures are managed and lead by people from Western

cultures. Moreover, we believe the findings of our research are applicable in

other areas than CSR, such as the communication of other responsibilities and

tasks within the same context as stated earlier. We want to emphasize that

industry, company, or country is not the key contexts in our research, but the

managers’ and employees’ cultural origins are.

6.4 Suggestions for Further Research

The area of CSR, in terms of cross-‐cultural communication within organizations,

is highly contemporary and significant, and therefore in need of further research.

Thus, we recommend further research to be derived from this thesis. We suggest

a similar research, but with the collection of empirical data from a larger number

of organizations; hence, making it possible to generalize to a greater extent.

Moreover, interviews conducted with both managers and employees are

recommended in order to receive a complete perspective of this phenomenon.

Additionally, we suggest further research within Asian organizations, in order to

understand how local managers engage their employees in CSR, and further

analyze the differences and similarities compared to how Western managers

engage employees. Hence, receive valuable findings on how organizations

worldwide can make their CSR activities more effective.

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61

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ATTACHMENT

ATTACHMENT 1: Interview guide (Swedish)

Inledande frågor

§ Position i företaget?

§ År inom företaget?

§ År i Taiwan?

§ Tidigare arbetserfarenhet?

1. Kan du kortfattat beskriva företagets historia och utveckling?

§ Produktportfölj?

§ Verksamhet i Taiwan?

§ Ekonomisk utveckling?

Socialt ansvarstagande i Taiwan

2. När började ert företag arbeta med socialt ansvar i Taiwan?

3. Hur har ert arbete med social ansvarstagande utvecklats över tid?

§ Skiljer det sig från andra delar av företaget i andra länder?

4. Hur ser du på socialt ansvarstagande?

Kulturskillnader och ledarskap

5. Hur upplever du de kulturella skillnaderna mellan dig och dina anställda?

6. Upplever du att du behöver anpassa ditt sätt att leda anställda här i

Taiwan? Om ja, hur?

7. Hur involverar ni era anställda i ert arbete med socialt ansvar?

§ Hur upplever du deras engagemang?

8. Vad är din uppfattning angående deras förståelse för företagets sociala

ansvar?

§ Anser du att deras förståelse har förändrats över tiden? Om ja, hur?

Kommunikation med anställda

9. Hur kommunicerar du ert sociala ansvar till era taiwanesiska anställda?

ATTACHMENT

10. Upplever du att du måste anpassa din kommunikation gällande detta

område? Om ja, hur?

11. Hur upplever du kommunikationen från dina anställda gällande socialt

ansvar?

§ Har den förändrats över tiden?

Avslutande frågor

12. Vad är dina förväntningar på den framtida utvecklingen beträffande

socialt ansvarstagande?

§ I branschen?

§ I företagets verksamhet?

ATTACHMENT

ATTACHMENT 2: Interview guide (English)

Initial questions

§ Position in the company?

§ Years working for the company?

§ Years in Taiwan?

§ Earlier working experience?

1. Can you briefly describe the company’s history and its development?

§ Product portfolio?

§ Operations in Taiwan?

§ Economic development?

Social responsibility in Taiwan

2. When did your company start working with social responsibility in

Taiwan?

3. How has your work with social responsibility developed over time?

§ Does it differ from other parts of the company in other countries?

4. How do you perceive social responsibility?

Culture differences and leadership

5. What is your perception of the cultural differences between you and your

employees?

6. Do you perceive it as necessary to adapt the way you lead employees here

in Taiwan? If yes, how?

7. How do you involve your employees in your work with social

responsibility?

§ How do you perceive their engagement?

8. What is your opinion regarding their understanding of the company’s

social responsibility?

§ Do you feel that their understanding has changed over time? If yes,

how?

ATTACHMENT

Communication with employees

9. How do you communicate social responsibility to your Taiwanese

employees?

10. Do you feel that you need to adapt your communication regarding this

subject? If yes, how?

11. How do you perceive the communication from your employees regarding

social responsibility?

§ Has it changed over time?

Ending questions

12. What are your expectations on the future development regarding social

responsibility?

a. In the industry?

b. In the firm’s operations?

Linnaeus University – a firm focus on quality and competence On 1 January 2010 Växjö University and the University of Kalmar merged to form Linnaeus University. This new university is the product of a will to improve the quality, enhance the appeal and boost the development potential of teaching and research, at the same time as it plays a prominent role in working closely together with local society. Linnaeus University offers an attractive knowledge environment characterised by high quality and a competitive portfolio of skills. Linnaeus University is a modern, international university with the emphasis on the desire for knowledge, creative thinking and practical innovations. For us, the focus is on proximity to our students, but also on the world around us and the future ahead. Linnæus University SE-391 82 Kalmar/SE-351 95 Växjö Telephone +46 772-‐28 80 00

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